===============================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended April 3, 1994
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _______________ to _____________
Commission File No. 1-2267
THE MEAD CORPORATION
(Exact name of registrant as specified in its charter)
Ohio 31-0535759
(State of Incorporation) (I.R.S. Employer Identification No.)
MEAD WORLD HEADQUARTERS
COURTHOUSE PLAZA NORTHEAST
DAYTON, OHIO 45463
(Address of principal executive offices)
Registrant's telephone number, including area code: 513-495-6323
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No .
--- ---
The number of Common Shares outstanding at April 3, 1994 was 59,278,185.
================================================================================
<PAGE>
THE MEAD CORPORATION AND CONSOLIDATED SUBSIDIARIES
--------------------------------------------------
QUARTERLY PERIOD ENDED APRIL 3, 1994
------------------------------------
PART I - FINANCIAL INFORMATION
------------------------------
ITEM 1. FINANCIAL STATEMENTS
--------------------
THE MEAD CORPORATION AND CONSOLIDATED SUBSIDIARIES
- --------------------------------------------------
BALANCE SHEETS
- --------------
(All dollar amounts in millions)
April 3, Dec. 31,
1994 1993
-------- --------
ASSETS
- ------
Current assets:
Cash and cash equivalents $ 10.9 $ 9.3
Accounts receivable 633.1 598.2
Inventories 491.9 446.8
Other current assets 74.2 77.0
-------- --------
Total current assets 1,210.1 1,131.3
Investments and other assets:
Investees 72.9 65.1
Other assets 562.0 555.2
-------- --------
634.9 620.3
Property, plant and equipment 4,452.9 4,382.6
Less accumulated depreciation and
amortization (2,018.7) (1,969.7)
-------- --------
2,434.2 2,412.9
-------- --------
Total assets $4,279.2 $4,164.5
======== ========
LIABILITIES AND SHAREOWNERS' EQUITY
- ------------------------------------
Current liabilities:
Notes payable $ 164.2 $
Accounts payable 292.0 350.3
Accrued liabilities 321.1 348.7
Current maturities of long-term debt 13.6 12.5
-------- --------
Total current liabilities 790.9 711.5
Long-term debt 1,368.8 1,368.8
Deferred items 527.1 506.2
Shareowners' equity:
Common shares 176.8 176.5
Additional paid-in capital 29.4 26.3
Foreign currency translation adjustment (7.2) (7.7)
Net unrealized gain on securities 6.8 9.1
Retained earnings 1,386.6 1,373.8
-------- --------
1,592.4 1,578.0
-------- --------
Total liabilities and
shareowners' equity $4,279.2 $4,164.5
======== ========
See notes to financial statements
<PAGE>
THE MEAD CORPORATION AND CONSOLIDATED SUBSIDIARIES
- --------------------------------------------------
STATEMENTS OF EARNINGS
- ----------------------
(All amounts in millions, except per share amounts)
First Quarter Ended
--------------------
April 3, April 4,
1994 1993
-------- --------
Net sales $1,155.6 $1,135.5
Cost of products sold 919.4 910.6
-------- --------
Gross profit 236.2 224.9
Selling, administrative and
research expenses 176.5 170.8
-------- --------
Earnings from operations 59.7 54.1
Other revenues (expenses) - net (7.9) .8
Interest and debt expense (24.6) (24.4)
-------- --------
Earnings before income taxes 27.2 30.5
Income taxes 11.0 11.7
-------- --------
Earnings before equity in net
earnings of investees 16.2 18.8
Equity in net earnings of investees 11.4 6.8
-------- --------
Net earnings $ 27.6 $ 25.6
======== ========
Net earnings per common and
common equivalent share $ .46 $ .43
===== =====
Cash dividends per common share $ .25 $ .25
===== =====
Average common and common equivalent
shares outstanding (millions) 59.8 59.4
===== =====
See notes to financial statements
<PAGE>
THE MEAD CORPORATION AND CONSOLIDATED SUBSIDIARIES
- --------------------------------------------------
STATEMENTS OF CASH FLOWS
- ------------------------
(All dollar amounts in millions)
First Quarter Ended
--------------------
April 3, April 4,
1994 1993
------ ------
Cash flows from operating activities:
Net earnings $ 27.6 $ 25.6
Adjustments to reconcile net earnings to
