<PAGE>
As filed with the Securities and Exchange Commission on June 15, 1999
Registration No. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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Georgia-Pacific Corporation
(Exact name of Registrant as specified in its charter)
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GEORGIA 93-0432081
(State or other jurisdiction of (I.R.S. Employer Identification
incorporation or organization) Number)
133 Peachtree Street, N.E.
Atlanta, GA 30303
(404) 652-4000
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
KENNETH F. KHOURY
Vice President, Deputy General Counsel and Secretary
GEORGIA-PACIFIC CORPORATION
133 Peachtree Street, N.E.
Atlanta, GA 30303
(404) 652-4000
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
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Copy to:
JOHN B. TEHAN
SIMPSON THACHER & BARTLETT
425 Lexington Avenue
New York, New York 10017
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Approximate date of commencement of proposed sale to public: From time to
time after the effective date of this Registration Statement, as determined in
light of market conditions.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [_]
If any of the securities being registered in this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or
interest reinvestment plans, please check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [X]
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(continued on following page)
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CALCULATION OF REGISTRATION FEE
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<TABLE>
<CAPTION>
Proposed Maximum
Title of Each Class of Proposed Maximum Aggregate
Securities to Be Amount to Be Offering Price Offering Amount of
Registered Registered(1)(2) per Unit(3) Price(3) Registration Fee
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<S> <C> <C> <C> <C>
Debt Securities.........
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Preferred Stock, without
par value per share....
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Georgia-Pacific
Corporation--Georgia-
Pacific Group Common
Stock, par value $.80
per share..............
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Georgia-Pacific Group
Rights to Purchase
Series B Junior
Preferred Stock, no par
value..................
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Georgia-Pacific
Corporation--Timber
Group Common Stock, par
value $.80 per share
(4)....................
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Timber Group Rights to
Purchase Series C
Junior Preferred Stock,
no par value...........
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Warrants................
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Stock Purchase
Contracts..............
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Stock Purchase Units
Total.................. $2,475,000,000(5) 100% $2,475,000,000(5) $688,050
</TABLE>
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(1) Such amount in U.S. dollars or the equivalent thereof in other currencies,
including composite currencies, as shall result in an aggregate initial
offering price for all securities of $2,475,000,000.
(2) Prior to the occurrence of certain events, the rights to purchase Series B
Junior Preferred Stock and the rights to purchase Series C Junior Preferred
Stock (collectively the "rights") will not be evidenced or traded
separately from the related Georgia-Pacific Group Stock or Timber Stock.
Value, if any, of the rights is reflected in the market price of the
related Timber Stock or Georgia-Pacific Group Stock. Accordingly, no
separate fee is paid on the rights. In addition, no separate consideration
will be received for the stock purchase contracts. Accordingly, no separate
fee is paid on the stock purchase contracts.
(3) Estimated solely for the purpose of computing the registration fee.
(4) Issuable upon conversion of Georgia-Pacific Corporation--Georgia-Pacific
Group Common Stock into Georgia-Pacific Corporation--Timber Group Common
Stock as set forth in our restated articles of incorporation and upon
conversion of convertible Subordinated Debt Securities into Georgia-Pacific
Corporation--Timber Group Common Stock pursuant to the Subordinated
Indenture.
(5) Such amount represents the principal amount of any Debt Securities issued
at their principal amount, the issue price rather than the principal amount
of any Debt Securities issued at an original issue discount, the
liquidation preference of any Preferred Stock and the initial offering
price of any Georgia-Pacific Corporation--Georgia-Pacific Group Common
Stock, Georgia-Pacific Corporation--Timber Group Common Stock, Warrants and
Stock Purchase Units.
Pursuant to Rule 429 under the Securities Act of 1933, the Prospectus
contained in this Registration Statement and supplements to such Prospectus is
a combined Prospectus and also relates to up to $300,000,000 of unsold
securities registered under Registration Statement No. 333-61665 previously
filed with the Commission on Form S-3 and declared effective on August 24, 1998
and to $200,000,000 of unsold securities registered under Registration
Statement No. 333-01785 previously filed with the Commission on Form S-3 and
declared effective on March 22, 1996. This Registration Statement constitutes
post-effective Amendment No. 1 to Registration Statement No. 333-61665 and
post-effective Amendment No. 2 to Registration Statement No. 333-01785 and such
post-effective amendments shall hereafter become effective concurrently with
the effectiveness of this Registration Statement and in accordance with Section
8(c) of the Securities Act of 1933. Upon the effectiveness of such post-
effective amendments, this Registration Statement, Registration Statement No.
333-61665 and Registration Statement No. 333-01785 will relate to an aggregate
of $2,975,000,000 of Debt Securities, Preferred Stock, Georgia-Pacific
Corporation--Georgia-Pacific Group Common Stock, Georgia-Pacific Group Rights
to Purchase Series B Junior Preferred Stock, Georgia-Pacific Corporation--
Timber Group Common Stock, Timber Group Rights to Purchase Series C Junior
Preferred Stock, Warrants, Stock Purchase Contracts and Stock Purchase Units.
The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the registrant
shall file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933, as amended, or until this Registration Statement
shall become effective on such date as the Securities and Exchange Commission,
acting pursuant to said Section 8(a), may determine.
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<PAGE>
SUBJECT TO COMPLETION, DATED JUNE 15, 1999.
PROSPECTUS
$2,975,000,000
Georgia-Pacific Corporation
Georgia-Pacific Corporation may offer and sell--
. Debt Securities
. Preferred Stock
. Georgia-Pacific Corporation--Georgia-Pacific Group
Common Stock and Georgia-Pacific Group Rights to
Purchase Series B Junior Preferred Stock
. Georgia-Pacific Corporation--Timber Group Common Stock
and Timber Group Rights to Purchase Series C Junior
Preferred Stock
. Warrants
. Stock Purchase Contracts
. Stock Purchase Units
We will provide specific terms of these securities in supplements to this
prospectus. You should read this prospectus and any supplements carefully
before you invest.
This prospectus may be used to offer and sell securities only if accompanied
by the prospectus supplement for those securities.
Neither the Securities and Exchange Commission nor any state securities
commission has approved these securities or determined that this prospectus
supplement or the prospectus is accurate or complete. Any representation to the
contrary is a criminal offense.
June , 1999
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
ABOUT THIS PROSPECTUS..................................................... 1
WHERE YOU CAN FIND MORE INFORMATION....................................... 1
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE........................... 2
THE COMPANY............................................................... 3
USE OF PROCEEDS........................................................... 3
RATIO OF EARNINGS TO FIXED CHARGES........................................ 3
DESCRIPTION OF DEBT SECURITIES............................................ 4
General................................................................. 4
Subordination of Subordinated Debt Securities........................... 6
Certain Covenants....................................................... 7
Certain Definitions..................................................... 9
Merger, Sale and Lease.................................................. 9
Conversion Rights....................................................... 10
Events of Default....................................................... 10
Modification and Waiver................................................. 11
Discharge, Defeasance and Covenant Defeasance........................... 12
Book-Entry Securities................................................... 13
Concerning the Trustees................................................. 15
DESCRIPTION OF PREFERRED STOCK............................................ 15
General................................................................. 15
Rank.................................................................... 16
Dividend Rights......................................................... 16
Voting Rights........................................................... 17
Liquidation Rights...................................................... 17
Redemption.............................................................. 17
Conversion.............................................................. 17
DESCRIPTION OF COMMON STOCK............................................... 17
Authorized and Outstanding Shares....................................... 17
Dividends............................................................... 18
Voting Rights........................................................... 18
Conversion and Redemption............................................... 20
Liquidation............................................................. 25
Determinations by Our Board of Directors................................ 25
Preemptive Rights....................................................... 25
Restated Rights Agreement............................................... 25
Certain Anti-Takeover Provisions of Georgia Law, Our Restated Articles
of Incorporation and Bylaws and Our Restated Rights Agreement.......... 27
DESCRIPTION OF WARRANTS................................................... 31
DESCRIPTION OF STOCK PURCHASE CONTRACTS AND STOCK PURCHASE UNITS.......... 32
PLAN OF DISTRIBUTION...................................................... 32
LEGAL MATTERS............................................................. 33
EXPERTS................................................................... 33
</TABLE>
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ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement that we filed with the
Securities and Exchange Commission, the "Commission", utilizing a "shelf"
registration process. Under this shelf process, we may from time to time sell
any combination of the securities described in this prospectus in one or more
offerings up to a total dollar amount of $2,975,000,000.
We provide information to you about the securities in two separate documents
that progressively provide more detail:
. this prospectus, which contains general information, some of which may
not apply to your securities; and
. the accompanying prospectus supplement, which describes the terms of
your securities and may also add, update or change information contained
in this prospectus.
If the terms of your securities vary between the accompanying prospectus
supplement and this prospectus, you should rely on the different information in
the prospectus supplement.
You should read both this prospectus and any prospectus supplement together
with the additional information described under the heading "Where You Can Find
More Information" to learn more about us and the securities we are offering.
Unless otherwise indicated or unless the context requires otherwise, all
references in this prospectus to "Georgia-Pacific", "we", "us", "our" or
similar references mean Georgia-Pacific Corporation and its consolidated
subsidiaries.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and current reports, proxy statements and other
information with the Commission. You may read and copy any document that we
file at the Public Reference Room of the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549. Information on the operation of the Public Reference
Room may be obtained by calling the Commission at 1-800-SEC-0330. You may also
inspect our filings at the regional offices of the Commission located at
Citicorp, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661 and 7
World Trade Center, New York, New York 10048 or over the Internet at the
Commission's home page at http://www.sec.gov. You can also inspect reports and
other information we file at the offices of the New York Stock Exchange, Inc.,
20 Broad Street, New York, New York 10005, on which exchange our Georgia-
Pacific Corporation--Georgia-Pacific Group Common Stock, par value $.80 per
share, "Georgia-Pacific Group Stock", and our Georgia-Pacific Corporation--
Timber Group Common Stock, par value $.80 per share, "Timber Stock", are
traded. We refer to the Georgia-Pacific Group Stock and the Timber Stock as the
"Common Stock".
This prospectus constitutes part of a Registration Statement on Form S-3
filed with the Commission under the Securities Act of 1933. It omits some of
the information contained in the Registration Statement, and you should refer
to the Registration Statement for further information about us and the
securities offered by this prospectus. Any statement contained in this
prospectus concerning the provisions of any document filed as an exhibit to the
Registration Statement or otherwise filed with the Commission is not
necessarily complete, and in each instance you should refer to the copy of the
document filed.
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<PAGE>
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Commission allows us to disclose important information to you by
referring you to documents we have filed or will file with them. The
information "incorporated by reference" is an important part of this
prospectus, and information that we file later with the Commission will
automatically update and supersede previously filed information. We incorporate
by reference the documents listed below and any future filings made with the
Commission under Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange
Act of 1934 until the offering of all of the securities is completed:
. Our Annual Report on Form 10-K for the year ended December 31, 1998
(filed on March 19, 1999 and amended on April 7, 1999);
. Our Quarterly Report on Form 10-Q for the quarter ended April 3, 1999;
and
. Our Current Reports on Form 8-K dated March 18, 1999 and May 4, 1999.
You may request a copy of these filings, at no cost, by directing your
request to Kenneth F. Khoury, Vice President, Deputy General Counsel and
Secretary, Georgia-Pacific Corporation, 133 Peachtree Street, N.E., Atlanta,
Georgia 30303, (404) 652-4000.
2
<PAGE>
THE COMPANY
Georgia-Pacific, founded in 1927 as a wholesaler of hardwood lumber in
Augusta, Georgia, has grown through expansion and acquisitions to become one of
the world's leading manufacturers and distributors of building products and one
of the world's leading producers of pulp and paper. In December 1997, we
separated our timber business into a new operating group called The Timber
Company. Our manufacturing and distribution businesses are now known as the
Georgia-Pacific Group.
The Georgia-Pacific Group is one of the nation's largest producers of
structural and other wood panels, lumber, communication papers, containerboard
and market pulp. It also is the second largest gypsum wallboard producer in
North America and operates the world's largest building products distribution
system. In addition, it operates a rapidly growing tissue products business.
The Timber Company is engaged in the business of growing and selling timber
and wood fiber and is the third largest private owner of timberlands in the
United States, owning approximately 5.0 million acres of timberland in the
United States and Canada, and managing an additional 400,000 acres under long-
term leases, collectively, the "Timberlands". The Timber Company grows various
commercial species of trees on the Timberlands and sells timber and wood fiber
to the Georgia-Pacific Group and other industrial wood users. The principal
products sold by The Timber Company are softwood sawtimber, softwood pulpwood,
hardwood sawtimber and hardwood pulpwood.
On May 25, 1999, we entered into a definitive merger agreement with
Unisource Worldwide Inc., the largest independent marketer and distributor of
printing and imaging paper and supply systems in North America. Unisource's
fiscal 1998 revenues were $7.4 billion. Pursuant to the merger agreement, we
will acquire all the outstanding shares of Unisource for $12 per share in cash,
or approximately $840 million. We will also assume approximately $400 million
in net debt. After the merger, Unisource will become a separate subsidiary of
the Georgia-Pacific Group.
USE OF PROCEEDS
Unless we otherwise indicate in the applicable prospectus supplement, we
will use the net proceeds from the sale of the securities offered by this
prospectus and the applicable prospectus supplement for general corporate
purposes. General corporate purposes may include the reduction of short-term
debt, possible acquisitions, investments in, or extension of credit to, our
subsidiaries and the possible acquisition of real property for use in our
business.
RATIO OF EARNINGS TO FIXED CHARGES
Our ratio of earnings to fixed charges for each of the periods indicated is
as follows:
<TABLE>
<CAPTION>
Three
Months
Ended Year Ended December 31,
April 3, ------------------------
1999 1998 1997 1996 1995 1994
-------- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Ratio of earnings to fixed charges
(unaudited)................................ 3.08 2.05 1.48 1.55 4.41 2.14
</TABLE>
The ratio of earnings to fixed charges is computed by dividing "earnings",
which consist of (1) income before income taxes, extraordinary items and
accounting changes, (2) interest expense (excluding interest capitalized during
the period and including amortization of previously capitalized interest) and
(3) one-third of rental expense (the portion deemed representative of
interest), by "fixed charges", which consist of (1) total interest costs
(including interest capitalized during the period) and (2) one-third of rental
expense.
We do not have, and have not had, any Preferred Stock outstanding during the
periods indicated. Accordingly, we cannot show you the ratio of combined fixed
charges and Preferred Stock dividends to earnings.
3
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DESCRIPTION OF DEBT SECURITIES
We may from time to time offer and sell debt securities, consisting of
debentures, notes and/or other unsecured evidences of indebtedness, the "Debt
Securities". The Debt Securities will be either our unsecured senior debt
securities, the "Senior Debt Securities", or our unsecured subordinated debt
securities, the "Subordinated Debt Securities". The Senior Debt Securities will
be issued under an Indenture, the "Senior Indenture", between us and The Bank
of New York, as Trustee, the "Senior Trustee". The Subordinated Debt Securities
are to be issued under a second Indenture, the "Subordinated Indenture", which
will be entered into between us and The Bank of New York, as Trustee, the
"Subordinated Trustee". The Senior Indenture and the Subordinated Indenture are
together called the "Indentures" and the Senior Trustee and the Subordinated
Trustee are together called the "Trustees".
The following summary of certain provisions of the Indentures is not
complete. You should refer to the Indentures. We have filed copies of the
Indentures as exhibits to the registration statement of which this prospectus
is a part, Registration Statement File No. 333- , the "Registration
Statement". Section references below are to the section in the applicable
Indenture. Capitalized terms have the meanings assigned to them in the
applicable Indenture. The referenced sections of the Indentures and the
definitions of capitalized terms are incorporated by reference.
We have summarized below the general terms and provisions of the Debt
Securities. We will describe the particular terms of the Debt Securities
offered by any prospectus supplement in the prospectus supplement relating to
the offered Debt Securities.
We have substantial operations at the subsidiary level. Claims of creditors
of our subsidiaries, including general creditors, generally will have priority
as to the assets of subsidiaries over our claims and the claims of holders of
our indebtedness, including holders of the Debt Securities. We will rely on
cash generated from operations, including the operations of our subsidiaries,
and our available financing sources in order to meet our debt service
obligations.
General
The Indentures do not limit the amount of Debt Securities that we may issue.
(Section 301) Each Indenture provides that Debt Securities may be issued from
time to time in one or more series. The Debt Securities will be our unsecured
obligations.
The Indentures and the Debt Securities do not contain any provisions that
would:
. limit our ability or the ability of our subsidiaries to incur debt;
. require us or an acquiror to repurchase Debt Securities in the event of
a "change in control"; or
. afford holders of Debt Securities protection in the event of a highly
leveraged or similar transaction involving us or our subsidiaries.
You should read the applicable prospectus supplement for information with
respect to any deletions from, modifications of or additions to the events of
default or covenants described below that are applicable to the offered Debt
Securities.
Unless otherwise indicated in the applicable prospectus supplement,
principal of, premium, if any, and interest on the Debt Securities will be
payable at the corporate trust office of the Trustees in the Borough of
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Manhattan, The City of New York, provided that, at our option, interest may be
paid by mailing a check to the address of the person receiving interest as it
appears on the security register for the Debt Securities. Transfers of Debt
Securities, other than book-entry securities, may be made at the same location.
The Debt Securities will be issued only in fully registered form without
coupons and, unless otherwise indicated in the applicable prospectus
supplement, in denominations of $1,000 or integral multiples thereof. (Section
302) We will not charge for any registration of transfer or exchange of the
Debt Securities, but we may require payment of an amount sufficient to cover
any tax or other governmental charge imposed in connection with the transfer or
exchange. (Section 305)
The prospectus supplement relating to the particular series of Debt
Securities being offered will specify the particular terms of those Debt
Securities. The terms may include:
. the title and type of the particular series of Debt Securities;
. any limit on the aggregate principal amount of the particular series of
Debt Securities;
. the date or dates on which the principal of the particular series of
Debt Securities will mature;
. the rate or rates, which may be fixed or variable, per year or the
method by which such rate or rates will be determined, at which the
particular series of Debt Securities will bear interest, if any;
. the date or dates from which interest, if any, will accrue, or the
method by which such date or dates will be determined, the date or dates
on which interest will be payable and the record dates for interest
payment dates;
. the place or places where the principal of, and premium, if any, and any
interest on the particular series of Debt Securities will be payable;
. the period or periods within which, the price or prices at which, and
the terms and conditions upon which, the particular series of Debt
Securities may be redeemed, in whole or in part, at our option;
. our obligation, if any, to redeem, repay or purchase the particular
series of Debt Securities pursuant to any sinking fund or analogous
provision or at the option of the holders and the period or periods
within which, the price or prices at which and the terms and conditions
upon which the particular series of Debt Securities will be redeemed,
repaid or purchased, in whole or in part, pursuant to such obligation;
. the currency or currencies of payment of principal of, premium, if any,
and interest on the particular series of Debt Securities;
. the index, if any, used to determine the amount of payment of principal
of, premium, if any, and interest on the particular series of Debt
Securities;
. in the case of a particular series of Subordinated Debt Securities, the
portion of the principal amount of the Subordinated Debt Securities
which will be payable upon the declaration of acceleration of the
maturity thereof;
. any additional restrictive covenants included for the benefit of the
holders of the particular series of Debt Securities;
. any additional events of default with respect to the particular series
of Debt Securities;
. in the case of a particular series of Subordinated Debt Securities,
whether that series will be convertible into shares of any class of
Common Stock and if so, the terms and conditions, which may be in
addition to or in lieu of the provisions contained in the Subordinated
Indenture, upon which the series will be convertible, including the
conversion price and conversion period;
. in the case of a particular series of Subordinated Debt Securities,
information with respect to book-entry procedures, if any; and
5
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. any other terms of the particular series of Debt Securities not
inconsistent with the provisions of the Indentures. (Section 301)
Some of the Debt Securities may be issued as original issue discount Debt
Securities. Original issue discount Debt Securities are securities sold by us
for substantially less than their stated principal amount. Federal income tax
consequences and other special considerations applicable to any original issue
discount Debt Securities will be described in the applicable prospectus
supplement. (Section 101)
Subordination of Subordinated Debt Securities
Our obligations to make any payment of the principal of and premium, if any,
and interest on the Subordinated Debt Securities will be subordinate and junior
in right of payment to all Senior Indebtedness and, in certain circumstances
relating to our liquidation, dissolution, termination or reorganization, to all
Additional Senior Obligations. (Article Thirteen of the Subordinated Indenture)
We cannot make any payment of the principal of and premium, if any, or interest
on the Subordinated Debt Securities if there is a default in payment with
respect to Senior Indebtedness or an event of default with respect to any
Senior Indebtedness that results in the acceleration of its maturity and that
default or event of default continues.
The Subordinated Indenture defines "Senior Indebtedness" as:
. all "indebtedness of Georgia-Pacific for money borrowed", whether now
outstanding or later created, assumed or incurred, other than:
. the Subordinated Debt Securities;
. any obligation "ranking on a parity with the Subordinated Debt
Securities"; or
. any obligation "ranking junior to the Subordinated Debt Securities";
and
. any deferrals, renewals or extensions of any such Senior Indebtedness.
The term "indebtedness of Georgia-Pacific for money borrowed" means any
obligation of, or any obligation guaranteed by, Georgia-Pacific for repayment
of borrowed money, whether or not evidenced by bonds, debentures, notes or
other written instruments, and any deferred obligations for payment of the
purchase price of property or assets acquired other than in the ordinary course
of business.
The Subordinated Indenture defines "Additional Senior Obligations" as all
our indebtedness, whether now outstanding or later created, assumed or
incurred, for claims in respect of derivative products such as interest and
foreign exchange rate contracts, commodity contracts and similar arrangements.
However, Additional Senior Obligations do not include:
. any claims in respect of Senior Indebtedness; or
. any obligations:
. ranking on a parity with the Subordinated Debt Securities or
. ranking junior to the Subordinated Debt Securities.
For purposes of this definition, "claim" has the meaning assigned to it in
Section 101(4) of the United States Bankruptcy Code of 1978. The Subordinated
Indenture does not limit or prohibit the incurrence of Senior Indebtedness or
Additional Senior Obligations.
The Subordinated Indenture defines "ranking on a parity with the
Subordinated Debt Securities" as any obligation of Georgia-Pacific that:
. ranks equally with and not prior to the Subordinated Debt Securities in
right of payment upon the happening of any insolvency, receivership,
conservatorship, reorganization, readjustment of debt,
6
<PAGE>
marshalling of assets and liabilities or similar proceedings or any
liquidation, dissolution or termination of or relating to Georgia-
Pacific as a whole, whether voluntary or involuntary; and
. is specifically designated as ranking on a parity with the Subordinated
Debt Securities by express provision in the instrument creating or
evidencing such obligation. (Section 101 of the Subordinated Indenture)
The Subordinated Indenture defines "ranking junior to the Subordinated Debt
Securities" as any obligation of Georgia-Pacific that:
. ranks junior to and not equally with or prior to the Subordinated Debt
Securities in right of payment upon the happening of any insolvency,
receivership, conservatorship, reorganization, readjustment of debt,
marshalling of assets and liabilities or similar proceedings or any
liquidation, dissolution or termination of or relating to Georgia-
Pacific as a whole, whether voluntary or involuntary; and
. is specifically designated as ranking junior to the Subordinated Debt
Securities by express provisions in the instrument creating or
evidencing that obligation (Section 101 of the Subordinated Indenture).
Upon any payment or distribution of assets to creditors upon any insolvency,
receivership, conservatorship, reorganization, readjustment of debt,
marshalling of assets and liabilities or similar proceedings or any
liquidation, dissolution or termination of or relating to Georgia-Pacific as a
whole, whether voluntary or involuntary, the holders of all Senior Indebtedness
will first be entitled to receive payment in full before the holders of the
Subordinated Debt Securities will be entitled to receive any payment of the
principal of and premium, if any, or interest on the Subordinated Debt
Securities. If, after paying the holders of Senior Indebtedness, any cash,
property or securities remain, those excess proceeds will first be applied to
pay in full all the Additional Senior Obligations; then we can make payments on
the Subordinated Debt Securities.
If the holders of Subordinated Debt Securities receive payment and are aware
at the time of receiving payment that all Senior Indebtedness and Additional
Senior Obligations have not been paid in full, then that payment will be held
in trust for the benefit of the holders of Senior Indebtedness or Additional
Senior Obligations, as the case may be. (Section 1301 of the Subordinated
Indenture) Because of this subordination, in the event of insolvency, holders
of the Subordinated Debt Securities may recover less, proportionately, than
holders of Senior Indebtedness and holders of Additional Senior Obligations and
our general unsecured creditors.
Certain Covenants
Limitation on Liens
We may not, nor may we permit any restricted subsidiary, as defined below,
to, create or assume any mortgage, security interest, pledge or lien,
collectively, a "lien", upon any principal property, as defined below, or upon
the shares of stock or indebtedness of any restricted subsidiary, without
equally and ratably securing the Debt Securities. However, this restriction
does not apply to:
(1) liens on any principal property existing at the time of its
acquisition and liens created contemporaneously with or within 120 days
after (or created pursuant to firm commitment financing arrangements
obtained within that period) the completion of the acquisition, improvement
or construction of such property to secure payment of the purchase price of
such property or the cost of such construction or improvements;
(2) liens on property or shares of stock or indebtedness of a
corporation existing at the time it is merged into or its assets are
acquired by us or a restricted subsidiary;
(3) liens on property or shares of stock or indebtedness of a
corporation existing at the time it becomes a restricted subsidiary;
(4) liens securing debts of a restricted subsidiary to us and/or one or
more of our subsidiaries;
7
<PAGE>
(5) liens in favor of a governmental unit to secure payments under any
contract or statute, or to secure debts incurred in financing the
acquisition of or improvements to property subject thereto;
(6) liens on timberlands in connection with an arrangement under which
we and/or one or more restricted subsidiaries are obligated to cut or pay
for timber in order to provide the lienholder with a specified amount of
money, however determined;
(7) liens created or assumed in the ordinary course of the business of
exploring for, developing or producing oil, gas or other minerals
(including borrowings in connection therewith) on, or on any interest in,
or on any proceeds from the sale of, property acquired for such purposes,
production therefrom (including the proceeds thereof), or material or
equipment located thereon;
(8) liens in favor of any customer arising in respect of and not
exceeding the amount of performance deposits and partial, progress, advance
or other payments by that customer for goods produced or services rendered
to that customer in the ordinary course of business;
(9) liens to extend, renew or replace any liens referred to in clauses
(1) through (8) or this clause (9) or any lien existing on the date of the
applicable Indenture;
(10) mechanics' and similar liens;
(11) liens arising out of litigation or judgments being contested; and
(12) liens for taxes not yet due, or being contested, landlords' liens,
tenants' rights under leases, easements, and similar liens not impairing
the use or value of the property involved. (Section 1004)
See "Exemption from Limitations on Liens and Sale and Lease-Back".
Limitation on Sale and Lease-Back
Transactions involving sale and lease-back by us or one or more restricted
subsidiaries of any principal property, except for leases not exceeding three
years, are prohibited unless:
(1) we and/or such restricted subsidiary or subsidiaries would be
entitled to incur indebtedness secured by a lien on that property without
securing the Debt Securities;
(2) an amount equal to the value of the sale and lease-back is applied
within 120 days to:
. the voluntary retirement of indebtedness for borrowed money of Georgia-
Pacific or any restricted subsidiary maturing more than one year after
the date incurred and which is senior to or equal with the Debt
Securities in right of payment ("funded debt"); or
. the purchase of other property that will constitute principal property
having a value at least equal to the net proceeds of the sale; or
(3) we and/or a restricted subsidiary shall deliver to the applicable
Trustee for cancellation funded debt (including the Debt Securities) in an
aggregate principal amount at least equal to the net proceeds of the sale.
(Section 1005)
See "Exemption from Limitations on Liens and Sale and Lease-Back".
Exemption from Limitations on Liens and Sale and Lease-Back
We and/or one or more restricted subsidiaries are permitted to create or
assume liens or enter into sale and lease-back transactions that would not
otherwise be permitted under the limitations described under "Limitation on
Liens" and "Limitation on Sale and Lease-Back", provided that the sum of the
aggregate amount of all indebtedness secured by these liens (not including
indebtedness otherwise permitted under the exceptions described in clauses (1)
through (12) under "Limitation on Liens") and the value of all of these sale
and lease-back transactions (not including those that are for less than three
years or in respect of which indebtedness is retired or property is purchased
or Debt Securities are delivered, as described under "Limitation on Sale and
Lease-Back") will not exceed 5% of the net tangible assets, as defined below,
of us and our restricted subsidiaries. (Section 1006)
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Applicability of Covenants
Any series of Debt Securities may provide that any one or more of the
covenants described above, as well as certain provisions of the "Merger, Sale
and Lease" covenant described below, shall not be applicable to the Debt
Securities of such series. (Section 1009)
Certain Definitions
The following terms are defined in more detail in Section 101 of the
applicable Indenture.
"Net tangible assets" means, at any date, the aggregate amount of assets
(less applicable reserves and other properly deductible items) after
deducting therefrom (1) all current liabilities, (2) any item representing
Investments in Unrestricted Subsidiaries, as defined in the applicable
Indenture, and (3) all goodwill, trade names, trademarks, patents,
unamortized debt discount and expense and other like intangibles, all of
the foregoing as set forth on the most recent consolidated balance sheet of
Georgia-Pacific and computed in accordance with generally accepted
accounting principles.
"Principal property" means any mill, manufacturing plant or facility or
timberlands owned by us or one or more restricted subsidiaries and located
within the continental United States, but does not include any such mill,
plant, facility or timberlands which are acquired after the date of the
applicable Indenture for the disposal of solid waste or control or
abatement of atmospheric pollutants or contaminants, or water, noise or
other pollutants, or which in the opinion of our board of directors is not
of material importance to our total business and our restricted
subsidiaries as an entirety, and does not include timberlands designated by
our board of directors as being held primarily for development or sale, or
minerals or mineral rights.
"Restricted subsidiary" means a subsidiary substantially all of the
property of which is located within the continental United States and which
itself, or with us or one or more other restricted subsidiaries, owns a
principal property.
"Subsidiary" means any corporation a majority of the outstanding voting
stock of which is owned or controlled by us or one or more subsidiaries and
which is consolidated in our accounts.
Merger, Sale and Lease
Under the Senior Indenture, we may consolidate with or merge into any other
corporation or sell, convey or lease all or substantially all of our properties
and assets to any person, without the consent of the holders of any of the
outstanding Senior Debt Securities, provided that:
. any successor or purchaser will expressly assume the due and punctual
payment of the principal of and interest on all the Senior Debt
Securities and the due and punctual performance and observance of all of
the covenants and conditions of the Senior Indenture to be performed by
us under a supplemental indenture; and
. we have delivered to the Trustee under the Senior Indenture an opinion
of counsel stating compliance with these provisions. (Sections 801 and
804 of the Senior Indenture)
Under the Subordinated Indenture, we may not consolidate with or merge into
any other corporation or sell, convey, exchange, transfer or lease all or
substantially all of our properties and assets to any person, unless:
. any successor or purchaser is a corporation organized under the laws of
any domestic jurisdiction;
. any such successor or purchaser expressly assumes our obligations on the
Subordinated Debt Securities and under the Subordinated Indenture;
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. immediately after the transaction, no event of default, and no event
that, after notice or lapse of time or both, would become an event of
default, occurs and continues; and
. certain other conditions are met. (Section 801 of the Subordinated
Indenture)
Under both Indentures, if upon any merger of us with or into any other
corporation, or upon any sale or lease of all or substantially all of our
properties, any principal property of Georgia-Pacific or a restricted
subsidiary or any shares of stock or indebtedness of a restricted subsidiary
owned immediately prior to such merger, sale or lease would, thereupon, become
subject to any lien other than liens permitted, without securing the Debt
Securities under Sections 1004 and 1006 of the applicable Indenture summarized
above, prior to such event, we will secure the Debt Securities, equally with
all of our other obligations so secured, by a lien on such principal property,
shares or indebtedness prior to all liens other than any liens existing up to
that time thereon and liens so permitted by those Sections of the Indenture.
(Section 802)
Conversion Rights
The terms and conditions, if any, upon which Subordinated Debt Securities
are convertible into shares of any class of Common Stock will be set forth in
the prospectus supplement relating to such series of Subordinated Debt
Securities. Such terms will include:
. the conversion price;
. the conversion period;
. provisions as to whether conversion will be at the option of the holder
or us;
. the events requiring an adjustment of the conversion price; and
. provisions affecting conversion in the event of the redemption of such
series of Subordinated Debt Securities.
Events of Default
Unless otherwise provided in the applicable prospectus supplement, the
Indentures provide that the following events constitute events of default:
. failure to pay any interest upon any Debt Security when due, and that
failure continues for 30 days (in the case of the Subordinated
Indenture, whether or not payment is prohibited by the subordination
provisions);
. failure to pay the principal of, or premium, if any, on, any Debt
Security when due at its maturity or upon acceleration (in the case of
the Subordinated Indenture, whether or not payment is prohibited by the
subordination provisions);
. failure to deposit any sinking fund payment, when due, in respect of any
Debt Security of that series (whether or not payment is prohibited by
the subordination provisions);
. failure to perform any other covenants or warranties in the applicable
Indenture, other than a covenant or warranty included in the applicable
Indenture solely for the benefit of a series of Debt Securities under
the applicable Indenture other than that series, and that failure
continues for 90 days, in the case of the Senior Indenture, and 60 days,
in the case of the Subordinated Indenture, after written notice as
provided in the applicable Indenture;
. certain events of bankruptcy, insolvency or reorganization of Georgia-
Pacific; and
. any other event of default provided with respect to Debt Securities of
that series. (Section 501)
Acceleration of Debt Securities. If an event of default with respect to Debt
Securities of any series at the time outstanding occurs and is continuing,
either the applicable Trustee or the holders of at least 25% in
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aggregate principal amount of outstanding Debt Securities of that series may
declare the principal amount (or, if those Debt Securities are original issue
discount Debt Securities, the portion of the principal amount specified in
their terms) of all Debt Securities of that series due and payable immediately.
At any time after a declaration of acceleration with respect to Debt Securities
of any series has been made but, before a judgment or decree based on
acceleration has been obtained, the holders of a majority in aggregate
principal amount of the outstanding Debt Securities of that series may, under
certain circumstances, rescind and annul that acceleration if all events of
default, other than the non-payment of accelerated principal (or specified
portion thereof) with respect to Debt Securities of that series, have been
cured or waived as provided in the applicable Indenture. (Section 502)
General. If there is a default in the payment of principal, premium, if any,
or interest, if any, or the performance of any covenant or agreement in the
Debt Securities or the Indentures, the applicable Trustee, subject to certain
limitations and conditions, may institute judicial proceedings to enforce
payment of that principal, premium, if any, or interest, if any, or to obtain
the performance of that covenant or agreement or any other proper remedy.
(Section 503) Under certain circumstances, the applicable Trustee may withhold
notice of a default to the holders of the securities if the applicable Trustee
in good faith determines that the withholding of that notice is in the best
interest of the holders, and the applicable Trustee will withhold the notice
for certain defaults for a period of 30 days. (Section 602) You should review
the prospectus supplement relating to any series of Debt Securities that are
original issue discount Debt Securities for particular provisions relating to
acceleration of the stated maturity of a portion of the principal amount of
that series of original issue discount Debt Securities if an event of default
occurs and is continuing.
The Indentures provide that, subject to the duty of the applicable Trustee
during default to act with the required standard of care, the applicable
Trustee does not have to exercise any of its rights or powers under the
applicable Indenture at the request or direction of any of the holders, unless
those holders have offered to the applicable Trustee reasonable security or
indemnity. (Section 603) Subject to the foregoing sentence and to certain other
conditions, the holders of a majority in aggregate principal amount of the
outstanding Debt Securities of any series will have the right to direct the
time, method and place of conducting any proceeding for any remedy available to
the applicable Trustee, or exercising any trust or power conferred on the
applicable Trustee, with respect to the Debt Securities of that series.
(Section 512)
No holders of any Debt Securities of any series may institute any proceeding
with respect to the applicable Indenture, or for the appointment of a receiver
or trustee or for any remedy relating to that appointment:
. unless those holders have already given to the applicable Trustee
written notice of a continuing event of default;
. unless the holders of at least 25% in aggregate principal amount of the
outstanding Debt Securities of that series have made written request,
and offered reasonable indemnity, to the applicable Trustee to institute
such a proceeding as Trustee;
. if the Trustee has received from the holders of a majority in aggregate
principal amount of the outstanding Debt Securities of that series a
direction inconsistent with the written request; and
. unless the Trustee has failed to institute the proceeding within 60
days. (Section 507)
The above limitations do not apply to a suit instituted by holder of a Debt
Security for enforcement of payment of the principal of and premium, if any, or
interest on the Debt Security on or after the respective due dates described in
the Debt Security. (Section 508)
We are required to furnish to each Trustee annually a statement as to the
performance by us of certain of our obligations under the applicable Indenture
and as to any default in such performance. (Section 1007)
Modification and Waiver
We and the applicable Trustee may modify and amend the Indentures with the
consent of the holders of at least 66 2/3% in aggregate principal amount of the
outstanding Debt Securities of each series issued under the applicable
Indenture and affected by the modification or amendment, but no such
modification or amendment
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may, without the consent of the holders of each outstanding Debt Security of
the series affected by the modification or amendment:
. change the stated maturity of the principal of, or any installment of
principal of or interest on, any Debt Security of that series;
. reduce the principal amount of or premium, if any, or interest on, any
Debt Security of any series (including, in the case of an original issue
discount Debt Security, the amount payable upon acceleration of
maturity);
. change the place or currency of payment of principal of or the premium,
if any, or interest on any Debt Security of that series;
. impair the right of any holder to institute suit for the enforcement of
any payment on any Debt Security of such series;
. in the case of the Subordinated Debt Securities, modify the
subordination provisions in a manner adverse to the holders of the
Subordinated Debt Securities of that series; or
. reduce the percentage in principal amount of outstanding Debt Securities
of any series, the consent of whose holders is required for modification
or amendment of the applicable Indenture or for waiver of compliance
with certain provisions of the applicable Indenture or for waiver of
certain defaults. (Section 902)
The holders of at least 66 2/3% in aggregate principal amount of the
outstanding Debt Securities of any series may, on behalf of all holders of that
series, waive compliance by us with certain restrictive provisions of the
applicable Indenture. (Section 1008) The holders of a majority in aggregate
principal amount of the outstanding Debt Securities of any series may, on
behalf of all holders of that series, waive any past default under the
applicable Indenture, except a default in the payment of principal, premium, if
any, or interest and regarding certain covenants. (Section 513)
Discharge, Defeasance and Covenant Defeasance
The applicable Indenture with respect to Debt Securities of any series may
be discharged, subject to certain terms and conditions, when:
. either (1) all Debt Securities of such series have been delivered to the
applicable Trustee for cancellation or (2) all Debt Securities of such
series not theretofore delivered to the applicable Trustee for
cancellation (a) have become due and payable, (b) will become due and
payable at their stated maturity within one year, or (c) are to be
called for redemption within one year under arrangements satisfactory to
the applicable Trustee for the giving of notice by the applicable
Trustee, and we, in the case of (a), (b) or (c) of subclause (2), have
irrevocably deposited or caused to be deposited with the applicable
Trustee as trust funds in trust for such purpose an amount in the
currency in which such Debt Securities are denominated sufficient to pay
and discharge the entire indebtedness on such Debt Securities for
principal and premium, if any, and interest to the date of such deposit
in the case of Debt Securities which have become due and payable or to
the stated maturity or redemption date, as the case may be;
. paid or caused to be paid all other sums payable under the applicable
Indenture by us; and
. we have delivered to the applicable Trustee an officers' certificate and
an opinion of counsel each stating that all conditions precedent therein
provided relating to the satisfaction and discharge of the applicable
Indenture with respect to such series have been complied with. (Section
401)
If so specified when the Subordinated Debt Securities of a particular series
are created, after we have deposited with the Subordinated Trustee, cash or
government securities, in trust for the benefit of the holders
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sufficient to pay the principal of, premium, if any, and interest on the
Subordinated Debt Securities of such series when due, then we, at our option:
. will be deemed to have paid and satisfied our obligations on all
outstanding Subordinated Debt Securities of that series, which is known
as "defeasance and discharge"; or
. will cease to be under any obligation, other than to pay when due the
principal of, premium, if any, and interest on these Subordinated Debt
Securities, relating to the Subordinated Debt Securities of that series,
which is known as "covenant defeasance".