net cash (used in) operating activities:
Depreciation, amortization and depletion of
property, plant and equipment 57.4 63.7
Depreciation and amortization of other assets 12.6 13.2
Deferred income taxes 10.1 12.5
Investees-earnings and dividends (9.0) (5.0)
Other 9.1 (4.1)
Change in assets and liabilities:
Accounts receivable (34.9) (26.4)
Inventories (45.1) (55.2)
Other current assets (2.7) 13.1
Accounts payable and accrued liabilities (85.9) (84.9)
Cash provided by (used in) discontinued operations (.9) .3
------ ------
Net cash (used in) operating activities (61.7) (47.2)
------ ------
Cash flows from investing activities:
Capital expenditures (80.7) (52.4)
Additions to equipment rented to others (13.1) (9.8)
Investments in and advances to investees (.3) (.3)
Other 3.8 (3.5)
------ ------
Net cash (used in) investing activities (90.3) (66.0)
------ ------
Cash flows from financing activities:
Additional borrowings 168.6 187.9
Payments on borrowings (167.8) (187.3)
Notes payable 164.2 120.4
Cash dividends paid (14.8) (14.7)
Common shares issued 3.4 5.4
------ ------
Net cash provided by financing activities 153.6 111.7
------ ------
Increase (decrease) in cash and cash equivalents 1.6 (1.5)
Cash and cash equivalents at beginning of year 9.3 18.4
------ ------
Cash and cash equivalents at end of quarter $ 10.9 $ 16.9
====== ======
See notes to financial statements
<PAGE>
THE MEAD CORPORATION AND CONSOLIDATED SUBSIDIARIES
- --------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
- -----------------------------
(All dollar amounts in millions)
A - FINANCIAL STATEMENTS
The balance sheet at December 31, 1993 is condensed financial
information taken from the audited balance sheet. The interim
financial statements are unaudited. In the opinion of management,
all adjustments (which consist only of normal recurring
adjustments) necessary to present fairly the financial position and
results of operations for the interim periods presented have been
made.
B - ACCOUNTING POLICIES
On an interim basis, all costs subject to recurring year-end
adjustments have been estimated and allocated ratably to the
quarters. Income taxes have been provided based on the estimated
tax rate for the respective years after excluding infrequently
occurring items whose specific tax effect is reported during the
same interim period as the related transaction.
C - INVENTORIES
The amount of inventories is (principally last-in, first-out
method):
April 3, Dec. 31,
1994 1993
------ ------
Finished and semi-finished products $354.3 $301.3
Raw materials 73.7 81.0
Stores and supplies 63.9 64.5
------ ------
$491.9 $446.8
====== ======
<PAGE>
D - INVESTEES
Summarized operating data for Northwood Forest Industries, Ltd. are
in the following table and Mead's 50% share of net earnings is
included in the financial statements:
First Quarter Ended
--------------------
April 3, April 4,
1994 1993
-------- --------
Revenues $130.5 $131.9
====== ======
Gross profit $ 29.5 $ 16.7
====== ======
Net earnings $ 16.7 $ 6.9
====== ======
E - ADDITIONAL INFORMATION ON CASH FLOWS
First Quarter Ended
--------------------
April 3, April 4,
1994 1993
-------- --------
Cash paid for:
Interest $ 32.6 $ 30.9
====== ======
Income taxes $ 1.8
======
F - LONG-TERM DEBT
Long-term debt at April 3, 1994, includes $244.6 million of
short-term borrowings which have been classified as long-term debt
since the company has the intent to consummate these transactions
on a long-term basis and has the ability to do so under the
existing $550 million bank credit agreement. After reduction for
these financings, the company has unused lines of credit of $305.4
million.
G - CHANGE IN ACCOUNTING ESTIMATE
Effective January 1, 1994, the depreciable lives of certain paper
mill equipment were changed to 20 years from 16 years to more
closely reflect the current service lives of the assets. The
effect of the change was to increase net earnings by $6.5 million
($.11 per share) in the first quarter of 1994.
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
-------------------------------------------------
CONDITION AND RESULTS OF OPERATIONS
-----------------------------------
RESULTS OF OPERATIONS
- ---------------------
Net Sales
- ---------
Net sales for the first quarter of 1994 were $1.156 billion, up
slightly from $1.136 billion for the same period of 1993. Weak,
and in some instances declining prices, in most of Mead's markets
along with excess capacity in several product lines affected sales
for the period. Additionally, the general economic recovery has
been slow and uneven. The European and Japanese economies continue
to be depressed.
Operating Costs and Expenses
- ----------------------------
Gross profit as a percentage of sales improved to 20.4% in the
first quarter of 1994 from 19.8% a year earlier. In the first
quarter of 1994, Mead decided to lengthen the depreciable life of
certain paper mill equipment to 20 years from 16 years, a change
that more closely reflects the current life of these assets and
brings Mead in line with common practice in the industry. This
change had the effect of increasing net earnings by $10.7 million
($6.5 million after tax, or 11 cents per share). Without this
change, gross profit as a percent of sales would have declined
slightly to 19.5% in the first quarter of 1994. The pressures on
selling prices were almost totally offset by productivity
improvements throughout the company.
Selling, administrative and research expenses for the first quarter
of 1994 were $176.5 million, a $5.7 million increase over the
comparable period of 1993. The increase is due primarily to
efforts at Mead Packaging to penetrate new markets, and additional
expenses related to cost reduction activities at several divisions,
most notably Zellerbach. These additional expenses were partially
offset by lower expenses at Mead Data Central. During the first
quarter of last year, MDC had invested significant amounts in its
sales, marketing and research programs.
Other Revenues (Expenses) - Net
- -------------------------------
Other (expenses) were $(7.9) million in the first quarter of 1994
compared to other revenues of $.8 million in the first quarter of
1993. During the first quarter of 1994, the Federal Reserve
increased the federal funds rate causing a decline in the bond
market. The company had interest rate options which were
correlated to the yields on long-term bonds. As a result, other
revenues (expenses) - net for 1994 includes $12.1 million ($7.4
million after tax, or 12 cents per share) in losses relating to
adjustments to market for these financial instruments, principally
resulting from a one-time loss on the close-out of a leveraged
written option embedded in an interest rate swap transaction with
Bankers Trust Company. The risk of loss from future adjustments to
market of the financial instruments the company currently uses is
not significant in the opinion of management.
Interest and Debt Expense
- -------------------------
First quarter 1994 interest and debt expense was $24.6 million
compared to $24.4 million for the first quarter 1993.
Equity in Net Earnings of Investees
- -----------------------------------
Earnings contributed by Mead's investees, primarily its jointly-
owned Northwood companies, increased to $11.4 million for the first
quarter of 1994 compared to $6.8 million for the comparable quarter
of 1993. Strong prices for wood products, rising prices for pulp
and improved pulp mill operations all contributed to the increase.
Financial Data by Business
- --------------------------
Comparisons between 1994 and 1993 earnings in the following
discussion have been made prior to the depreciation expense effect
of the change in asset lives.
Both sales and earnings declined in the Paper segment compared to
first quarter 1993 amounts due to lower volume and continuing low
or declining prices for uncoated grades. Sales were down
approximately 5% and earnings down 9% compared to the same quarter
of 1993. Continued improved operations at Mead's two largest paper
mills in Escanaba, Michigan, and Chillicothe, Ohio, helped mitigate
the adverse effects of price and volume throughout the segment.
Mead expects that pressure on prices and tonnage will continue in
the Paper segment.
Sales for the Packaging and Paperboard segment increased about 3%
in the first quarter of 1994 compared to the first quarter of 1993,
but earnings decreased about 23% compared to the first quarter of
1993. The increase in sales came from the Mead Coated Board
Division due, in part, to the Division's two sawmill operations.
Mead Containerboard's sales were level with those of the first
quarter of 1993 despite declining prices for corrugated boxes.