Under the Subordinated Indenture, we must also deliver to the Subordinated
Trustee an opinion of counsel to the effect that the holders of the
Subordinated Debt Securities will not recognize income, gain or loss for
federal income tax purposes as a result of such deposit and defeasance and
discharge or covenant defeasance and that federal income tax would be imposed
on the holders in the same manner as if such defeasance and discharge had not
occurred. In the case of a defeasance and discharge, such opinion must be based
upon a ruling or administrative pronouncement of the IRS.
When there is a defeasance and discharge, (1) the Subordinated Indenture
will no longer govern the Subordinated Debt Securities of that series, (2) we
will no longer be liable for payment and (3) the holders of that series of
Subordinated Debt Securities will be entitled only to the deposited funds. When
there is a covenant defeasance, however, we will continue to be obligated to
make payments when due if the deposited funds are not sufficient.
The obligations and rights under the Subordinated Indenture regarding
compensation, reimbursement and indemnification of the Subordinated Trustee,
optional redemption, mandatory and optional scheduled installment payments, if
any, registration of transfer and exchange of the Subordinated Debt Securities
of such series, replacement of mutilated, destroyed, lost or stolen
Subordinated Debt Securities and certain other administrative provisions will
continue even if we exercise our defeasance and discharge or covenant
defeasance options. (Sections 403 and 404 of the Subordinated Indenture)
Under current federal income tax law, a covenant defeasance would not be
treated as a taxable exchange of Subordinated Debt Securities. Prospective
investors are urged to consult their own tax advisors as to the specific
consequences of a defeasance and discharge, including the applicability and
effect of tax laws other than the federal income tax law.
Book-Entry Securities
The Debt Securities of a series may be issued in the form of one or more
book-entry securities that will be deposited with a Depositary or its nominee
identified in the applicable prospectus supplement. In this case, book-entry
securities will be issued in aggregate denominations equal to the aggregate
principal amount of Debt Securities represented by such book-entry securities.
Unless and until it is exchanged in whole or in part for Debt Securities in
definitive registered form, a book-entry security may not be transferred except
as a whole by the applicable Depositary to a nominee of such Depositary or by a
nominee of the Depositary to the Depositary or another nominee of the
Depositary or by the Depositary or any such nominee to a successor of the
Depositary or a nominee of such successor.
The specific terms of the depositary arrangement with respect to any Debt
Securities to be represented by a book-entry security will be described in the
applicable prospectus supplement. We anticipate that the following provisions
will apply to all depositary arrangements.
Upon the issuance of a book-entry security, the Depositary for such book-
entry security or its nominee will credit, on its book-entry registration and
transfer system, the respective principal amounts of the Debt Securities
represented by such book-entry security to the accounts of persons that have
accounts with such Depositary, "participants". We or the underwriters or agents
will designate such accounts. Participants include
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securities brokers and dealers, banks and trust companies, clearing
corporations and certain other organizations. Access to the Depositary's system
is also available to others, such as banks, brokers, dealers and trust
companies that clear through or maintain a custodial relationship with a
participant, either directly or indirectly, "indirect participants". Persons
who are not participants may beneficially own book-entry securities held by the
Depositary only through participants or indirect participants.
Ownership of beneficial interests in any book-entry security will be shown
on, and the transfer of that ownership will be effected only through, records
maintained by the Depositary or its nominee (with respect to interests of
participants) and on the records of participants (with respect to interests of
indirect participants). The laws of some states require that certain purchasers
of securities take physical delivery of such securities in definitive form.
These laws, as well as the limits on participation in the Depositary's book-
entry system, may impair the ability to transfer beneficial interests in a
book-entry security.
So long as the Depositary or its nominee is the registered owner of a book-
entry security, such Depositary or such nominee will be considered the sole
owner or holder of the Debt Securities represented by such book-entry security
for all purposes under the applicable Indenture. Except as provided below,
owners of beneficial interests in securities represented by book-entry
securities will not be entitled to have such Debt Securities registered in
their names, will not be entitled to receive physical delivery of such Debt
Securities in definitive form and will not be considered the owners or holders
of such Debt Securities under the applicable Indenture.
Payments of principal of and any premium and interest on Debt Securities
registered in the name of the Depositary or its nominee will be made to the
Depositary or its nominee, as the case may be, as the registered owner of the
book-entry securities representing such Debt Securities. We expect that the
Depositary for a series of Debt Securities or its nominee, upon receipt of any
payment of principal, premium or interest, will credit immediately
participants' accounts with payments in amounts proportionate to their
beneficial interests in the book-entry security, as shown on the records of
such Depositary or its nominee. We also expect that payments by participants
and indirect participants to owners of beneficial interests in such book-entry
security held through such persons will be governed by standing instructions
and customary practices, as is now the case with securities registered in
"street name", and will be the responsibility of such participants and indirect
participants. Neither we, the applicable Trustee, any authenticating agent, any
paying agent nor the security registrar for such Debt Securities will have any
responsibility or liability for any aspect of the records relating to, or
payments made on account of, beneficial ownership interests in any book-entry
security or for maintaining, supervising or reviewing any records relating to
such beneficial ownership interests. (Section 311)
If the Depositary for Debt Securities of a series notifies us that it is
unwilling or unable to continue as Depositary or if at any time the Depositary
ceases to be a clearing agency registered under the Exchange Act, we have
agreed to appoint a successor depositary. If such a successor is not appointed
by us within 90 days, we will issue Debt Securities of such series in
definitive registered form in exchange for the book-entry security. In
addition, we may at any time and in our sole discretion determine that the Debt
Securities of any series will no longer be represented by book-entry
securities. In that event, we will issue Debt Securities of such series in
definitive registered form in exchange for such book-entry securities. Further,
if we so specify with respect to the Debt Securities of a series, or if an
event of default, or an event which with notice, lapse of time or both would be
an event of default with respect to the Debt Securities of such series has
occurred and is continuing, an owner of a beneficial interest in a book-entry
security representing Debt Securities of such series may receive Debt
Securities of such series in definitive registered form. In any such case, an
owner of a beneficial interest in a book-entry security will be entitled to
physical delivery in definitive registered form of Debt Securities of the
series represented by such book-entry security equal in principal amount to
such beneficial interest and to have such Debt Securities registered in such
owner's name. (Section 305) Debt Securities so issued in definitive form will
be issued in denominations of $1,000 and integral multiples of $1,000 and will
be issued in registered form only, without coupons.
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Concerning the Trustees
We maintain customary banking relationships with The Bank of New York, and
The Bank of New York is a lender under our $1.5 billion unsecured revolving
credit facility.
DESCRIPTION OF PREFERRED STOCK
We have summarized below the general terms of the Preferred Stock, without
par value per share, "Preferred Stock", and the Junior Preferred Stock, without
par value per share, "Junior Preferred Stock", to which any prospectus
supplement may relate. The summary is not complete. We will describe some of
the terms of any series of the Preferred Stock or the Junior Preferred Stock,
as the case may be, offered by any prospectus supplement in the prospectus
supplement for that series of Preferred Stock or Junior Preferred Stock, as
applicable. If we indicate the terms of any such series in the prospectus
supplement, those terms may differ from the terms described below. We encourage
you to read our restated articles of incorporation which have been filed with
the Commission and the articles supplementary to our restated articles of
incorporation which will be filed with the Commission in connection with the
offering of the series of Preferred Stock or Junior Preferred Stock.
General
We are authorized to issue up to 10,000,000 shares of Preferred Stock and
25,000,000 shares of Junior Preferred Stock, of which 5,000,000 shares have
been designated as Series B Junior Preferred Stock and 5,000,000 shares have
been designated as Series C Junior Preferred Stock. The shares of Series B
Junior Preferred Stock and Series C Junior Preferred Stock have been reserved
for issuance in connection with our restated rights agreement described under
"Description of Common Stock--Restated Rights Agreement". As of the date of
this prospectus, we had no Preferred Stock or Junior Preferred Stock
outstanding.
Our restated articles of incorporation authorize our board of directors to
provide for the issuance of Preferred Stock and Junior Preferred Stock in one
or more series, without shareholder action. Our board of directors can
determine the rights, preferences and limitations of each series. Prior to the
issuance of each series of Preferred Stock or Junior Preferred Stock, as the
case may be, our board of directors will adopt resolutions creating and
designating the series as a series of Preferred Stock or Junior Preferred
Stock, as applicable.
The Preferred Stock and the Junior Preferred Stock have the terms described
below, unless otherwise provided in the prospectus supplement relating to a
particular series of the Preferred Stock or Junior Preferred Stock, as the case
may be. You should read the prospectus supplement relating to the particular
series of the Preferred Stock or Junior Preferred Stock offered thereby for
specific terms, including:
. the designation of the series and the number of shares offered;
. the amount per share payable in the event of liquidation;
. the price at which the particular series of Preferred Stock or the
Junior Preferred Stock, as the case may be, will be issued;
. the dividend rate, the dates on which dividends will be payable and the
date from which dividends will commence to cumulate;
. any redemption, retirement or sinking fund provisions;
. whether the shares have voting rights, and the extent of any such voting
rights, including, without limitation, the right to elect directors;
. the terms and conditions, if any, on which shares may be converted;
. any other preferences, rights, restrictions and qualifications of shares
of such series permitted by law and the restated articles of
incorporation.
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Rank
Any series of Preferred Stock will rank:
. senior to all classes of Common Stock and Junior Preferred Stock with
respect to dividend rights and liquidation rights;
. senior to classes of Preferred Stock with respect to either dividend
rights or liquidation rights where the terms of the Preferred Stock
entitle the holders to receipt of dividends or a liquidation
distribution, as the case may be, in preference or priority to the
holders of such other classes of Preferred Stock;
. equally with classes of Preferred Stock with respect to either dividend
rights or liquidation rights if the holders of the Preferred Stock are
entitle to receipt of dividends or a liquidation distribution, as the
case may be, without preference or priority one over the other; and
. junior to classes of Preferred Stock with respect to either dividend
other rights or liquidation rights if the rights of holders are subject
or subordinate to the rights of holders of such other classes of
Preferred Stock to receipt of dividends or a liquidation distribution,
as the case may be.
Any series of Junior Preferred Stock will rank:
. senior to all classes of Common Stock with respect to dividend rights
and liquidation rights;
. senior to classes of Junior Preferred Stock with respect to either
dividend rights or liquidation rights if the terms of the Junior
Preferred Stock entitle the holders to receipt of dividends or a
liquidation distribution, as the case may be, in preference or priority
to the holders of such other classes of Junior Preferred Stock;
. equally with classes of Junior Preferred Stock with respect to either
dividend rights or liquidation rights if the holders of the Junior
Preferred Stock are entitled to receipt of dividends or a liquidation
distribution, as the case may be, without preference or priority one
over the other; and
. junior to all classes of Preferred Stock with respect to dividend rights
and liquidation rights, and to classes of Junior Preferred Stock with
respect to either dividend rights or liquidation rights if the rights of
holders are subject or subordinate to the rights of holders of such
other classes of Junior Preferred Stock to receipt of dividends or a
liquidation distribution, as the case may be.
Dividend Rights
Dividends on the Preferred Stock and the Junior Preferred Stock are
cumulative.
Each series of Preferred Stock and Junior Preferred Stock will be entitled
to dividends as described in the prospectus supplement. Different series of
Preferred Stock and Junior Preferred Stock may be entitled to dividends at
different rates. The rate may be fixed or variable or both.
Holders of the Preferred Stock and Junior Preferred Stock of each series
will be entitled to receive, when, as and if declared by our board of
directors, cash dividends at the rates and on the dates described in the
prospectus supplement. Each dividend will be payable to the holders of record
as they appear on our stock record books on record dates determined by our
board of directors.
No full dividends may be declared or paid or funds set apart for the payment
of dividends on any equal securities unless dividends have been paid or set
apart for payment on the Preferred Stock or Junior Preferred Stock, as the case
may be. If full dividends are not paid, the Preferred Stock or Junior Preferred
Stock, as the case may be, will share dividends pro rata with the securities
ranking equally. No dividends may be declared or paid or funds set apart for
the payment of dividends on any junior securities unless full cumulative
dividends for all dividend periods terminating on or prior to the date of the
declaration or payment will have been paid or declared and a sum sufficient for
the payment set apart for payment on the Preferred Stock or Junior Preferred
Stock, as the case may be.
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Voting Rights
Except as we indicate in the prospectus supplement, or except as required by
applicable law, the holders of the Preferred Stock and the Junior Preferred
Stock will not be entitled to any voting rights.
Liquidation Rights
If we liquidate, dissolve or terminate our affairs, either voluntarily or
involuntarily, the holders of each series of Preferred Stock and Junior
Preferred Stock will be entitled to receive, after we pay our debts and
liabilities and after we provide for liquidating distributions to holders of
securities senior to such series of Preferred Stock or Junior Preferred Stock,
as the case may be, and before we make any liquidating distributions to holders
of securities junior to such series of Preferred Stock or Junior Preferred
Stock, as the case may be, liquidating distributions in the amount described in
the prospectus supplement relating to such series of Preferred Stock and Junior
Preferred Stock, as the case may be, plus an amount equal to accrued and unpaid
dividends for all dividend periods prior to that point in time.
If the amounts payable with respect to such series of Preferred Stock or
Junior Preferred Stock, as the case may be, and any other securities equal with
such series are not paid in full, the holders of such series of Preferred Stock
or Junior Preferred Stock and the securities equal with such series will share
proportionately in the distribution of our assets in proportion to the full
liquidation preferences to which they are entitled. After the holders of such
series of Preferred Stock or Junior Preferred Stock, as the case may be, are
paid in full, they will have no right or claim to any of our remaining assets.
Redemption
The prospectus supplement will state the terms, if any, on which shares of a
series of Preferred Stock or Junior Preferred Stock, as the case may be, may be
redeemable, in whole or in part, or subject to mandatory redemption pursuant to
a sinking fund.
Conversion
The prospectus supplement will state the terms, if any, on which shares of a
series of Preferred Stock or Junior Preferred Stock, as the case may be, are
convertible into other securities of ours.
DESCRIPTION OF COMMON STOCK
We have summarized below the material terms of the Georgia-Pacific Group
Stock and the Timber Stock. The summary is not complete. We encourage you to
read our restated articles of incorporation and our bylaws. You should also
refer to the applicable provisions of the Georgia Business Corporation Code.
Authorized and Outstanding Shares
We are authorized to issue up to 400,000,000 shares of Georgia-Pacific Group
Stock, par value $.80 per share. At May 13, 1999, we had outstanding 85,818,888
shares of Georgia-Pacific Group Stock. On June 3, 1999, we split the Georgia-
Pacific Group Stock, issuing to holders of Georgia-Pacific Group Stock an
additional share of Georgia-Pacific Group Stock for each share that they owned.
After giving effect to the stock split, the number of shares of Georgia-Pacific
Group Stock outstanding on May 13, 1999 would have been 171,637,776. We also
are authorized to issue up to 250,000,000 shares of Timber Stock, par value
$.80 per share. At May 13, 1999, we had outstanding 84,909,044 shares of Timber
Stock.
Dividends
Our ability to pay dividends on the Georgia-Pacific Group Stock and the
Timber Stock is limited by Georgia law. Under Georgia law, dividends are
limited to our legally available assets and subject to the prior payment of
dividends on any outstanding shares of Preferred Stock and Junior Preferred
Stock. Under Georgia law, assets are not legally available for paying dividends
if (1) we would not be able to pay our debts as they become due in the usual
course of business or (2) our total assets would be less than our total
liabilities plus, subject to some exceptions, any amounts necessary to satisfy
the preferential rights upon dissolution of shareholders whose preferential
rights are superior to those of shareholders receiving the dividend.
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<PAGE>
Our ability to pay dividends on the Georgia-Pacific Group Stock and the
Timber Stock is also limited by our restated articles of incorporation. Under
our restated articles of incorporation, dividends are limited to an amount not
greater than the available dividend amount for the relevant group. Each group's
available dividend amount is, on any date, any amount in excess of the minimum
amount necessary for the group to be able to pay its debts as they become due
in the usual course of business, as determined by our board of directors
exercising its business judgment based on the facts and circumstances then
existing. This amount is calculated as if the group were a stand-alone company.
Under Georgia law, the amount of assets legally available for paying
dividends is determined on the basis of our entire company, and not just the
respective groups. Consequently, the amount of our legally available assets
will reflect the amount of any net losses of each group, any dividends on
Georgia-Pacific Group Stock, Timber Stock, any Preferred Stock or any Junior
Preferred Stock, and any repurchases of Georgia-Pacific Group Stock or Timber
Stock or Preferred Stock or Junior Preferred Stock. Dividend payments on the
Georgia-Pacific Group Stock and the Timber Stock and the Timber Stock could be
precluded because legally available assets are not available under Georgia law,
even though the available dividend amount test for the particular relevant
group was met. Moreover, we cannot assure you that there will be an available
dividend amount for either group.
Subject to these restrictions on paying dividends, our board of directors
may, in its sole discretion, declare and pay dividends exclusively on the
Georgia-Pacific Group Stock, exclusively on the Timber Stock or on both, in
equal or unequal amounts, without having to take into account the relative
available dividend amounts for the two groups, the amount of dividends it
previously declared on each class of Common Stock, the respective voting or
liquidation rights of each class or any other factor.
Voting Rights
Under our restated articles of incorporation, the entire voting power of our
shareholders is vested in the holders of Georgia-Pacific Group Stock and Timber
Stock. Except as otherwise provided by law, by the terms of any outstanding
Preferred Stock and Junior Preferred Stock or by any provision of our restated
articles of incorporation restricting the power to vote on a specified matter
to other shareholders, holders of Georgia-Pacific Group Stock and Timber Stock
are entitled to vote on any matter on which our shareholders are, by law or by
the provisions of our restated articles of incorporation or our bylaws,
entitled to vote. Both classes of Common Stock vote together as a single voting
group on each matter on which holders of Common Stock are generally entitled to
vote.
On each matter as to which holders of both classes of Common Stock vote
together as a single voting group:
. each share of Georgia-Pacific Group Stock has one vote; and
. each share of Timber Stock has a number of votes equal to the quotient
of the time-weighted average market value of one share of Timber Stock
over the 20-trading day period ending on the 10th trading day prior to
the record date for determining the Common Stock holders entitled to
vote, divided by the time-weighted average market value of one share of
Georgia-Pacific Group Stock over the same period.
In calculating the time-weighted average market values of the two classes of
Common Stock, the average market values for the second, third and fourth five-
trading day period in the 20-trading day period will be weighted two times,
three times and four times, respectively, the weight given to the average
market value of the first five trading days in the 20-trading day period.
Accordingly, the relative per share voting rights of the Georgia-Pacific
Group Stock and the Timber Stock fluctuate depending upon changes in the
relative market values of shares of the two classes of Common Stock. As of the
date of this prospectus, Georgia-Pacific Group Stock has a substantial majority
of the voting power because the aggregate market value of the outstanding
shares of Georgia-Pacific Group Stock is substantially greater than the
aggregate market value of the outstanding shares of Timber Stock.
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<PAGE>
If shares of only one class of Common Stock are outstanding, each share of
that class has one vote. If either class of Common Stock is entitled to vote as
a separate voting group with respect to any matter, each share of that class
will, for purposes of that vote, have one vote on the matter.
Fluctuations in the relative voting rights of the Georgia-Pacific Group
Stock and the Timber Stock could influence an investor interested in acquiring
and maintaining a fixed percentage of the voting power of our stock to acquire
such percentage of both classes of Common Stock, and would limit the ability of
investors in one class to acquire for the same consideration relatively more or
less votes per share than investors in the other class.
The holders of Georgia-Pacific Group Stock and Timber Stock do not have any
right to vote separately as a voting group on any matter coming before our
shareholders, except for the limited voting group voting rights provided under
Georgia law described below, by New York Stock Exchange rules or as determined
by our board of directors. In addition to the approval of the holders of a
majority of the voting power of all shares of Common Stock voting together as a
single voting group, the approval of a majority of the outstanding shares of
Georgia-Pacific Group Stock or Timber Stock, voting as a separate voting group,
would also be required under Georgia law to approve any amendment to our
restated articles of incorporation that would, among other things:
. increase or decrease the number of authorized shares of Georgia-Pacific
Group Stock or Timber Stock; or
. change the designation, rights, preferences or limitations of the shares
of the class.
The following illustration demonstrates the calculation of the number of
votes each share of Timber Stock would be entitled on all matters on which
holders of Georgia-Pacific Group Stock and Timber Stock vote together as a
single voting group. If:
. the time-weighted average market value of Timber Stock during the 20-
trading day valuation period was $30 per share; and
. the time-weighted average market value of Georgia-Pacific Group Stock
during the 20-trading day valuation period was $50 per share,
then each share of Georgia-Pacific Group Stock would have one vote and each
share of Timber Stock would have 0.6 votes based on the following calculation:
$30 per share = 0.6 votes
-------------
$50 per share
Assuming 200 million shares of Georgia-Pacific Group Stock and 100 million
shares of Timber Stock were outstanding, the shares of Georgia-Pacific Group
Stock would represent 76.9% of our total voting power and the shares of Timber
Stock would represent 23.1% of our total voting power.
Conversion and Redemption
Mandatory Dividend, Redemption or Conversion of Common Stock If Disposition of
Group Assets Occurs
If we dispose of all or substantially all of the properties and assets of
either the Georgia-Pacific Group or the Timber Group, we must take action that
returns the value of those assets to the holders of that group's Common Stock.
That action could take the form of a cash dividend, a redemption of shares or a
conversion into the other group's Common Stock.
Accordingly, if we sell all or substantially all of one group's assets in a
transaction other than one described below under "Exceptions to the Dividend,
Redemption or Conversion Requirement if a Disposition Occurs", we will:
19
<PAGE>
. pay a dividend to the holders of shares of that group's Common Stock in
cash and/or securities or other property having a fair value equal to
the net proceeds of the disposition; or
. (1) if the disposition involves all of the properties and assets of that
group, redeem all outstanding shares of that group's Common Stock in
exchange for cash and/or securities or other property having a fair
value equal to the net proceeds of the disposition; or
. (2) if the disposition involves substantially all, but not all, of the
properties and assets of that group, redeem a number of whole shares of
that group's Common Stock in exchange for cash and/or securities or
other property having a fair value equal to the net proceeds of the
disposition; the number of shares so redeemed will have, in the
aggregate, an average market value, during the 10-trading day period
beginning on the 16th trading day following the disposition date,
closest to the net proceeds; or
. convert each outstanding share of that group's Common Stock into a
number of shares of the other group's Common Stock equal to 110% of the
ratio of the average market value of one share of Common Stock of the
group whose assets are disposed to the average market value of one share
of Common Stock of the other group, during the 10-trading day period
beginning on the 16th trading day following the disposition date.
We may only pay a dividend or redeem shares of Common Stock if we have
legally available assets under Georgia law and the amount to be paid to holders
is less than or equal to the available dividend amount for the group. We will
pay the dividend or complete the redemption or conversion prior to or on the
85th trading day following the disposition date.
For purposes of determining whether a disposition has occurred,
"substantially all of the properties and assets" of either group means a
portion of the properties and assets:
. that represents at least 80% of the then fair value of the properties
and assets of that group; or
. from which were derived at least 80% of the aggregate revenues of that
group for the immediately preceding 12 fiscal quarterly periods.
The "net proceeds" of a disposition means an amount equal to what remains of
the gross proceeds of the disposition after we pay or reasonably provide for,
as determined by our board of directors:
. any taxes payable by us, or which would have been payable but for the
utilization of tax benefits attributable to the group not subject to the
disposition, in respect of the disposition or in respect of any
resulting dividend or redemption;
. any transaction costs, including, without limitation, any legal,
investment banking and accounting fees and expenses; and
. any liabilities of or attributed to the group whose assets are disposed,
including, without limitation, any liabilities for deferred taxes, any
indemnity or guarantee obligations incurred in connection with the
disposition or otherwise, any liabilities for future purchase price
adjustments and any preferential amounts plus any accumulated and unpaid
dividends in respect of the Preferred Stock or Junior Preferred Stock
attributed to that group.
We may elect to pay the dividend or redemption price either in the same form
as the proceeds of the disposition were received or in any other combination of
cash, securities or other property that our board of directors or, in the case
of securities that have not been publicly traded for a period of at least 15
months, an independent investment banking firm, determines will have an
aggregate market value of not less than the fair value of the net proceeds.
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<PAGE>
The following illustration demonstrates the provisions requiring a mandatory
dividend, redemption or conversion if a disposition occurs. If:
. 200 million shares of Georgia-Pacific Group Stock and 100 million shares
of Timber Stock were outstanding;
. the net proceeds of the disposition of substantially all (but not all)
of the assets of the Timber Group equals $2 billion;
. the average market value of Timber Stock during the 10-trading day
valuation period was $30 per share; and
. the average market value of Georgia-Pacific Group Stock during the same
valuation period was $50 per share,
then we could do any of the following:
(1) pay a dividend to the holders of shares of Timber Stock equal to:
<TABLE>
<S> <C> <C>
net proceeds = $2 billion
---------------- ------------------
number of 100 million shares
outstanding
shares of Timber
Stock
</TABLE>
(2) redeem for $30 per share a number of shares of Timber Stock equal
to:
<TABLE>
<S> <C> <C>
net proceeds = $2 billion
----------------- -----------------
average market $30 per share
value of
Timber Stock
= 66,666,666 shares
</TABLE>
(3) convert each outstanding share of Timber Stock into a number of
Georgia-Pacific Group Stock equal to:
<TABLE>
<S> <C> <C> <C> <C> <C>
average market
value of
1.10 x Timber Stock = 1.10 x $ 30 per share
--------------------------- --------------
average market value of 4$50 per share
Georgia-Pacific Group Stock
= 0.66 shares
</TABLE>
Our board of directors may, within one year after a dividend or redemption
following a disposition of a group's properties or assets, convert each
outstanding share of that group's Common Stock into a number of shares of the
other group's Common Stock equal to 110% of the ratio of the time-weighted
average market value of one share of Common Stock of the group whose assets are
disposed over the 20-trading day period ending on the 5th trading day prior to
the date the notice of the conversion is mailed to the holders to the time-
weighted average market value of one share of Common Stock of the other group
over the same period. We refer you to "--Voting Rights" for a summary
explanation of how we will calculate the time-weighted average market values.
The following illustration demonstrates the calculation of the number of
shares issuable upon conversion of one class of Common Stock into shares of the
other class of Common Stock within one year following a disposition. If:
. 200 million shares of Georgia-Pacific Group Stock and 100 million shares
of Timber Stock were outstanding immediately prior to a conversion;
. the time-weighted average market value of Timber Stock during the 20-
trading day valuation period was $10 per share; and
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<PAGE>
. the time-weighted average market value of Georgia-Pacific Group Stock
during the same valuation period was $50 per share,
then each share of Timber Stock could be converted into 0.22 shares of Georgia-
Pacific Group Stock based on the following calculation:
<TABLE>
<S> <C> <C> <C> <C>
1.10 x $10.00 per share = 0.22 shares
----------------
$50 per share
</TABLE>
Exceptions to the Dividend, Redemption or Conversion Requirement If a
Disposition Occurs
We are not required to take any of the above actions for any disposition of
all or substantially all of the properties and assets of either group in a
transaction or series of related transactions that results in our receiving for
those properties and assets primarily equity securities of any entity which:
. acquires those properties or assets or succeeds to the business
conducted with those properties or assets or controls such acquiror or
successor; and
. is primarily engaged or proposes to engage primarily in one or more
businesses similar or complementary to the businesses conducted by that
group prior to the disposition, as determined by our board of directors.
The purpose of this exception is to enable us technically to dispose of
properties or assets of a group to other entities engaged or proposing to
engage in businesses similar or complementary to those of that group without
requiring a dividend on, or a conversion or redemption of, the class of Common
Stock of that group, so long as we hold an equity interest in that entity. A
joint venture in which we own a direct or indirect equity interest is an
example of such an acquiror. We are not required to control that entity,
whether by ownership or contract provisions.
We are also not required to effect a dividend, redemption or conversion if
the disposition is:
. of all or substantially all of our properties and assets in one
transaction or a series of related transactions in connection with our
dissolution, liquidation or winding up and the distribution of our
assets to shareholders;
. on a pro rata basis, such as in a spin-off, to the holders of all
outstanding shares of the Common Stock of the group whose assets are
disposed; or
. made to any person or entity controlled by us, as determined by our
board of directors.
Notices If Disposition of Group Assets Occurs
Not later than the 10th trading day after the consummation of a disposition,
we will announce publicly by press release:
. the estimated net proceeds of the disposition;
. the number of shares outstanding of the Common Stock of the group whose
assets are disposed; and
. the number of shares of that group's Common Stock into or for which
convertible securities are then convertible, exchangeable or exercisable
and the conversion, exchange or exercise price of those convertible
securities.
In addition, not earlier than the 26th trading day and not later than the 30th
trading day after the consummation of the disposition, we will announce
publicly by press release whether we will pay a dividend or redeem shares of
the Common Stock with the net proceeds of the disposition or convert the shares
of Common Stock of the group whose assets are disposed into the other group's
Common Stock.
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<PAGE>
We will mail to each holder of shares of the group whose assets are disposed
the additional notices and other information required by our restated articles
of incorporation.
Conversion of Common Stock at Our Option at Any Time
Our board of directors may at any time convert each outstanding share of:
. Georgia-Pacific Group Stock into a number of shares of Timber Stock; or
. Timber Stock into a number of shares of Georgia-Pacific Group Stock,
equal to 115% of the ratio of the time-weighted average market value of one
share of Common Stock of the group whose shares are to be converted over the
20-trading day period ending on the 5th trading day prior to the date the
notice of conversion is mailed to the holders to the time-weighted average
market value of one share of Common Stock of the other group over the same
period. We refer you to "--Voting Rights" for a summary explanation of how we
will calculate the time-weighted average market values.
These provisions allow us the flexibility to recapitalize the two classes of
Common Stock into one class of Common Stock that would, after the
recapitalization, represent an equity interest in all of our businesses. The
optional conversion could be exercised at any time in the future if our board
of directors determines that, under the facts and circumstances then existing,
an equity structure consisting of two classes of Common Stock intended to
reflect separately the performance of our manufacturing business and our timber
business were no longer in the best interests of all of our shareholders. A
conversion could be exercised, however, at a time that is disadvantageous to
the holders of one of the classes of Common Stock.
Conversion would be based upon the relative market values of the Georgia-
Pacific Group Stock and the Timber Stock. Many factors could affect the market
values of the Georgia-Pacific Group Stock or the Timber Stock, including:
. our results of operations and those of each of the groups;
. trading volumes; and
. general economic and market conditions.
Market values could also be affected by decisions by our board of directors or
our management that investors perceive to affect differently one class of
Common Stock compared to the other. These decisions could include:
. changes to our management and allocation policies;
. transfers of assets between the groups;
. allocations of corporate opportunities and financing resources between
the groups; and
. changes in dividend policies.
The following illustration demonstrates the calculation of the number of
shares issuable upon conversion of one class of Common Stock into shares of the
other class at our option. If:
. 200 million shares of Georgia-Pacific Group Stock and 100 million shares
of Timber Stock were outstanding immediately prior to a conversion;
. the time-weighted average market value of Timber Stock during the 20-
trading day valuation period was $30 per share; and
. the time-weighted average market value of Georgia-Pacific Group Stock
during the same valuation period was $50 per share,
23
<PAGE>
then each share of Timber Stock could be converted into 0.69 shares of Georgia-
Pacific Group Stock based on the following calculation:
1.15 X $30 per share = 0.69 shares
-------------
$50 per share
Redemption in Exchange for Stock of Subsidiary
Our board of directors may redeem on a pro rata basis all of the outstanding
shares of Georgia-Pacific Group Stock or Timber Stock for shares of the common
stock of one or more of our wholly-owned subsidiaries which own all of the
assets and liabilities attributed to the relevant group. We may redeem shares
of Common Stock for subsidiary stock only if we have legally available assets
under Georgia law.
As a result of a redemption, holders of each class of Common Stock would
hold securities of separate legal entities operating in distinct lines of
business. This redemption could be authorized by our board of directors at any
time in the future if it determines that, under the facts and circumstances
then existing, an equity structure comprised of Georgia-Pacific Group Stock and
Timber Stock is no longer in the best interests of all of our shareholders.
Selection of Shares for Redemption
If less than all of the outstanding shares of a class of Common Stock are to
be redeemed, we will redeem those shares proportionately from among the holders
of outstanding shares of that class of Common Stock or by such method as may be
determined by our board of directors to be equitable.
Fractional Interests
We are not required to issue fractional shares of any capital stock or any
fractional securities to any holder of either class of Common Stock upon any
conversion, redemption, dividend or other distribution described above. If a
fraction is not issued to a holder, we will pay cash instead of that fraction.
Transfer Taxes
We will pay all documentary, stamp or similar issue or transfer taxes that
may be payable in respect of the issue or delivery of any shares of capital
stock and/or other securities on conversion or redemption of shares. We will
not, however, be required to pay any tax that may be payable in respect of any
transfer involved in the issue or delivery of any shares of capital stock
and/or other securities in a name other than that in which the shares of such
Common Stock so converted or redeemed were registered, and no such issue or
delivery will be made unless the person requesting such issue has paid to us
the amount of any such tax, or has established to our satisfaction that such
tax had been paid.
Liquidation
In the event of our liquidation, dissolution or termination, after we pay
our debts, other liabilities and full preferential amounts to which our holders
of any Preferred Stock or Junior Preferred Stock are entitled, the holders of
Georgia-Pacific Group Stock and Timber Stock are entitled to receive our
assets, if any, remaining for distribution to holders of Common Stock on a per
share basis in proportion to a fixed number of liquidation units per share of
such class.
Each share of Georgia-Pacific Group Stock has one liquidation unit. As of
the date of this prospectus, each share of Timber Stock has 0.402 of a
liquidation unit. The number of liquidation units per share of Common Stock
will not change without the approval of shareholders of each Group, except in
the limited circumstances described below. Consequently, the liquidation rights
of the holders of the respective classes of Common Stock may not bear any
relationship to the relative market values or the relative voting rights of the
two classes.
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<PAGE>
No holders of Georgia-Pacific Group Stock will have any special right to
receive specific assets of the Georgia-Pacific Group and no holder of Timber
Stock will have any special right to receive specific assets of the Timber
Group in the case of our liquidation, dissolution or termination.
If we subdivide or combine the outstanding shares of either class of Common
Stock or declare a dividend or other distribution of shares of either class of
Common Stock to holders of that class of Common Stock, the number of
liquidation units of either class of Common Stock will be appropriately
adjusted by our board of directors to avoid any dilution in the aggregate,
relative liquidation rights of any class of Common Stock.
Neither a merger nor share exchange of Georgia-Pacific into or with any
other corporation, nor any sale, transfer, lease, exchange or other disposition
of all or any part of our assets, will, alone, be deemed to be a liquidation of
us, or cause our dissolution, for purposes of these liquidation provisions.
Determinations by Our Board of Directors
Any determinations made in good faith by our board of directors under any
provision described above and any determination with respect to any group or
the rights of holders of shares of either class of Common Stock, are final and
binding on all of our shareholders, subject to the rights of shareholders under
applicable Georgia law and under the federal and state securities laws.
Preemptive Rights
Neither the holders of Georgia-Pacific Group Stock nor the holders of Timber
Stock have any preemptive rights or any rights to convert their shares into any
other securities of Georgia-Pacific.
Restated Rights Agreement
Under our restated rights agreement, we have issued to all holders of
Georgia-Pacific Group Stock rights to purchase Series B Junior Preferred Stock
if a "distribution date" occurs and to all holders of Timber Stock rights to
purchase Series C Junior Preferred Stock if a "distribution date" occurs. We
refer to the Georgia-Pacific Group purchase rights and the Timber Group
purchase rights as the "rights".
Until a distribution date occurs, the rights can be transferred only with
the Common Stock. On the occurrence of a distribution date, the rights will
separate from the Common Stock and become exercisable as described below.
A "distribution date" will occur upon the earlier of:
. the tenth day after a public announcement that a person or group of
affiliated or associated persons other than us, one of our subsidiaries
or one of our employee benefit plans (an "acquiring person") has
acquired beneficial ownership of 15% or more of the total voting rights
of the then outstanding shares of Common Stock; or
. the tenth business day following the commencement of a tender or
exchange offer that would result in such person or group beneficially
owning such voting rights.
The total voting rights of the Common Stock will be determined based upon the
voting rights of holders of outstanding shares of Georgia-Pacific Group Stock
and Timber Stock at the time of any determination.
Following the distribution date, holders of rights will be entitled to
purchase from us:
. in the case of a Georgia-Pacific Group right, one one-hundredth
(1/100th) of a share of Series B Junior Preferred Stock at a purchase
price of $350, subject to adjustment; and
. in the case of a Timber Group right, one one-hundredth (1/100th) of a
share of Series C Junior Preferred Stock at a purchase price of $100,
subject to adjustment.
25
<PAGE>
If (1) any person or group becomes an acquiring person, (2) an acquiring
person engages in one or more "self-dealing" transactions with us as described
in our restated rights agreement, (3) we are the surviving or continuing
corporation in a merger or other combination with an acquiring person and all
of the Common Stock remains outstanding and is not changed or exchanged, or (4)
while there is an acquiring person, there is a reclassification of securities,
recapitalization of Georgia-Pacific or other transaction that increases by more
than 1% the proportionate share of the outstanding shares of any class or
series of any equity securities of Georgia-Pacific beneficially owned by the
acquiring person, then the rights will "flip-in". At that time, the rights
beneficially owned by any acquiring person will become null and void and:
. a Georgia-Pacific Group right will entitle its holder to purchase, at
the Series B purchase price, a number of shares of Series B Junior
Preferred Stock with a market value equal to twice the Series B purchase
price; and
. a Timber Group right will entitle its holder to purchase, at the Series
C purchase price, a number of shares of Series C Junior Preferred Stock
with a market value equal to twice the Series C purchase price.
If, following the date of a public announcement that an acquiring person has
become such, (1) we are acquired in a merger or other business combination
transaction and we are not the surviving corporation, (2) any person
consolidates or merges with us and all or part of the Common Stock is converted
or exchanged for securities, cash or property or any other person, or (3) 50%
or more of our assets or earning power is sold or transferred, then the rights
will "flip-over". At that time, each Georgia-Pacific Group right and each
Timber Group right will entitle its holder to purchase, for the Series B
purchase price or Series C purchase price, as applicable, a number of shares of
common stock of the surviving entity in any such merger, consolidation or other
business combination or the purchaser in any such sale or transfer with a
market value equal to twice the Series B purchase price or Series C purchase
price.