Domestic sales of Mead Packaging are ahead of last year, but
continued weakness in European and Japanese economies caused
foreign sales to decline. Mead expects prices for coated board and
beverage packaging to remain uncertain in the short term. Mead
Containerboard reports that a recent price increase in corrugated
medium appears to be holding.
In the Distribution and School and Office Products segment, sales
increased about 2% in the first quarter of 1994 as compared to the
same period of 1993. The increase came from Mead's Zellerbach
distribution business. The first quarter is essentially the "off-
season" for Mead School and Office Products. Their sales are
somewhat behind 1993 levels due, in part, to retailers' efforts in
managing their own inventories, but earnings are essentially equal
to last year. The division is encouraged by the early response to
its "back-to-school" season. Zellerbach's earnings are behind 1993
levels because of weak paper prices and additional restructuring
costs.
Investments made by Mead Data Central (MDC) in the first half of
1993 contributed to the Electronic Publishing segment's first
quarter 1994 sales and earnings improvements over the comparable
period in 1993. First quarter 1994 sales were 14% above the first
quarter of 1993, and earnings increased substantially. Part of the
earnings improvement arose due to certain intangible assets related
to a previous acquisition becoming fully amortized by the end of
1993. Amortization expense was, therefore, lower in the first
quarter of 1994 than in 1993. MDC also had incurred significant
expenses in the first half of 1993 to enhance its sales, marketing
and research programs. New products, cost reductions and the
results of its strengthened sales force accounted for the rest of
the earnings improvement.
Liquidity and Capital Resources
- -------------------------------
Mead's consolidated working capital at April 3, 1994 was $419.2
million in comparison to $419.8 million at December 31, 1993. The
seasonal increase in inventories for Mead School and Office
Products was financed through short-term borrowings. The current
ratio declined to 1.5 at April 3, 1994 as compared to 1.6 at the
prior fiscal year end.
Borrowed capital (long-term debt) as a percent of total capital
(long-term debt plus shareowners' equity) decreased from 46.4% at
December 31, 1993 to 46.2% at April 3, 1994.
Capital expenditures for the first quarter totaled $80.7 million as
compared to $52.4 million for the first quarter of 1993. Much of
the 1994 spending was at the Escanaba, Michigan, and Chillicothe,
Ohio, paper mills to upgrade Mead's coated paper system.
The Company uses various financial instruments, including
derivative products, with off-balance sheet risk, to manage its
interest rate exposure. These derivatives include options, forward
contracts and interest-rate swaps. The current derivative
portfolio includes:
(A) Interest rate caps with a notional amount of $400 million
having an average strike rate of 10.1% and an average
maturity of 4.9 years. Purchased caps give the Company
the right to receive a payment to offset any increase in
interest rates above strike rates. The Company uses caps
to protect its floating rate debt from abnormal rate
increases such as those experienced in the early 1980's.
(B) Interest rate swaps with a notional amount of $275
million convert a floating rate liability into a fixed
rate liability for one party and achieves the reverse for
the other party. These swap agreements do not involve a
transfer of any principal dollars, only the exchange of
interest payments for a specified period. The Company
uses swaps to adjust its mix of fixed and floating rate
debt. The average fixed interest rate received is 5.8%
for an average maturity of 3.5 years and the average
fixed interest rate paid is 8.4% for an average maturity
of 5.1 years.
In the opinion of management, the risk of loss to the Company in
the event of nonperformance by any counterparty under these
agreements is not significant. All counterparties are rated A or
higher by Moody's and Standard and Poor's with the majority of the
contracts executed with counterparties rated AA or higher by both
agencies.
At the end of the first quarter, the Company paid a fixed rate or
variable rate subject to a capped rate on 68% of its debt and paid
a floating rate of interest on the remainder. A change of 1% in
the floating interest rate, on an annual basis, would result in a
$.07 change in net earnings per share for the year. The market
value of the long-term debt, excluding capital leases, at quarter-
end exceeded the book value by $1.6 million while the market value
at year-end exceeded the book value by $43.8 million.
The Company reported a $7.4 million loss after tax for the quarter
from derivatives used to manage debt interest rates, including
termination of a leveraged written option embedded in an interest
rate swap. Although the loss on these transactions has been
recorded by the end of the first quarter, actual cash payments will
be made over the next 6-1/2 years. The swap, including the option,
was written in connection with the Company's overall policy to
manage exposure to fluctuations of interest rates.