The rights will expire on December 31, 2007, unless we terminate them before
that time. A majority of the independent directors of our board may terminate
all of the rights without any payment to any holder of rights at any time until
the earlier of:
. the tenth day following a public announcement that an acquiring person
has become such; or
. December 31, 2007.
Once our board acts to terminate the rights, the right to exercise the rights
will terminate and each right will become null and void.
A holder of a right will not have any rights as a shareholder of Georgia-
Pacific, including the right to vote or to receive dividends, until a right is
exercised.
At any time prior to the occurrence of a distribution date, we may, without
the approval of any holders of rights, supplement or amend any provision of our
restated rights agreement in any manner, whether or not such supplement or
amendment is adverse to any holders of the rights. However, we may not
supplement or amend the principal economic terms, such as the expiration date
of the rights and the number and price of shares of Junior Preferred Stock for
which a right is exercisable, without the approval of a majority of the
independent directors.
From and after the occurrence of a distribution date, we may, without the
approval of any holder of rights, supplement or amend our restated rights
agreement:
. to cure any ambiguity;
. to correct or supplement any provision that may be defective or
inconsistent;
. subject to some exceptions, to shorten or lengthen any time period under
the restated rights agreement; or
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. in any manner that we may deem necessary or desirable and which does not
adversely affect the interests of the holders of rights, other than an
acquiring person, and which does not change the principal economic
terms.
Certain Anti-Takeover Provisions of Georgia Law, Our Restated Articles of
Incorporation and Bylaws and Our Restated Rights Agreement
The following discussion concerns certain provisions of Georgia law, our
restated articles of incorporation, our bylaws and our restated rights
agreement that could be viewed as having the effect of discouraging an attempt
to obtain control of Georgia-Pacific.
Georgia Law
Under Georgia law, unless otherwise provided by a corporation's articles of
incorporation or bylaws, a merger or share exchange or sale of all or
substantially all of the corporation's assets must be approved by a majority of
all the votes entitled to be cast, voting as a single voting group.
Shareholders of the corporation surviving a merger or share exchange need not
approve the merger or share exchange if certain conditions are met. Neither our
restated articles of incorporation nor our bylaws contain a provision which
alters the requirements with respect to mergers or share exchanges or a sale of
all or substantially all of our assets under Georgia law.
We have elected in our bylaws to be covered by two provisions of Georgia law
that restrict business combinations with interested shareholders: the Business
Combinations Provision and the Fair Price Provision. Under Georgia law, once
adopted, these provisions may be repealed only by the affirmative vote of at
least 66 2/3% of the "continuing directors" and a majority of the votes
entitled to be cast by the voting shares, other than the voting shares
beneficially owned by an "interested shareholder" and, with respect to the Fair
Price Provision, his, her or its associates and affiliates. An "interested
shareholder" is defined as a holder of 10% or more of the outstanding voting
stock. "Continuing directors" are directors who served prior to the time the
interested shareholder acquired an ownership of 10% or more of the outstanding
voting stock and who are unaffiliated with the interested shareholder.
Interested Shareholder Transactions
The Business Combinations Provision generally prohibits us from entering
into certain business combination transactions with any interested shareholder
for a five-year period following the time that such shareholder became an
interested shareholder.
An interested shareholder may engage in a business combination transaction
with us within the five-year period only if:
. our board of directors approved the transaction before the shareholder
became an interested shareholder or approved the transaction in which
the shareholder became an interested shareholder;
. the interested shareholder acquired at least 90% of the voting stock
outstanding in the transaction in which it became an interested
shareholder; or
. after becoming an interested shareholder, the interested shareholder
acquired additional shares resulting in the interested shareholder being
the beneficial owner of at least 90% of the outstanding voting shares,
excluding Insider Shares, and the transaction was approved at an annual
or special meeting of shareholders by the holders of a majority of the
voting stock entitled to vote, excluding from the vote, Insider Shares
and voting stock beneficially owned by the interested shareholder.
"Insider Shares" refer to shares owned by:
. persons who are directors or officers of Georgia-Pacific, their
affiliates or associates;
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. our subsidiaries; and
. our employee stock plans under which participants do not have the right
to determine confidentially the extent to which shares held under such
plans will be tendered in a tender or exchange offer.
Fair Price Requirements
The Fair Price Provision imposes requirements on "business combinations" of
Georgia-Pacific with any interested shareholder. In addition to any vote
required by law or by our restated articles of incorporation, under the Fair
Price Provision, business combinations with an interested shareholder must meet
one of the following criteria:
. the transaction must be unanimously approved by our continuing
directors, provided that the continuing directors constitute at least
three members of our board of directors at the time the transaction is
approved;
. the transaction must be recommended by at least 66 2/3% of the
continuing directors and approved by a majority of the votes entitled to
be cast by the voting shares, other than the voting shares beneficially
owned by the interested shareholder who is, or whose affiliate is, a
party to the business combination; or
. the terms of the transaction must meet specified fair pricing criteria
and other tests.
These criteria are designed to protect our minority shareholders.
Our Restated Articles of Incorporation and Bylaws
Authorized Shares of Preferred Stock
Our restated articles of incorporation provide that we may from time to time
issue shares of Preferred Stock and Junior Preferred Stock in one or more
series, the terms of which will be determined by our board of directors. Our
restated articles of incorporation authorize 10,000,000 shares of Preferred
Stock and 25,000,000 shares of Junior Preferred Stock, of which 5,000,000
shares have been designated as Series B Junior Preferred Stock and 5,000,000
shares of Series C Junior Preferred Stock. The shares of Series B Junior
Preferred Stock and Series C Junior Preferred Stock have been reserved for
issuance in connection with our restated rights agreement. We will not solicit
approval of our shareholders unless our board of directors believes that
approval is advisable or is required by New York Stock Exchange rules or
Georgia law.
The existence of authorized, unissued and unreserved Preferred Stock and
Junior Preferred Stock could enable our board of directors to issue shares to
persons friendly to current management which could render more difficult, or
discourage, an attempt to obtain control of Georgia-Pacific by means of a
merger, tender offer, proxy contest or otherwise, and protect the continuity of
our management. These additional shares also could be used to dilute the share
ownership of persons seeking to obtain control of Georgia-Pacific.
Shareholder Nominations and Proposals
Our bylaws provide that any shareholder may present a nomination for a
directorship at an annual meeting of shareholders only if advance notice of
such nomination has been delivered to Georgia-Pacific not less than 60 days or
more than 75 days prior to the meeting. If less than 70 days' notice or public
disclosure of the date of the meeting is given or made to shareholders, notice
by the shareholder must be received not later than 10 days after the notice was
mailed or the disclosure made.
Similarly, any shareholder may present a proposal at an annual meeting only
if advance notice of the proposal has been delivered to Georgia-Pacific not
less than 120 calendar days before the date Georgia-Pacific's proxy statement
released to shareholders in connection with the previous year's annual meeting.
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The foregoing notices must describe:
. the proposal to be brought at the meeting or the nominee for director,
as applicable;
. personal information regarding the shareholder giving the notice;
. the number of shares owned by the shareholder; and
. his or her interest in the proposal.
These procedural requirements could have the effect of delaying or
preventing the submission of matters proposed by any shareholder to a vote of
the shareholders.
Staggered Board
Our board of directors is divided into three classes of directors serving
staggered three-year terms. Each class consists of, as nearly as possible, one-
third of the total number of directors.
The classification of directors makes it more difficult for shareholders to
change the composition of our board of directors. At least two annual meetings
of shareholders, instead of one, generally will be required to change the
majority of our board of directors. The classification provisions of our bylaws
and restated articles of incorporation could discourage a third party from
initiating a proxy contest, making a tender offer or otherwise attempting to
obtain control of Georgia-Pacific.
Increase in the Number of Directors
Our bylaws provide that the number of directors may be increased or
decreased either by:
. our board of directors; or
. the affirmative vote of at least 75% of the voting power of the
outstanding capital stock entitled to vote generally in the election of
directors, voting as a separate voting group.
Filling Vacancies
Our bylaws provide that any vacancy on our board of directors may be filled:
. by a majority of the remaining members of the board though less than a
quorum or by the sole remaining director, as the case may be; or
. if no director remains, by the holders of the shares of capital stock
who are entitled to vote for the director with respect to which the
vacancy is being filled.
However, if a vacancy occurs with respect to a director elected by a particular
class or series of shares voting as a separate voting group, our bylaws provide
that that vacancy may be filled:
. by the remaining director or directors elected by that class or series;
. or if no director remains, by the holders of that class or series.
Any vacancy arising by reason of an increase in the number of directors may
only be filled by our board of directors.
Accordingly, our board of directors could temporarily prevent any
shareholder from enlarging our board and filling the new directorships with
such shareholder's own nominees.
Special Meetings of Shareholders
Under Georgia law and our bylaws, we must call a special meeting of the
shareholders if called by:
. the chairman or vice chairman of our board of directors;
. our chief executive officer;
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. our president;
. our board of directors; or
. the holders of at least 75% of the voting power of the outstanding
capital stock entitled to vote on any issue proposed to be considered at
the proposed special meeting, voting as a separate voting group.
In addition, a special meeting must be called upon the termination of the
exclusive right of one or more classes or series of capital stock, voting as a
separate voting group, to vote for directors, when requested by the holders of
10% of the aggregate voting power of the outstanding capital stock then
entitled to vote generally in the election of directors.
Restrictions on Amendments of Our Restated Articles of Incorporation
Amendments to our restated articles of incorporation must be recommended to
the shareholders by our board of directors and approved at a properly called
meeting of shareholders by a majority of the voting power of the outstanding
capital stock entitled to vote generally in the election of directors, voting
together as a single voting group. However, the affirmative vote of the holders
of at least 75% of the voting power of the outstanding capital stock entitled
to vote generally in the election of directors, voting together as a single
voting group, is required to amend, change, repeal or add any provision of our
restated articles of incorporation relating to:
. the Junior Preferred Stock; or
. the provisions establishing the required votes for amending our restated
articles of incorporation or our bylaws.
Restrictions on Amendments of Our Bylaws
Amendments to our bylaws may be approved by our board of directors or by the
affirmative vote of the holders of a majority of the voting power of the
outstanding capital stock entitled to vote generally in the election of
directors, voting together as a single voting group. However, the affirmative
vote of the holders of at least 75% of the voting power of the outstanding
capital stock entitled to vote generally in the election of directors, voting
together as a single voting group, is required to amend, change, repeal or add
any provision of our bylaws relating to:
. the number of members of our board of directors;
. the classification of our board of directors;
. the procedure for nominating directors;
. calling special meetings of the shareholders;
. calling special meetings of our board of directors; or
. establishing a quorum at a meeting of our board of directors.
Social Responsibility Provision
Our restated articles of incorporation permit our board of directors to
consider any pertinent factors, including general, social and economic effects,
in discharging its duties and in determining what is in the best interests of
Georgia-Pacific. Consequently, our board of directors is authorized to consider
factors other than the interests of the shareholders when considering an
acquisition offer.
Our Restated Rights Agreement
As described under "--Restated Rights Agreement", our restated rights
agreement will permit disinterested shareholders to acquire additional shares
of Georgia-Pacific or of an acquiring company at a substantial discount in the
event of certain described changes in control. Our restated rights agreement is
intended to discourage anyone from buying shares of Common Stock having more
than 15% of the total voting power of Georgia-Pacific without approval of our
board of directors.
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DESCRIPTION OF WARRANTS
We may issue warrants, the "Warrants", to purchase Debt Securities,
Preferred Stock or Common Stock, collectively, the "Securities". Warrants may
be issued independently or together with Debt Securities, Preferred Stock or
Common Stock and may be attached to or separate from any offered securities.
Each series of Warrants will be issued under a separate warrant agreement, each
a "Warrant Agreement", to be entered into between us and a warrant agent, the
"Warrant Agent". The Warrant Agent will act solely as our agent in connection
with the Warrants and will not assume any obligation or relationship of agency
or trust for or with holders or beneficial owners of Warrants.
We have summarized below the general terms and provisions of the Warrants
that we may offer. We will describe further terms of the Warrants and the
applicable Warrant Agreement in the prospectus supplement.
The prospectus supplement will describe the following terms, where
applicable, of the Warrants in respect of which this prospectus is being
delivered:
. the title of the Warrants;
. the aggregate number of the Warrants;
. the price or prices at which the Warrants will be issued;
. the designation, aggregate principal amount and terms of the securities
purchasable upon exercise of the Warrants;
. the designation and terms of the securities with which the Warrants are
issued and the number of the Warrants issued with each such security;
. if applicable, the date on and after which the Warrants and the related
securities will be separately transferable;
. the price at which the securities purchasable upon exercise of the
Warrants may be purchased;
. the date on which the right to exercise the Warrants will commence and
the date on which the right will expire;
. the minimum or maximum amount of the Warrants which may be exercised at
any one time;
. information with respect to book-entry procedures, if any;
. a discussion of certain federal income tax considerations; and
. any other terms of the Warrants, including terms, procedures and
limitations relating to the exchange and exercise of the Warrants.
DESCRIPTION OF STOCK PURCHASE CONTRACTS AND STOCK PURCHASE UNITS
We may issue stock purchase contracts, "Stock Purchase Contracts",
representing contracts obligating holders to purchase from us, and us to sell
to the holders, a specified number of shares of either class or both classes of
Common Stock at a future date or dates. The price per share of Common Stock and
number of shares of Common Stock may be fixed at the time the Stock Purchase
Contracts are issued or may be determined by reference to a specific formula
set forth in the Stock Purchase Contracts. The Stock Purchase Contracts may be
issued separately or as a part of stock purchase units, "Stock Purchase Units",
consisting of a Stock Purchase Contract and Debt Securities or debt obligations
of third parties, including U.S. Treasury securities, securing the holders'
obligations to purchase the Common Stock under the Stock Purchase Contracts.
The Stock Purchase Contracts may require us to make periodic payments to the
holders of the Stock Purchase Units or vice-versa. These payments may be
unsecured or prefunded on some basis. The Stock Purchase Contracts may require
holders to secure their obligations thereunder in a specified manner.
The prospectus supplement will describe the terms of any Stock Purchase
Contracts or Stock Purchase Units.
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PLAN OF DISTRIBUTION
We may sell securities to or through underwriters or dealers, directly to
other purchasers or through agents. Each prospectus supplement will describe
the method of distribution of the securities that are being offered.
The distribution of the securities may take place from time to time in one
or more transactions at a fixed price or prices, which may be changed, or at
market prices prevailing at the time of sale, at prices related to such
prevailing market prices or at negotiated prices.
In connection with the sale of securities, underwriters may receive
compensation from us or from purchasers of securities for whom they may act as
agents in the form of discounts, concessions or commissions. Underwriters may
sell securities to or through dealers, and the dealers may receive compensation
in the form of discounts, concessions or commissions from the underwriters
and/or commissions from the purchasers for whom they may act as agents.
Underwriters, dealers and agents that participate in the distribution of
securities may be deemed to be underwriters, and any discounts or commissions
received by them from us and any profit on the resale of securities by them may
be deemed to be underwriting discounts and commissions, under the Securities
Act. Any underwriter or agent will be identified, and any compensation received
from us will be described, in the prospectus supplement.
If so indicated in the applicable prospectus supplement and subject to
existing market conditions, we will authorize underwriters or other persons
acting as our agents to solicit offers by certain institutions to purchase
offered Debt Securities from us pursuant to contracts providing for payment and
delivery on a future date. Institutions with which such contracts may be made
include but are not limited to commercial and savings banks, insurance
companies, pension funds, investment companies, educational and charitable
institutions and others, but in all cases such institutions must be approved by
us. The obligations of any purchaser under any such contract will be subject to
the condition that the purchase of the offered Debt Securities will not at the
time of delivery be prohibited under the laws of the jurisdiction to which the
purchaser is subject. The underwriters and the other agents will not have any
responsibility in respect of the validity or performance of the contracts.
Underwriters and agents who participate in the distribution of securities
may be entitled under agreements which may be entered into by us to
indemnification by us against certain liabilities, including liabilities under
the Securities Act.
Except as indicated in the applicable prospectus supplement, the securities
are not expected to be listed on a securities exchange, except for the Georgia-
Pacific Group Stock and Timber Stock, which are listed on the New York Stock
Exchange, and any underwriters or dealers will not be obligated to make a
market in securities. We cannot predict the activity or liquidity of any
trading in the securities.
LEGAL MATTERS
The validity of the Securities will be passed upon for us by Simpson Thacher
& Bartlett, New York, New York. Simpson Thacher & Bartlett will rely on local
counsel (who may include members of our legal staff) as to matters of Georgia
law.
EXPERTS
The audited consolidated and combined financial statements and schedules of
Georgia-Pacific Corporation and subsidiaries, Georgia-Pacific Corporation--
Georgia-Pacific Group and Georgia-Pacific Corporation--The Timber Company
incorporated by reference in this prospectus and elsewhere in the registration
statement have been audited by Arthur Andersen LLP, independent public
accountants, as indicated in their reports with respect thereto, and are
incorporated by reference in this prospectus in reliance upon the authority of
said firm as experts in giving said reports.
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PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The Company estimates that expenses, other than underwriting compensation,
in connection with the offerings described in this Registration Statement will
be as follows:
<TABLE>
<S> <C>
Registration fee.............................................. $ 688,050
Trustees' fees and expenses................................... 50,000
Printing and engraving expenses............................... 170,000
Legal fees and expenses....................................... 300,000
Accounting fees and expenses.................................. 25,000
Rating agency fees............................................ 500,000
Blue Sky fees and expenses.................................... 10,000
Miscellaneous................................................. 10,000
----------
Total....................................................... $1,753,050
==========
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Subsection (a) of Section 14-2-851 of the Georgia Business Corporation Code
provides that a corporation may indemnify or obligate itself to indemnify an
individual made a party to a proceeding because he is or was a director against
liability incurred in the proceeding if he acted in a manner he believed in
good faith to be in or not opposed to the best interests of the corporation
and, in the case of any criminal proceeding, he had no reasonable cause to
believe his conduct was unlawful. Subsection (d) of Section 14-2-851 of the
Georgia Business Corporation Code provides that a corporation may not indemnify
a director in connection with a proceeding by or in the right of the
corporation in which the director was adjudged liable to the corporation, or in
connection with any other proceeding in which he was adjudged liable on the
basis that personal benefit was improperly received by him. Notwithstanding the
foregoing, pursuant to Section 14-2-854 a court may order a corporation to
indemnify a director if such court determines the director is fairly and
reasonably entitled to indemnification in view of all the relevant
circumstances, whether or not such director met the standard of conduct set
forth in subsection (a) of Section 14-2-851 of the Georgia Business Corporation
Code or was adjudged liable as described in subsection (d) of Section 14-2-851
of the Georgia Business Corporation Code.
Section 14-2-852 of the Georgia Business Corporation Code provides that to
the extent that a director has been successful, on the merits or otherwise, in
the defense of any proceeding to which he was a party, or in defense of any
claim, issue, or matter therein, because he is or was a director of the
corporation, the corporation shall indemnify the director against reasonable
expenses incurred by him in connection therewith.
Section 14-2-857 of the Georgia Business Corporation Code provides that an
officer of the corporation who is not a director is entitled to mandatory
indemnification under Section 14-2-852 and is entitled to apply for court
ordered indemnification under Section 14-2-854, in each case to the same extent
as a director. In addition, Section 14-2-857 provides that a corporation may
also indemnify an officer, employee or agent who is not a director to the
extent, consistent with public policy, that may be provided by its articles of
incorporation, bylaws, action of its board of directors or contract.
In accordance with Article VI of the Company's Bylaws, every person (and the
heirs and personal representatives of such person) who is or was a director,
officer, employee or agent of the Company, or of any other corporation,
partnership, joint venture, trust or other enterprise in which he served at the
request of the Company, shall be indemnified by the Company against all
liability and expense (including, without limitation, counsel fees and
disbursements, and amounts of judgments, fines, penalties and amounts paid in
settlement by, a director, officer, employee or agent) actually and reasonably
incurred by him in connection with or resulting
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from any threatened, pending or completed claim, action, suit or proceeding,
whether civil, criminal, administrative or investigative or in connection with
any appeal relating thereto, in which he may become involved, as a party or
otherwise, or with which he may be threatened, by reason of his being or having
been a director, officer, employee or agent of the Company or such other
corporation, partnership, joint venture, trust or other enterprise, or by
reason of any action taken or omitted by him in this capacity as such director,
officer, employee or agent whether or not he continues to be such at the time
such liability or expense shall have been incurred. Every such person (and the
heirs and personal representatives of such person), to the extent that such
person has been successful on the merits or otherwise with respect to any such
claim, action, matter, suit or proceeding is entitled to indemnification as of
right for expenses (including attorneys' fees) actually and reasonably incurred
by him in connection therewith. Except as provided in the preceding sentence,
upon receipt of a claim for indemnification under Article VI of the Company's
Bylaws, the Corporation shall proceed as follows: If the claim is made by a
director or officer of the Company, the Board of Directors, by a majority vote
of a quorum consisting of directors who were not parties to the applicable
action, suit or proceeding, shall determine whether the claimant met the
applicable standard of conduct as set forth in subsections (A) or (B) below. If
such quorum is not obtainable or, even if obtainable, a quorum of disinterested
directors so directs, such determination shall be made by independent legal
counsel (who may be the regular inside or outside counsel for the Company) in
written opinion. If such determination has not been made within 90 days after
the claim is asserted, the claimant shall have the right to require that the
determination be submitted to the shareholders at the next regular meeting of
shareholders by vote of a majority of the shares entitled to vote thereon. If a
claim is made by a person who is not a director or officer of the Company, the
Chief Executive Officer and the general counsel of the Company shall determine,
subject to applicable law, the manner in which there shall be made the
determination as to whether the claimant met the applicable standard of conduct
as set forth in subsections (A) and (B) below. In the case of each claim for
indemnification, the Company shall pay the claim to the extent the
determination is favorable to the person making the claim.
(A) In the case of a claim, action, suit or proceeding other than by or
in the right of the Company to procure a judgment in its favor, the
director, officer, employee or agent must have acted in a manner he
reasonably believed to be in or not opposed to the best interests of the
Company, and, in addition, in any criminal action or proceeding, had no
reasonable cause to believe that his conduct was unlawful. In addition, any
director seeking indemnification must not have been adjudged liable on the
basis that any personal benefit was received by him. For the purpose of
this subsection (A), the termination of any claim, action, suit or
proceeding, civil, criminal or administrative, by judgment, order,
settlement (either with or without court approval) or conviction, or upon a
plea of guilty or nolo contendere or its equivalent, shall not create a
presumption that a director, officer, employee or agent did not meet the
standards of conduct set forth in this Subsection.
(B) In the case of a claim, action, suit or proceeding by or in the
right of the Company to procure a judgment in its favor, the director,
officer, employee or agent must have acted in good faith in a manner he
reasonably believed to be in or not opposed to the best interests of the
Company, provided, however, that no indemnification under this subsection
(B) shall be made (1) with regard to any claim, issue or matter as to which
such director, officer, employee or agent shall have been adjudged to be
liable to the Company unless and only to the extent that the court in which
such action or suit was brought shall determine that, despite the
adjudication of liability but in view of all the circumstances of the case,
such director, officer, employee or agent is fairly and reasonably entitled
to indemnity for such expenses which the court shall deem proper, or (2)
for amounts paid, or expenses incurred, in connection with the defense or
settlement of any such claim, action, suit or proceeding, unless a court of
competent jurisdiction has approved indemnification with regard to such
amounts or expenses.
Pursuant to Article VI of the Company's Bylaws, expenses incurred by any
person who is or was a director, officer, employee or agent of the Company with
respect to any claim, action, suit or proceeding of the character described in
the first sentence of the preceding paragraph shall be advanced by the Company
prior to the final disposition thereof upon receipt of an undertaking by or on
behalf of the recipient to repay such
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amount if it shall be ultimately determined that he is not entitled to
indemnification. Indemnification and advancement of expenses pursuant to
Article VI of the Company's Bylaws is not exclusive of any rights to which any
such director, officer, employee or other person may otherwise be entitled by
contract or by law.
The Company carries insurance policies insuring its liability to officers
and directors under the foregoing indemnity and insuring its officers and
directors against liability incurred in their capacity as such.
Any underwriter who may become a party to the proposed form of Underwriting
Agreement, filed as Exhibit 1 to this Registration Statement, will agree to
indemnify the directors of the Company and each officer who signs this
Registration Statement against certain liabilities, including liabilities under
the Securities Act of 1933, to the extent specified therein.
ITEM 16. EXHIBITS
<TABLE>
<C> <S>
1(a) Form of Underwriting Agreement (filed as Exhibit 1 to the Company's
Registration Statement
No. 33-43453 and incorporated herein by this reference thereto).
*1(b) Form of Underwriting Agreement (Georgia-Pacific Group Common Stock).
*1(c) Form of Underwriting Agreement (Preferred Stock).
*1(d) Form of Underwriting Agreement (Warrants).
*1(e) Form of Underwriting Agreement (Stock Purchase Contracts).
*1(f) Form of Underwriting Agreement (Stock Purchase Units).
4(a) Indenture, dated as of March 1, 1983, between Georgia-Pacific
Corporation, The Chase Manhattan Bank (National Association), Trustee,
relating to the Senior Debt Securities (filed as Exhibit 4.4(i) to the
Company's Annual Report on Form 10-K for the year ended December 31,
1996 (File No. 1-3506) and incorporated herein by this reference
thereto).
4(b) 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 Company's Annual Report on Form 10-K for the year ended
December 31, 1996 (File No. 1-3506), and incorporated herein by this
reference thereto).
4(c) Agreement of Resignation, Appointment and Acceptance dated as of January
31, 1992 by and among Georgia-Pacific Corporation, Morgan Guaranty Trust
Company of New York and The Bank of New York, as Successor Trustee
(filed as Exhibit 4.4(iii) to the Company's Annual Report on Form 10-K
for the year ended December 31, 1996, File No. 1-3506, and incorporated
herein by this reference thereto.)
4(d) Form of Senior Debt Securities (included in Article Two of Exhibit
4(a)).
4(e) Credit Agreement, dated as of December 23, 1996, 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 Company's Annual Report on Form 10-K for the year ended
December 31, 1996 (File No. 1-3506), and incorporated herein by this
reference thereto).
4(f) 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
Company 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 Company. The Company hereby agrees to furnish a copy of
any such instrument to the Commission upon request.
4(g) Form of Indenture between Georgia-Pacific Corporation and The Bank of
New York, as Trustee, relating to the Subordinated Debt Securities.
4(h) Form of Subordinated Debt Securities (included in Article Two of Exhibit
4(g)).
*4(i) Form of Articles Supplementary relating to each series of Preferred
Stock (to be filed in connection with the offering of each series of
Preferred Stock).
</TABLE>
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<TABLE>
<C> <S>
*4(j) Form of Preferred Stock share certificate.
*4(k) Form of Articles Supplementary relating to each series of Junior
Preferred Stock (to be filed in connection with the offering of each
series of Junior Preferred Stock).
*4(l) Form of Junior Preferred Stock share certificate.
4(m) Form of Georgia-Pacific Corporation--Georgia-Pacific Group Common
Stock share certificate (filed as Exhibit 4 to the Company's
Registration Statement on Form 8-A relating to File No. 333-35813,
and incorporated herein by this reference thereto).
4(n) Form of Georgia-Pacific Corporation--Timber Group Common Stock share
certificate (filed as Exhibit 5 to the Company's Registration
Statement on Form 8-A relating to File No. 333-35813, and
incorporated herein by this reference thereto).
*4(o) Form of Warrant Agreement.
*4(p) Form of Purchase Contract Agreement relating to Stock Purchase
Contracts and Stock Purchase Units.
*4(q) Form of Pledge Agreement for Stock Purchase Contracts and Stock
Purchase Units.
4(r) Restated Articles of Incorporation of the Company (filed as Exhibit
3.2 to the Company's Registration Statement on Form S-4 (File No.
333-35813), and incorporated herein by this reference thereto).
4(s) Bylaws of the Company (filed as Exhibit 3.2 to the Company's
Quarterly Report on Form 10-Q for the quarter ended April 3, 1999
(File No. 1-3506), and incorporated herein by this reference
thereto).
4(t) Restated Rights Agreement, dated as of December 16, 1997, between
Georgia-Pacific Corporation and First Chicago Trust Company of New
York, with Form of Georgia-Pacific Group Rights Certificate attached
as Exhibit A-1, Form of Timber Group Rights Certificate attached as
Exhibit A-2, Series B Junior Preferred Stock Designation attached as
Exhibit B-1 and Series C Junior Preferred Stock Designation attached
as Exhibit B-2 (filed as Exhibit 8 to the Company's Registration
Statement on Form 8-A relating to File No. 333-35813, and
incorporated by reference thereto).
** (5) Opinion of Simpson Thacher & Bartlett, as to validity of the
securities.
(12) Statement re: Computation of Ratio of Earnings to Fixed Charges.
(23)(a) Consent of Arthur Andersen LLP.
**(23)(b) Consent of Simpson Thacher & Bartlett (included in exhibit 5).
(24) Powers of Attorney included in signature page.
(25) Statement of Eligibility on Form T-1 under the Trust Indenture Act
of 1939, as amended, of The Bank of New York (incorporated by
reference to exhibit 4.4(iii) from the Registrant's Annual Report on
Form 10-K for the year ended December 31, 1996 (Commission File No.
1-3506) filed with the Securities and Exchange Commission).
</TABLE>
- --------
* To be filed subsequent to the effectiveness of this Registration Statement
by an amendment to the Registration Statement or incorporated by reference
pursuant to a Current Report on Form 8-K in connection with the offering of
Securities.
** To be filed by amendment.
ITEM 17. UNDERTAKINGS.
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made
of the securities registered hereby, a post-effective amendment to this
registration statement to:
(i) include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933, as amended (the "Securities Act");
II-4
<PAGE>
(ii) reflect in the prospectus any facts or events arising after the
effective date of the registration statement (or the most recent post-
effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the
registration statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum offering
range may be reflected in the form of prospectus filed with the
Commission pursuant to Rule 424(b) if, in the aggregate, the changes in
volume and price represent no more than 20 percent change in the
maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration statement.
(iii) include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or
any material change to such information in the registration statement;
provided, however, that paragraphs (1)(i) and (1)(ii) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the registrant pursuant to
Section 13 or Section 15(d) of the Securities Exchange Act of 1934, as amended
(the "Exchange Act") that are incorporated by reference in this registration
statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a
new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act (and, where applicable, each filing of an employee benefit plan's
annual report pursuant to Section 15(d) of the Exchange Act) that is
incorporated by reference in the registration statement shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
registrant pursuant to the provisions described under Item 15, or otherwise,
the registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
II-5
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
Registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-3 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Atlanta, State of Georgia, on June
15, 1999.
GEORGIA-PACIFIC CORPORATION
By: /s/ John F. McGovern
-----------------------------------
John F. McGovern
Executive Vice President--Finance
and
Chief Financial Officer
The undersigned Directors and Officers of Georgia-Pacific Corporation
hereby appoint A.D. Correll, James F. Kelley and Kenneth F. Khoury, and each
of them, as attorneys-in-fact for the undersigned, with full power of
substitution and resubstitution for, and in the name, place and stead of the
undersigned, to sign and file with the Securities and Exchange Commission
under the Securities Act of 1933, as amended, any and all amendments
(including post-effective amendments) and exhibits to this Registration
Statement and any and all applications and other documents to be filed with
the Securities and Exchange Commission pertaining to the registration of the
securities covered hereby, with full power and authority to do and perform
each and every act and thing requisite and necessary or desirable, hereby
ratifying and confirming all that said attorneys-in-fact, or either of them,
or their substitute or substitutes, may lawfully do or cause to be done by
virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-3 has been signed by the following persons in
the capacities indicated.
Signature Title Date
/s/ A.D. Correll Director, Chairman, Chief June 15, 1999
- --------------------------------- Executive Officer and
A.D. Correll President (principal
executive officer)
/s/ John F. McGovern Executive Vice President-- June 15, 1999
- --------------------------------- Finance and Chief
John F. McGovern Financial Officer
(principal financial
officer)
/s/ James E. Terrell Vice President and June 15, 1999
- --------------------------------- Controller (principal
James E. Terrell accounting officer)
/s/ * Director June 15, 1999
- ---------------------------------
James S. Balloun
/s/ * Director June 15, 1999
- ---------------------------------
Robert Carswell
/s/ * Director June 15, 1999
- ---------------------------------
Jane Evans
/s/ * Director June 15, 1999
- ---------------------------------
Donald V. Fites
II-6
<PAGE>
Signature Title Date
/s/ * Director June 15, 1999
- ---------------------------------
Harvey C. Fruehauf, Jr.
/s/ * Director June 15, 1999
- ---------------------------------
Richard V. Giordana
/s/ * Director June 15, 1999
- ---------------------------------
David R. Goode
/s/ * Director June 15, 1999
- ---------------------------------
M. Douglas Ivester
/s/ * Director June 15, 1999
- ---------------------------------
Louis W. Sullivan
/s/ * Director June 15, 1999
- ---------------------------------
Janes B. Williams
By: /s/ * Director June 15, 1999
- ---------------------------------
James F. Kelley
As Attorney-in-Fact for the
Directors or Officers by whose
names an asterisk appears.
II-7
<PAGE>
EXHIBIT 4(g)
================================================================================
GEORGIA-PACIFIC CORPORATION
and
THE BANK OF NEW YORK,
Trustee
---------------
INDENTURE
Dated as of June __, 1999
---------------
Providing for the issuance of
subordinated debt securities in series
================================================================================
<PAGE>
GEORGIA-PACIFIC CORPORATION
Reconciliation and tie between Trust Indenture Act of 1939 and
Indenture dated as of June __, 1999
Trust Indenture Indenture
Act Section Section
Section 310(a)(1).................................. 609
(a)(2)................................ 609
(a)(3)................................ Not Applicable
(a)(4)................................ Not Applicable
(b) ............................... 608, 610
Section 311(a) ............................... 613
(b) ............................... 613
Section 312(a) ............................... 701, 702(a)
(b) ............................... 702(b)
(c) ............................... 702(c)
Section 313(a) ............................... 703(a)
(b) ............................... 703(b)
(c) ............................... 703(a), 703(b)
(d) ............................... 703(c)
Section 314(a) ............................... 704
(b) ............................... Not Applicable
(c)(1)................................ 102
(c)(2)................................ 102
(c)(3)................................ Not Applicable
(d) ............................... Not Applicable
(e) ............................... 102
Section 315(a) ............................... 601(a)
(b) ............................... 602
(c) ............................... 601(b)
(d) ............................... 601(c)
(d)(1)................................ 601(a)(1)
(d)(2)................................ 601(c)(2)
(d)(3)................................ 601(c)(3)
(e) ............................... 514
Section 316(a) ............................... 101
(a)(1)(A)............................. 502, 513
(a)(1)(B)............................. 513
(a)(2)................................ Not Applicable
(b) ............................... 508
Section 317(a)(1).................................. 503
(a)(2)................................ 504
(b) ............................... 1003
Section 318(a) ............................... 107
- -------------
NOTE: This reconciliation and tie shall not, for any purpose, be deemed to be a
part of the Indenture.
<PAGE>
TABLE OF CONTENTS
Page
----
Parties ........................................................ 1
Recitals of the Company.......................................... 1
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION............1
Section 101. Definitions..........................................1
Act..............................................1
Additional Senior Obligations....................2
Affiliate........................................2
control..........................................2
Authenticating Agent.............................2
Board of Directors...............................2
Board Resolution.................................2
Book-Entry Security..............................2
Business Day.....................................2
Closing Price....................................2
Commission.......................................3
Company..........................................3
"Company Request" or "Company Order".............3
Conversion Agent.................................3
Conversion Price.................................3
Corporate Trust Office...........................3
corporation......................................3
Covenant Defeasance..............................3
Current Market Price.............................4
Defaulted Interest...............................4
Defeasance.......................................4
Depositary.......................................4
Event of Default.................................4
Holder...........................................4
Indenture........................................4
interest.........................................4
Interest Payment Date............................4
Investments in Unrestricted Subsidiaries.........4
Net Tangible Assets..............................4
Maturity.........................................5
Officers' Certificate............................5
Opinion of Counsel...............................5
Original Issue Discount Security.................5
Outstanding......................................5
Paying Agent.....................................6
Person...........................................6
Place of Payment.................................6
Predecessor Security.............................6
Principal Property...............................6
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<PAGE>
Ranking Junior to the Securities...................6
Ranking on a Parity with the Securities............7
Redemption Date....................................7
Redemption Price...................................7
Regular Record Date................................7
Responsible Officer................................7
Securities.........................................7
"Security Register," "Security Registrar" and
"Co-Security Registrar"...........................7
Senior Indebtedness................................7
Special Record Date................................7
Stated Maturity....................................8
Subsidiary.........................................8
Trading Day........................................8
Trustee............................................8
Trust Indenture Act................................8
U.S. Government Obligations........................8
Value..............................................8
Vice President.....................................8
Voting Stock.......................................8
Section 102. Compliance Certificates and Opinions...................8
Section 103. Form of Documents Delivered to Trustee.................9
Section 104. Acts of Holders.......................................10
Section 105. Notices, Etc., to Trustee and Company.................10
Section 106. Notice to Holders; Waiver.............................11
Section 107. Conflict With Trust Indenture Act.....................11
Section 108. Effect of Headings and Table of Contents..............11
Section 109. Successors and Assigns................................11
Section 110. Separability Clause...................................11
Section 111. Benefits of Indenture.................................11
Section 112. Governing Law.........................................12
Section 113. Legal Holidays........................................12
ARTICLE TWO
SECURITY FORMS......................................................12
Section 201. Forms Generally.......................................12
Section 202. Form of Face of Security..............................12
Section 203. Form of Reverse of Security...........................16
Section 204. Form of Trustee's Certificate of Authentication.......19
Section 205. Issuance of Book-Entry Securities.....................19
ARTICLE THREE
THE SECURITIES......................................................20
Section 301. Amount Unlimited; Issuable in Series..................20
Section 302. Denominations.........................................22
Section 303. Execution, Authentication, Delivery and Dating........22
Section 304. Temporary Securities..................................23
Section 305. Registration, Registration of Transfer and Exchange...23
-ii-
<PAGE>
Section 306. Mutilated, Destroyed, Lost and Stolen Securities......25
Section 307. Payment of Interest; Interest Rights Preserved........26
Section 308. Persons Deemed Owners.................................27
Section 309. Cancellation..........................................27
Section 310. Computation of Interest...............................27
Section 311. Regarding Beneficial Ownership Interests in
Book-Entry Securities................................28
ARTICLE FOUR
SATISFACTION AND DISCHARGE..........................................28
Section 401. Satisfaction and Discharge of Indenture...............28
Section 402. Defeasance and Discharge..............................29
Section 403. Covenant Defeasance...................................29
Section 404. Conditions to Defeasance or Covenant Defeasance.......30
Section 405. Deposited Money and U.S. Government Obligations to Be
Held in Trust; Other Miscellaneous Provisions........31
ARTICLE FIVE
REMEDIES............................................................31
Section 501. Events of Default.....................................31
Section 502. Acceleration of Maturity; Rescission and Annulment....32
Section 503. Collection of Indebtedness and Suits for
Enforcement by Trustee...............................33
Section 504. Trustee May File Proofs of Claim......................34
Section 505. Trustee May Enforce Claims Without Possession of
Securities...........................................34
Section 506. Application of Money Collected........................34
Section 507. Limitation on Suits...................................35
Section 508. Unconditional Right of Holders to Receive Principal,
Premium and Interest.................................35
Section 509. Restoration of Rights and Remedies....................36
Section 510. Rights and Remedies Cumulative........................36
Section 511. Delay or Omission Not Waiver..........................36
Section 512. Control by Holders....................................36
Section 513. Waiver of Past Defaults...............................36
Section 514. Undertaking for Costs.................................37
Section 515. Waiver of Stay or Extension Laws......................37
ARTICLE SIX
THE TRUSTEE.........................................................37
Section 601. Certain Duties and Responsibilities...................37
Section 602. Notice of Defaults....................................38
Section 604. Not Responsible for Recitals or Issuance of
Securities...........................................40
Section 605. May Hold Securities...................................40
Section 606. Money Held in Trust...................................40
Section 607. Compensation and Reimbursement........................40
Section 608. Disqualification; Conflicting Interests...............41
Section 609. Corporate Trustee Required; Eligibility...............41
Section 610. Resignation and Removal; Appointment of Successor.....41
-iii-
<PAGE>
Section 611. Acceptance of Appointment by Successor.................43
Section 612. Merger, Conversion, Consolidation or Succession to
Business..............................................44
Section 613. Preferential Collection of Claims Against Company......44
Section 614. Appointment of Authenticating Agent....................44
ARTICLE SEVEN
LISTS OF HOLDERS AND REPORTS BY TRUSTEE AND COMPANY..................46
Section 701. Company to Furnish Trustee Names and Addresses of
Holders...............................................46
Section 702. Preservation of Information; Communications to
Holders...............................................46
Section 703. Reports by Trustee.....................................46
Section 704. Reports by Company.....................................47
ARTICLE EIGHT
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE.................47
Section 801. Company May Consolidate, Etc. Only on Certain Terms....47
Section 802. Securities to Be Secured in Certain Events.............47
Section 803. Successor Corporation Substituted......................48
Section 804. Assumption by Subsidiary of Company's Obligations......48
ARTICLE NINE
SUPPLEMENTAL INDENTURES..............................................49
Section 901. Supplemental Indentures Without Consent of Holders.....49
Section 902. Supplemental Indentures With Consent of Holders........50
Section 903. Execution of Supplemental Indentures...................51
Section 904. Effect of Supplemental Indentures......................51
Section 905. Conformity With Trust Indenture Act....................52
Section 906. Reference in Securities to Supplemental Indentures.....52
ARTICLE TEN
COVENANTS............................................................52
Section 1001. Payment of Principal, Premium and Interest............52
Section 1002. Maintenance of Office or Agency.......................52
Section 1003. Money for Securities Payments to be Held in Trust.....53
Section 1004. Limitation on Liens...................................54
Section 1005. Limitation on Sale and Lease-Back.....................56
Section 1006. Exemption from Limitation on Liens and Sale and
Lease-Back...........................................56
Section 1007. Statement by Officers as to Default...................57
Section 1008. Waiver of Certain Covenants...........................57
Section 1009. Applicability of Covenants............................57
-iv-
<PAGE>
ARTICLE ELEVEN
REDEMPTION OF SECURITIES.............................................57
Section 1101. Applicability of Article..............................57
Section 1102. Election to Redeem; Notice to Trustee.................57
Section 1103. Selection by Trustee of Securities to be Redeemed.....58
Section 1104. Notice of Redemption..................................58
Section 1105. Deposit of Redemption Price...........................59
Section 1106. Securities Payable on Redemption Date.................59
Section 1107. Securities Redeemed in Part...........................59
ARTICLE TWELVE
SINKING FUNDS........................................................59
Section 1201. Applicability of Article..............................59
Section 1202. Satisfaction of Sinking Fund Payments With
Securities...........................................60
Section 1203. Redemption of Securities for Sinking Fund.............60
ARTICLE THIRTEEN
SUBORDINATION OF SECURITIES..........................................60
Section 1301. Agreement to Subordinate..............................60
Section 1302. Obligation of the Company Unconditional...............62
Section 1303. Notice to Trustee of Facts Prohibiting Payment........62
Section 1304. Application by Trustee of Moneys Deposited With It....63
Section 1305. Subrogation to Rights of Holders of Senior
Indebtedness and Additional Senior Obligations.......63
Section 1306. Subordination Rights Not Impaired by Acts or Omissions
of Company, Holders of Senior Indebtedness or Holders
of Additional Senior Obligations....................63
Section 1307. Authorization of Trustee to Effectuate Subordination
of Securities........................................64
Section 1308. Right of Trustee to Hold Senior Indebtedness and
Additional Senior Obligations........................64
Section 1309. Article Thirteen Not to Prevent Events of Default.....64
Section 1310. Article Applicable to Paying Agents...................64
Section 1311. Reliance on Judicial Order or Certificate of
Liquidating Agent....................................64
Section 1312. Trustee Not Fiduciary for Holders of Senior
Indebtedness or Holders of Additional Senior
Obligations.........................................65
Section 1313. Payment Permitted If No Default.......................65
ARTICLE FOURTEEN
HOLDERS' MEETINGS....................................................65
Section 1401. Purposes for Which Meetings May be Called.............65
Section 1402. Manner of Calling Meetings............................66
Section 1403. Call of Meetings by Company or Holders................66
Section 1404. Who May Attend and Vote at Meetings...................66
Section 1405. Regulations May be Made by Trustee....................66
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<PAGE>
Section 1406. Evidence of Actions by Holders........................67
Section 1407. Exercise of Rights of Trustee and
Holders Not to be Hindered or Delayed................67
ARTICLE FIFTEEN
CONVERSION...........................................................67
Section 1501. Applicability; Conversion Privilege...................67
Section 1502. Conversion Procedure; Conversion Price;
Fractional Shares....................................67
Section 1503. Adjustment of Conversion Price for Georgia-Pacific
Group Stock or Timber Stock..........................68
Section 1504. Consolidation or Merger of the Company................71
Section 1505. Notice of Adjustment..................................71
Section 1506. Notice in Certain Events..............................72
Section 1507. Company To Reserve Stock; Registration; Listing.......72
Section 1508. Taxes on Conversion...................................73
Section 1509. Conversion After Record Date..........................73
Section 1510. Company Determination Final...........................74
Section 1511. Trustee's Disclaimer..................................74
-vi-
<PAGE>
INDENTURE, dated as of June __, 1999, between GEORGIA-PACIFIC
CORPORATION, a corporation duly organized and existing under the laws of the
State of Georgia (herein called the "Company"), having its principal office at
133 Peachtree Street, N.E., Atlanta, Georgia 30303, and The Bank of New York, a
New York State banking corporation, as Trustee (herein called the "Trustee").
RECITALS OF THE COMPANY
The Company has duly authorized the execution and delivery of this
Indenture to provide for the issuance from time to time of its unsecured
subordinated debentures, notes or other evidences of indebtedness (herein called
the "Securities"), to be issued in one or more series as provided in this
Indenture.
All things necessary to make this Indenture a valid agreement of the
Company, in accordance with its terms, have been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the
Securities by the Holders thereof, it is mutually covenanted and agreed, for the
equal and proportionate benefit of all Holders of the Securities or of any
series thereof, as follows:
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
Section 101. Definitions.
-----------
For all purposes of this Indenture, except as otherwise expressly
provided or unless the context otherwise requires:
(1) the terms defined in this Article have the meanings assigned to
them in this Article and include the plural as well as the singular;
(2) all other terms used herein which are defined in the Trust
Indenture Act, either directly or by reference therein, have the meanings
assigned to them therein;
(3) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted accounting
principles and, except as otherwise expressly provided herein, the term
"generally accepted accounting principles" with respect to any computation
required or permitted hereunder shall mean such accounting principles as
are generally accepted at the date of such computation; and
(4) the words "herein", "hereof" and "hereunder" and other words of
similar import refer to this Indenture as a whole and not to any particular
Article, Section or other subdivision.
"Act," when used with respect to any Holder, has the meaning
specified in Section 104.
<PAGE>
2
"Additional Senior Obligations" means all indebtedness of the Company
for claims in respect of derivative products such as interest and foreign
exchange rate contracts, commodity contracts and similar arrangements, whether
outstanding on the date of execution of this Indenture or thereafter created,
assumed or incurred; provided, however, that Additional Senior Obligations shall
not include claims in respect of Senior Indebtedness or any obligation (i)
Ranking Junior to the Securities or (ii) Ranking on a Parity with the
Securities. For purposes of this definition, "claim" shall have the meaning
assigned thereto in Section 101(4) of the United States Bankruptcy Code of 1978,
as amended, and in effect on the date of execution of this Indenture.
"Affiliate" of any specified Person means any other Person directly
or indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition, "
control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Authenticating Agent" means any Person authorized by the Trustee to
act on behalf of the Trustee to authenticate Securities.
"Board of Directors" means either the board of directors of the
Company, any duly authorized committee of that board or any officer of the
Company duly authorized by the board of directors of the Company or a duly
authorized committee of that board to take a specified action or make a
specified determination (the authorization of such offices being evidenced by a
copy of a resolution certified by the Secretary or an Assistant Secretary of the
Company to have been duly adopted by the board of directors of the Company or a
duly authorized committee of that board and to be in full force and effect on
the date of such certification and delivered to the Trustee).
"Board Resolution" means a copy of the resolution or action certified
by the Secretary or an Assistant Secretary of the Company to have been duly
adopted or taken by the Board of Directors and to be in full force and effect on
the date of such certification, and delivered to the Trustee.
"Book-Entry Security" means a Security in the form prescribed in
Section 205 evidencing all or part of a series of Securities, issued to the
Depositary for such series or its nominee and registered in the name of such
Depositary or its nominee.
"Business Day", when used with respect to any Place of Payment, means
each Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on which
banking institutions in that Place of Payment are generally authorized or
obligated by law to close.
"Closing Price" of the Georgia-Pacific Group Stock or the Timber
Stock, as applicable, means the last reported sale price of such stock (regular
way) as shown on the Composite Tape of the New York Stock Exchange (or, if such
stock is not listed or admitted to trading on the New York Stock Exchange, on
the principal national securities exchange on which such stock is listed or
admitted to trading), or, in case no such sale takes place on such day, the
average of the closing bid and asked prices on the New York Stock Exchange (or,
if such stock is not listed or admitted to trading on the New York Stock
Exchange, on the principal national securities exchange on which such stock is
listed or admitted to trading), or, if it is not listed or admitted to trading
on any national securities exchange, the last reported sale price of such stock
as reported by the National Association of Securities Dealers Automated
Quotation System (NASDAQ), or in case no such sale takes place on such day, the
average of the closing bid and asked prices as reported by NASDAQ, or if such
stock is not so reported, the average of
<PAGE>
3
the closing bid and asked prices as furnished by any member of the National
Association of Securities Dealers, Inc., selected from time to time by the
Company for that purpose.
"Commission" means the Securities and Exchange Commission, as from
time to time constituted, created under the Securities Exchange Act of 1934, as
amended, or, if at any time after the execution of this instrument such
Commission is not existing and performing the duties now assigned to it under
the Trust Indenture Act, then the body performing such duties at such time.
"Company" means the Person named as the "Company" in the first
paragraph of this instrument until a successor corporation shall have become
such pursuant to the applicable provisions of this Indenture, and thereafter,
"Company" shall mean such successor corporation.
"Company Request" or "Company Order" means a written request or order
signed in the name of the Company by its Chairman of the Board, its President, a
Vice Chairman or a Vice President, and by its Treasurer, an Assistant Treasurer,
its Comptroller, an Assistant Comptroller, its Secretary or an Assistant
Secretary, and delivered to the Trustee.
"Conversion Agent" means any Person authorized by the Company to
receive Securities to be converted into Georgia-Pacific Group Stock or Timber
Stock, as applicable, on behalf of the Company. The Company initially
authorizes the Trustee to act as Conversion Agent for the Securities on its
behalf. The Company may at any time and from time to time authorize one or more
Persons to act as Conversion Agent in addition to or in place of the Trustee
with respect to any series of Securities issued under this Indenture.
"Conversion Price" means, with respect to any series of Securities
which are convertible into Georgia-Pacific Group Stock or Timber Stock, as
applicable, the price per share of such stock at which the Securities of such
series are so convertible, as specified pursuant to Section 301 with respect to
such series, as such price may be adjusted from time to time in accordance with
Section 1503.
"Corporate Trust Office" means the office of the Trustee at which at
any particular time its corporate trust business shall be principally
administered, which office at the date of execution of this Indenture is located
at _______________________, Attention:_____________________; except, that,
with respect to presentation of Securities for registration of transfer and
exchange, and the location of the Securities Register, such term means the
office or agency of the Security Registrar in said Borough, at which at any
particular time its corporate agency business shall be conducted.
"corporation" includes corporations, associations, companies and
business trusts.
"Covenant Defeasance" has the meaning specified in Section 403.
"Current Market Price" on any date means the average of the daily
Closing Prices per share of Georgia-Pacific Group Stock or Timber Stock, as
applicable, for any thirty (30) consecutive Trading Days selected by the Company
prior to the date in question, which thirty (30) consecutive Trading Day period
shall not commence more than forty-five (45) Trading Days prior to the day in
question; provided that with respect to Section 1503(3), the "Current Market
Price" of the Georgia-Pacific Group Stock or Timber Stock, as applicable, shall
mean the average of the daily Closing Prices
<PAGE>
4
per share of such stock for the five (5) consecutive Trading Days ending on the
date of the distribution referred to in Section 1503(3) (or if such date shall
not be a Trading Day, on the Trading Day immediately preceding such date).
"Defaulted Interest" has the meaning specified in Section 307.
"Defeasance" has the meaning specified in Section 402.
"Depositary" means, with respect to the Securities of any series
issuable or issued in the form of a Book-Entry Security, the Person designated
as Depositary by the Company pursuant to Section 301 until a successor
Depositary shall have been appointed pursuant to Section 305, and thereafter
"Depositary" shall mean or include each Person who is then a Depositary
hereunder, and if at any time there is more than one such Person, "Depositary"
as used with respect to the Securities of any such series shall mean the
Depositary with respect to the Securities of that series.
"Event of Default" has the meaning specified in Section 501.
"Georgia-Pacific Group Stock" means the Georgia-Pacific Group class of
common stock, par value $.80 per share, of the Company authorized at the date of
this Indenture as originally signed.
"Holder" means a Person in whose name a Security is registered in the
Security Register.
"Indenture" means this instrument as originally executed or as it may
from time to time be supplemented or amended by one or more indentures
supplemental hereto entered into pursuant to the applicable provisions hereof
and shall include the terms of particular series of Securities established as
contemplated by Section 301.
"interest", when used with respect to an Original Issue Discount
Security which by its terms bears interest only after Maturity, means interest
payable after Maturity.
"Interest Payment Date", when used with respect to any Security,
means the Stated Maturity of an installment of interest on such Security.
"Investments in Unrestricted Subsidiaries" means Investments made by
the Company or by any Restricted Subsidiary in Unrestricted Subsidiaries, net of
Investments made by Unrestricted Subsidiaries in the Company or any Restricted
Subsidiary. If any corporation which becomes a Restricted Subsidiary after the
date of this Indenture shall, at the time it becomes a Restricted Subsidiary,
have any Investments in an Unrestricted Subsidiary, such Investments shall be
deemed to be Investments made by the Company in such Unrestricted Subsidiary at
the time such corporation becomes a Restricted Subsidiary, in the amount at
which such Investments are then carried on the books of such corporation. If any
corporation shall become an Unrestricted Subsidiary after the date of this
Indenture, the Investments of the Company and its Restricted Subsidiaries in
such corporation shall be deemed to be Investments made at the time such
corporation becomes an Unrestricted Subsidiary, in the amount at which such
Investments are then carried on the books of the Company and its Restricted
Subsidiaries.
"Net Tangible Assets" means, at any date, the aggregate amount of
assets (less applicable reserves and other properly deductible items) after
deducting therefrom (a) all current liabilities, (b) any item representing
Investments in Unrestricted Subsidiaries and (c) all goodwill, trade names,
trademarks, patents, unamortized debt discount and expense and other like
intangibles, all of the foregoing as set
<PAGE>
5
forth on the then most recent consolidated balance sheet of the Company and its
Subsidiaries and computed in accordance with generally accepted accounting
principles.
"Maturity", when used with respect to any Security, means the date on
which the principal of such Security or an instalment of principal becomes due
and payable as therein or herein provided, whether at the Stated Maturity or by
declaration of acceleration, call for redemption or otherwise.
"Officers' Certificate" means a certificate signed by the Chairman of
the Board, the President, a Vice Chairman or a Vice President, and by the
Treasurer, an Assistant Treasurer, the Comptroller, an Assistant Comptroller,
the Secretary or an Assistant Secretary of the Company, or a Subsidiary, as the
case may be, and delivered to the Trustee.
"Opinion of Counsel" means a written opinion of counsel, who may be
an employee of or counsel for the Company, or who may be other counsel
satisfactory to the Trustee.
"Original Issue Discount Security" means any Security which provides
for an amount less than the principal amount thereof to be due and payable upon
a declaration of acceleration of the Maturity thereof pursuant to Section 502.
"Outstanding", when used with respect to Securities, means, as of the
date of determination, all Securities theretofore authenticated and delivered
under this Indenture, except:
(i) Securities theretofore cancelled by the Trustee or
delivered to the Trustee for cancellation;
(ii) Securities for whose payment or redemption money in the
necessary amount has been theretofore deposited with the Trustee or any
Paying Agent (other than the Company) in trust or set aside and segregated
in trust by the Company (if the Company shall act as its own Paying Agent)
for the Holders of such Securities; provided, that if such Securities are
to be redeemed, notice of such redemption has been duly given pursuant to
this Indenture or provision therefor satisfactory to the Trustee has been
made; and
(iii) Securities which have been paid pursuant to Section 306 or
in exchange for or in lieu of which other Securities have been
authenticated and delivered pursuant to this Indenture, other than any such
Securities in respect of which there shall have been presented to the
Trustee proof satisfactory to it that such Securities are held by a bona
fide purchaser in whose hands such Securities are valid obligations of the
Company;
provided, however, that in determining whether the Holders of the requisite
principal amount of the Outstanding Securities have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, (i) the principal
amount of an Original Issue Discount Security that shall be deemed to be
Outstanding shall be the amount of the principal thereof that would be due and
payable as of the date of such determination upon acceleration of the Maturity
thereof pursuant to Section 502; (ii) the principal amount of a Security
denominated in a foreign currency or currencies shall be the U.S. dollar
equivalent, determined on the date of original issuance of such Security, of the
principal amount (or, in the case of an Original Issue Discount Security, the
U.S. dollar equivalent on the date of original issuance of such Security of the
amount determined as provided in (i) above) of such Security; and (iii)
Securities owned by or held for the account of the Company or any other obligor
upon the Securities or any Affiliate of the
<PAGE>
6
Company or of such other obligor shall be disregarded and deemed not to be
Outstanding, except that, in determining whether the Trustee shall be protected
in relying upon any such request, demand, authorization, direction, notice,
consent or waiver, only Securities which a Responsible Officer of the Trustee
actually knows to be so owned shall be so disregarded. Securities so owned or so
held which have been pledged in good faith may be regarded as Outstanding if the
pledgee establishes to the satisfaction of the Trustee the pledgee's right so to
act with respect to such Securities and that the pledgee is not the Company or
any other obligor upon the Securities or any Affiliate of the Company or of such
other obligor. Upon request of the Trustee, the Company shall furnish to the
Trustee promptly an Officers' Certificate listing and identifying all
Securities, if any, known by the Company to be owned by or held for the account
of the Company or any other obligor upon the Securities, or any Affiliate of the
Company or of such obligor and the Trustee shall be entitled to accept such
Officers' Certificate as conclusive evidence of the facts therein set forth and
of the fact that all Securities not listed therein and not otherwise excluded
from the provisions hereof are Outstanding for the purposes of any such
determination.
"Paying Agent" means any Person authorized by the Company to pay the
principal of (and premium, if any) or interest on any Securities on behalf of
the Company.
"Person" means any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
"Place of Payment," when used with respect to the Securities of any
series, means the place or places where the principal of (and premium, if any)
and interest on the Securities of that series are payable as specified as
contemplated by Section 301.
"Predecessor Security" of any particular Security means every
previous Security evidencing all or a portion of the same debt as that evidenced
by such particular Security; and, for the purposes of this definition, any
Security authenticated and delivered under Section 306 in exchange for or in
lieu of a mutilated, destroyed, lost or stolen Security shall be deemed to
evidence the same debt as the mutilated, destroyed, lost or stolen Security.
"Principal Property" means any mill, manufacturing plant,
manufacturing facility or timberlands, owned by the Company and/or one or more
Restricted Subsidiaries and located within the continental United States of
America; provided that the term "Principal Property" shall not include: (a) any
such mill, plant, facility or timberlands or portion thereof (i) which is
financed by obligations issued by a State, a Territory or a possession of the
United States of America, or any political subdivision of any of the foregoing,
or the District of Columbia, the interest on which is excludable from gross
income of the holders thereof pursuant to the provisions of Section 103 (a)(1)
(but only if by reason of section 103(b)(4)(E) or (F)) of the Internal Revenue
Code of 1986, as amended (or any successor to such provision), as in effect at
the time of the issuance of such obligations, or (ii) which in the opinion of
the Board of Directors is not of material importance to the total business
conducted by the Company and its Restricted Subsidiaries, considered as a whole;
(b) any timberlands designated by the Company's Board of Directors as being held
primarily for development and or sale rather than for the production of timber;
or (c) any minerals or mineral rights.
"Ranking Junior to the Securities", when used with respect to any
obligation of the Company, means any obligation of the Company which (a) ranks
junior to and not equally with or prior to the Securities in right of payment
upon the happening of any event of the kind specified in the first
<PAGE>
7
sentence of the first paragraph of Section 1301 and (b) is specifically
designated as ranking junior to the Securities by express provisions in the
instrument creating or evidencing such obligation.
"Ranking on a Parity with the Securities", when used with respect to
any obligation of the Company, means any obligation of the Company which (a)
ranks equally with and not prior to the Securities in right of payment upon the
happening of any event of the kind specified in the first sentence of the first
paragraph of Section 1301 and (b) is specifically designated as ranking on a
parity with the Securities by express provisions in the instrument creating or
evidencing such obligation. The securing of any obligations of the Company,
otherwise Ranking on a Parity with the Securities or Ranking Junior to the
Securities, is not deemed to prevent such obligations from constituting
obligations Ranking on a Parity with the Securities or Ranking Junior to the
Securities.
"Redemption Date", when used with respect to any Security to be
redeemed, means the date fixed for such redemption by or pursuant to this
Indenture.
"Redemption Price", when used with respect to any Security to be
redeemed, means the price at which it is to be redeemed pursuant to this
Indenture.
"Regular Record Date" for the interest payable on any Interest
Payment Date on the Securities of any series means the date specified for that
purpose as contemplated by Section 301.
"Responsible Officer", when used with respect to the Trustee, means
the chairman of the trust committee, any vice president, secretary, assistant
secretary, managing director, treasurer or any other officer of the Trustee
customarily performing functions similar to those performed by any of the above
designated officers and also, with respect to any particular matter, any other
officer to whom such matter is referred because of such officer's knowledge of
and familiarity with the particular subject.
"Restricted Subsidiary" means any Subsidiary (i) substantially all of
the property of which is located within the continental United States of America
and (ii) which itself, or with the Company and/or one or more other Restricted
Subsidiaries, owns a Principal Property.
"Securities" has the meaning stated in the first recital of this
Indenture and more particularly means any Securities authenticated and delivered
under this Indenture.
"Security Register", "Security Registrar" and "Co-Security Registrar"
have the respective meanings specified in Section 305.
"Senior Indebtedness" means (a) all indebtedness of the Company for
money borrowed, whether outstanding on the date of execution of this Indenture
or thereafter created, assumed or incurred except (i) the Securities, (ii) any
obligation Ranking on a Parity with the Securities or (iii) any obligation
Ranking Junior to the Securities and (b) any deferrals, renewals or extensions
of any such Senior Indebtedness. As used in the preceding sentence, the term
"indebtedness of the Company for money borrowed" shall mean any obligation of,
or any obligation guaranteed by, the Company for the repayment of borrowed
money, whether or not evidenced by bonds, debentures, notes or other written
instruments, and any deferred obligation for the payment of the purchase price
of property or assets acquired other than in the ordinary course of business.
"Special Record Date" for the payment of any Defaulted Interest means
a date fixed by the Trustee pursuant to Section 307.
<PAGE>
8
"Stated Maturity", when used with respect to any Security or any
installment of principal thereof or interest thereon, means the date specified
in such Security as the fixed date on which the principal of such Security or
such installment of principal or interest is due and payable.
"Subsidiary" means a corporation more than 50% of the outstanding
Voting Stock of which is owned, directly or indirectly, by the Company or by one
or more other Subsidiaries, or by the Company and one or more other
Subsidiaries.
"Timber Stock" means the Timber Group class of common stock, par value
$.80 per share, of the Company authorized at the date of this Indenture as
originally signed.
"Trading Day" means, with respect to the Georgia-Pacific Group Stock
or Timber Stock, as applicable, so long as the Georgia-Pacific Group Stock or
Timber Stock, as applicable, is listed or admitted to trading on the New York
Stock Exchange, a day on which the New York Stock Exchange is open for the
transaction of business, or, if the Georgia-Pacific Group Stock or Timber Stock,
as applicable, is not listed or admitted to trading on the New York Stock
Exchange, a day on which the principal national securities exchange on which the
Georgia-Pacific Group Stock or Timber Stock, as applicable, is listed is open
for the transaction of business, or, if the Georgia-Pacific Group Stock or
Timber Stock, as applicable, is not so listed or admitted for trading on any
national securities exchange, a day on which NASDAQ is open for the transaction
of business.
"Trustee" means the Person named as "Trustee" in the first paragraph
of this instrument until a successor Trustee shall have become such with respect
to one or more series of Securities pursuant to the applicable provisions of
this Indenture, and thereafter "Trustee" shall mean or include each Person who
is then a Trustee hereunder, and if at any time there is more than one such
Person, "Trustee" as used with respect to the Securities of any series shall
mean the Trustee with respect to Securities of that series.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as in
force at the date as of which this instrument was executed; provided, however,
that in the event the Trust Indenture Act of 1939 is amended after such date,
"Trust Indenture Act" means, to the extent required by any such amendment, the
Trust Indenture Act of 1939 as so amended.
"Unrestricted Subsidiary" means any Subsidiary of the Company other
than a Restricted Subsidiary.
"U.S. Government Obligations" means either (i) direct obligations of
the United States of America or (ii) obligations of a Person controlled or
supervised by and acting as an agency or instrumentality of the United States of
America, the timely payment of which is unconditionally guaranteed by the full
faith and credit of the United States of America.
"Value" has the meaning specified in Section 1005.
"Vice President", when used with respect to the Company or the
Trustee, means any vice president, whether or not designated by a number or a
word or words added before or after the title "vice president."
"Voting Stock", means stock of the class or classes having general
voting power under ordinary circumstances to elect at least a majority of the
board of directors, managers or trustees of the
<PAGE>
9
subject corporation (irrespective of whether or not at the time stock of any
other class or classes shall have or might have voting power by reason of the
happening of any contingency).
Section 102. Compliance Certificates and Opinions.
------------------------------------
Upon any application or request by the Company to the Trustee to take
any action under any provision of this Indenture, the Company shall furnish to
the Trustee an Officers' Certificate stating that all conditions precedent, if
any, provided for in this Indenture relating to the proposed action have been
complied with and an Opinion of Counsel stating that in the opinion of such
counsel all such conditions precedent, if any, have been complied with, except
that in the case of any such application or request as to which the furnishing
of such documents is specifically required by any provision of this Indenture
relating to such particular application or request, no additional certificate or
opinion need be furnished.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include:
(1) a statement that each individual signing such certificate or
opinion has read such covenant or condition and the definitions herein
relating thereto;
(2) a brief statement as to the nature and scope of the examination
or investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(3) a statement that, in the opinion of each such individual, he has
made such examination or investigation as is necessary to enable him to
express an informed opinion as to whether or not such covenant or condition
has been complied with; and
(4) a statement as to whether, in the opinion of each such
individual, such condition or covenant has been complied with.
Section 103. Form of Documents Delivered to Trustee.
--------------------------------------
In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of the Company may be based,
insofar as it relates to legal matters, upon a certificate or opinion of, or
representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which his certificate or opinion is based are
erroneous. Any such certificate or Opinion of Counsel may be based, insofar as
it relates to factual matters, upon a certificate or opinion of, or
representations by, an officer or officers of the Company stating that the
information with respect to such factual matters is in the possession of the
Company, unless each counsel knows, or in the exercise of reasonable care should
know, that the certificate or opinion or representations with respect to such
matters are erroneous.
<PAGE>
10
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
Section 104. Acts of Holders.
---------------
(a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Indenture to be given or taken by
Holders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Holders in person or by agent duly
appointed in writing; and, except as herein otherwise expressly provided, such
action shall become effective when such instrument or instruments are delivered
to the Trustee and, where it is hereby expressly required, to the Company. Such
instrument or instruments (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the "Act" of the Holders signing
such instrument or instruments. Proof of execution of any such instrument or of
a writing appointing such agent shall be sufficient for any purpose of this
Indenture and (subject to Section 601) conclusive in favor of the Trustee and
the Company, if made in the manner provided in this Section.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized by
law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Where
such execution is by a signer acting in a capacity other than his individual
capacity, such certificate or affidavit shall also constitute sufficient proof
of his authority. The fact and date of the execution of any such instrument or
writing, or the authority of the Person executing the same, may also be proved
in any other manner which the Trustee deems sufficient.
(c) The ownership of Securities shall be proved by the Security
Register.
(d) Any request, demand, authorization, direction, notice, consent,
waiver or other Act of the Holder of any Security shall bind every future Holder
of the same Security and the Holder of every Security issued upon the
registration of transfer thereof or in exchange therefor or in lieu thereof in
respect of anything done, omitted or suffered to be done by the Trustee or the
Company in reliance thereon, whether or not notation of such action is made upon
such Security.
Section 105. Notices, Etc., to Trustee and Company.
-------------------------------------
Any request, demand, authorization, direction, notice, consent, waiver
or Act of Holders or other document provided or permitted by this Indenture to
be made upon, given or furnished to, or filed with,
(1) the Trustee by any Holder or by the Company shall be sufficient
for every purpose hereunder if made, given, furnished or filed in writing
to or with the Trustee at its Corporate Trust Office, or
(2) the Company by the Trustee or by any Holder shall be sufficient
for every purpose hereunder (unless otherwise herein expressly provided) if
in writing and mailed, first-class postage prepaid, to the Company
addressed to the attention of its General Counsel at 133 Peachtree Street,
N.E., Atlanta, Georgia 30303 or at any other address previously furnished
in writing to the Trustee by the Company.
<PAGE>
11
Section 106. Notice to Holders; Waiver.
-------------------------
Where this Indenture provides for notice to Holders of any event, such
notice shall be sufficiently given (unless otherwise herein expressly provided)
if in writing and mailed, first class postage prepaid, to each Holder affected
by such event, at his address as it appears in the Security Register, not later
than the latest date, and not earlier than the earliest date, prescribed for the
giving of such notice. In any case where notice to Holders is given by mail,
neither the failure to mail such notice, nor any defect in any notice so mailed,
to any particular Holder shall affect the sufficiency of such notice with
respect to other Holders. Where this Indenture provides for notice in any
manner, such notice may be waived in writing by the Person entitled to receive
such notice, either before or after the event, and such waiver shall be the
equivalent of such notice. Waivers of notice by Holders shall be filed with the
Trustee, but such filing shall not be a condition precedent to the validity of
any action taken in reliance upon such waiver.
In case by reason of the suspension of regular mail service or by
reason of any other cause it shall be impracticable to give such notice by mail,
then notification as shall be made with the approval of the Trustee shall
constitute a sufficient notification for every purpose hereunder.
Section 107. Conflict With Trust Indenture Act.
---------------------------------
If any provision hereof limits, qualifies or conflicts with a
provision of the Trust Indenture Act that is required under such Act to be part
of and govern this Indenture, the latter provision shall control. If any
provision of this Indenture modifies or excludes any provision of the Trust
Indenture Act that may be so modified or excluded, the latter provision shall be
deemed to apply to this Indenture as so modified or to be excluded, as the case
may be.
Section 108. Effect of Headings and Table of Contents.
----------------------------------------
The Article and Section headings herein and the Table of Contents are
for convenience only and shall not affect the construction hereof.
Section 109. Successors and Assigns.
----------------------
All covenants and agreements in this Indenture by the Company shall
bind its successors and assigns, whether so expressed or not.
Section 110. Separability Clause.
-------------------
In case any provision in this Indenture or in the Securities shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
Section 111. Benefits of Indenture.
---------------------
Nothing in this Indenture or in the Securities, express or implied,
shall give to any Person, other than the parties hereto and their successors
hereunder, the holders of Senior Indebtedness and Additional Senior Obligations
and the Holders, any benefit or any legal or equitable right, remedy or claim
under this Indenture.
<PAGE>
12
Section 112. Governing Law.
-------------
This Indenture and the Securities shall be governed by and construed
in accordance with the laws of the State of New York.
Section 113. Legal Holidays.
--------------
In any case where any Interest Payment Date, Redemption Date or Stated
Maturity of any Security shall not be a Business Day at any Place of Payment,
then (notwithstanding any other provision of this Indenture or of the
Securities) payment of interest or principal (and premium, if any) need not be
made at such Place of Payment on such date, but may be made on the next
succeeding Business Day at such Place of Payment with the same force and effect
as if made on the Interest Payment Date or Redemption Date, or at the Stated
Maturity, provided that no interest shall accrue for the period from and after
such Interest Payment Date, Redemption Date or Stated Maturity, as the case may
be.
ARTICLE TWO
SECURITY FORMS
Section 201. Forms Generally.
---------------
The Securities of each series shall be in substantially the form set
forth in this Article, or in such other form as shall be established by or
pursuant to a Board Resolution or in one or more indentures supplemental hereto,
in each case with such appropriate insertions, omissions, substitutions and
other variations as are required or permitted by this Indenture, and may have
such letters, numbers or other marks of identification and such legends or
endorsements placed thereon as may be required to comply with the rules of any
securities exchange or as may, consistently herewith, be determined by the
officers executing such Securities, as evidenced by their execution of the
Securities. If the form of Securities of any series is established by action
taken pursuant to a Board Resolution, a copy of an appropriate record of such
action shall be certified by the Secretary or an Assistant Secretary of the
Company and delivered to the Trustee at or prior to the delivery of the Company
Order contemplated by Section 303 for the authentication and delivery of such
Securities.
The Trustee's certificates of authentication shall be in substantially
the form set forth in this Article.
The definitive Securities shall be printed, lithographed or engraved
on steel engraved borders or may be produced in any other manner, all as
determined by the officers executing such Securities, as evidenced by their
execution of such Securities.
Section 202. Form of Face of Security.
------------------------
THIS SECURITY IS NOT A DEPOSIT AND IS NOT INSURED BY THE FEDERAL
DEPOSIT INSURANCE CORPORATION OR ANY GOVERNMENTAL AGENCY.
[If the Security is an Original Issue Discount Security, insert -- FOR
PURPOSES OF SECTION 1273 OF THE UNITED STATES INTERNAL REVENUE CODE OF 1986, AS
AMENDED, THE ISSUE PRICE OF THIS SECURITY IS % OF ITS PRINCIPAL AMOUNT AND
THE ISSUE DATE IS ____________, 19__.]
<PAGE>
13
GEORGIA-PACIFIC CORPORATION
___________ Subordinated _____________
due __________________
No. _______________ $___________
GEORGIA-PACIFIC CORPORATION, a Georgia corporation (hereinafter called
the "Company", which term includes any successor corporation under the Indenture
hereinafter referred to), for value received, hereby promises to pay to
______________, or registered assigns, the principal sum of ___________________
Dollars on _________________ [If the Security is to bear interest prior to
Maturity, insert--, and to pay interest thereon from _____________, or from the
most recent Interest Payment Date to which interest has been paid or duly
provided for, semi-annually on ______________ and ____________ in each year,
commencing ________________, at the rate of _____% per annum, [If applicable,
insert method of calculation of floating rate,] until the principal hereof is
paid or made available for payment [If applicable, insert--, and (to the extent
that the payment of such interest shall be legally enforceable) at the rate of
____% per annum on any overdue principal and premium and on any overdue
installment of interest]. The interest so payable, and punctually paid or duly
provided for, on any Interest Payment Date will, as provided in such Indenture,
be paid to the Person in whose name this Security (or one or more Predecessor
Securities) is registered at the close of business on the Regular Record Date
for such interest, which shall be the ___________ or ____________ (whether or
not a Business Day), as the case may be, next preceding such Interest Payment
Date. Any such interest not so punctually paid or duly provided for will
forthwith cease to be payable to the Holder on such Regular Record Date and may
either be paid to the Person in whose name this Security (or one or more
Predecessor Securities) is registered at the close of business on a Special
Record Date for the payment of such Defaulted Interest to be fixed by the
Trustee, notice whereof shall be given to Holders of Securities of this series
not less than 10 days prior to such Special Record Date, or be paid at any time
in any other lawful manner not inconsistent with the requirements of any
securities exchange on which the Securities of this series may be listed, and
upon such notice as may be required by such exchange, all as more fully provided
in said Indenture].
[If the Security is not to bear interest prior to Maturity, insert--
The principal of this Security shall not bear interest except in the case of a
default in payment of principal upon acceleration, upon redemption or at Stated
Maturity and in such case the overdue principal of this Security shall bear
interest at the rate of % per annum (to the extent that the payment of such
interest shall be legally enforceable), which shall accrue from the date of such
default in payment to the date payment of such principal has been made or duly
provided for. Interest on any overdue principal shall be payable on demand.
Any such interest on any overdue principal that is not so paid on demand shall
bear interest at the rate of % per annum (to the extent that the payment of
such interest shall be legally enforceable), which shall accrue from the date of
such demand for payment to the date payment of such interest has been made or
duly provided for, and such interest shall also be payable on demand.]
Payment of the principal of (and premium, if any) and [if applicable,
insert-- any such] interest on this Security will be made at the offices or
agencies of the Trustee maintained for that purpose in New York, New York
[describe relevant currency] [if applicable, insert--; provided, however, that
at the option of the Company payment of interest may be made by check drawn upon
any Paying Agent and mailed on or prior to an Interest Payment Date to the
address of the Person entitled thereto as such address shall appear in the
Security Register.]
<PAGE>
14
REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS SECURITY
SET FORTH ON THE REVERSE HEREOF, WHICH FURTHER PROVISIONS SHALL FOR ALL PURPOSES
HAVE THE SAME EFFECT AS IF SET FORTH AT THIS PLACE.
Unless the certificate of authentication hereon has been executed by
the Trustee referred to on the reverse hereof, directly or through an
authenticating agent, by the manual signature of an authorized signer, this
Security shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.
Dated:
GEORGIA-PACIFIC CORPORATION
By ___________________________
[Seal]
Attest:
_______________________
<PAGE>
15
Section 203. Form of Reverse of Security.
---------------------------
This Security is one of a duly authorized issue of securities of the
Company (herein called the "Securities"), issued and to be issued in one or more
series under an Indenture, dated as of June __, 1999 (herein called the
"Indenture") between the Company and The Bank of New York, as Trustee (herein
called the "Trustee", which term includes any successor trustee under the
Indenture), to which Indenture and all indentures supplemental thereto reference
is hereby made for a statement of the respective rights, limitations of rights,
duties and immunities thereunder of the Company, the Trustee, the holders of
Senior Indebtedness, the holders of Additional Senior Obligations and the
Holders of the Securities and of the terms upon which the Securities are, and
are to be, authenticated and delivered. This Security is one of the series
designated on the face hereof [, limited in aggregate principal amount to
$________].