The Company also uses foreign currency options and forward
contracts to reduce the Company's risk due to foreign currency
exchange rate movement. Gains and losses on these contracts
generally offset losses and gains on the assets, liabilities and
transactions being hedged. These financial instruments are used to
minimize exposure and to reduce risk from exchange rate
fluctuations in the regular course of the Company's global
business. Based on the opinion of management, no material exposure
exists in any of these instruments.
PART II - OTHER INFORMATION
- ---------------------------
Item 1. LEGAL PROCEEDINGS
-----------------
Reference is made to the third paragraph under "Item 3. Legal
Proceedings" in Mead's Annual Report on Form 10-K for the fiscal
year ended December 31, 1993, regarding a declaratory judgment
action filed by Mead against the U. S. Navy. Mead filed a Renewed
Motion for Partial Summary Judgment on April 21, 1994 as to the
liability of the U. S. Navy and cited additional documents in
support.
Reference is made to the seventh paragraph under "Item 3.
Legal Proceedings" in Mead's Annual Report on Form 10-K for the
fiscal year ended December 31, 1993, regarding alleged air
violations at the Mead Publishing Paper mill in Escanaba, Michigan.
A settlement was reached with USEPA in April, 1994. Mead agreed to
pay a fine of $85,000, to make minor changes to some equipment and
operating procedures and to provide certain reports to USEPA in
settlement of this proceeding.
In March, 1994, Mead received a Notice of Violation from USEPA
for alleged Violations of the Ohio State Implementation Plan
("SIP") under the Clean Air Act. USEPA alleges that on two
occasions emissions of particulate matter from one of the boilers
at the Mead Fine Paper mill in Chillicothe, Ohio exceeded levels
allowed under the SIP. USEPA and Mead are discussing these
allegations, and Mead does not believe that this proceeding will
have a material adverse effect on the Company.
Mead has been informed by Ohio EPA that it is contemplating an
enforcement action seeking penalties from Mead for various alleged,
unrelated air violations at the Mead Fine Paper mill in
Chillicothe, Ohio dating back to 1989. The alleged violations
concern particulate emissions from a coal-fired boiler in 1989, the
absence of a permit for the facility's chlorine unloading station
and the untimely installation of equipment to control odors. Ohio
EPA and Mead are discussing these allegations, and Mead does not
believe that any such proceeding will have a material adverse
effect on the Company.
<PAGE>
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
--------------------------------
(a) Exhibits
(10) Material Contracts:
(1) Mead Management Incentive Plan for 1994 in
which executive officers participate.
(2) Restricted Stock Plan effective December 10,
1987, as amended through April 28, 1994.
(3) Lease Agreement between The Industrial
Development Board of the City of Phenix City,
Alabama and Mead Coated Board, Inc., dated as
of June 1, 1993.
(11.1), (11.2), (11.3) Calculations of Net Earnings per
Share.
(b) No current reports on Form 8-K were filed with the
Commission in the first quarter of 1994.
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.
Date: May 13, 1994
THE MEAD CORPORATION
- --------------------
(Registrant)
By J. D. Fuller
-----------------------------
J. D. Fuller
Controller and
Chief Accounting Officer
QUARTERLY\FORM10Q.WP
051294
Exhibit (10.1)
MEAD MANAGEMENT INCENTIVE PLAN
------------------------------
1994
----
OBJECTIVE The objective of the Mead Management Incentive Plan is to
- --------- recognize and reward key managers for achieving and sustaining
superior corporate performance compared to other industrial
companies.
PARTICIPATION All elected officers of the Corporation will participate in
ELIGIBILITY this plan.
- -----------
PAYOUT Participants must be employees of the company, an affiliate or
ELIGIBILITY a subsidiary at the end of the plan year to receive payout from
- ----------- this plan. An appropriate proration of earned awards may be
made in case of death, disability, retirement, hire or transfer
during the plan year. In such cases, the incentive target will
be pro-rated to reflect the months of service.