[If applicable, insert-- The Securities of this series are subject to
redemption upon not less than 30 days notice by mail, [if applicable, insert--
(1) on _______________ in any year commencing with the year ____ and ending with
the year ____ through operation of the sinking fund for this series at a
Redemption Price equal to 100% of the principal amount, and (2)] at any time [on
or after ___________, ____], as a whole or in part, at the election of the
Company, at the following Redemption Prices (expressed as percentages of the
principal amount): If redeemed [on or before _________________, ____% and if
redeemed] during the 12-month period beginning ______________ of the years
indicated,
Year Redemption Price Year Redemption Price
- ---- ---------------- ---- ----------------
and thereafter at a Redemption Price equal to ____% of the principal amount,
together in the case of any such redemption [If applicable, insert-- (whether
through operation of the sinking fund or otherwise)] with accrued interest to
the Redemption Date, but interest installments whose Stated Maturity is on or
prior to such Redemption Date will be payable to the Holders of such Securities,
or one or more Predecessor Securities, of record at the close of business, on
the relevant Record Dates referred to on the face hereof, all as provided in the
Indenture.]
[If applicable, insert-- The Securities of this series are subject to
redemption upon not less than 30 days notice by mail, (1) on _____________ in
any year commencing with the year ___________ and ending with the year
__________ through operation of the sinking fund for this series at the
Redemption Prices for redemption through operation of the sinking fund
(expressed as percentages of the principal amount) set forth in the table below,
and (2) at any time [on or after _____________], as a whole or in part, at the
election of the Company, at the Redemption Prices for redemption otherwise than
through operation of the sinking fund (expressed as percentages of the principal
amount) set forth in the table below: If redeemed during the 12-month period
beginning ____________ of the years indicated,
<PAGE>
16
Redemption Price Redemption Price
For Redemption Through For Redemption Otherwise
Operation Than Through Operation
Year of the Sinking Fund of the Sinking Fund
- ---- ------------------- -------------------
and thereafter at a Redemption Price equal to ____% of the principal amount,
together in the case of any such redemption (whether through operation of the
sinking fund or otherwise) with accrued interest to the Redemption Date, but
interest installments whose Stated Maturity is on or prior to such Redemption
Date will be payable to the Holders of such Securities, or one or more
Predecessor Securities, of record at the close of business on the relevant
Record Dates referred to on the face hereof, all as provided in the Indenture.]
[Notwithstanding the foregoing, the Company may not, prior to
_________, redeem any Securities of this series as contemplated by [Clause (2)
of] the preceding paragraph as a part of, or in anticipation of, any refunding
operation by the application, directly or indirectly, of moneys borrowed having
an interest cost to the Company (calculated in accordance with generally
accepted financial practice) of less than ____% per annum.]
[The sinking fund for this series provides for the redemption on
____________ in each year beginning with the year _____ and ending with the year
____ of [not less than] $_______ [("mandatory sinking fund") and not more than
$_________] aggregate principal amount of Securities of this series.
[Securities of this series acquired or redeemed by the Company otherwise than
through [mandatory] sinking fund payments may be credited against subsequent
[mandatory] sinking fund payments otherwise required to be made.]
In the event of redemption of this Security in part only, a new
Security or Securities of this series for the unredeemed portion hereof will be
issued in the name of the Holder hereof upon the cancellation hereof.
In any case where any Interest Payment Date, Redemption Date or Stated
Maturity of any Security shall not be a Business Day at any Place of Payment,
then (notwithstanding any other provision of the Indenture or of this Security)
payment of interest or principal (and premium, if any) need not be made at such
Place of Payment on such date, but may be made on the next succeeding Business
Day at such Place of Payment with the same force and effect as if made on the
Interest Payment Date or Redemption Date, or at the Stated Maturity, provided
that no interest shall accrue for the period from and after such Interest
Payment Date, Redemption Date or Stated Maturity, as the case may be.
The indebtedness evidenced by this Security is unsecured and, to the
extent provided in the Indenture, subordinate and subject in right of payment to
the prior payment in full of all Senior Indebtedness and, under certain
circumstances, to Additional Senior Obligations, and this Security is issued
subject to the provisions of the Indenture with respect thereto. Each Holder of
this Security, by accepting the same, (a) agrees to and shall be bound by such
provisions and (b) authorizes and directs the Trustee on his behalf to take such
action as may be necessary or appropriate to effectuate the subordination so
provided.
<PAGE>
17
[If the Security is not an Original Issue Discount Security,-- If an
Event of Default (as defined in the Indenture) with respect to the Company shall
occur and be continuing, the principal of the Securities of this series may be
declared due and payable in the manner and with the effect provided in the
Indenture.]
[If the Security is an Original Issue Discount Security,-- If an Event
of Default (as defined in the Indenture) with respect to the Company shall occur
and be continuing, an amount of principal of the Securities of this series may
be declared due and payable in the manner and with the effect provided in the
Indenture. Such amount shall be equal to -- insert formula for determining the
amount. Upon payment (i) of the amount of principal so declared due and payable
and (ii) of interest on any overdue principal and overdue interest (in each case
to the extent that the payment of such interest shall be legally enforceable),
all of the Company's obligations in respect of the payment of the principal of
and interest, if any, on the Securities of this series shall terminate.]
The Indenture permits, with certain exceptions as therein provided,
the amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Securities of each series to be
affected under the Indenture at any time by the Company and the Trustee with the
consent of the Holders of 66% in principal amount of the Securities at the time
Outstanding of each series to be affected. The Indenture also contains
provisions permitting the Holders of specified percentages in aggregate
principal amount of the Securities of each series at the time Outstanding, on
behalf of the Holders of all Securities of such series, to waive compliance by
the Company with certain provisions of the Indenture and certain past defaults
under the Indenture and their consequences. Any such consent or waiver by the
Holder of this Security shall be conclusive and binding upon such Holder and
upon all future Holders of this Security and of any Security issued upon the
registration of transfer hereof or in exchange herefor or in lieu hereof,
whether or not notation of such consent or waiver is made upon this Security.
No reference herein to the Indenture and no provision of this Security
or of the Indenture shall alter or impair the obligation of the Company, which
is absolute and unconditional, to pay the principal of (and premium, if any) and
interest on this Security at the times, place and rate, and in the coin or
currency, herein prescribed.
As provided in the Indenture and subject to certain limitations
therein set forth, the transfer of this Security is registrable in the Security
Register, upon surrender of this Security for registration of transfer at the
office or agency of the Company in any place where the principal of (and
premium, if any) and interest on this Security are payable, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Company and the Security Registrar duly executed by, the Holder hereof or his
attorney duly authorized in writing, and thereupon one or more new Securities of
this series, of authorized denominations and for the same aggregate principal
amount, will be issued to the designated transferee or transferees.
The Securities of this series are issuable only in registered form
without coupons in denominations of $_________ and any integral multiple
thereof. As provided in the Indenture and subject to certain limitations
therein set forth, Securities of this series are exchangeable for a like
aggregate principal amount of Securities of this series of a different
authorized denomination, as requested by the Holder surrendering the same.
<PAGE>
18
No service charge shall be made for any such registration of transfer
or exchange, but the Company may require payment of a sum sufficient to cover
any tax or other governmental charge payable in connection therewith.
The Indenture provides that a Subsidiary may assume the obligations of
the Company under the Indenture and the Securities, subject to the satisfaction
of certain conditions, including the Company's guaranteeing of the Subsidiary's
obligations under this Security and the Indenture.
Prior to due presentment of this Security for registration of
transfer, the Company, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name this Security is registered as the owner
hereof for all purposes, whether or not this Security shall be overdue, and
neither the Company, the Trustee nor any such agent shall be affected by notice
to the contrary.
All terms used in this Security which are defined in the Indenture
shall have the meanings assigned to them in the Indenture.
Section 204. Form of Trustee's Certificate of Authentication.
-----------------------------------------------
This is one of the Securities of the series designated therein
referred to in the within-mentioned Indenture.
By ____________________________
[NAME OF TRUSTEE]
as Trustee
Section 205. Issuance of Book-Entry Securities.
---------------------------------
Any Book-Entry Security authenticated and issued hereunder shall, in
addition to the provisions contained in Section 202 and 203, bear a legend in
substantially the following form, subject to modification by the Depositary:
"This Security is a Book-Entry Security within the meaning of the
Indenture hereinafter referred to and is registered in the name of a
Depositary or a nominee of a Depositary. This Security is exchangeable for
Securities registered in the name of a person other than the Depositary or
its nominee only in the limited circumstances described in the Indenture
and may not be transferred except as a whole by the Depositary to a nominee
of the Depositary or by a nominee of the Depositary to the Depositary or
another nominee of the Depositary."
Any Book-Entry Security issued hereunder may provide that it shall
represent the aggregate amount of Outstanding Securities from time to time
endorsed thereon and may also provide that the aggregate may from time to time
be reduced to reflect exchanges or increased to reflect the issuance of
additional uncertificated Securities of such series. Any endorsement of a Book-
Entry Security to reflect the amount, or any increase or decrease in the amount,
of Outstanding Securities represented thereby shall be made by the Trustee and
in such manner as shall be specified in such
<PAGE>
19
Security or the Company Order to be delivered to the Trustee pursuant to Section
303. Any instructions by the Company with respect to a Book-Entry Security,
after its initial issuance, shall be in writing but need not comply with Section
102.
Each Depositary designated pursuant to Section 301 for a Book-Entry
Security must, at the time of its designation and at all times while it serves
as Depositary, be a clearing agency registered under the Securities Exchange Act
of 1934, as amended, and any other applicable statute or regulation.
Book-Entry Securities may be issued only in registered form and in
either temporary or permanent form.
ARTICLE THREE
THE SECURITIES
Section 301. Amount Unlimited; Issuable in Series.
------------------------------------
The aggregate principal amount of Securities which may be
authenticated and delivered under this Indenture is unlimited.
The Securities may be issued in one or more series. There shall be
established in or pursuant to a Board Resolution, and set forth in an Officers'
Certificate, or established in one or more indentures supplemental hereto, prior
to the issuance of Securities of any series:
(1) the title of the Securities of the series (which shall
distinguish the Securities of the series from all other Securities);
(2) any limit upon the aggregate principal amount of the Securities
of the series which may be authenticated and delivered under this Indenture
(except for Securities authenticated and delivered upon registration of
transfer of, or in exchange for, or in lieu of, other Securities of the
series pursuant to Section 304, 305, 306, 906 or 1107);
(3) the date or dates on which the principal of the Securities of the
series is payable;
(4) the rate or rates at which the Securities of the series shall
bear interest, if any, the date or dates from which such interest shall
accrue, the Interest Payment Dates on which such interest shall be payable
and the Regular Record Date for the interest payable on any Interest
Payment Date;
(5) the place or places, if any, in addition to New York, New York,
where the principal of (and premium, if any) and interest on Securities of
the series shall be payable;
(6) the period or periods within which, the price or prices at which
and the terms and conditions upon which Securities of the series may be
redeemed, in whole or in part, at the option of the Company;
(7) the obligation, if any, of the Company to redeem or purchase
Securities of the series pursuant to any sinking fund or analogous
provisions or at the option of a Holder thereof and the
<PAGE>
20
period or periods within which, the price or prices at which and the terms
and conditions upon which Securities of the series shall be redeemed or
purchased, in whole or in part, pursuant to such obligation;
(8) if other than denominations of $1,000 and any integral multiple
thereof, the denominations in which Securities of the series shall be
issuable;
(9) the currency or currencies, including composite currencies, in
which payment of the principal of and any premium and interest on the
Securities of the series shall be payable if other than the currency of the
United States of America;
(10) if the amount or payments of principal of and any premium or
interest on the Securities of the series may be determined with reference
to an index, the manner in which such amounts shall be determined;
(11) if other than the principal amount thereof, the portion of the
principal amount of Securities of the series which shall be payable upon
declaration of acceleration of the Maturity thereof pursuant to Section
502;
(12) whether the Securities of the series will be convertible into
shares of Georgia-Pacific Group Stock or Timber Stock, as applicable, and
if so, the terms and conditions, which may be in addition to or in lieu of
the provisions of Article Fifteen, upon which such Securities will be so
convertible, including the Conversion Price and the conversion period;
(13) the form of the Securities, and the extent, if any, to which any
of the Securities will be issuable in Book-Entry form and, in such case,
the Depositary for such Book-Entry Security or Securities, and the terms
and conditions, if any, upon which such Book-Entry Security may be
exchanged in whole or in part for definitive Securities, if other than as
set forth in Section 305; and
(14) any other terms of the series (which terms shall not be
inconsistent with the provisions of this Indenture).
All Securities of any one series shall be substantially identical
except as to denomination and except as may otherwise be provided in or pursuant
to such Board Resolution and set forth in such Officers' Certificate or in any
such indenture supplemental hereto.
At the option of the Company, interest on the Securities of any series
that bears interest may be paid by mailing a check to the address of the person
entitled thereto as such address shall appear in the Securities Register.
If any of the terms of the series are established by action taken
pursuant to a Board Resolution, a copy of an appropriate record of such action
shall be certified by the Secretary or an Assistant Secretary of the Company and
delivered to the Trustee at or prior to the delivery of the Officers'
Certificate setting forth the terms of the series.
The Securities shall be subordinated to Senior Indebtedness and, under
certain circumstances, to Additional Senior Obligations as provided in Article
Thirteen.
<PAGE>
21
Section 302. Denominations.
-------------
The Securities of each series shall be issuable in registered form
without coupons in such denominations as shall be specified as contemplated by
Section 301. In the absence of any such provisions with respect to the
Securities of any series, the Securities of such series shall be issuable in
denominations of $1,000 and any integral multiple thereof.
Section 303. Execution, Authentication, Delivery and Dating.
----------------------------------------------
The Securities shall be executed on behalf of the Company by its
President or one of its Executive 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 Securities may be
manual or facsimile.
Securities bearing the manual or facsimile signatures of 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 authentication and delivery of such Securities or did not
hold such offices at the date of such Securities.
At any time and from time to time after the execution and delivery of
this Indenture, the Company may deliver Securities of any series executed by the
Company to the Trustee for authentication, together with a Company Order for the
authentication and delivery of such Securities, and the Trustee in accordance
with the Company Order and subject to the provisions hereof shall authenticate
and deliver such Securities. If the form or terms of the Securities of the
series have been established in or pursuant to one or more Board Resolutions as
permitted by Sections 201 and 301, in authenticating such Securities, and
accepting the additional responsibilities under this Indenture in relation to
such Securities, the Trustee shall be entitled to receive, and (subject to
Section 601) shall be fully protected in relying upon, an Opinion of Counsel
stating:
(a) if the form of such Securities has been established by or
pursuant to Board Resolution as permitted by Section 201, that such form
has been established in conformity with the provisions of this Indenture;
(b) if the terms of such Securities have been established by or
pursuant to Board Resolution as permitted by Section 301, that such terms
have been established in conformity with the provisions of this Indenture;
and
(c) that all conditions precedent to the authentication and delivery
of such Securities have been complied with and that such Securities, when
authenticated and delivered by the Trustee and issued by the Company in the
manner and subject to any conditions specified in such Opinion of Counsel,
will constitute valid and legally binding obligations of the Company,
enforceable in accordance with their terms, subject to bankruptcy,
insolvency, reorganization and other laws of general applicability relating
to or affecting the enforcement of creditors rights and to general equity
principles.
If such form or terms have been so established, the Trustee shall not
be required to authenticate such Securities if the issue of such Securities
pursuant to this Indenture will affect the Trustee's own rights, duties or
immunities under the Securities and this Indenture or otherwise in a manner
which is not reasonably acceptable to the Trustee.
<PAGE>
22
Each Security shall be dated the date of its authentication.
No Security shall be entitled to any benefit under this Indenture or
be valid or obligatory for any purpose unless there appears on such Security a
certificate of authentication substantially in the form provided for herein
executed by the Trustee by manual signature, and such certificate upon any
Security shall be conclusive evidence, and the only evidence, that such Security
has been duly authenticated and delivered hereunder and is entitled to the
benefits of this Indenture.
If the Company shall establish pursuant to Section 301 that the
Securities of a series are to be issued in whole or in part in the form of one
or more Book-Entry Securities, then the Company shall execute and the Trustee
shall, in accordance with this Section and a Company Order for the
authentication and delivery of such Book-Entry Securities with respect to such
series, authenticate and deliver one or more Book-Entry Securities in permanent
or temporary form that (i) shall represent and shall be denominated in an
aggregate amount equal to the aggregate principal amount of the Outstanding
Securities of such series to be represented by one or more Book-Entry
Securities, (ii) shall be registered in the name of the Depositary for such
Book-Entry Security or Securities or the nominee of such Depositary and (iii)
shall be delivered by the Trustee to such Depositary or pursuant to such
Depositary's instructions.
Section 304. Temporary Securities.
--------------------
Pending the preparation of definitive Securities of any series, the
Company may execute, and upon Company Order the Trustee shall authenticate and
deliver, temporary Securities which are printed, lithographed, typewritten,
mimeographed or otherwise produced, in any authorized denomination,
substantially of the tenor of the definitive Securities in lieu of which they
are issued and with such appropriate insertions, omissions, substitutions and
other variations as the officers executing such Securities may determine, as
evidenced by their execution of such Securities.
If temporary Securities of any series are issued, the Company will
cause definitive Securities of that series to be prepared without unreasonable
delay. After the preparation of definitive Securities of such series, the
temporary Securities of such series shall be exchangeable for definitive
Securities of such series upon surrender of the temporary Securities of such
series at the office or agency of the Company in a Place of Payment for that
series, without charge to the Holder. Upon surrender for cancellation of any
one or more temporary Securities of any series, the Company shall execute and
the Trustee shall authenticate and deliver in exchange therefor a like principal
amount of definitive Securities of the same series of authorized denominations.
Until so exchanged the temporary Securities of any series shall in all respects
be entitled to the same benefits under this Indenture as definitive Securities
of such series.
Section 305. Registration, Registration of Transfer and Exchange.
---------------------------------------------------
The Company shall cause to be kept at the office of the Security
Registrar designated pursuant to this Section 305 or Section 1002 a register
(being the combined register of the Security Registrar and any Co-Security
Registrars and herein sometimes collectively referred to as the "Security
Register") in which, subject to such reasonable regulations as it may prescribe,
the Company shall provide for the registration of Securities and for transfers
of Securities. The Trustee is hereby initially appointed "Security Registrar"
for the purpose of registering Securities as herein provided.
<PAGE>
23
Upon surrender for registration of transfer of any Security of any
series at the office or agency in a Place of Payment for that series, the
Company shall execute, and the Trustee shall authenticate and deliver, in the
name of the designated transferee or transferees, one or more new Securities of
the same series, of any authorized denominations and of a like aggregate
principal amount.
At the option of the Holder, Securities of any series may be exchanged
for other Securities of the same series, of any authorized denominations and of
a like aggregate principal amount, upon surrender of the Securities to be
exchanged at such office or agency. Whenever any Securities are so surrendered
for exchange, the Company shall execute, and the Trustee shall authenticate and
deliver, the Securities which the Holder making the exchange is entitled to
receive.
All Securities issued upon registration of transfer or exchange of
Securities shall be the valid obligations of the Company, evidencing the same
debt, and entitled to the same benefits under this Indenture, as the Securities
surrendered upon such registration of transfer or exchange.
Every Security presented or surrendered for registration of transfer
or for exchange shall (if so required by the Company, the Security Registrar or
any Co-Security Registrar) be duly endorsed, or be accompanied by a written
instrument of transfer in form satisfactory to the Company, the Security
Registrar or such Co-Security Registrar duly executed, by the Holder thereof or
his attorney duly authorized in writing.
No service charge shall be made for any registration of transfer or
exchange of Securities, but the Company may require payment of a sum sufficient
to cover any tax or other governmental charge that may be imposed in connection
with any registration of transfer or exchange of Securities, other than
exchanges pursuant to Section 304, 906 or 1107 not involving any transfer.
Neither the Company, the Security Registrar nor any Co-Security
Registrar shall be required (i) to issue, register the transfer of or exchange
Securities of any series during a period beginning at the opening of business 15
days before the day of the mailing of a notice of redemption of Securities of
that series selected for redemption under Section 1103 and ending at the close
of business on the day of such mailing, or (ii) to register the transfer of or
exchange any Security so selected for redemption in whole or in part, except the
unredeemed portion of any Security being redeemed in part.
If at any time the Depositary for the Securities of a series notifies
the Company that it is unwilling or unable to continue as Depositary for the
Securities of such series or if at any time the Depositary for the Securities of
such series shall no longer be eligible under Section 205, the Company shall
appoint a successor Depositary with respect to the Securities of such series.
If a successor Depositary for the Securities of such series is not appointed by
the Company within 90 days after the Company receives such notice or becomes
aware of such ineligibility, the Company's election pursuant to Section 301(13)
shall no longer be effective with respect to the Securities of such series and
the Company will execute, and the Trustee, upon receipt of a Company Order for
the authentication and delivery of definitive Securities of such series, will
authenticate and deliver Securities of such series of like tenor and terms in
definitive form in an aggregate principal amount equal to the principal amount
of the Book-Entry Security or Securities representing such series in exchange
for such Book-Entry Security or Securities.
The Company may at any time and in its sole discretion determine that
the Securities of any series issued in the form of one or more Book-Entry
Securities shall no longer be represented by such Book-Entry Security or
Securities. In such event, the Company will execute, and the Trustee, upon
<PAGE>
24
receipt of a Company Order for the authentication and delivery of definitive
Securities of such series, will authenticate and deliver Securities of such
series of like tenor and terms in definitive form in an aggregate principal
amount equal to the principal amount of the Book-Entry Security or Securities
representing such series in exchange for such Book-Entry Security or Securities.
If specified by the Company pursuant to Section 301 with respect to a
series of Securities, or if an Event of Default, or an event which with notice,
lapse of time or both would be an Event of Default with respect to the
Securities of such series has occurred and is continuing, a Person owning a
beneficial interest in a Book-Entry Security for Securities of such series may
instruct the Depositary for such series of Securities to surrender such Book-
Entry Security for such series of Securities in exchange in whole or in part for
Securities of such series of like tenor in definitive registered form.
Thereupon, the Company shall execute, and the Trustee shall authenticate and
deliver, without service charge:
(a) to the Person specified by such Depositary a new Security or
Securities of the same series, of like tenor, of any authorized
denomination as requested by such Person, in an aggregate principal amount
equal to and in exchange for such Person's beneficial interest in the Book-
Entry Security; and
(b) to such Depositary a new Book-Entry Security of like tenor in an
authorized denomination equal to the difference, if any, between the
principal amount of the surrendered Book-Entry Security and the aggregate
principal amount of Securities delivered pursuant to clause (a) above.
Upon the exchange of a Book-Entry Security for Securities in
definitive form, such Book-Entry Security shall be cancelled by the Trustee.
Securities issued in exchange for a Book-Entry Security pursuant to this Section
shall be registered in such names and in such authorized denominations, and
delivered to such addresses, as the Depositary for such Book-Entry Security,
pursuant to instructions from its direct or indirect participants or otherwise,
shall instruct the Trustee in writing. The Trustee shall deliver such
Securities to the Persons in whose names such Securities are so registered or to
the Depositary.
Notwithstanding any other provision of this Section, unless and until
it is exchanged in whole or in part for Securities in definitive registered
form, a Book-Entry Security representing all or a portion of the Securities of a
series may not be transferred except as a whole by the Depositary for such
series to a nominee of such Depositary or by a nominee of such Depositary to
such Depositary or another nominee of such Depositary or by such Depositary or
any such nominee to a successor Depositary for such series or a nominee of such
successor Depositary.
Section 306. Mutilated, Destroyed, Lost and Stolen Securities.
------------------------------------------------
If any mutilated Security is surrendered to the Trustee and there is
delivered to the Company and the Trustee such security or indemnity as may be
required by them to save each of them and any agent of either of them harmless
then the Company shall execute and the Trustee shall authenticate and deliver in
exchange therefor a new Security of the same series and of like tenor and
principal amount and bearing a number not contemporaneously outstanding.
If there shall be delivered to the Company and the Trustee (i)
evidence to their satisfaction of the destruction, loss or theft of any Security
and (ii) such security or indemnity as may be
<PAGE>
25
required by them to save each of them and any agent of either of them harmless,
then, in the absence of notice to the Company or the Trustee that such Security
has been acquired by a bona fide purchaser, the Company shall execute and upon
its request the Trustee shall authenticate and deliver, in lieu of any such
destroyed, lost or stolen Security, a new Security of the same series and of
like tenor and principal amount and bearing a number not contemporaneously
outstanding.
In case any such mutilated, destroyed, lost or stolen Security has
become or is about to become due and payable, the Company in its discretion may,
instead of issuing a new Security, pay such Security.
Upon the issuance of any new Security under this Section, the Company
may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) connected therewith.
Every new Security of any series issued pursuant to this Section in
lieu of any destroyed, lost or stolen Security shall constitute an original
additional contractual obligation of the Company, whether or not the destroyed,
lost or stolen Security shall be at any time enforceable by anyone, and shall be
entitled to all the benefits of this Indenture equally and proportionately with
any and all other Securities of that series duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the replacement
or payment of mutilated, destroyed, lost or stolen Securities.
Section 307. Payment of Interest; Interest Rights Preserved.
----------------------------------------------
Interest on any Security which is payable, and is punctually paid or
duly provided for, on any Interest Payment Date shall be paid to the Person in
whose name that Security (or one or more Predecessor Securities) is registered
at the close of business on the Regular Record Date for such interest.
Any interest on any Security of any series which is payable, but is
not punctually paid or duly provided for, on any Interest Payment Date (herein
called "Defaulted Interest") shall forthwith cease to be payable to the Holder
on the relevant Regular Record Date by virtue of having been such Holder, and
such Defaulted Interest may be paid by the Company, at its election in each
case, as provided in Clause (1) or (2) below:
(1) The Company may elect to make payment of any Defaulted Interest to
the Persons in whose name the Securities of such series (or their
respective Predecessor Securities) are registered at the close of business
on a Special Record Date for the payment of such Defaulted Interest, which
shall be fixed in the following manner. The Company shall notify the
Trustee in writing of the amount of Defaulted Interest proposed to be paid
on each Security of such series and the date of the proposed payment, and
at the same time the Company shall deposit with the Trustee an amount of
money equal to the aggregate amount proposed to be paid in respect of such
Defaulted Interest or shall make arrangements satisfactory to the Trustee
for such deposit prior to the date of the proposed payment, such money when
deposited to be held in trust for the benefit of the Persons entitled to
such Defaulted Interest as in this Clause provided. Thereupon the Trustee
shall fix a Special Record Date for the payment of such Defaulted Interest
<PAGE>
26
which shall not be more than 15 days and not less than 10 days prior to the
date of the proposed payment and not less than 10 days after the receipt by
the Trustee of the notice of the proposed payment. The Trustee shall
promptly notify the Company of such Special Record Date and, in the name
and at the expense of the Company, shall cause notice of the proposed
payment of such Defaulted Interest and the Special Record Date thereof to
be mailed, first-class postage prepaid, to each Holder of Securities of
such series at his address as it appears in the Security Register, not less
than 10 days prior to such Special Record Date. Notice of the proposed
payment of such Defaulted Interest and the Special Record Date therefor
having been so mailed, such Defaulted Interest shall be paid to the Persons
in whose names the Securities of such series (or their respective
Predecessor Securities) are registered at the close of business on such
Special Record Date and shall no longer be payable pursuant to the
following Clause (2).
(2) The Company may make payment of any Defaulted Interest on the
Securities of any series in any other lawful manner not inconsistent with
the requirements of any securities exchange on which such Securities may be
listed, and upon such notice as may be required by such exchange, if, after
notice given by the Company to the Trustee of the proposed payment pursuant
to the Clause, such manner of payment shall be deemed practicable by the
Trustee.
Subject to the foregoing provisions of this Section, each Security
delivered under this Indenture upon registration of, transfer of or in exchange
for or in lieu of any other Security shall carry the rights to interest accrued
and unpaid, and to accrue, which were carried by such other Security.
Section 308. Persons Deemed Owners.
---------------------
Prior to due presentment of a Security for registration of transfer,
the Company, the Trustee and any agent of the Company or the Trustee may treat
the Person in whose name such Security is registered as the owner of such
Security for the purpose of receiving payment of principal of (and premium, if
any) and (subject to Section 307) interest on such Security and for all other
purposes, whatsoever, whether or not such Security be overdue, and neither the
Company, the Trustee nor any agent of the Company or the Trustee shall be
affected by notice to the contrary.
Section 309. Cancellation.
------------
All Securities surrendered for payment, redemption, registration of
transfer or exchange or for credit against any sinking fund payment shall, if
surrendered to any person other than the Trustee, be delivered to the Trustee
and shall be promptly cancelled by it. The Company may at any time deliver to
the Trustee for cancellation any Securities previously authenticated and
delivered hereunder which the Company may have acquired in any manner
whatsoever, and all Securities so delivered shall be promptly cancelled by the
Trustee. No Securities shall be authenticated in lieu of or in exchange for any
Securities cancelled as provided in this Section, except as expressly permitted
by this Indenture. All cancelled Securities held by the Trustee shall be
disposed of as directed by a Company Order.
Section 310. Computation of Interest.
-----------------------
Except as otherwise contemplated by Section 301 for Securities of any
series, interest on the Securities of each series shall be computed on the basis
of a year of twelve 30-day months.
<PAGE>
27
Section 311. Regarding Beneficial Ownership Interests in Book-Entry
------------------------------------------------------
Securities.
- ----------
Neither the Company, the Trustee, any Authenticating Agent and Paying
Agent nor the Security Registrar will have any responsibility or liability for
any aspect of the records relating to or payments made on account of beneficial
ownership interests in a Book-Entry Security or for maintaining, supervising or
reviewing any records relating to such beneficial ownership interests.
ARTICLE FOUR
SATISFACTION AND DISCHARGE; DEFEASANCE
Section 401. Satisfaction and Discharge of Indenture.
---------------------------------------
This Indenture shall upon Company Request cease to be of further
effect (except as to (i) remaining rights of registration of transfer,
substitution and exchange of Securities, (ii) rights hereunder of Holders to
receive payments of principal of (and premium, if any) and interest on the
Securities, and other rights, duties and obligations of the Holders as
beneficiaries hereof with respect to the amounts, if any, so deposited with the
Trustee and (iii) the rights, obligations and immunities of the Trustee
hereunder), and the Trustee, at the expense of the Company, shall execute proper
instruments acknowledging satisfaction and discharge of this Indenture, when
(1) either
(A) all Securities theretofore authenticated and delivered (other
than (i) Securities which have been destroyed, lost or stolen and
which have been replaced or paid as provided in Section 306 and (ii)
Securities for whose payment money has theretofore been deposited in
trust or segregated and held in trust by the Company and thereafter
repaid to the Company or discharged from such trust, as provided in
Section 1003) have been delivered to the Trustee for cancellation; or
(B) all such Securities not theretofore delivered to the Trustee
for cancellation (i) have become due and payable, or (ii) will become
due and payable at their Stated Maturity within one year, or (iii) are
to be called for redemption within one year under arrangements
satisfactory to the Trustee for the giving of notice of redemption by
the Trustee in the name, and at the expense, of the Company; and the
Company, in the case of (i), (ii) or (iii) above, has deposited or
caused to be deposited with the Trustee as trust funds in trust for
the purpose an amount sufficient to pay and discharge the entire
indebtedness on such Securities not theretofore delivered to the
Trustee for cancellation, for principal (and premium, if any) and
interest to the date of such deposit (in the case of Securities which
have become due and payable) or to the Stated Maturity or Redemption
Date, as the case may be;
(2) the Company has paid or caused to be paid all other sums payable
hereunder by the Company; and
(3) the Company has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel, each stating that all conditions precedent
herein provided for relating to the satisfaction and discharge of this
Indenture have been complied with.
<PAGE>
28
In the event there are Securities of two or more series hereunder, the Trustee
shall be required to execute an instrument acknowledging satisfaction and
discharge of this Indenture only if requested to do so with respect to
Securities of all series as to which it is Trustee and if the other conditions
thereto are met. In the event there are two or more Trustees hereunder, then
the effectiveness of any such instrument shall be conditioned upon receipt of
such instruments from all Trustees hereunder.
Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company to the Trustee under Section 607, the obligations of
the Trustee to any Authenticating Agent under Section 614 and, if money shall
have been deposited with the Trustee pursuant to subclause (B) of Clause (1) of
this Section, the obligations of the Trustee under Section 405 and the last
paragraph of Section 1003 shall survive.
Section 402. Defeasance and Discharge.
------------------------
The following provisions shall apply to the Securities of each series
unless specifically otherwise provided in a Board Resolution, Officers'
Certificate or indenture supplemental hereto provided pursuant to Section 301.
In addition to discharge of this Indenture pursuant to Sections 401 and 403, in
the case of any series of Securities with respect to which an amount sufficient
to pay and discharge the entire indebtedness on such Securities not theretofore
delivered to the Trustee for cancellation, for principal (and premium, if any)
and interest, as certified pursuant to subparagraph (a) of Section 404 can be
determined at the time of making the deposit referred to in such subparagraph
(a), the Company shall be deemed to have paid and discharged the entire
indebtedness on all the Securities of such series as provided in this Section on
and after the date the conditions set forth in Section 404 are satisfied, and
the provisions of this Indenture with respect to the Securities of such series
shall no longer be in effect (except as to (i) rights of registration of
transfer and exchange of Securities of such series, (ii) substitution of
mutilated, defaced, destroyed, lost or stolen Securities of such series, (iii)
rights of holders of Securities of such series to receive, solely from the trust
fund described in subparagraph (a) of Section 404, payments of principal thereof
and interest, if any, thereon upon the original stated due dates therefor (but
not upon acceleration), and remaining rights of the holders of Securities of
such series to receive mandatory sinking fund payments, if any, (iv) the rights,
obligations, duties and immunities of the Trustee hereunder, (v) this Section
402 and (vi) the rights of the Holders of Securities of such series as
beneficiaries hereof with respect to the property so deposited with the Trustee
payable to all or any of them) (hereinafter called "Defeasance"), and the
Trustee at the cost and expense of the Company, shall execute proper instruments
acknowledging the same.
Section 403. Covenant Defeasance.
-------------------
In the case of any series of Securities with respect to which an
amount sufficient to pay and discharge the entire indebtedness on such
Securities not theretofore delivered to the Trustee for cancellation, for
principal (and premium, if any) and interest, as certified pursuant to
subparagraph (a) of Section 404 can be determined at the time of making the
deposit referred to in such subparagraph (a), (i) the Company shall be released
from its obligations under any covenants specified in or pursuant to this
Indenture (except as to (A) rights of registration of transfer and exchange of
Securities of such series, (B) substitution of mutilated, defaced, destroyed,
lost or stolen Securities of such series, (C) rights of Holders of Securities of
such series to receive, from the Company pursuant to Section 1001, payments of
principal thereof and interest, if any, thereon upon the original stated due
dates therefor (but not upon acceleration), and mandatory sinking fund payments,
if any, (D) the rights, obligations, duties and immunities of the Trustee
hereunder and (E) the rights of Holders of Securities of such series as
beneficiaries hereof with respect to the property so deposited with the Trustee
payable to all or any of
<PAGE>
29
them, and (ii) the occurrence of any event specified in Section 501(4) (with
respect to any of the covenants specified in or pursuant to this Indenture) and
501(7) shall be deemed not to be or result in an Event of Default, in each case
with respect to the Outstanding Securities of such series on or after the date
the conditions set forth in Section 404 are satisfied (hereinafter called
"Covenant Defeasance"), and the Trustee, at the cost of the Company, shall
execute proper instruments acknowledging the same. For this purpose, such
Covenant Defeasance means that the Company may omit to comply with and shall
have no liability in respect of any term, condition or limitation set forth in
any such covenant (to the extent specified in the case of Section 501(4)),
whether directly or indirectly by reason of any reference elsewhere herein to
any such covenant or by reason of any reference in any such covenant to any
other provision herein or in any other document, but the remainder of this
Indenture and the Securities of such series shall be unaffected thereby.
Section 404. Conditions to Defeasance or Covenant Defeasance.
-----------------------------------------------
The following shall be the conditions to application of Sections 402
and 403 to the Outstanding Securities of any series:
(a) with reference to Section 402 or 403, the Company has irrevocably
deposited or caused to be irrevocably deposited with the Trustee as funds
in trust, specifically pledged as security for, and dedicated solely to,
the benefit of the Holders of Securities of such series (i) cash in an
amount, or (ii) U.S. Government Obligations maturing as to principal and
interest, if any, at such times and in such amounts as will insure the
availability of cash, or (iii) a combination thereof, in each case
sufficient, in the opinion of a nationally recognized firm of independent
public accountants expressed in a written certification thereof delivered
to the Trustee, to pay and discharge (A) the principal of and interest, if
any, on all Securities of such series on each date that such principal or
interest, if any, is due and payable, and (B) any mandatory sinking fund
payments on the dates on which such payments are due and payable in
accordance with the terms of this Indenture and the Securities of such
series;
(b) in the case of Defeasance under Section 402, the Company has
delivered to the Trustee an Opinion of Counsel based on the fact that (x)
the Company has received from, or there has been published by, the Internal
Revenue Service a ruling or (y) since the date hereof, there has been a
change in the applicable United States Federal income tax law, in either
case to the effect that, and such opinion shall confirm that, the Holders
of the Securities of such series will not recognize income, gain or loss
for United States Federal income tax purposes as a result of such deposit,
Defeasance and discharge and will be subject to United States Federal
income tax on the same amount and in the same manner and at the same times
as would have been the case if such deposit, Defeasance and discharge had
not occurred;
(c) in the case of Covenant Defeasance under Section 403, the Company
has delivered to the Trustee an Opinion of Counsel to the effect that, and
such opinion shall confirm that, the holders of the Securities of such
series will not recognize income, gain or loss for United States Federal
income tax purposes as a result of such deposit and Covenant Defeasance and
will be subject to the United States Federal income tax on the same amount
and in the same manner and at the same times as would have been the case if
such deposit and Covenant Defeasance had not occurred;
<PAGE>
30
(d) no Event of Default or event which with notice or lapse of time
or both would become an Event of Default shall have occurred or be
continuing on the date of the deposit referred to in subparagraph (a);
(e) such Defeasance or Covenant Defeasance will not result in a
breach or violation of, or constitute a default under, any agreement or
instrument to which the Company is a party or by which it is bound; and
(f) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent contemplated by this provision have been complied with.
Section 405. Deposited Money and U.S. Government Obligations to Be
-----------------------------------------------------
Held in Trust; Other Miscellaneous Provisions.
- ---------------------------------------------
Subject to the provisions of the last paragraph of Section 1003, all
money and U.S. Government Obligations deposited with the Trustee pursuant to
Sections 401 and 404 shall be held in trust, and such money and all money from
such U.S. Government Obligations shall be applied by it, in accordance with the
provisions of the Securities and this Indenture, to the payment, either directly
or through any Paying Agent (including the Company acting as its own Paying
Agent) as the Trustee may determine, to the Persons entitled thereto, of the
principal (and premium, if any) and interest for whose payment such money and
U.S. Government Obligations has been deposited with the Trustee.
The Company shall pay and indemnify the Trustee against any tax, fee
or other charge imposed on or assessed against the U.S. Government Obligations
deposited pursuant to Section 404 or the principal or interest received in
respect of such obligations other than any such tax, fee or other charge that by
law is for the account of the Holders of Outstanding Securities.
Notwithstanding the foregoing provisions of this Article Four, if the
Securities of any series are payable in a coin or currency or currency unit
other than such coin or currency of the United States of America as at the time
of payment is legal tender for payment of public or private debts, the coin or
currency or currency unit or the nature of the government obligations to be
deposited with the Trustee under the foregoing provisions of this Article Four
shall be as set forth in the Officers' Certificate or established in the
supplemental indenture under which the Securities of such series are issued.
ARTICLE FIVE
REMEDIES
Section 501. Events of Default.
-----------------
"Event of Default", whenever used herein with respect to Securities of
any series, means any one of the following events (whatever the reason for such
Event of Default and whether it shall be occasioned by the provisions of Article
13 or be voluntary or involuntary or be effected by operation of law or pursuant
to any judgment, decree or order of any court or any order, rule or regulation
of any administrative or governmental body):
<PAGE>
31
(1) default in the payment of any interest upon any Security of that
series when it becomes due and payable, and continuance of such default for
a period of 30 days;
(2) default in the payment of the principal of (or premium, if any,
on) any Security of that series at its Maturity;
(3) default in the deposit of any sinking fund payment, when and as
due by the terms of a Security of that series;
(4) default in the performance, or breach, of any covenant or warranty
of the Company in this Indenture (other than a covenant or warranty a
default in whose performance or whose breach is elsewhere in this Section
specifically dealt with or which has expressly been included in this
Indenture solely for the benefit of a series of Securities other than that
series), and continuance of such default or breach for a period of 60 days
after there has been given, by registered or certified mail, to the Company
by the Trustee or to the Company and the Trustee by the Holders of at least
10% in principal amount of the Outstanding Securities of that series a
written notice specifying such default or breach and requiring it to be
remedied and stating that such notice is a "Notice of Default" hereunder;
(5) the entry of a decree or order for relief in respect of the
Company by a court having jurisdiction in the premises in an involuntary
case under the Federal or state bankruptcy laws, as now or hereafter
constituted, and the continuance of any such decree or order unstayed and
in effect for a period of 60 consecutive days;
(6) the commencement by the Company of a voluntary case under the
Federal or state bankruptcy laws, as now or hereafter constituted, or the
consent by the Company to the entry of a decree or order for relief in an
involuntary case under any such law; or
(7) any other Event of Default provided with respect to Securities of
such series specified as contemplated by Section 301.
Section 502. Acceleration of Maturity; Rescission and Annulment.
--------------------------------------------------
If an Event of Default with respect to Securities of any series at
that time Outstanding occurs and is continuing, then in every such case the
Trustee or the Holders of not less than 25% in principal amount of the
Outstanding Securities of such series may declare the principal amount (or, if
any Securities of such series are Original Issue Discount Securities, such
portion of the principal amount of such Original Issue Discount Securities as
may be specified in the terms of such Original Issue Discount Securities) of all
the Securities of such series to be due and payable immediately, by a notice in
writing to the Company (and to the Trustee if given by Holders), and upon any
such declaration such principal amount (or specified amount), plus accrued and
unpaid interest (and premium, if any), shall become immediately due and payable.
At any time after such a declaration of acceleration with respect to
Securities of any series has been made and before a judgment or decree for
payment of the money due has been obtained by the Trustee as hereinafter in this
Article provided, the Holders of a majority in principal amount of the
Outstanding Securities of that series, by written notice to the Company and the
Trustee, may rescind and annul such declaration and its consequences if
<PAGE>
32
(1) the Company has paid or deposited with the Trustee a sum
sufficient to pay
(A) all overdue interest on all Securities of that series,
(B) the principal of (and premium, if any, on) any Securities of
that series which have become due otherwise than by such declaration
of acceleration and interest thereon at the rate or rates prescribed
therefor in such Securities,
(C) to the extent that payment of such interest is lawful,
interest upon overdue interest at the rate or rates prescribed
therefor in such Securities, and
(D) all sums paid or advanced by the Trustee hereunder and the
reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel; and
(2) all Events of Default with respect to Securities of that series,
other than the nonpayment of the principal of Securities of such series
which has become due solely by such declaration of acceleration, have been
cured or waived as provided in Section 513.
No such rescission shall affect any subsequent default or impair any
right consequent thereon.
Section 503. Collection of Indebtedness and Suits for Enforcement by
-------------------------------------------------------
Trustee.
- -------
The Company covenants that if
(1) default is made in the payment of any interest on any Security
when such interest becomes due and payable and such default continues for a
period of 30 days, or
(2) default is made in the payment of the principal of (or premium, if
any, on) any Security at the Maturity thereof,
the Company will, upon demand of the Trustee, pay to it, for the benefit of the
Holders of such Securities, the whole amount then due and payable on such
Securities for principal (and premium, if any) and interest and, to the extent
that payment of such interest shall be legally enforceable, interest on any
overdue principal (and premium, if any) and on any overdue interest, at the rate
or rates prescribed therefor in such Securities, and, in addition thereto, such
further amount as shall be sufficient to cover the costs and expenses of
collection, including the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel.
If the Company fails to pay such amounts forthwith upon such demand,
the Trustee, in its own name and as trustee of an express trust, may institute a
judicial proceeding for the collection of the sums so due and unpaid, may
prosecute such proceeding to judgment or final decree and may enforce the same
against the Company or any other obligor upon such Securities and collect the
moneys adjudged or decreed to be payable in the manner provided by law out of
the property of the Company or any other obligor upon such Securities, wherever
situated.
If an Event of Default with respect to Securities of any series occurs
and is continuing, the Trustee may in its discretion proceed to protect and
enforce its rights and the rights of the Holders of
<PAGE>
33
Securities of such series by such appropriate judicial proceedings as the
Trustee shall deem most effectual to protect and enforce any such rights,
whether for the specific enforcement of any covenant or agreement in this
Indenture or in aid of the exercise of any power granted herein, or to enforce
any other proper remedy.
Section 504. Trustee May File Proofs of Claim.
--------------------------------
In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
judicial proceeding relative to the Company or any other obligor upon the
Securities or the property of the Company or of such other obligor or their
creditors, the Trustee (irrespective of whether the principal of the Securities
shall then be due and payable as therein expressed or by declaration or
otherwise and irrespective of whether the Trustee shall have made any demand on
the Company for the payment of overdue principal or interest) shall be entitled
and empowered, by intervention in such proceeding or otherwise, to take any and
all actions authorized under the Trust Indenture Act in order to have claims of
the Holders and the Trustee allowed in any such proceeding. In particular, the
Trustee shall be authorized
(i) to file and prove a claim of the whole amount of principal
(and premium, if any) and interest owing and unpaid in respect of the
Securities and to file such other papers or documents as may be
necessary or advisable in order to have the claims of the Trustee
(including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel) and
of the Holders allowed in such judicial proceeding, and
(ii) to collect and receive any moneys or other property payable
or deliverable on any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Holder to make such payments to the Trustee and, in the event that the
Trustee shall consent to the making of such payments directly to the Holders, to
pay to the Trustee any amount due it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and other
amounts due the Trustee under Section 607.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Securities
or the rights of any Holder thereof or to authorize the Trustee to vote in
respect of the claim of the Holder in any such proceeding.
Section 505. Trustee May Enforce Claims Without Possession of
------------------------------------------------
Securities.
- ----------
All rights of action and claims under this Indenture or the Securities
may be prosecuted and enforced by the Trustee without the possession of any of
the Securities or the production thereof in any proceeding relating thereto, and
any such proceeding instituted by the Trustee shall be brought in its own name
as trustee of an express trust, and any recovery of judgment shall, after
provision for the payment of the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, be for the
ratable benefit of the Holders of the Securities in respect of which such
judgment has been recovered.
<PAGE>
34
Section 506. Application of Money Collected.
------------------------------
Any money collected by the Trustee pursuant to this Article shall be
applied in the following order, at the date or dates fixed by the Trustee and,
in case of the distribution of such money on account of principal (or premium,
if any) or interest, upon presentation of the Securities and the notation
thereof of the payment if only partially paid and upon surrender thereof if
fully paid:
FIRST: To the payment of all amounts due the Trustee hereunder; and
SECOND: To the payment of the amounts then due and unpaid for
principal of (and premium, if any) and interest on the Securities in respect of
which or for the benefit of which such money has been collected, ratably,
without preference or priority of any kind, according to the amounts due and
payable on such Securities for principal (and premium, if any) and interest,
respectively.
Section 507. Limitation on Suits.
-------------------
No Holder of any Security of any series shall have any right to
institute any proceeding, judicial or otherwise, with respect to this Indenture,
or for the appointment of a receiver or trustee, or for any other remedy
hereunder, unless
(1) such Holder has previously given written notice to the Trustee of
a continuing Event of Default with respect to the Securities of that
series;
(2) the Holders of not less than 25% in principal amount of the
Outstanding Securities of that series shall have made written request to
the Trustee to institute proceedings in respect of such Event of Default in
its own name as Trustee hereunder;
(3) such Holder or Holders have offered to the Trustee reasonable
indemnity against the costs, expenses and liabilities to be incurred in
compliance with such request;
(4) the Trustee for 60 days after its receipt of such notice, request
and offer of indemnity has failed to institute any such proceeding; and
(5) no direction inconsistent with such written request has been given
to the Trustee during such 60-day period by the Holders of a majority in
principal amount of the Outstanding Securities of that series;
it being understood and intended that no one or more of such Holders shall have
any right in any manner whatever by virtue of, or by availing of, any provision
of this Indenture to affect, disturb or prejudice the rights of any other of
such Holder or Holders of any other series, or to obtain or to seek to obtain
priority or preference over any other of such Holders or to enforce any right
under this Indenture, except in the manner herein provided and for the equal and
ratable benefit of all of such Holders.
Section 508. Unconditional Right of Holders to Receive Principal,
----------------------------------------------------
Premium and Interest.
- --------------------
Notwithstanding any other provision in this Indenture, the Holder of
any Security shall have the right, which is absolute and unconditional, to
receive payment of the principal of (and premium, if any) and (subject to
Section 307) interest on such Security on the Stated Maturity or Maturities
<PAGE>
35
expressed in such Security (or, in the case of redemption, on the Redemption
Date) and to institute suit for the enforcement of any such payment, and such
rights shall not be impaired without the consent of such Holder.
Section 509. Restoration of Rights and Remedies.
----------------------------------
If the Trustee or any Holder has instituted any proceeding to enforce
any right or remedy under this Indenture and such proceeding has been
discontinued or abandoned for any reason, or has been determined adversely to
the Trustee or to such Holder, then and in every such case, subject to any
determination in such proceeding, the Company, the Trustee, and the Holders
shall be restored severally and respectively to their former positions hereunder
and thereafter all rights and remedies of the Trustee and the Holders shall
continue as though no such proceeding had been instituted.
Section 510. Rights and Remedies Cumulative.
------------------------------
Except as otherwise provided with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Securities in the last paragraph
of Section 306, no right or remedy herein conferred upon or reserved to the
Trustee or to the Holders is intended to be exclusive of any other right or
remedy, and every right and remedy shall, to the extent permitted by law, be
cumulative and in addition to every other right and remedy given hereunder or
now or hereafter existing at law or in equity or otherwise. The assertion or
employment of any right or remedy hereunder, or otherwise, shall not prevent the
concurrent assertion or employment of any other appropriate right or remedy.
Section 511. Delay or Omission Not Waiver.
----------------------------
No delay or omission of the Trustee or of any Holder of any Security
to exercise any right or remedy accruing upon any Event of Default shall impair
any such right or remedy or constitute a waiver of any such Event of Default or
any acquiescence therein. Every right and remedy given by this Article or by
law to the Trustee or to the Holders may be exercised from time to time, and as
often as may be deemed expedient, by the Trustee or by the Holders, as the case
may be.
Section 512. Control by Holders.
------------------
The Holders of a majority in principal amount of the Outstanding
Securities of any series shall have the right to direct the time, method and
place of conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred on the Trustee, with respect to the
Securities of such series, provided that
(1) such direction shall not be in conflict with any rule of law or
with this Indenture, and
(2) the Trustee may take any other action deemed proper by the Trustee
which is not inconsistent with such direction.
Section 513. Waiver of Past Defaults.
-----------------------
The Holders of not less than a majority in principal amount of the
Outstanding Securities of any series may on behalf of the Holders of all the
Securities of such series waive any past default hereunder with respect to such
series and its consequences, except a default:
<PAGE>
36
(1) in the payment of the principal of (or premium, if any) or
interest on any Security of such series, or
(2) in respect of a covenant or provision hereof which under Article
Nine cannot be modified or amended without the consent of the Holder of
each Outstanding Security of such series affected.
Upon any such waiver, such default shall cease to exist, and any Event
of Default arising therefrom shall be deemed to have been cured, for every
purpose of this Indenture; but no such waiver shall extend to any subsequent or
other default or impair any right consequent thereon.
Section 514. Undertaking for Costs.
---------------------
All parties to this Indenture agree, and each Holder of any Security
by his acceptance thereof shall be deemed to have agreed, that any court may in
its discretion require, in any suit for the enforcement of any right or remedy
under this Indenture, or in any suit against the Trustee for any action taken,
suffered or omitted by it as Trustee, the filing by any party litigant in such
suit of an undertaking to pay the costs of such suit, and that such court may in
its discretion assess reasonable costs, including reasonable attorney's fees,
against any party litigant in such suit, having due regard to the merits and
good faith of the claims or defenses made by such party litigant; but the
provisions of this section shall not apply to any suit instituted by the
Company, to any suit instituted by the Trustee, to any suit instituted by any
Holder, or group of Holders, holding in the aggregate more than 10% in principal
amount of the Outstanding Securities of any series, or to any suit instituted by
any Holder for the enforcement of the payment of the principal of (or premium,
if any) or interest on any Security on or after the Stated Maturity or
Maturities expressed in such Security (or, in the case of redemption, on or
after the Redemption Date).
Section 515. Waiver of Stay or Extension Laws.
--------------------------------
The Company covenants (to the extent that it may lawfully do so) that
it will not at any time insist upon, or plead, or in any manner whatsoever claim
or take the benefit or advantage of, any stay or extension law wherever enacted,
now or at any time hereafter in force, which may affect the covenants or the
performance of this Indenture; and the Company (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such law
and covenants that it will not hinder, delay or impede the exercise of any power
herein granted to the Trustee, but will suffer and permit the exercise of every
such power as though no such law had been enacted.
ARTICLE SIX
THE TRUSTEE
Section 601. Certain Duties and Responsibilities.
-----------------------------------
(a) Except during the continuance of an Event of Default with respect
to Securities of any series,
<PAGE>
37
(1) the Trustee undertakes to perform, with respect to Securities of
such series, such duties and only such duties as are specifically set forth
in this Indenture, and no implied covenants or obligations shall be read
into this Indenture against the Trustee; and
(2) in the absence of bad faith on its part, the Trustee may, with
respect to Securities of such series, conclusively rely, as to the truth of
the statements and correctness of the opinions expressed therein, upon
certificates or opinions furnished to the Trustee and conforming to the
requirements of this Indenture; but in the case of any such certificates or
opinions which by any provision hereof are specifically required to be
furnished to the Trustee, the Trustee shall be under a duty to examine the
same to determine whether or not they conform to the requirements of this
Indenture.
(b) In case an Event of Default with respect to Securities of any
series has occurred and is continuing, the Trustee shall exercise, with respect
to Securities of such series, such of the rights and powers vested in it by this
Indenture, and use the same degree of care and skill in their exercise, as a
prudent man would exercise or use under the circumstances in the conduct of his
own affairs.
(c) No provision of this Indenture shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act, or its own wilful misconduct, except that
(1) this Subsection shall not be construed to limit the effect to
Subsection (a) of this Section;
(2) the Trustee shall not be liable for any error of judgment made in
good faith by a Responsible Officer, unless it shall be proved that the
Trustee was negligent in ascertaining the pertinent facts;
(3) the Trustee shall not be liable with respect to any action taken
or omitted to be taken by it in good faith in accordance with the Direction
of the Holders of majority in principal amount of the Outstanding
Securities of any series, determined as provided in Section 512, relating
to the time, method and place of conducting any proceeding for any remedy
available to the Trustee, or exercising any trust or power conferred upon
the Trustee, under this Indenture with respect to the Securities of such
series; and
(4) no provision of this Indenture shall require the Trustee to expend
or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder, or in the exercise of any of
its rights or powers, if it shall have reasonable grounds for believing
that repayment of such funds or adequate indemnity against such risk or
liability is not reasonably assured to it.
(d) Whether or not therein expressly so provided, every provision of
this Indenture relating to the conduct or affecting the liability of or
affording protection to the Trustee shall be subject to the provisions of this
Section.
Section 602. Notice of Defaults.
------------------
Within 90 days after the occurrence of any default hereunder with
respect to the Securities of any series, the Trustee shall transmit by mail to
all Holders of Securities of such series, as
<PAGE>
38
their names and addresses appear in the Security Register, notice of such
default hereunder known to the Trustee, unless such default shall have been
cured or waived; provided, however, that, except in the case of a default in the
payment of the principal of (or premium, if any) or interest on any Security of
such series or in the payment of any sinking fund instalment with respect to
Securities of such series, the Trustee shall be protected in withholding such
notice if and so long as a Responsible Officer of the Trustee in good faith
determines that the withholding of such notice is in the interest of the Holders
of Securities of such series; and provided, further, that in the case of any
default of the character specified in Section 501(4) with respect to Securities
of such series, no such notice to Holders shall be given until at least 30 days
after the occurrence thereof. For the purpose of this Section, the term
"default" means any event which is, or after notice or lapse of time or both
would become, an Event of Default with respect to Securities of such series.
Section 603. Certain Rights of Trustee.
-------------------------
Subject to the provisions of Section 601:
(a) the Trustee may conclusively rely and shall be fully protected in
acting or refraining from acting upon any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction,
consent, order, bond, debenture, note, other evidence of indebtedness or
other paper or document believed by it to be genuine and to have been
signed or presented by the proper party or parties;
(b) any request or direction of the Company mentioned herein shall be
sufficiently evidenced by a Company Request or Company Order and any
resolution of the Board of Directors may be sufficiently evidenced by a
Board Resolution;
(c) whenever in the administration of this Indenture the Trustee shall
deem it desirable that a matter be proved or established prior to taking,
suffering or omitting any action hereunder, the Trustee (unless other
evidence be herein specifically prescribed) may, in the absence of bad
faith on its part, conclusively rely upon an Officers' Certificate;
(d) the Trustee may consult with counsel and the written advice of
such counsel or any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken, suffered or
omitted by it hereunder in good faith and in reliance thereon;
(e) the Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or direction
of any of the Holders pursuant to this Indenture, unless such Holders shall
have offered to the Trustee reasonable security or indemnity against the
costs, expenses and liabilities which might be incurred by it in compliance
with such request or direction;
(f) the Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture, note, other evidence of indebtedness or other paper or
document, but the Trustee, in its direction, may make such further inquiry
or investigation into such facts or matters as it may see fit, and, if the
Trustee shall determine to make such further inquiry or investigation, it
shall be entitled to examine the books, records and premises of the
Company, personally or by agent or attorney; and
<PAGE>
39
(g) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents,
custodians, nominees or attorneys, and the Trustee shall not be responsible
for any misconduct or negligence on the part of any agent, custodian,
nominee or attorney appointed with due care by it hereunder.
Section 604. Not Responsible for Recitals or Issuance of Securities.
------------------------------------------------------
The recitals contained herein and in the Securities, except the
Trustee's certificates of authentication, shall be taken as the statements of
the Company, and the Trustee or any Authenticating Agent assumes no
responsibility for their correctness. The Trustee makes no representations as
to the validity of sufficiency of this Indenture or of the Securities. Neither
the Trustee nor any Authenticating Agent shall be accountable for the use or
application by the Company of Securities or the proceeds thereof.
Section 605. May Hold Securities.
-------------------
The Trustee, any Authenticating Agent, any Paying Agent, any Security
Registrar or any other agent of the Company, in its individual or any other
capacity, may become the owner or pledgee of Securities and, subject to Section
603 and 613, may otherwise deal with the Company with the same rights it would
have if it were not Trustee, Authenticating Agent, Paying Agent, Security
Registrar or such other agent.
Section 606. Money Held in Trust.
-------------------
Money held by the Trustee in trust hereunder need not be segregated
from other funds except to the extent required by law. The Trustee shall be
under no liability for interest on any money received by it hereunder except as
otherwise agreed with the Company.
Section 607. Compensation and Reimbursement.
------------------------------
The Company agrees
(1) to pay to the Trustee from time to time reasonable compensation
for all services rendered by it hereunder (which compensation shall not be
limited by any provision of law in regard to the compensation of a trustee
of any express trust);
(2) except as otherwise expressly provided herein, to reimburse the
Trustee upon its request for all reasonable expenses, disbursements and
advances incurred or made by the Trustee in accordance with any provision
of this Indenture (including the reasonable compensation and the expenses
and disbursements of its agents and counsel), except any such expense,
disbursement or advance as may be attributable to its negligence or bad
faith; and
(3) to indemnify the Trustee and its officers, employees and directors
for, and to hold them harmless against, any loss, liability or expense
incurred without negligence or bad faith on their part, arising out of or
in connection with the acceptance or administration of the trust or trusts
hereunder, including the costs and expenses of defending themselves against
any claim or liability in connection with the exercise or performance of
any of the powers or duties of the Trustee hereunder.
<PAGE>
40
As security for the performance of the obligations of the Company
under this Section, the Trustee shall have a lien prior to the Securities upon
all property and funds held or collected by the Trustee as such, except for
funds held in trust for the benefit of the Holders of Securities.
When the Trustee incurs expenses or renders services in connection
with an Event of Default hereunder, the fees, charges, expenses and indemnities
provided for in this Section 607 (including the charges of Trustee's counsel)
are intended to constitute expenses of the administration under any applicable
Federal or state bankruptcy, insolvency or other similar law.
The provision of this Section 607 shall survive the termination of
this Indenture or the earlier resignation or removal of the Trustee, any Paying
Agent or any Authenticating Agent, as the case may be.
Section 608. Disqualification; Conflicting Interests.
---------------------------------------
If the Trustee has or shall acquire a conflicting interest within the
meaning of the Trust Indenture Act, the Trustee shall either eliminate such
interest or resign, to the extent and in the manner provided by, and subject to
the provisions of, the Trust Indenture Act and this Indenture.
Section 609. Corporate Trustee Required; Eligibility.
---------------------------------------
There shall at all times be a Trustee hereunder which shall be a
corporation which satisfies the requirements of Section 310(a) of the Trust
Indenture Act and which has a combined capital and surplus of not less than
$50,000,000. If such corporation publishes reports of condition at least
annually, pursuant to law or to the requirements of a supervising or examining
authority, then for the purposes of this Section, the combined capital and
surplus of such corporation shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published. If at
any time the Trustee shall cease to be eligible in accordance with the
provisions of this Section, it shall resign immediately in the manner and with
the effect hereinafter specified in this Article.
Section 610. Resignation and Removal; Appointment of Successor.
-------------------------------------------------
(a) No resignation or removal of the Trustee and no appointment of a
successor Trustee pursuant to this Article shall become effective until the
acceptance of appointment by the successor Trustee in accordance with the
applicable requirements of Section 611.
(b) The Trustee may resign at any time with respect to the Securities
of one or more series by giving written notice thereof to the Company. If the
instrument of acceptance by a successor Trustee required by Section 611 shall
not have been delivered to the Trustee within 30 days after the giving of such
notice of resignation, the resigning Trustee may petition any court of competent
jurisdiction for the appointment of a successor Trustee with respect to such
series.
(c) The Trustee may be removed at any time with respect to the
Securities of any series by Act of the Holders of a majority in principal amount
of the Outstanding Securities of such series, delivered to the Trustee and to
the Company.
<PAGE>
41
(d) If at any time
(1) the Trustee shall fail to comply with Section 608 after written
request therefor by the Company or by any Holder who has been a bona fide
Holder of a Security for at least six months, or
(2) the Trustee shall cease to be eligible under Section 609 and shall
fail to resign after written request therefor by the Company or by any such
Holder, or
(3) the Trustee shall become incapable of acting or shall be adjudged
a bankrupt or insolvent or a receiver of the Trustee or of its property
shall be appointed or any public officer shall take charge or control of
the Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation,
then, in any such case, (i) the Company by a Board Resolution may remove the
Trustee with respect to all Securities, or (ii) subject to Section 514, any
Holder who has been a bona fide Holder of a Security for at least six months
may, on behalf of himself and all other similarly situated, petition any court
of competent jurisdiction for the removal of the Trustee with respect to all
Securities and the appointment of a successor Trustee or Trustees.
(e) If the Trustee shall resign, be removed or become incapable of
acting, or if a vacancy shall occur in the office of Trustee for any cause, with
respect to the Securities of one or more series, the Company, by a Board
Resolution, shall promptly appoint a successor Trustee or Trustees with respect
to the Securities of that or those series (it being understood that any such
successor Trustee may be appointed with respect to the Securities of one or more
or all of such series and that at any time there shall be only one Trustee with
respect to the Securities of any particular series) and shall comply with the
applicable requirements of Section 611. If, within one year after such
resignation, removal, or incapability, or the occurrence of such vacancy, a
successor Trustee with respect to the Securities of any series shall be
appointed by Act of the Holders of a majority in principal amount of the
Outstanding Securities of such series delivered to the Company and the retiring
Trustee, the successor Trustee so appointed shall, forthwith upon its acceptance
of such appointment in accordance with the applicable requirements of Section
611, become the successor Trustee with respect to the Securities of such series
and to that extent supersede the successor Trustee appointed by the Company. If
no successor Trustee with respect to the Securities of any series shall have
been so appointed by the Company or the Holders and accepted appointment in the
manner required by Section 611, any holder who has been a bona fide Holder of a
Security of such series for at least six months may, on behalf of himself and
all other similarly situated, petition any court of competent jurisdiction for
the appointment of a successor Trustee with respect to the Securities of such
series.
(f) The Company shall give notice of each resignation and each removal
of the Trustee with respect to the Securities of any series and each appointment
of a successor Trustee with respect to the Securities of any series by mailing
written notice of such event by first-class mail, postage prepaid, to all
Holders of Securities of such series as their names and addresses appear in the
Security Register. Each notice shall include the name of the successor Trustee
with respect to the Securities of such series and the address of its Corporate
Trust Office.
(g) Upon the appointment of a successor Trustee (except pursuant to
Section 612), all fees, charges and expenses to date of the retiring Trustee
shall become immediately due and payable.
<PAGE>
42
(h) The retiring Trustee shall have no liability for the acts or
omissions of any successor Trustee hereunder except with respect to successors
pursuant to Section 612.
Section 611. Acceptance of Appointment by Successor.
--------------------------------------
(a) In case of the appointment hereunder of a successor Trustee with
respect to all Securities, every such successor Trustee so appointed shall
execute, acknowledge and deliver to the Company and to the retiring Trustee an
instrument accepting such appointment, and thereupon the resignation or removal
of the retiring Trustee shall become effective and such successor Trustee,
without any further act, deed or conveyance, shall become vested with all the
rights, powers, trusts and duties of the retiring Trustee; but, on the request
of the Company or the successor Trustee, such retiring Trustee shall, upon
payment of its charges, execute and deliver an instrument transferring to such
successor Trustee all the rights, powers, and trusts of the retiring Trustee and
shall duly assign, transfer and deliver to such successor Trustee all property
and money held by such retiring Trustee hereunder, subject nevertheless to its
lien, if any, provided for in Section 607.
(b) In case of the appointment hereunder of a successor Trustee with
respect to the Securities of one or more (but not all) series, the Company, the
retiring Trustee and each successor Trustee with respect to the Securities of
one or more series shall execute and deliver an indenture supplemental hereto
wherein each successor Trustee shall accept such appointment and which (1) shall
contain such provisions as shall be necessary or desirable to transfer, and
confirm to, and to vest in, each successor Trustee all the rights, powers,
trusts and duties of the retiring Trustee with respect to the Securities of that
or those series to which the appointment of such successor Trustee relates, (2)
if the retiring Trustee is not retiring with respect to all Securities, shall
contain such provisions as shall be deemed necessary or desirable to confirm
that all the rights, powers, trusts and duties of the retiring Trustee with
respect to the Securities of that or those as to which the retiring Trustee is
not retiring shall continue to be vested in the retiring Trustee, and (3) shall
add to or change any of the provisions of this Indenture as shall be necessary
to provide for or facilitate the administration of the trusts hereunder by more
than one Trustee, it being understood that nothing herein or in such
supplemental indenture shall constitute such Trustees co-trustees of the same
trust, that each such Trustee shall be trustee of a trust or trusts hereunder
separate and apart from any trust or trusts hereunder administered by any other
such Trustee and that no Trustee shall be responsible for any act or failure to
act on the part of any other Trustee hereunder, and upon the execution and
delivery of such supplemental indenture the resignation or removal of the
retiring Trustee shall become effective to the extent provided therein, such
retiring Trustee shall with respect to the Securities of that or those series to
which the appointment of such successor Trustee relates have no further
responsibility for the exercise of rights and powers or for the performance of
the duties and obligations vested in the Trustee under this Indenture, and each
such successor Trustee, without any further act, deed or conveyance, shall
become vested with all the rights, powers, trusts and duties of the retiring
Trustee with respect to the Securities of that or those series to which the
appointment of such successor Trustee relates; but, on request of the Company or
any successor Trustee, such retiring Trustee shall duly assign, transfer and
deliver to such successor Trustee, to the extent contemplated by such
supplemental indenture, the property and money held by such retiring Trustee
hereunder with respect to property and money held by such retiring Trustee
hereunder with respect to the Securities of that or those series to which the
appointment of such successor Trustee relates.
(c) Upon request of any such successor Trustee, the Company shall
execute any and all instruments for more fully and certainly vesting in and
confirming to such successor Trustee all such rights, powers and trusts referred
to in paragraphs (a) or (b) of this Section, as the case may be.
<PAGE>
43
(d) No successor Trustee shall accept its appointment unless at the
time of such acceptance such successor Trustee shall be qualified and eligible
under this Article.
Section 612. Merger, Conversion, Consolidation or Succession to
--------------------------------------------------
Business.
- --------
Any corporation into which the Trustee may be merged or converted or
with which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all the corporate trust business
of the Trustee, shall be the successor of the Trustee hereunder, provided such
corporation shall be otherwise qualified and eligible under this Article,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto. In case any Securities shall have been
authenticated, but not delivered, by the Trustee then in office, any successor
by merger, conversion or consolidation to such authenticating Trustee may adopt
such authentication and deliver the Securities so authenticated with the same
effect as if such successor Trustee had itself authenticated such Securities.
Section 613. Preferential Collection of Claims Against Company.
-------------------------------------------------
If the Trustee shall be or shall become a creditor, directly or
indirectly, secured or unsecured, of the Company or of any other obligor on the
Securities, the Trustee shall be subject to the provisions of the Trust
Indenture Act regarding the collection of claims against the Company or any such
other obligor on the Securities.
Section 614. Appointment of Authenticating Agent.
-----------------------------------
At any time when any of the Securities remain Outstanding, the Trustee
may appoint an Authenticating Agent or Agents with respect to one or more series
of Securities which shall be authorized to act on behalf of the Trustee to
authenticate Securities of such series issued upon exchange, registration of
transfer or partial redemption thereof and Securities so authenticated shall be
entitled to the benefits of this Indenture and shall be valid and obligatory for
all purposes as if authenticated by the Trustee hereunder. Wherever reference
is made in this Indenture to the authentication and delivery of Securities by
the Trustee or the Trustee's certificate of authentication, such reference shall
be deemed to include authentication and delivery on behalf of the Trustee by an
Authenticating Agent and a certificate of authentication executed on behalf of
the Trustee by an Authenticating Agent. Each Authenticating Agent shall be
acceptable to the Company and shall at all times be a corporation organized and
doing business under the laws of the United States of America, any State thereof
or the District of Columbia, authorized under such laws to act as Authenticating
Agent, having a combined capital and surplus of not less than $50,000,000 and
subject to supervision or examination by Federal or State authority. If such
Authenticating Agent publishes reports of condition at least annually, pursuant
to law or to the requirements of said supervising or examining authority, then
for the purpose of this Section, the combined capital and surplus of such
Authenticating Agent shall be deemed to be its combined capital and surplus as
set forth in its most recent report of condition so published. If at any time
an Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, such Authenticating Agent shall resign immediately
in the manner and with the effect specified in this Section.
Any corporation into which an Authenticating Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which such Authenticating Agent
shall be a party, or any corporation succeeding to the corporate agency or
corporate trust business of an Authenticating Agent, shall continue to be an
<PAGE>
44
Authenticating Agent, provided such corporation shall be otherwise eligible
under this Section, without the execution or filing of any paper or any further
act on the part of the Trustee or the Authenticating Agent.
An Authenticating Agent may resign at any time by giving written
notice thereof to the Trustee and to the Company. The Trustee may at any time
terminate the agency of an Authenticating Agent by giving written notice thereof
to such Authenticating Agent and to the Company. Upon receiving such notice of
resignation or upon such termination, or in case at any time such Authenticating
Agent shall cease to be eligible in accordance with the provisions of this
Section, the Trustee may appoint a successor Authenticating Agent which shall be
acceptable to the Company and shall mail written notice of such appointment by
first-class mail, postage prepaid, to all Holders of Securities of the series
with respect to which such Authenticating Agent will serve, as their names and
addresses appear in the Security Register. Any successor Authenticating Agent
upon acceptance of its appointment hereunder shall become vested with all the
rights, powers and duties of its predecessor hereunder, with like effect as if
originally named as an Authenticating Agent. No successor Authenticating Agent
shall be appointed unless eligible under the provisions of this Section.
The Trustee agrees to pay to each Authenticating Agent from time to
time reasonable compensation for its services under this Section, and the
Trustee shall be entitled to be reimbursed for such payments, subject to the
provisions of Section 607.
The provisions of Sections 308, 603, 604, 605, 607 and 612 shall be
applicable to each Authenticating Agent.
Pursuant to each appointment made under this Section, the Securities
of each series covered by such appointment may have endorsed thereon, in
addition to the Trustee's certificate of authentication, an alternative
certificate of authentication in the following form:
This is one of the Securities of the series designated therein
referred to in the within-mentioned Indenture.
[NAME OF TRUSTEE]
as Trustee
By:______________________________
As Authenticating Agent
By:______________________________
Authorized Officer
In the event that the Trustee is also acting as Paying Agent and
Registrar hereunder, the rights and protections afforded to the Trustee pursuant
to this Article Six shall also be afforded to such Paying Agent and Registrar.
<PAGE>
45
ARTICLE SEVEN
LISTS OF HOLDERS AND REPORTS BY TRUSTEE AND COMPANY
Section 701. Company to Furnish Trustee Names and Addresses of
-------------------------------------------------
Holders.
- -------
The Company will furnish or cause to be furnished to the Trustee
(a) semi-annually, not more than 15 days after each Regular Record
Date, in each year, a list, in such form as the Trustee may reasonably
require, of the names and addresses of the Holders as of such Regular
Record Date, and
(b) at such times as the Trustee may request in writing, within 30
days after the receipt by the Company of any such request, a list of
similar form and content as of a date not more than 15 days prior to the
time such list is furnished;
excluding from any such list names and addresses received by the Trustee in its
capacity as Co-Security Registrar.
Section 702. Preservation of Information; Communications to Holders.
------------------------------------------------------
(a) The Trustee shall preserve, in as current a form as is reasonably
practicable, the names and addresses of Holders contained in the most recent
list furnished to the Trustee as provided in Section 701 and the names and
addresses of Holders received by the Trustee in its capacity as Co-Security
Registrar. The Trustee may destroy any list furnished to it as provided in
Section 701 upon receipt of a new list so furnished.
(b) The rights of Holders to communicate with other Holders with
respect to their rights under this Indenture or under the Securities, and the
corresponding rights and privileges of the Trustee, shall be as provided by the
Trust Indenture Act.
(c) Every Holder of Securities, by receiving and holding the same,
agrees with the Company and the Trustee that neither the Company nor the Trustee
nor any agent of either of them shall be held accountable by reason of the
disclosure of any such information as to the names and addresses of the Holders
made pursuant to the Trust Indenture Act.
Section 703. Reports by Trustee.
------------------
(a) Within 60 days after May 15 of each year commencing with the year
2000, the Trustee shall transmit by mail to all Holders, as their names and
addresses appear in the Security Register, a brief report dated as of such May
15 that complies with the Trust Indenture Act.
(b) The Trustee shall transmit by mail to all Holders such other
reports concerning the Trustee and its actions under this Indenture as may be
required pursuant to the Trust Indenture Act at the times and in the manner
provided pursuant thereto.
(c) A copy of each such report shall, at the time of such transmission
to Holders, be filed by the Trustee with each stock exchange upon which any
Securities are listed, with the Commission
<PAGE>
46
and with the Company. The Company will notify the Trustee when any Securities
are listed on any stock exchange.
Section 704. Reports by Company.
------------------
The Company shall file with the Trustee and the Commission, and
transmit to Holders, such information, documents and other reports, and such
summaries thereof, as may be required pursuant to the Trust Indenture Act;
provided that any such information, documents or reports required to be filed
with the Commission pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934, as amended, shall be filed with the Trustee within 15 days after
the same is so required to be filed with the Commission.
ARTICLE EIGHT
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
Section 801. Company May Consolidate, Etc. Only on Certain Terms.
---------------------------------------------------
The Company shall not consolidate with or merge into any other
corporation or sell, convey, exchange, transfer or lease its properties and
assets substantially as an entirety to any Person, unless:
(1) the corporation formed by such consolidation or into which the
Company is merged or the Person which acquires by conveyance or transfer,
or which leases, the properties and assets of the Company substantially as
an entirety shall be a corporation organized and existing under the laws of
the United States of America, any State thereof or the District of Columbia
and shall expressly assume, by an indenture supplemental hereto, executed
and delivered to the Trustee, in form satisfactory to the Trustee, the due
and punctual payment of the principal of (and premium, if any) and interest
on all the Securities and the performance of every covenant of this
Indenture on the part of the Company to be performed or observed;
(2) immediately after giving effect to such transaction and treating
any indebtedness which becomes an obligation of the Company or a Subsidiary
as a result of such transaction as having been incurred by the Company or
such Subsidiary at the time of such transaction, no Event of Default, and
no event which, after notice or lapse of time or both, would become an
Event of Default, shall have happened and be continuing; and
(3) the Company has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel, each stating that such consolidation, merger,
conveyance, transfer or lease and supplemental indenture comply with this
Article and that all conditions precedent herein provided for relating to
such transaction have been complied with.
Section 802. Securities to Be Secured in Certain Events.
------------------------------------------
If, upon any consolidation, merger, conveyance, transfer or lease
referred to in Section 801, any Principal Property of the Company or of any
Restricted Subsidiary or any shares of stock or indebtedness of any Restricted
Subsidiary owned immediately prior thereto would thereupon become subject to any
mortgage, security interest, pledge, lien or encumbrance, other than liens
permitted under
<PAGE>
47
Section 1004 or Section 1006, without securing the Securities, the Company,
prior to such consolidation, merger, conveyance, transfer or lease, will by an
indenture supplemental hereto secure the due and punctual payment of the
principal of and interest on the Securities (equally and ratably with any other
indebtedness of the Company then, or as a result thereof to be, secured thereby)
by a direct lien on such Principal Property, shares of stock or indebtedness,
prior to all liens other than any then existing thereon and then so permitted by
Section 1004 or Section 1006.
Section 803. Successor Corporation Substituted.
---------------------------------
Upon any consolidation by the Company with or merger by the Company
into any other corporation or any conveyance, transfer or lease of the
properties and assets of the Company substantially as an entirety in accordance
with Section 801, the successor corporation formed by such consolidation or into
which the Company is merged or to which such conveyance, transfer or lease is
made shall succeed to, and be substituted for, and may exercise every right and
power of, the Company under this Indenture with the effect as if such successor
corporation had been named as the Company herein, and thereafter, except in the
case of a lease, the predecessor corporation shall be relieved of all
obligations and covenants under this Indenture and the Securities.
Section 804. Assumption by Subsidiary of Company's Obligations.
-------------------------------------------------
A Subsidiary may assume the obligations of the Company for the due and
punctual payment of the principal of (and premium, if any) and interest on the
Securities and the performance of the Company's other obligations under this
Indenture and the Securities, to be performed or observed, provided that:
(1) such Subsidiary shall expressly assume such obligations by an
indenture supplemental hereto, executed and delivered to the Trustee;
(2) the Company shall guarantee the obligations of such Subsidiary
under the Securities and this Indenture;
(3) in addition to assuming obligations under the Securities and this
Indenture, such Subsidiary shall agree to indemnify the Holder of each
Security against (a) any tax, assessment or governmental charge imposed as
a result of or relating to the act of such assumption and (b) costs or
expenses incurred directly in connection with the act of assumption;
(4) immediately after giving effect to such transaction, no Event of
Default, and no event which, after notice or lapse of time or both, would
become an Event of Default, shall have happened and be continuing;
(5) the Company shall deliver to the Trustee an Officers' Certificate
and an Opinion of Counsel, to the effect that (a) such assumption, (b) such
guarantee and (c) such supplemental indenture comply with this Article and
that all conditions precedent herein provided for relating to such
assumption have been complied with and such supplemental indenture and
guarantee by the Company have been duly authorized and delivered by the
Company, and each constitutes a valid and legally binding instrument of the
Company, enforceable in accordance with its terms subject to bankruptcy,
insolvency, reorganization, moratorium or other laws relating to or
affecting the enforcement of creditors' rights generally, and subject, as
to enforcement, to general
<PAGE>
48
principles of equity, and any other customary exceptions which such counsel
states do not materially prejudice the rights of the Holders under this
Indenture and the Securities; and
(6) such Subsidiary shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel to the effect that (a) such
Subsidiary has obtained all governmental and regulatory approvals and
consents necessary for its assumption of liability as principal debtor in
respect of the Securities in place of the Company; (b) such approvals and
consents are at the time of assumption in full force and effect; and (c)
such supplemental indenture has been duly authorized and delivered by such
Subsidiary, constitutes a valid and legally binding instrument of such
Subsidiary, enforceable in accordance with its terms subject to bankruptcy,
insolvency, reorganization, moratorium or other laws relating to or
affecting the enforcement of creditors' rights generally and subject, as to
enforcement, to general principles of equity, and any other customary
exceptions which such counsel states do not materially prejudice the rights
of the Holders under this Indenture and the Securities.
Upon compliance with, and subject to, the requirements set forth above
in this Section 804, such Subsidiary shall succeed to and be substituted for the
Company, with the same effect as if it had been named as the Company herein and
in the Securities in place of the Company; and the Company shall thereupon be
relieved of any further obligation or liability hereunder or upon the Securities
(except as provided in its guarantee as aforesaid). Such Subsidiary may cause
to be signed, and may issue in its own name, any or all of the Securities
issuable hereunder which theretofore shall not have been signed by the Company
and delivered to the Trustee; and, upon the order of such Subsidiary, instead of
the Company, and subject to all the terms, conditions and limitations in this
Indenture prescribed, the Trustee shall authenticate and shall deliver any
Securities which previously shall have been signed and delivered as provided
herein, with the guarantee of the Company endorsed thereon, and any Securities
which such Subsidiary thereafter shall cause to be signed and delivered, with
the guarantee of the Company endorsed thereon, to the Trustee for that purpose.
All the Securities so issued shall in all respects have the same legal rank and
benefit under this Indenture as the Securities theretofore or thereafter issued
in accordance with the terms of this Indenture as though all of such Securities
had been issued at the date thereof. In the event a Subsidiary shall assume the
obligations of the Company in accordance with this Section 804, such changes in
phraseology and form (but not in substance) may be made in the Securities
thereafter to be issued as may be appropriate.
ARTICLE NINE
SUPPLEMENTAL INDENTURES
Section 901. Supplemental Indentures Without Consent of Holders.
--------------------------------------------------
Without the consent of any Holders, the Company, when authorized by a
Board Resolution, and the Trustee, at any time and from time to time, may enter
into one or more indentures supplemental hereto, in form satisfactory to the
Trustee, for any of the following purposes:
(1) to evidence the succession of another corporation to the Company
and the assumption by any such successor of the covenants of the Company
herein and in the Securities or to evidence the assumption by a Subsidiary
of the Company's obligations in accordance with Section 803;
<PAGE>
49
(2) to add to the covenants of the Company for the benefit of the
Holders of all or any series of Securities (and if such covenants are to be
for the benefit of less than all series of Securities, stating that such
covenants are expressly being included solely for the benefit of such
series) or to surrender any right or power herein conferred upon the
Company;
(3) to add any additional Events of Default;
(4) to add to or change any of the provisions of this Indenture to
such extent as shall be necessary to permit or facilitate the issuance of
Securities in bearer form, registrable or not registrable as to principal,
and with or without interest coupons;
(5) to add to, change or eliminate any of the provisions of this
Indenture in respect of one or more series of Securities; provided that any
such addition, change or elimination (i) shall neither (A) apply to any
Security of any series created prior to the execution of such supplemental
indenture and entitled to the benefit of such provision nor (B) modify the
rights of the Holders of any such Security with respect to such provision
or (ii) shall become effective only when there is no such Security
Outstanding;
(6) to secure the Securities;
(7) to establish the form or terms of Securities of any series as
permitted by Section 201 and 301;
(8) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee with respect to the Securities of one or
more series and to add to or change any of the provisions of this Indenture
as shall be necessary to provide for or facilitate the administration of
the trusts hereunder by more than one Trustee, pursuant to the requirements
of Section 611(b); or
(9) to cure any ambiguity, to correct or supplement any provision
contained herein or in any supplemental indenture which may be inconsistent
with any other provision herein or in any supplemental indenture, or to
make any other provisions with respect to matters or questions arising
under this Indenture or under any supplemental indenture, provided such
action shall not adverselx affect the interests of the Holders of
Securities of any series in any material respect.
Section 902. Supplemental Indentures With Consent of Holders.
-----------------------------------------------
With the consent of the Holders of not less than 66 2/3% in principal
amount of the Outstanding Securities of each series affected by such
supplemental indenture, by Act of said Holders delivered to the Company and the
Trustee, the Company, when authorized by a Board Resolution, and the Trustee may
enter into an indenture or indentures supplemental hereto for the purpose of
adding any provisions to or changing in any manner or eliminating any of the
provisions of this Indenture or of modifying in any manner the rights of the
Holders of Securities of such series under this Indenture; provided, however,
that no such supplemental indenture shall, without the consent of the Holder of
each Outstanding Security affected thereby,
(1) change the Stated Maturity of the principal of, or any instalment
of principal or of interest on, any Security, or reduce the principal
amount thereof or the rate of interest thereon or any premium payable upon
the redemption thereof, or reduce the amount of the principal of an
<PAGE>
50
Original Issue Discount Security that would be due and payable upon a
declaration of acceleration of the Maturity thereof pursuant to Section
502, or change any Place of Payment where, or the coin or currency in
which, any Security or any premium or the interest thereon is payable, or
impair the right to institute suit for the enforcement of any such payment
on or after the Stated Maturity thereof (or, in the case of redemption, on
or after the Redemption Date), or
(2) reduce the percentage in principal amount of the Outstanding
Securities of any series, the consent of whose Holders is required for any
such supplemental indenture, or the consent of whose Holders is required
for any waiver (of compliance with certain provisions of this Indenture or
certain defaults hereunder and their consequences) provided for in this
Indenture, or
(3) modify the provisions of this Indenture with respect to
subordination of the Securities in a manner adverse to the Holders of such
series, or
(4) modify any of the provisions of this Section, Section 513 or
Section 1008, except to increase any such percentage or to provide that
certain other provisions of this Indenture cannot be modified or waived
without the consent of the Holder of each Outstanding Security affected
thereby; provided, however, that this clause shall not be deemed to require
the consent of any Holder with respect to changes in the references to "the
Trustee" and concomitant changes in Section 1008 or the deletion of this
provision, in accordance with the requirements of Section 611(b) and
901(8).
A supplemental indenture which changes or eliminates any covenant or other
provision of this Indenture which has expressly been included solely for the
benefit of one or more particular series of Securities, or which modifies the
rights of the Holders of Securities of such series with respect to such covenant
or other provision, shall be deemed not to affect the rights under this
Indenture of the Holders of Securities of any other series.
It shall not be necessary for any Act of Holders under this Section to
approve the particular form of any proposed supplemental indenture, but it shall
be sufficient if such Act shall approve the substance thereof.
Section 903. Execution of Supplemental Indentures.
------------------------------------
In executing or accepting the additional trusts created by, any
supplemental indenture permitted by this Article or the modification thereby of
the trusts created by this Indenture, the Trustee shall be entitled to receive,
and (subject to Section 601) shall be fully protected in relying upon, an
Officers' Certificate stating that all conditions precedent to the execution of
such supplemental indenture have been fulfilled and an Opinion of Counsel
stating that the execution of such supplemental indenture is authorized or
permitted by this Indenture. The Trustee may, but shall not be obligated to,
enter into any such supplemental indenture which affects the Trustee's own
rights, duties or immunities under this Indenture or otherwise.
Section 904. Effect of Supplemental Indentures.
---------------------------------
Upon the execution of any supplemental indenture under this Article,
this Indenture shall be modified in accordance therewith, and such supplemental
indenture shall form a part of this Indenture
<PAGE>
51
for all purposes; and every Holder of Securities theretofore or thereafter
authenticated and delivered hereunder shall be bound thereby.
Section 905. Conformity With Trust Indenture Act.
-----------------------------------
Every supplemental indenture executed pursuant to this Article shall
conform to the requirements of the Trust Indenture Act as then in effect.
Section 906. Reference in Securities to Supplemental Indentures.
--------------------------------------------------
Securities of any series authenticated and delivered after the
execution of any supplemental indenture pursuant to this Article may, and shall
if required by the Trustee, bear a notation in form approved by the Trustee as
to any matter provided for in such supplemental indenture. If the Company shall
so determine, new Securities of any series so modified as to conform, in the
opinion of the Trustee and the Company, to any such supplemental indenture may
be prepared and executed by the Company and authenticated and delivered by the
Trustee in exchange for Outstanding Securities of such series.
ARTICLE TEN
COVENANTS
Section 1001. Payment of Principal, Premium and Interest.
------------------------------------------
The Company covenants and agrees for the benefit of each series of
Securities that it will duly and punctually pay the principal of (and premium,
if any) and interest on the Securities of that series in accordance with the
terms of the Securities and this Indenture.
Section 1002. Maintenance of Office or Agency.
-------------------------------
The Company will maintain in each Place of Payment for any series of
Securities an office or agency where Securities of that series may be presented
or surrendered for payment, where Securities of that series may be surrendered
for registration of transfer or exchange and where notices and demands to or
upon the Company in respect of the Securities of that series and this Indenture
may be served. The Company will give prompt, written notice to the Trustee of
the location, and any change in the location, of such office or agency. If at
any time the Company shall fail to maintain any such required office or agency
or shall fail to furnish the Trustee with the address thereof, such
presentations, surrenders, notices and demands may be made or served at the
Corporate Trust Office of the Trustee, and the Company hereby appoints the
Trustee as its agent to receive all such presentations, surrenders, notices and
demands.
The Company may also from time to time designate one or more other
offices or agencies where the Securities of one or more series may be presented
or surrendered for any or all such purposes and may from time to time rescind
such designations; provided, however, that no such designation or rescission
shall in any manner relieve the Company of its obligation to maintain an office
or agency in each Place of Payment for Securities of any series for such
purposes. The Company will give prompt written notice to the Trustee of any
such designations or rescission and of any change in the location of any such
other office or agency. The Company hereby designates as a Place of Payment for
<PAGE>
52
each series of Securities, the Borough of Manhattan, The City of New York, and
appoints the Trustee at its Corporate Trust Office as Paying Agent in such city.
Section 1003. Money for Securities Payments to be Held in Trust.
-------------------------------------------------
If the Company shall at any time act as its own Paying Agent with
respect to any series of Securities, it will, on or before each due date of the
principal of (and premium, if any) or interest on any of the Securities of that
series, segregate and hold in trust for the benefit of the Persons entitled
thereto a sum sufficient to pay the principal (and premium, if any) or interest
so becoming due until such sums shall be paid to such Persons or otherwise
disposed of as herein provided and will promptly notify the Trustee of its
action or failure so to act.
Whenever the Company shall have one or more Paying Agents for any
series of Securities, it will, prior to each due date of the principal of (and
premium, if any) or interest on any Securities of that series, deposit with a
Paying Agent a sum sufficient to pay the principal (and premium, if any) or
interest so becoming due, such sum to be held in trust for the benefit of the
Persons entitled to such principal, premium or interest, and (unless such Paying
Agent is the Trustee) the Company will promptly notify the Trustee of its
actions or failure so to act.
The Company will cause each Paying Agent for any series of Securities
other than the Trustee to execute and deliver to the Trustee an instrument in
which such Paying Agent shall agree with the Trustee, subject to the provision
of this Section, that such Paying Agent will:
(1) hold all sums held by it for the payment of the principal of (and
premium, if any) or interest on Securities of that series in trust for the
benefit of the Persons entitled thereto until such sums shall be paid to
such Persons or otherwise disposed of as herein provided;
(2) give the Trustee notice of any default by the Company (or any
other obligor upon the Securities of that series) in the making of any
payment of principal (and premium, if any) or interest on the Securities of
that series; and
(3) at any time during the continuance of any such default, upon the
written request of the Trustee, forthwith pay to the Trustee all sums so
held in trust by such Paying Agent.
The Company may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay, or
by Company Order direct any Paying Agent to pay, to the Trustee all sums held in
trust by the Company or such Paying Agent, such sums to be held by the Trustee
upon the same trusts as those upon which such sums were held by the Company or
such Paying Agent; and, upon such payment by any Paying Agent to the Trustee,
such Paying Agent shall be released from all further liability with respect to
such money.
Any money deposited with the Trustee or any Paying Agent, or then held
by the Company, in trust for the payment of the principal of (and premium, if
any) or interest on any Security of any series and remaining unclaimed for three
years after such principal (and premium, if any) or interest has become due and
payable shall be paid to the Company on Company Request, or (if then held by the
Company) shall be discharged from such trust; and the Holder of such Security
shall thereafter, as an unsecured general creditor, look only to the Company for
payment thereof, and all liability of the Trustee or such Paying Agent with
respect to such trust money, and all liability of the Company as trustee
thereof, shall thereupon cease, provided, however, that the Trustee or such
Paying Agent, before being
<PAGE>
53
required to make any such repayment, may at the expense of the Company cause to
be published once, in a newspaper published in the English language, customarily
published on each Business Day and of general circulation in the Borough of
Manhattan, The City of New York, notice that such money remains unclaimed and
that, after a date specified therein, which shall not be less than 30 days from
the date of such publication, any unclaimed balance of such money then remaining
will be repaid to the Company.
Section 1004. Limitation on Liens.
-------------------
The Company will not create or assume, and will not permit any
Restricted Subsidiary to create or assume, any mortgage, security interest,
pledge or lien (collectively in this Article Ten referred to as "lien") of or
upon any Principal Property or shares of capital stock or indebtedness of any
Restricted Subsidiary, whether owned at the date of this Indenture or thereafter
acquired, without making effective provision, and the Company in such case will
make or cause to be made effective provision, whereby the Outstanding Securities
shall be secured by such lien equally and ratably with any and all other
indebtedness or obligations thereby secured, so long as such other indebtedness
or obligations shall be so secured; provided that the foregoing shall not apply
to any of the following:
(1) liens on any Principal Property acquired, constructed or improved
after the date of this Indenture which are created or assumed
contemporaneously with, or within 120 days after, or pursuant to financing
arrangements for which a firm commitment is made by a bank, insurance
company or other lender or investor (not including the Company or any
Restricted Subsidiary) within 120 days after the completion of such
acquisition, construction or improvement to secure or provide for the
payment of any part of the purchase price of such property or the cost of
such construction or improvement, or, in addition to liens contemplated by
Clauses (2) and (3) below, liens on any Principal Property existing at the
time of acquisition thereof, provided that in the case of any such
acquisition, construction or improvement the lien shall not apply to any
property theretofore owned by the Company and/or, one or more Restricted
Subsidiaries other than, in the case of such construction or improvement
any theretofore unimproved real property on which the property so
constructed, or the improvement, is located;
(2) liens on property or shares of capital stock or indebtedness of a
corporation existing at the time such corporation is merged into or
consolidated with the Company or a Restricted Subsidiary or at the time of
a sale, lease or other disposition of the properties of a corporation as an
entirety or substantially as an entirety to the Company or a Restricted
Subsidiary;
(3) liens on property or shares of capital stock or indebtedness of a
corporation existing at the time such corporation becomes a Restricted
Subsidiary;
(4) liens to secure indebtedness of a Restricted Subsidiary to the
Company and/or one or more Subsidiaries;
(5) liens in favor of the United States of America or any State
thereof or any department, agency or political subdivision of the United
States of America or any State thereof, to secure partial progress, advance
or other payments pursuant to any contract or statute or to secure any
indebtedness incurred for the purpose of financing all or any part of the
purchase price or the cost of constructing or improving the property
subject to such liens;
<PAGE>
54
(6) liens on timberlands in connection with an arrangement under which
the Company and/or one or more Restricted Subsidiaries are obligated to cut
or pay for timber in order to provide the lienholder with a specified
amount of money however determined;
(7) liens created or assumed in the ordinary course of the business of
exploring for, developing or producing oil, gas or other minerals
(including in connection with borrowings of money for such purposes) on, or
on any interest in, or on any proceeds from the sale of, property, acquired
or held for the purpose of exploring for, developing or producing oil, gas
or other minerals, or production therefrom, or proceeds of such production,
or material or equipment located on such property;
(8) liens in favor of any customer arising in respect of performance
deposits and partial progress, advance or other payments made by or on
behalf of such customer for goods produced or to be produced for or
services rendered or to be rendered to such customer in the ordinary course
of business, which liens shall not exceed the amount of such deposits or
payments;
(9) liens for the sole purpose of extending renewing or replacing in
whole or in part any lien referred to in the foregoing clauses (1) to (8),
inclusive, or in this clause (9), or any lien created prior to and existing
on the date of this Indenture, provided that the indebtedness secured
thereby shall not exceed in principal amount the indebtedness so secured at
the time of such extension, renewal or replacement and that such extension,
renewal or replacement shall be limited to all or a part of the property
which secured the lien so extended, renewed or replaced (plus improvements
on such property);
(10) mechanics', workmen's, repairmen's, materialmen's, carriers' and
other similar liens arising in the ordinary course of business;
(11) liens created by or resulting from any litigation or proceedings
which are being contested in good faith by appropriate proceedings; liens
arising out of judgements or awards against the Company and/or one or more
Restricted Subsidiaries with respect to which the Company and/or such
Restricted Subsidiary or Subsidiaries are in good faith prosecuting an
appeal or proceedings for review; or liens incurred by the Company and/or
one or more Restricted Subsidiaries for the purpose of obtaining a stay or
discharge in the course of any legal proceeding to which the Company and/or
Subsidiaries are a party; or
(12) liens for taxes or assessments or governmental charges or levies
not yet due or delinquent, or which can thereafter be paid without penalty,
or which are being contested in good faith by appropriate proceedings;
landlord's liens on property held under lease, and tenants' rights under
leases; easements; and any other liens of a nature similar to those
hereinabove described in this clause (12) which do not, in the opinion of
the Company, materially impair the title of such property in the operation
of the business of the Company or any Restricted Subsidiary or the value of
such property for the purposes of such business.
<PAGE>
55
Section 1005. Limitation on Sale and Lease-Back.
---------------------------------
The Company will not, nor will it permit any Restricted Subsidiary to,
enter into any arrangement with any person providing for the leasing by the
Company and/or one or more Restricted Subsidiaries of any Principal Property
(except for temporary leases for a term, including any renewal thereof, of not
more than three years and except for leases between the Company and one or more
Restricted Subsidiaries or between Restricted Subsidiaries), which property has
been or is to be sold or transferred by the Company and such Restricted
Subsidiary or Subsidiaries to such person (in this Article Ten referred to as
"Sale and Lease-Back Transaction") unless (a) the Company and/or Restricted
Subsidiary or Subsidiaries would be entitled to incur indebtedness secured by a
lien on such property without equally and ratably securing the Securities
pursuant to the provisions of Section 1004, (b) the Company shall apply or cause
to be applied an amount equal to the Value of such Sale and Lease-Back
Transaction within 120 days of the effective date of any arrangement (i) to the
retirement of indebtedness for borrowed money incurred or assumed by the Company
or any Restricted Subsidiary (other than indebtedness for borrowed money owed to
the Company and/or one or more Restricted Subsidiaries) which by its terms
matures on, or is extendable or renewable at the option of the obligor to a date
more then twelve months after the date of the incurrence or assumption of such
indebtedness and which is senior in right of payment to, or ranks pari passu
with, the Securities ("funded debt"), or (ii) to the purchase of other property
which will constitute "Principal Property" having a fair value in the opinion of
the Board of Directors at least equal to the Value of such Sale and Lease-Back
Transaction or (c) the Company or a Restricted Subsidiary shall deliver to the
Trustee or other applicable trustee for cancellation Securities or funded debt
in aggregate principal amount at least equal to the Value of such Sale and
Lease-Back Transaction.
For purposes of this Section 1005 and Section 1006, the term "Value"
shall mean, with respect to a Sale and Lease-Back Transaction, as of any
particular time, the amount equal to the greater of (1) the net proceeds of the
sale or transfer of the property leased pursuant to such Sale and Lease-Back
Transaction or (2) the fair value in the opinion of the Board of Directors of
such property at the time of entering into such Sale and Lease-Back Transaction,
in either case divided first by the number of full years of the term of the
lease and then multiplied by the number of full years of such term remaining at
the time of determination without regard to any renewal or extension options
contained in the lease.
Section 1006. Exemption from Limitation on Liens and Sale and Lease-
-----------------------------------------------------
Back.
- ----
Notwithstanding the provisions of Sections 1004 and 1005, the Company
and any one or more of its Restricted Subsidiaries may nevertheless create or
assume liens which would otherwise require securing of the Securities under said
provisions, and enter into Sale and Lease-Back Transactions without compliance
with either clause (b) or (c) of Section 1005, provided that the aggregate
amount of all such liens and Sale and Lease-Back Transactions permitted by this
Section at any time outstanding, (as measured by the sum of (i) all indebtedness
secured by all such liens then outstanding or to be so created or assumed but
excluding secured indebtedness permitted under the exceptions in Section 1004,
and (ii) the Value of all such Sale and Lease-Back Transactions then outstanding
or to be so entered into, but excluding such transactions in which indebtedness
is retired or property is purchased or Securities or funded debt are delivered
pursuant to Section 1005) shall not exceed 5% of the Net Tangible Assets of the
Company and its Restricted Subsidiaries.
<PAGE>
56
Section 1007. Statement by Officers as to Default.
-----------------------------------
The Company will deliver to the Trustee, within 120 days after the end
of each fiscal year of the Company ending after the date hereof an officers'
Certificate, stating whether or not to the best knowledge of the signers thereof
the Company is in default in the performance and observance of any of the terms,
provisions and conditions of Sections 1004 to 1006, inclusive, and if the
Company shall be in default, specifying all such defaults and the nature and
status thereof of which they may have knowledge.
Section 1008. Waiver of Certain Covenants.
---------------------------
The Company may omit in any particular instance to comply with any
term, provision or condition set forth in Sections 1004 and 1006, inclusive,
with respect to the Securities of any series if before the time for such
compliance the Holders of at least 66 2/3% in principal amount of the
Outstanding Securities of such series shall, by Act of such Holders, either
waive such compliance in such instance or generally waive compliance with such
term, provision or condition but no such waiver shall extend to or affect such
term, provision or condition except to the extent so expressly waived, and,
until such waiver shall become effective, the obligations of the Company and the
duties of the Trustee in respect of any such term, provision or condition shall
remain in full force and effect.
Section 1009. Applicability of Covenants.
--------------------------
Any series of Securities may provide, as contemplated by Section 301
of this Indenture, that any one or more of the covenants set forth in Sections
802, and 1004 and 1008, inclusive, shall not be applicable to the Securities of
such series.
ARTICLE ELEVEN
REDEMPTION OF SECURITIES
Section 1101. Applicability of Article.
------------------------
Securities of any series which are redeemable before their Stated
Maturity shall be redeemable in accordance with their terms and (except as
otherwise specified as contemplated by Section 301 for Securities of any series)
in accordance with this Article or Article Twelve.
Section 1102. Election to Redeem; Notice to Trustee.
-------------------------------------
The election of the Company to redeem any Securities shall be
evidenced by a Board Resolution. In case of any redemption at the election of
the Company of less than all the Securities of any series, the Company shall, at
least 60 days prior to the Redemption Date fixed by the Company (unless a
shorter notice shall be satisfactory to the Trustee), notify the Trustee of such
Redemption Date and of the principal amount of Securities of such series to be
redeemed. In the case of any redemption of Securities at the election of the
Company prior to the expiration of any restriction on redemptions provided in
the terms of such Securities or elsewhere in this Indenture, the Company shall
furnish the Trustee with an Officers' Certificate evidencing compliance with
such restriction.
<PAGE>
57
Section 1103. Selection by Trustee of Securities to be Redeemed.
-------------------------------------------------
If less than all the Securities of any series are to be redeemed, the
particular Securities to be redeemed shall be selected not more than 60 days
prior to the Redemption Date by the Trustee, from the Outstanding Securities of
such series not previously called for redemption, by such method as the Trustee
shall deem fair and appropriate and which may provide for the selection for
redemption of portions (equal to the minimum authorized denomination for
Securities of that series or any integral multiple thereof) of the principal
amount of Securities of such series of a denomination larger than the minimum
authorized denomination for Securities of that series.
The Trustee shall promptly notify the Company in writing of the
Securities selected for redemption and, in the case of any Securities selected
for partial redemption, the principal amount thereof to be redeemed.
For all purposes of this Indenture, unless the context otherwise
requires, all provisions relating to the redemption of Securities shall relate,
in the case of any Securities redeemed or to be redeemed only in part, to the
portion of the principal amount of such Securities which has been or is to be
redeemed.
Section 1104. Notice of Redemption.
--------------------
Notice of redemption shall be given by first-class mail, postage
prepaid, mailed not less than 30 nor more than 60 days prior to the Redemption
Date, to each Holder of Securities to be redeemed, at his address appearing in
the Security Register.
All notices of redemption shall state:
(1) the Redemption Date,
(2) the Redemption Price and the amount of any accrued interest to the
Redemption Date,
(3) if less than all the Outstanding Securities of any series are to
be redeemed, the identification (and, in the case of partial redemption,
the principal amounts) of the particular Securities to be redeemed,
(4) that on the Redemption Date, the Redemption Price will become due
and payable upon each such Security to be redeemed and, if applicable, that
interest thereon will cease to accrue on and after said date,
(5) the place or places where such Securities are to be surrendered
for payment of the Redemption Price and any accrued interest to the
Redemption Date, and
(6) that the redemption is for a sinking fund, if such is the case.
Notice of redemption of Securities to be redeemed at the election of
the Company shall be given by the Company or, at the Company's request, by the
Trustee in the name and at the expense of the Company.
<PAGE>
58
Section 1105. Deposit of Redemption Price.
---------------------------
Prior to any Redemption Date, the Company shall deposit with the
Trustee or with a Paying Agent (or, if the Company is acting as its own Paying
Agent, segregate and hold in trust as provided in Section 1003) an amount of
money sufficient to pay the Redemption Price of, and (except if the Redemption
Date shall be an Interest Payment Date) accrued interest on, all the Securities
which are to be redeemed on that date.
Section 1106. Securities Payable on Redemption Date.
-------------------------------------
Notice of redemption having been given as aforesaid, the Securities to
be redeemed shall, on the Redemption Date, become due and payable at the
Redemption Price therein specified, and from and after such date (unless the
Company shall default in the payment of the Redemption Price and accrued
interest) such Securities shall cease to bear interest. Upon surrender of any
such Security for redemption in accordance with said notice, such Security shall
be paid by the Company at the Redemption Price, together with accrued interest
to the Redemption Date; provided, however, that instalments of interest whose
Stated Maturity is on or prior to the Redemption Date shall be payable to the
Holders of such Securities, or one or more Predecessor Securities, registered as
such at the close of business on the relevant Record Dates according to their
terms and the provisions of Section 307.
If any Security called for redemption shall not be so paid upon
surrender therefor for redemption, the principal (and premium, if any) shall,
until paid, bear interest from the Redemption Date at the rate prescribed
therefor in the Security.
Section 1107. Securities Redeemed in Part.
---------------------------
Any Security which is to be redeemed only in part shall be surrendered
at a Place of Payment therefor (with, if the Company or the Trustee so requires,
due endorsement by, or a written instrument of transfer in form satisfactory to
the Company and the Trustee duly executed by, the Holder thereof or his attorney
duly authorized in writing) and the Company shall execute, and the Trustee shall
authenticate and deliver to the Holder of such Security without service charge,
a new Security or Securities of the same series, of any authorized denomination
as required by such Holder, in aggregate principal amount equal to and in
exchange for the unredeemed portion of the principal of the Security so
surrendered.
ARTICLE TWELVE
SINKING FUNDS
Section 1201. Applicability of Article.
------------------------
The provisions of this Article shall be applicable to any sinking fund
for the retirement of Securities of a series except as otherwise specified as
contemplated by Section 301 for Securities of such series.
The minimum amount of any sinking fund payment provided for by the
terms of Securities of any series is herein referred to as a "mandatory sinking
fund payment", and any payment in excess of such minimum amount provided for by
the terms of Securities of any series is herein referred
<PAGE>
59
to as an "optional sinking fund payment". If provided for by the terms of
Securities of any series, the cash amount of any sinking fund payment may be
subject to reduction as provided in Section 1202. Each sinking fund payment
shall be applied to the redemption of Securities of any series as provided for
by the terms of Securities of such series.
Section 1202. Satisfaction of Sinking Fund Payments With Securities.
-----------------------------------------------------
The Company (1) may deliver Outstanding Securities of a series (other
than any previously called for redemption) and (2) may apply as a credit
Securities of a series which have been redeemed either at the election of the
Company pursuant to the terms of such Securities or through the application of
permitted optional sinking fund payments pursuant to the terms of such
Securities, in each case in satisfaction of all or any part of any sinking fund
payment with respect to the Securities of such series required to be made
pursuant to the terms of such Securities as provided for by the terms of such
Series; provided, that such Securities have not been previously so credited.
Such Securities shall be received and credited for such purpose by the Trustee
at the Redemption Price specified in such Securities for redemption through
operation of the sinking fund and the amount of such sinking fund payment shall
be reduced accordingly.
Section 1203. Redemption of Securities for Sinking Fund.
-----------------------------------------
Not less than 60 days prior to each sinking fund payment date for any
series of Securities, the Company will deliver to the Trustee an Officers'
Certificate specifying the amount of the next ensuing sinking fund payment for
that series pursuant to the terms of that series, the portion thereof, if any,
which is to be satisfied by payment of cash and the portion thereof, if any,
which is to be satisfied by delivering and crediting Securities of that series
pursuant to Section 1202 and will also deliver to the Trustee any Securities to
be so delivered. Not less than 30 days before each sinking fund payment date
the Trustee shall select the Securities to be redeemed upon such sinking fund
payment date in the manner specified in Section 1103 and cause notice of the
redemption thereof to be given in the name of and at the expense of the Company
in the manner provided in Section 1104. Such notice having been duly given, the
redemption of such Securities shall be made upon the terms and in the manner
stated in Section 1106 and 1107.
ARTICLE THIRTEEN
SUBORDINATION OF SECURITIES
Section 1301. Agreement to Subordinate.
------------------------
The Company, for itself, its successors and assigns, covenants and
agrees, and each Holder of a Security likewise covenants and agrees by his
acceptance thereof, that the obligation of the Company to make any payment on
account of the principal of (and premium, if any) and interest on each and all
of the Securities shall be subordinate and junior in right of payment to the
Company's obligations to the holders of Senior Indebtedness and, under the
circumstances described in clause (ii) of this sentence, to the holders of
Additional Senior Obligations, to the extent provided herein, and that in the
case of any insolvency, receivership, conservatorship, reorganization,
readjustment of debt, marshalling of assets and liabilities or similar
proceedings or any liquidation or winding-up of or relating to the Company as a
whole, whether voluntary or involuntary, (i) all obligations to holders of
Senior Indebtedness shall be entitled to be paid in full before any payment
shall be made on account of the
<PAGE>
60
principal of (and premium, if any) or interest on the Securities and, (ii) if
after giving effect to the operation of clause (i) above, (A) any amount of
cash, property or securities remains available for payment or distribution in
respect of the Securities ("Excess Proceeds") and (B) creditors in respect of
Additional Senior Obligations have not received payment in full of amounts due
or to become due thereon or payment of such amounts have not been duly provided
for, then such Excess Proceeds shall first be applied to pay or provide for the
payment in full of all such Additional Senior Obligations before any payment
shall be made on account of the principal of (and premium, if any) or interest
on the Securities. In the event of any such proceeding, after payment in full of
all sums owing with respect to Senior Indebtedness and Additional Senior
Obligations, the Holders of the Securities, together with the holders of any
obligations of the Company Ranking on a Parity with the Securities, shall be
entitled to be paid from the remaining assets of the Company the amounts at the
time due and owing on account of unpaid principal of (and premium, if any) and
interest on the Securities before any payment or other distribution, whether in
cash, property or otherwise, shall be made on account of any capital stock or
any obligations of the Company Ranking Junior to the Securities. In addition, in
the event of any such proceeding, if any payment or distribution of assets of
the Company of any kind or character, whether in cash, property or securities,
including any such payment or distribution which may be payable or deliverable
by reason of the payment of any other indebtedness of the Company being
subordinated to the payment of the Securities, shall be received by the Trustee
or the Holders of the Securities before all Senior Indebtedness and Additional
Senior Obligations are paid in full and if the Holder or the Trustee, as the
case may be, receiving such payment is aware at the time of receipt that all
Senior Indebtedness and Additional Senior Obligations have not been paid in
full, then such payment or distribution shall, if received by any Holder, be
held in trust for the benefit of the holders of Senior Indebtedness and/or
Additional Senior Obligations, as the case may be or, if received by the
Trustee, shall be held by it and delivered forthwith to the trustee in
bankruptcy, receiver, assignee, agent or other Person making payment or
distribution of the assets of the Company, and, in each case, shall be applied
to the payment of all Senior Indebtedness and Additional Senior Obligations
remaining unpaid, until all such Senior Indebtedness and Additional Senior
Obligations shall have been paid in full, after giving effect to any concurrent
payment or distribution to the holders of such Senior Indebtedness and
Additional Senior Obligations. For purposes of this paragraph only, the words,
"cash, property or securities" shall not be deemed to include shares of stock of
the Company as reorganized or readjusted, or securities of the Company or any
other company provided for by a plan of reorganization or readjustment which are
subordinated in right of payment to all Senior Indebtedness and Additional
Senior Obligations which may at the time be outstanding to substantially the
same extent as, or to a greater extent than, the Securities are so subordinated
as provided in this Article.
The subordination provisions of the foregoing paragraph shall not be
applicable to amounts at the time due and owing on the Securities on account of
the unpaid principal of (and premium, if any) or interest on the Securities for
the payment of which funds have been deposited in trust with the Trustee or have
been set aside by the Company in trust in accordance with the provisions of this
Indenture; nor shall such provisions impair any rights, interests, remedies or
powers of any secured creditor of the Company in respect of any security the
creation of which is not prohibited by the provisions of this Indenture.
If there shall have occurred and be continuing (a) a default in any
payment with respect to any Senior Indebtedness or (b) an event of default with
respect to any Senior Indebtedness as a result of which the maturity thereof is
accelerated, unless and until such payment default or event of default shall
have been cured or waived or shall have ceased to exist, no payments shall be
made by the Company with respect to the principal of (or premium, if any) or
interest on the Securities. The
<PAGE>
61
provisions of this paragraph shall not apply to any payment with respect to
which the first paragraph of this Section would be applicable.
The securing of any obligations of the Company Ranking on a Parity
with the Securities or obligations Ranking Junior to the Securities shall not be
deemed to prevent such obligations from constituting obligations of the Company
Ranking on a Parity with the Securities or obligations Ranking Junior to the
Securities.
The consolidation of the Company with, or the merger of the Company
into, another Person or the liquidation or dissolution of the Company following
the conveyance or transfer of its properties and assets substantially as an
entirety to another Person upon the terms and conditions set forth in Article
Eight shall not be deemed a dissolution, winding-up, liquidation,
reorganization, assignment for the benefit of creditors or marshalling of assets
and liabilities of the Company for the purposes of this Section if the Person
formed by such consolidation or into which the Company is merged or the Person
which acquires by conveyance or transfer such properties and assets
substantially as an entirety, as the case may be, shall, as a part of such
consolidation, merger, conveyance, or transfer, comply with the conditions set
forth in Article Eight.
Section 1302. Obligation of the Company Unconditional.
---------------------------------------
Nothing contained in this Article or elsewhere in this Indenture is
intended to or shall impair, as between the Company and the Holders of the
Securities, the obligation of the Company, which is absolute and unconditional,
to pay the Holders of the Securities the principal of (and premium, if any) and
interest on the Securities when, where and as the same shall become due and
payable, all in accordance with the terms of the Securities, or is intended to
or shall affect the relative rights of the Holders of the Securities and
creditors other than the holders of Senior Indebtedness and Additional Senior
Obligations, nor shall anything herein or therein prevent the Trustee or the
Holder of any Security from exercising all remedies otherwise permitted by
applicable law upon an Event of Default under this Indenture, subject to the
rights, if any, under this Article of the holders of Senior Indebtedness and
Additional Senior Obligations in respect of cash, property, or securities of the
Company received upon the exercise of any such remedy.
Section 1303. Notice to Trustee of Facts Prohibiting Payment.
----------------------------------------------
The Company shall give prompt written notice to a Responsible Officer
of the Trustee located at the Corporate Trust Office of any fact known to the
Company which would prohibit the making of any payment to or by the Trustee in
respect of the Securities. Notwithstanding the provisions of this Article or
any other provision of this Indenture, the Trustee shall not be charged with
knowledge of the existence of any facts which would prohibit the making of any
payment to or by the Trustee in respect of the Securities, unless and until the
Trustee shall have received at its Corporate Trust Office written notice thereof
from the Company or a holder of Senior Indebtedness or Additional Senior
Obligations or from any trustee therefor, and, prior to the receipt of any such
written notice, the Trustee, subject to the provisions of Section 601, shall be
entitled in all respects to assume that no such facts exist; provided, however,
that if the Trustee shall not have received the notice provided for in this
Section at least three Business Days prior to the date upon which by the terms
hereof any money may become payable for any purpose (including, without
limitation, the payment of the principal of (and premium, if any) or interest on
any Security), then, anything herein contained to the contrary notwithstanding,
the Trustee shall have full power and authority to receive such money and to
apply the
<PAGE>
62
same to the purpose for which such money was received and shall not be affected
by any notice to the contrary which may be received by it during or after such
three Business Day period.
Subject to the provisions of Section 601, the Trustee shall be
entitled to rely on the delivery to it of a written notice by a Person
representing himself to be a holder of Senior Indebtedness or Additional Senior
Obligations (or a trustee therefor) to establish that such notice has been given
by a holder of Senior Indebtedness or Additional Senior Obligations (or a
trustee therefor). In the event that the Trustee determines in good faith that
further evidence is required with respect to the right of any Person as a holder
of Senior Indebtedness or Additional Senior Obligations to participate in any
payment or distribution pursuant to this Article, the Trustee may request such
Person to furnish evidence to the reasonable satisfaction of the Trustee as to
the amount of Senior Indebtedness or Additional Senior Obligations held by such
Person, the extent to which such Person is entitled to participate in such
payment or distribution and any other facts pertinent to the rights of such
Person under this distribution and any other facts pertinent to the rights of
such Person under this Article, and if such evidence is not furnished, the
Trustee may defer any payment to such Person pending judicial determination as
to the right of such Person to receive such payment.
Section 1304. Application by Trustee of Moneys Deposited With It.
--------------------------------------------------
Anything in this Indenture to the contrary notwithstanding, any
deposit of moneys by the Company with the Trustee or any other agent (whether or
not in trust) for any payment of the principal of (and premium, if any) or
interest on any Securities shall, except as provided in Section 1303, be subject
to the provisions of Section 1301.
Section 1305. Subrogation to Rights of Holders of Senior Indebtedness
-------------------------------------------------------
and Additional Senior Obligations.
- ---------------------------------
Subject to the payment in full of all Senior Indebtedness and
Additional Senior Obligations, the Holders of the Securities shall be subrogated
to the rights of the holders of Senior Indebtedness and the rights of holders of
Additional Senior Obligations to receive payments or distributions of assets of
the Company applicable to such Senior Indebtedness or Additional Senior
Obligations, as the case may be, until the principal of (and premium, if any)
and interest on the Securities shall be paid in full. For purposes of such
subrogation, none of the payments or distributions to the holders of the Senior
Indebtedness or to the holders of Additional Senior Obligations to which the
Holders of the Securities or the Trustee would be entitled except for the
provisions of this Article, or of payments over pursuant to the provisions of
this Article to the holders of Senior Indebtedness or to the holders of
Additional Senior Obligations by Holders of the Securities or the Trustee shall,
as among the Company, its creditors other than holders of Senior Indebtedness,
holders of Additional Senior Obligations and the Holders of the Securities, be
deemed to be a payment or distribution by the Company to or on account of the
Senior Indebtedness or the Additional Senior Obligations, as the case may be; it
being understood that the provisions of this Article are intended solely for the
purpose of defining the relative rights of the Holders of the Securities, on the
one hand, and the holders of the Senior Indebtedness and the holders of
Additional Senior Obligations on the other hand.
Section 1306. Subordination Rights Not Impaired by Acts or Omissions
------------------------------------------------------
of Company, Holders of Senior Indebtedness or Holders of Additional Senior
- --------------------------------------------------------------------------
Obligations.
- -----------
No right of any present or future holders of any Senior Indebtedness
or Additional Senior Obligations to enforce subordination as herein provided
shall at any time in any way be
<PAGE>
63
prejudiced or impaired by any act or failure to act on the part of the Company
or any act or failure to act, in good faith, by any such holder, or by any
noncompliance by the Company with the terms, provisions and covenants of this
Indenture, regardless of any knowledge thereof which any such holder may have or
be otherwise charged with.
Section 1307. Authorization of Trustee to Effectuate Subordination of
-------------------------------------------------------
Securities.
- ----------
Each Holder of a Security, by his acceptance thereof, authorizes and
expressly directs the Trustee on his behalf to take such actions as may be
necessary or appropriate to effectuate the subordination provided in this
Article and appoints the Trustee his attorney-in-fact for any and all such
purposes.
If, in the event of any proceeding or other action relating to the
Company referred to in the first sentence of Section 1301, a proper claim or
proof of debt in the form required in such proceeding or action is not filed by
or on behalf of the Holders of the Securities prior to fifteen days before the
expiration of the time to file such claim or claims, then the holder or holders
of Senior Indebtedness and Additional Senior Obligations shall have the right to
file and are hereby authorized to file appropriate claim for and on behalf of
the Holders of the Securities; provided, that no such filing by any holders of
Senior Indebtedness or Additional Senior Obligations shall preclude the Trustee
from filing such a proof of claim on behalf of the Holders of Securities.
Section 1308. Right of Trustee to Hold Senior Indebtedness and
------------------------------------------------
Additional Senior Obligations.
- -----------------------------
The Trustee in its individual capacity shall be entitled to all of the
rights set forth in this Article in respect of any Senior Indebtedness or
Additional Senior Obligations at any time held by it in its individual capacity
to the same extent as any other holder of such Senior Indebtedness or Additional
Senior Obligations, and nothing in this Indenture shall be construed to deprive
the Trustee of any of its rights as such holder. Nothing in this Article shall
subordinate to Senior Indebtedness or Additional Senior Obligations the claims
of the Trustee under Section 607.
Section 1309. Article Thirteen Not to Prevent Events of Default.
-------------------------------------------------
The failure to make a payment pursuant to the Securities by reason of
any provision in this Article shall not be construed as preventing the
occurrence of an Event of Default.
Section 1310. Article Applicable to Paying Agents.
-----------------------------------
In case at any time any Paying Agent other than the Trustee shall have
been appointed by the Company and be then acting hereunder, the term "Trustee"
as used in this Article shall in such case (unless the content otherwise
requires) be construed as extending to and including such Paying Agent within
its meaning as fully for all intents and purposes as if such Paying Agent were
named in this Article in addition to or in place of the Trustee; provided,
however, that Section 1308 shall not apply to the Company or any Affiliate of
the Company if it or such Affiliate acts as Paying Agent.
Section 1311. Reliance on Judicial Order or Certificate of
--------------------------------------------
Liquidating Agent.
- -----------------
Upon any payment or distribution of assets of the Company referred to
in this Article, the Trustee, subject to the provisions of Section 601, and the
Holders of the Securities shall be entitled to
<PAGE>
64
rely upon any order or decree entered by any court of competent jurisdiction in
which such insolvency, bankruptcy, receivership, liquidation, reorganization,
dissolution, winding-up or similar case or proceeding is pending, or a
certificate of the trustee in bankruptcy, receiver, liquidating trustee,
custodian, assignee for the benefit of creditors, agent or other Person making
such payment or distribution, delivered to the Trustee or to the Holders of
Securities for the purpose of ascertaining the Persons entitled to participate
in such payment or distribution, the holders of the Senior Indebtedness,
Additional Senior Obligations and other indebtedness of the Company, the amount
thereof or payable thereon, the amount or amounts paid or distributed thereon
and all other facts pertinent thereto or to this Article.
Section 1312. Trustee Not Fiduciary for Holders of Senior
-------------------------------------------
Indebtedness or Holders of Additional Senior Obligations.
- --------------------------------------------------------
The Trustee shall not be deemed to owe any fiduciary duty to the
holders of Senior Indebtedness or the holders of Additional Senior Obligations
and shall not be liable to any such holders if it shall in good faith mistakenly
pay over or distribute to Holders of Securities or to the Company or to any
other Person, cash, property or securities to which any holders of Senior
Indebtedness or Additional Senior Obligations shall be entitled by virtue of
this Article or otherwise.
Section 1313. Payment Permitted If No Default.
-------------------------------
Nothing contained in this Article or elsewhere in this Indenture or in
any of the Securities shall prevent the Company, at any time except during the
case of any insolvency, receivership, conservatorship, reorganization,
readjustment or debt, marshalling of assets and liabilities or similar
proceedings or any liquidation or winding-up of or relating to the Company
referred to in Section 1301 from making payments at any time of principal of
(and premium, if any) or interest on the Securities.
ARTICLE FOURTEEN
HOLDERS' MEETINGS
Section 1401. Purposes for Which Meetings May be Called.
-----------------------------------------
A meeting of Holders may be called at any time and from time to time
pursuant to the provisions of this Article for any of the following purposes:
(1) to give any notice to the Company or to the Trustee, or to give
any direction to the Trustee, or to waive or consent to the waiving of any
Event of Default hereunder and its consequences, or to take any other
action authorized to be taken by Holders pursuant to any of the provisions
of Article Five;
(2) to remove the Trustee or appoint a successor trustee, pursuant to
the provisions of Article Six;
(3) to consent to the execution of an indenture or indentures
supplemental hereto pursuant to the provisions of Section 901 and 902; or
<PAGE>
65
(4) to take any other action authorized to be taken by or on behalf of
the Holders of any specified aggregate principal amount of the Securities
under any other provision of this Indenture or under applicable law.
Section 1402. Manner of Calling Meetings.
--------------------------
The Trustee may at any time call a meeting of Holders to take any
action specified in Section 1401. Notice of every meeting of the Holders,
setting forth the time and the place of such meeting and in general terms the
action proposed to be taken at such meeting, shall be mailed by the Trustee to
the Company and to the Holders not less than 20 nor more than 60 days prior to
the date fixed for the meeting. Any meeting shall be valid without notice if
the Holders of all of the Outstanding Securities are present in person or by
proxy, or if notice is waived before or after the meeting by the Holders of all
of the Outstanding Securities, and if the Company and the Trustee are either
present or have, before or after the meeting, waived notice.
Section 1403. Call of Meetings by Company or Holders.
--------------------------------------
In case at any time the Company, pursuant to a resolution of its Board
of Directors, or the Holders of not less than 30% in aggregate principal amount
of the Outstanding Securities, shall have requested the Trustee to call a
meeting of Holders to take any action authorized in Section 1401 by written
request setting forth in reasonable detail the action proposed to be taken at
the meeting, and the Trustee shall not have mailed notice of such meeting within
20 days after receipt of such request, then the Company or such Holders in the
amount above specified may determine the time and the place in New York, New
York or in Atlanta, Georgia for such meeting and may call such meeting to take
any action authorized in Section 1401, by mailing notice thereof as provided in
Section 1402.
Section 1404. Who May Attend and Vote at Meetings.
-----------------------------------
To be entitled to vote at any meeting of Holders a person shall (a) be
a Holder of one or more Securities with respect to which the meeting is being
held, or (b) be a person appointed by an instrument in writing as proxy by such
Holder of one or more Securities. The only persons who shall be entitled to be
present or to speak at any meeting of Holders shall be the persons entitled to
vote at such meeting and their counsel and any representatives of the Trustee
and its counsel and any representatives of the Company and its counsel.
Section 1405. Regulations May be Made by Trustee.
----------------------------------
Notwithstanding any other provisions of this Indenture, the Trustee
may make such reasonable regulations as it may deem advisable for any meeting of
Holders, in regard to proof of the holding of Securities and of the appointment
of proxies, and in regard to the appointment and duties of inspectors of votes,
the submission and examination of proxies, certificates and other evidence of
the right to vote, and such other matters concerning the conduct of the meeting
as it shall deem appropriate.
At any meeting each Holder or proxy shall be entitled to one vote for
each $1,000 principal amount of Outstanding Securities held or represented by
him.
<PAGE>
66
Section 1406. Evidence of Actions by Holders.
------------------------------
Whenever the Holders of a specified percentage in aggregate principal
amount of the Securities may take any action, the fact that the Holders of such
percentage have acted may be evidence by (a) instruments of similar tenor
executed by Holders in person or by attorney or written proxy, or (b) the
Holders voting in favor thereof at any meeting of Holders called and held in
accordance with the provisions of the rules for meetings of Holders, or (c) by a
combination thereof. The Trustee may require proof of any matter concerning the
execution of any instrument by a Holder or his attorney or proxy as it shall
deem necessary.
Section 1407. Exercise of Rights of Trustee and Holders Not to be
---------------------------------------------------
Hindered or Delayed.
- -------------------
Nothing in this Article contained shall be deemed or construed to
authorize or permit, by reason of any call of a meeting of Holders or any rights
expressly or impliedly conferred hereunder to make such call, any hindrance or
delay in the exercise of any right or rights conferred upon or reserved to the
Trustee or to the Holders under any of the provisions of this Indenture or of
the Securities.
ARTICLE FIFTEEN
CONVERSION
Section 1501. Applicability; Conversion Privilege.
-----------------------------------
Except as otherwise specified pursuant to Section 301 for Securities
of any series, the provisions of this Article Fifteen shall be applicable to any
Securities that are convertible into Georgia-Pacific Group Stock or Timber
Stock. Each reference in this Article to a "Security" or "Securities" refers to
the Securities of a particular series that is convertible into Georgia-Pacific
Group Stock or Timber Stock, as applicable. Without limiting the generality of
the immediately preceding sentence, if two or more series of Securities with
conversion privileges are outstanding at any time, (i) the provisions of this
Article shall be applied separately to each such series, and (ii) references to
the Trustee refer to the Trustee for the Securities of such series. If so
provided pursuant to Section 301 with respect to the Securities of any series,
the Holder of a Security of such series shall have the right, at such Holder's
option, to convert, in accordance with the terms of such series of Securities
and this Article Fifteen, all or any part (if the portion to be converted and
the remaining portion of such Security are in authorized denominations for that
series of Securities) of such Security into shares of Georgia-Pacific Group
Stock or Timber Stock, as applicable, at any time during the period specified in
the terms of the Securities of the series pursuant to Section 301, at the
Conversion Price in effect on the date of conversion, or, as to any Securities
called for redemption at any time prior to the time and date fixed for such
redemption (unless the Company shall default in the payment of the Redemption
Price, in which case such right shall not terminate at such time and date).
Section 1502. Conversion Procedure; Conversion Price; Fractional
--------------------------------------------------
Shares.
- ------
(a) Except as otherwise specified as contemplated by Section 301 for
Securities of any series, each Security of such series to which this Article is
applicable shall be convertible at the office of the Conversion Agent, and at
such other place or places, if any, specified pursuant to Section 301 with
respect to the Securities of such series, into fully paid and nonassessable
shares (calculated to the nearest 1/100th of a share) of Georgia-Pacific Group
Stock or Timber Stock, as applicable. The Securities will
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67
be converted into shares of Georgia-Pacific Group Stock or Timber Stock, as
applicable, at the Conversion Price therefor. No payment or adjustment shall be
made in respect of dividends on the Georgia-Pacific Group Stock or Timber Stock,
as applicable, or accrued interest on a converted Security except as described
in Section 1509 and Section 1502(c). The Company may, but shall not be required,
in connection with any conversion of Securities, to issue a fraction of a share
of Georgia-Pacific Group Stock or Timber Stock, as applicable, and, if the
Company shall determine not to issue any such fraction, the Company shall,
subject to Section 1503(4), make a cash payment (calculated to the nearest cent)
equal to such fraction multiplied by the Closing Price of the Georgia-Pacific
Group Stock or Timber Stock, as applicable, on the last Trading Day prior to the
date of conversion.
(b) Before any Holder of a Security shall be entitled to convert the
same into Georgia-Pacific Group Stock or Timber Stock, as applicable, such
Holder shall surrender such Security duly endorsed to the Company or in blank,
at the office of the Conversion Agent or at such other place or places, if any,
specified pursuant to Section 301, and shall give written notice to the Company
at said office or place that he elects to convert the same and shall state in
writing therein the principal amount of Securities to be converted and the name
or names (with addresses) in which he wishes the certificate or certificates for
Georgia-Pacific Group Stock or Timber Stock, as applicable, to be issued.
If more than one Security shall be surrendered for conversion at one
time by the same Holder, the number of full shares of Georgia-Pacific Group
Stock or Timber Stock, as applicable, which shall be deliverable upon conversion
shall be computed on the basis of the aggregate principal amount of the
Securities (or specified portions thereof to the extent permitted thereby) so
surrendered. Subject to the next succeeding sentence, the Company will as soon
as practicable after the surrender of a Security for conversion, issue and
deliver at said office or place to the Holder of a Security, or to his nominee
or nominees, certificates for the number of full shares of Georgia-Pacific Group
Stock or Timber Stock, as applicable, to which he shall be entitled as
aforesaid, together, subject to the last sentence of paragraph (a) above, with
cash in lieu of any fraction of a share to which he would otherwise be entitled.
The Company shall not be required to deliver certificates for shares of Georgia-
Pacific Group Stock or Timber Stock, as applicable, while the stock transfer
books for such stock or the Security Register are duly closed for any purpose,
but certificates for shares of Georgia-Pacific Group Stock or Timber Stock, as
applicable, shall be issued and delivered as soon as practicable after the
opening of such books or Security Register.
(c) A Security shall be deemed to have been converted as of the close
of business on the date of the surrender of such Security for conversion as
provided above, and the Person or Persons entitled to receive the Georgia-
Pacific Group Stock or Timber Stock, as applicable, issuable upon such
conversion shall be treated for all purposes as the record Holder or Holders of
such Georgia-Pacific Group Stock or Timber Stock, as applicable, as of the close
of business on such date.
(d) In case any Security shall be surrendered for partial conversion,
the Company shall execute and the Trustee shall authenticate and deliver to or
upon the written order of the Holder of the Securities so surrendered, without
charge to such Holder (subject to the provisions of Section 1508), a new
Security or Securities in authorized denominations in an aggregate principal
amount equal to the unconverted portion of the surrendered Security.
Section 1503. Adjustment of Conversion Price for Georgia-Pacific
--------------------------------------------------
Group Stock or Timber Stock.
- ---------------------------
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68
The Conversion Price with respect to any Security which is convertible
into Georgia-Pacific Group Stock or Timber Stock, as applicable, shall be
adjusted from time to time as follows:
(1) In case the Company shall, at any time or from time to time while
any of such Securities are Outstanding, (i) pay a dividend in shares of its
Georgia-Pacific Group Stock or Timber Stock, as applicable, to holders of
Georgia-Pacific Group Stock or Timber Stock, as applicable, (ii) combine
its outstanding shares of Georgia-Pacific Group Stock or Timber Stock, as
applicable, into a smaller number of shares of Georgia-Pacific Group Stock
or Timber Stock, as applicable, (iii) subdivide its outstanding shares of
Georgia-Pacific Group Stock or Timber Stock, as applicable, into a greater
number of shares of Georgia-Pacific Group Stock or Timber Stock, as
applicable, or (iv) make a distribution in shares of Georgia-Pacific Group
Stock or Timber Stock, as applicable, to holders of Georgia-Pacific Group
Stock or Timber Stock, as applicable, then the Conversion Price in effect
immediately before such action shall be adjusted so that the Holders of
such Securities, upon conversion thereof into Georgia-Pacific Group Stock
or Timber Stock, as applicable, immediately following such event, shall be
entitled to receive the kind and amount of shares of capital stock of the
Company which they would have owned or been entitled to receive upon or by
reason of such event if such Securities had been converted immediately
before the record date (or, if no record date, the effective date) for such
event. An adjustment made pursuant to this Section 1503(1) shall become
effective retroactively immediately after the record date in the case of a
dividend or distribution and shall become effective retroactively
immediately after the effective date in the case of a subdivision or
combination. For the purposes of this Section 1503(1), each Holder of
Securities shall be deemed to have failed to exercise any right to elect
the kind or amount of securities receivable upon the payment of any such
dividend, subdivision, combination or distribution (provided that if the
kind or amount of securities receivable upon such dividend, subdivision,
combination or distribution is not the same for each nonelecting share,
then the kind and amount of securities or other property receivable upon
such dividend, subdivision, combination or distribution for each
nonelecting share shall be deemed to be the kind and amount so receivable
per share by a plurality of the nonelecting shares).
(2) In case the Company shall, at any time or from time to time while
any of such Securities are Outstanding, issue rights or warrants to all or
substantially all holders of shares of its Georgia-Pacific Group Stock or
Timber Stock, as applicable, entitling them (for a period expiring within
45 days after the record date for such issuance) to subscribe for or
purchase shares of Georgia-Pacific Group Stock or Timber Stock, as
applicable (or securities convertible into shares of Georgia-Pacific Group
Stock or Timber Stock, as applicable), at a price per share less than the
Current Market Price of the Georgia-Pacific Group Stock or Timber Stock, as
applicable, at such record date (treating the price per share of the
securities convertible into Georgia-Pacific Group Stock or Timber Stock, as
applicable, as equal to (x) the sum of (i) the price for a unit of the
security convertible into Georgia-Pacific Group Stock or Timber Stock, as
applicable, and (ii) any additional consideration initially payable upon
the conversion of such security into Georgia-Pacific Group Stock or Timber
Stock, as applicable, divided by (y) the number of shares of Georgia-
Pacific Group Stock or Timber Stock, as applicable, initially underlying
such convertible security), the Conversion Price with respect to such
Securities shall be adjusted so that it shall equal the price determined by
dividing the Conversion Price in effect immediately prior to the date of
issuance of such rights or warrants by a fraction, the numerator of which
shall be the number of shares of Georgia-Pacific Group Stock or Timber
Stock, as applicable, outstanding on the date of issuance of such rights or
warrants plus the number of additional shares of Georgia-Pacific Group
Stock or Timber Stock, as applicable, offered for
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69
subscription or purchase (or into which the convertible securities so
offered are initially convertible), and the denominator of which shall be
the number of shares of Georgia-Pacific Group Stock or Timber Stock, as
applicable, outstanding on the date of issuance of such rights or warrants
plus the number of shares or securities which the aggregate offering price
of the total number of shares or securities so offered for subscription or
purchase (or the aggregate purchase price of the convertible securities so
offered plus the aggregate amount of any additional consideration initially
payable upon conversion of such securities into Georgia-Pacific Group Stock
or Timber Stock, as applicable) would purchase at such Current Market Price
of the Georgia-Pacific Group Stock or Timber Stock, as applicable. Such
adjustment shall become effective retroactively immediately after the
record date for the determination of stockholders entitled to receive such
rights or warrants.
(3) In case the Company shall, at any time or from time to time while
any of such Securities are Outstanding, distribute to all or substantially
all holders of shares of its Georgia-Pacific Group Stock or Timber Stock,
as applicable (including any such distribution made in connection with a
consolidation or merger in which the Company is the continuing corporation
and the Georgia-Pacific Group Stock or Timber Stock, as applicable, is not
changed or exchanged), cash, evidences of its indebtedness, securities or
assets (excluding (i) regular periodic cash dividends in amounts, if any,
determined from time to time by the Board of Directors (to the extent paid
from current or retained earnings of the Company) or (ii) dividends payable
in shares of Georgia-Pacific Group Stock or Timber Stock, as applicable,
for which adjustment is made under Section 1503(1)) or rights or warrants
to subscribe for or purchase securities of the Company (excluding those
referred to in Section 1503(2)), then in each such case the Conversion
Price with respect to such Securities shall be adjusted so that it shall
equal the price determined by dividing the Conversion Price in effect
immediately prior to the date of such distribution by a fraction, the
numerator of which shall be the Current Market Price of the Georgia-Pacific
Group Stock or Timber Stock, as applicable, on the record date referred to
below, and the denominator of which shall be such Current Market Price of
the Georgia-Pacific Group Stock or Timber Stock, as applicable, less the
then fair market value (as determined by the Board of Directors of the
Company, whose determination shall be conclusive) of the portion of the
cash or assets or evidences of indebtedness or securities so distributed or
of such subscription rights or warrants applicable to one share of Georgia-
Pacific Group Stock or Timber Stock, as applicable (provided that such
denominator shall never be less than 1.0); provided, however, that no
-------- -------
adjustment shall be made with respect to any distribution of rights to
purchase securities of the Company if a Holder of Securities would
otherwise be entitled to receive such rights upon conversion at any time of
such Securities into Georgia-Pacific Group Stock or Timber Stock, as
applicable, unless such rights are subsequently redeemed by the Company, in
which case such redemption shall be treated for purposes of this section as
a dividend on the Georgia-Pacific Group Stock or Timber Stock, as
applicable. Such adjustment shall become effective retroactively
immediately after the record date for the determination of stockholders
entitled to receive such distribution; and in the event that such
distribution is not so made, the Conversion Price shall again be adjusted
to the Conversion Price which would then be in effect if such record date
had not been fixed.
(4) The Company shall be entitled to make such additional adjustments
in the Conversion Price, in addition to those required by subsections
1503(1), 1503(2) and 1503(3), as shall be necessary in order that any
dividend or distribution of Georgia-Pacific Group Stock or Timber Stock, as
applicable, any subdivision, reclassification or combination of shares of
Georgia-Pacific Group Stock or Timber Stock, as applicable, or any issuance
of rights or
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70
warrants referred to above shall not be taxable to the holders of Georgia-
Pacific Group Stock or Timber Stock, as applicable, for United States
Federal income tax purposes.
(5) In any case in which this Section 1503 shall require that any
adjustment be made effective as of or retroactively immediately following a
record date, the Company may elect to defer (but only for five (5) Trading
Days following the filing of the statement referred to in Section 1505)
issuing to the Holder of any Securities converted after such record date
the shares of Georgia-Pacific Group Stock or Timber Stock, as applicable,
and other capital stock of the Company issuable upon such conversion over
and above the shares of Georgia-Pacific Group Stock or Timber Stock, as
applicable, and other capital stock of the Company issuable upon such
conversion on the basis of the Conversion Price prior to 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 additional shares upon the occurrence of the event requiring such
adjustment.
(6) All calculations under this Section 1503 shall be made to the
nearest cent or one-hundredth of a share or security, with one-half cent
and 0.005 of a share, respectively, being rounded upward. Notwithstanding
any other provision of this Section 1503, the Company shall not be required
to make any adjustment of the Conversion Price unless such adjustment would
require an increase or decrease of at least 1% of such price. Any lesser
adjustment shall be carried forward and shall be made at the time of and
together with the next subsequent adjustment which, together with any
adjustment or adjustments so carried forward, shall amount to an increase
or decrease of at least 1% in such price. Any adjustments under this
Section 1503 shall be made successively whenever an event requiring such an
adjustment occurs.
(7) In the event that at any time, as a result of an adjustment made
pursuant to this Section 1503, the Holder of any Security thereafter
surrendered for conversion shall become entitled to receive any shares of
stock of the Company other than shares of Georgia-Pacific Group Stock or
Timber Stock, as applicable, into which the Securities originally were
convertible, the Conversion Price of such other shares so receivable upon
conversion of any such Security 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 Georgia-Pacific Group Stock or Timber Stock, as
applicable, contained in subparagraphs (1) through (6) of this Section
1503, and the provision of Sections 1501, 1502 and 1504 through 1509 with
respect to the Georgia-Pacific Group Stock or Timber Stock, as applicable,
shall apply on like or similar terms to any such other shares and the
determination of the Board of Directors as to any such adjustment shall be
conclusive.
(8) No adjustment shall be made pursuant to this Section: (i) if the
effect thereof would be to reduce the Conversion Price below the par value
(if any) of the Georgia-Pacific Group Stock or Timber Stock, as applicable,
or (ii) subject to 1503(5) hereof, with respect to any Security that is
converted prior to the time such adjustment otherwise would be made.
Section 1504. Consolidation or Merger of the Company.
--------------------------------------
In case of either (a) any consolidation or merger to which the Company
is a party, other than a merger or consolidation in which the Company is the
surviving or continuing corporation and which does not result in a
reclassification of, or change (other than a change in par value or from par
value to no par value or from no par value to par value) in, outstanding shares
of Georgia-Pacific Group
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71
Stock or Timber Stock, as applicable, or (b) any sale or conveyance of all or
substantially all of the property and assets of the Company to another Person,
then each Security then outstanding shall be convertible from and after such
merger, consolidation, sale or conveyance of property and assets into the kind
and amount of shares of stock or other securities and property receivable upon
such consolidation, merger, sale or conveyance by a holder of the number of
shares of Georgia-Pacific Group Stock or Timber Stock, as applicable, into which
such Securities should have been converted immediately prior to such
consolidation, merger, sale or conveyance, subject to adjustments which shall be
as nearly equivalent as may be practicable to the adjustments provided for in
this Article Fifteen (and assuming such holder of Georgia-Pacific Group Stock or
Timber Stock, as applicable, failed to exercise his rights of election, if any,
as to the kind or amount of securities, cash or other property receivable upon
such consolidation, merger, sale or conveyance (provided that, if the kind or
amount of securities, cash or other property receivable upon such consolidation,
merger, sale or conveyance is not the same for each nonelecting share, then the
kind and amount of securities, cash or other property (including cash)
receivable upon such consolidation, merger, sale or conveyance for each
nonelecting share shall be deemed to be the kind and amount so receivable per
share by a plurality of the nonelecting shares or securities)). The Company
shall not enter into any of the transactions referred to in clause (a) or (b) of
the preceding sentence unless effective provision shall be made so as to give
effect to the provisions set forth in this Section 1504. The provisions of this
Section 1504 shall apply similarly to successive consolidations, mergers, sales
or conveyances.
Section 1505. Notice of Adjustment.
--------------------
Whenever an adjustment in the Conversion Price with respect to a
series of Securities is required:
(1) the Company shall forthwith place on file with the Trustee and
any Conversion Agent for such Securities a certificate of the Treasurer of
the Company, stating the adjusted Conversion Price determined as provided
herein and setting forth in reasonable detail such facts as shall be
necessary to show the reason for and the manner of computing such
adjustment, such certificate to be conclusive evidence that the adjustment
is correct; and
(2) a notice stating that the Conversion Price has been adjusted and
setting forth the adjusted Conversion Price shall forthwith be given by the
Company, or at Company Request, by the Trustee in the name and at the
expense of the Company, in the manner provided in Section 106. Any notice
so given shall be conclusively presumed to have been duly given, whether or
not the Holder receives such notice.
Section 1506. Notice in Certain Events.
------------------------
In case:
(1) of a consolidation or merger to which the Company is a party and
for which approval of any stockholders of the Company is required, or of
the sale or conveyance to another Person or entity or group of Persons or
entities acting in concert as a partnership, limited partnership, syndicate
or other group (within the meaning of Rule 13d-3 under the Securities
Exchange Act of 1934, as amended) of all or substantially all of the
property and assets of the Company; or
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72
(2) of the voluntary or involuntary dissolution, liquidation or
winding up of the Company; or
(3) of any action triggering an adjustment of the Conversion Price
pursuant to this Article Fifteen;
then, in each case, the Company shall cause to be filed with the Trustee and the
Conversion Agent for the applicable Securities, and shall cause to be given, to
the Holders of applicable Securities in the manner provided in Section 106, at
least fifteen (15) days prior to the applicable date hereinafter specified, a
notice stating (x) the date on which a record is to be taken for the purpose of
any distribution or grant of rights or warrants triggering an adjustment to the
Conversion Price pursuant to this Article Fifteen, or, if a record is not to be
taken, the date as of which the holders of record of Georgia-Pacific Group Stock
or Timber Stock, as applicable, entitled to such distribution, rights or
warrants are to be determined, or (y) the date on which any reclassification,
consolidation, merger, sale, conveyance, dissolution, liquidation or winding up
triggering an adjustment to the Conversion Price pursuant to this Article
Fifteen is expected to become effective, and the date as of which it is expected
that holders of Georgia-Pacific Group Stock or Timber Stock, as applicable, of
record shall be entitled to exchange their Georgia-Pacific Group Stock or Timber
Stock, as applicable, for securities or other property deliverable upon such
reclassification, consolidation, merger, sale, conveyance, dissolution,
liquidation or winding up.
Failure to give such notice or any defect therein shall not affect the
legality or validity of the proceedings described in clause (1), (2) or (3) of
this Section.
Section 1507. Company To Reserve Stock; Registration; Listing.
-----------------------------------------------
(a) The Company shall at all times reserve and keep available, free
from preemptive rights, out of its authorized but unissued shares of Georgia-
Pacific Group Stock or Timber Stock, as applicable, for the purpose of effecting
the conversion of the Securities, such number of its duly authorized shares of
Georgia-Pacific Group Stock or Timber Stock, as applicable, as shall from time
to time be sufficient to effect the conversion of all applicable Outstanding
Securities into such Georgia-Pacific Group Stock or Timber Stock, as applicable,
at any time (assuming that, at the time of the computation of such number of
shares or securities, all such Securities would be held by a single holder);
provided, however, that nothing contained herein shall preclude the Company from
- -------- -------
satisfying its obligations in respect of the conversion of the Securities by
delivery of purchased shares of Georgia-Pacific Group Stock or Timber Stock, as
applicable, which are held in the treasury of the Company. The Company shall
from time to time, in accordance with the laws of the State of Georgia, use its
best efforts to cause the authorized amount of the Georgia-Pacific Group Stock
or Timber Stock, as applicable, to be increased if the aggregate of the
authorized amount of the Georgia-Pacific Group Stock or Timber Stock, as
applicable, remaining issued and the issued shares of such Georgia-Pacific Group
Stock or Timber Stock, as applicable, in its treasury (other than any such
shares reserved for issuance in any other connection) shall not be sufficient to
permit the conversion of all Securities. The Company covenants that all shares
of Georgia-Pacific Group Stock or Timber Stock, as applicable, which may be
issued upon conversion of Securities will upon issue be fully paid and
nonassessable and free from all liens and charges and, except as provided in
Section 1508, taxes with respect to the issue thereof.
(b) If any shares of Georgia-Pacific Group Stock or Timber Stock, as
applicable, which would be issuable upon conversion of Securities hereunder
require registration with or approval of any governmental authority before such
shares or securities may be issued upon such conversion, the Company will in
good faith and as expeditiously as possible endeavor to cause such shares or
securities
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73
to be duly registered or approved, as the case may be. The Company further
covenants that so long as the Georgia-Pacific Group Stock or Timber Stock, as
applicable, shall be listed on the New York Stock Exchange, the Company will, if
permitted by the rules of such exchange, list and keep listed all Georgia-
Pacific Group Stock or Timber Stock, as applicable, issuable upon conversion of
the Securities, and the Company will endeavor to list the shares of Georgia-
Pacific Group Stock or Timber Stock, as applicable, required to be delivered
upon conversion of the Securities prior to such delivery upon any other national
securities exchange upon which the outstanding Georgia-Pacific Group Stock or
Timber Stock, as applicable, is listed at the time of such delivery.
Section 1508. Taxes on Conversion.
-------------------
The issue of stock certificates on conversion of Securities shall be
made without charge to the converting Holder for any tax in respect of the issue
thereof, and the Company shall pay any and all documentary, stamp or similar
issue or transfer taxes that may be payable in respect of the issue or delivery
of shares of Georgia-Pacific Group Stock or Timber Stock, as applicable, on
conversion of Securities pursuant hereto. The Company shall not, however, be
required to pay any such tax which may be payable in respect of any transfer
involved in the issue or delivery of shares of Georgia-Pacific Group Stock or
Timber Stock, as applicable, or the portion, if any, of the Securities which are
not so converted in a name other than that in which the Securities so converted
were registered, and no such issue or delivery shall be made unless and until
the Person requesting such issue has paid to the Company the amount of such tax
or has established to the satisfaction of the Company that such tax has been
paid.
Section 1509. Conversion After Record Date.
----------------------------
If any Securities are surrendered for conversion subsequent to the
Regular Record Date preceding an Interest Payment Date but on or prior to such
Interest Payment Date (except Securities called for redemption on a Redemption
Date between such record date and Interest Payment Date), the Holder of such
Securities at the close of business on such Regular Record Date shall be
entitled to receive the interest payable on such Securities on such Interest
Payment Date notwithstanding the conversion thereof. Securities surrendered
for conversion during the period from the close of business on any Regular
Record Date next preceding any Interest Payment Date to the opening of business
on such Interest Payment Date shall (except in the case of Securities which
have been called for redemption on a Redemption Date within such period) be
accompanied by payment in New York Clearing House funds or other funds and in
the currency acceptable to the Company of an amount equal to the interest
payable on such Interest Payment Date on the Securities being surrendered for
conversion. Except as provided in this Section 1509 and Section 1502(c), no
adjustments in respect of payments of interest on Securities surrendered for
conversion or any dividends or distributions or interest on the Georgia-Pacific
Group Stock or Timber Stock, as applicable, issued upon conversion shall be made
upon the conversion of any Securities.
Section 1510. Company Determination Final.
---------------------------
Any determination that the Company or the Board of Directors must make
pursuant to this Article shall be conclusive if made in good faith and in
accordance with the provisions of this Article, absent manifest error.
Section 1511. Trustee's Disclaimer.
--------------------
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74
The Trustee has no duty to determine when an adjustment under this
Article should be made, how it should be made or what it should be. The Trustee
makes no representation as to the validity or value of any securities or assets
issued upon conversion of Securities. The Trustee shall not be responsible for
the Company's failure to comply with this Article. Each Conversion Agent other
than the Company shall have the same protection under this Section as the
Trustee.
This instrument may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same instrument.
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75
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed, and their respective corporate seals to be hereunto affixed
and attested, all as of the day and year first above written.
GEORGIA-PACIFIC CORPORATION
By:______________________________
[SEAL]
Attest:
____________________
THE BANK OF NEW YORK
as Trustee
By:______________________________
[SEAL]
Attest:
____________________
<PAGE>
76
STATE OF )
) ss:
COUNTY OF )
On the day of , 1999 before me personally came
, to me known, who, being by me duly sworn, did depose and say that
is of Georgia-Pacific Corporation, one of the
corporations described in and which executed the foregoing instrument; that
knows the seal of said corporation; that the seal affixed to said instrument is
such corporate seal; that it was so affixed by authority of the Board of
Directors of said corporation, and that signed
name thereto by like authority.
---------------------
Notary Public,
My Commission Expires , 199
STATE OF )
) ss:
COUNTY OF )
On the day of , 1998, before me personally came
, to me known, who, being by me duly sworn, did depose and say that
is a of The Bank Of New York, one of the
corporations described in and which executed the foregoing instrument; that
knows the seal of said corporation; that the seal affixed to said instrument is
such corporate seal; that it was so affixed by authority of the Board of
Directors of said corporation, and that signed
name thereto by like authority.
---------------------
Notary Public,
My Commission Expires , 199
<PAGE>
EXHIBIT 12
GEORGIA-PACIFIC CORPORATION AND SUBSIDIARIES
STATEMENTS OF COMPUTATION OF RATIO
OF EARNINGS TO FIXED CHARGES (UNAUDITED)
(Dollar Amounts in Millions)
<TABLE>
<CAPTION>
For the year ended December 31,
For three months ended -----------------------------------------------------------
April 3, 1999 1998 1997 1996 1995 1994
----------------------- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Fixed charges:
Total interest costs..................... $ 112 $ 452 $ 476 $ 490 $ 471 $ 493
One-third of rent expense................ 7 25 25 23 21 17
----------------------- ----- ----- ----- ------ -----
Total fixed charges................. 119 477 501 513 492 510
Add (deduct):
Income (loss) before income taxes,
extraordinary item and accounting
changes.............................. 244 491 235 296 1,697 572
Interest capitalized,
net of amortization..................... 3 8 6 (12) (18) 11
----------------------- ----- ----- ----- ------ -----
Ratio of earnings to $ 247 $ 499 $ 241 $ 284 $1,679 $ 583
fixed charges............................. 3.08 2.05 1.48 1.55 4.41 2.14
</TABLE>
<PAGE>
Exhibit 23(a)
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement of our reports dated February 5, 1999
included or incorporated by reference in Georgia-Pacific Corporation's Annual
Report on Form 10-K for the year ended December 31, 1998 and to all references
to our Firm included in this registration statement.
/s/ Arthur Andersen LLP
_____________________________________
Atlanta, Georgia
June 14, 1999