INCENTIVE The Incentive Target for each grade is the difference between
TARGET Mead's policy total cash compensation target and the midpoint.
- ------ This Target will be adjusted annually, based on competitive
data. The current year incentive targets are shown in
Attachment 1.
TOTAL PAYOUT Payout under the Mead Management Incentive Plan is the sum of
DETERMINATION target payout to individual participants, factored by Mead's
- ------------- Annual ROTC performance versus peers:
Payout = Target X Mead ROTC X Mead ROTC
------------------ ---------
Payout All Industry ROTC Forest Products ROTC
ROTC = (EAT+((1-Tax Rate) X Current Interest Expense) X 100
----------------------------------------------------
(Ending Equity + Ending Long-Term Debt)
The above calculated payout will be further adjusted by the
manager's assessment of individual performance.
For selected MMIP participants, the payout determination will
constitute 75% relative ROTC Formula (above) and 25% Cash Flow
Component. Payout of this component is the sum of:
o 60% of actual 1994 cash flow, and
o 40% of 1995 expected cash flow
The incentive potential of the Cash Flow Component is
illustrated in Attachment 2. The selected MMIP participants
with Cash Flow Impact are shown in Attachment 3.
<PAGE>
PAYOUT Senior Executives in grades 26 and above will not be eligible
THRESHOLD for payout unless Mead's annual ROTC is 5% or higher.
- ---------
Other participants will not be eligible for payout unless
there are corporate earnings for the year.
ADMINISTRATION Payout will be estimated periodically and required accrual of
- -------------- payout will be booked against earnings during the year.
Approved incentive checks will be prepared and expensed to
earnings at the time of payout. Corporate Compensation will
assist senior management in the administration of this plan.
RECOMMENDATIONS The Compensation Committee reviews and approves total
AND APPROVAL funding and individual payouts under the plan, and the
- ------------ amount, use and replenishment of any reserve funds.
The Compensation Committee may also determine if payout will
be in cash, restricted stock, or a combination thereof.
The CEO and COO recommend all individual payouts to the
Compensation Committee of the Board of Directors for approval.
Payout for the CEO and COO is recommended to the Board of
Directors by the Compensation Committee.
RESERVED RIGHTS The Mead Corporation reserves the right to alter, amend,
- --------------- suspend or terminate any or all provisions of the Mead
Management Incentive Plan, except such actions shall neither
inhibit nor hinder the rights of any individual with respect
to earned and credited awards which have been deferred.
Designation of a position as eligible for participation
neither guarantees the individual a right to an incentive
payment nor a right to continued employment.
S. C. Mason
----------------------------------------
Approved
May 3, 1994
----------------------------------------
Date
<PAGE>
Attachment 1
MEAD MANAGEMENT INCENTIVE PLAN
------------------------------
PAYOUT TARGETS
--------------
1994
----
1994 Policy Policy *Annual
Grade Midpoint Annual Target TCC Target Incentive Target
- ----- -------- ------------- ---------- ----------------
33 $637,944 $510,400 $1,148,300 $529,500
32 558,768 422,400 981,200 439,200
31 489,864 348,700 838,600 363,400
30 427,200 289,600 716,800 302,400
29 372,792 243,800 616,600 255,000
28 325,392 201,700 527,100 211,500
27 284,184 166,500 450,700 175,000
26 247,344 136,600 383,900 144,000
25 215,376 113,700 329,100 120,200
24 188,616 91,300 279,900 96,900
23 166,032 71,400 237,400 76,300
22 155,520 52,900 208,400 57,500
*For 1994 the above Incentive Targets include an addition of 3% of Midpoint.
<PAGE>
Attachment 2
CASH FLOW COMPONENT
-------------------
Incentive Potential
-------------------
1994 1994 1995 1995
Cash Flow Component Cash Flow Component
Actual Payout Expected Payout
----- ------ -------- ------
130.0 180% Maximum 126.0 120%
121.9 165% 118.1 110%
113.8 150% 110.3 100%
105.7 135% 102.4 90%
97.5 120% 94.5 80%
89.4 105% 86.6 70%
81.3 90% 78.8 60%
73.2 75% 70.9 50%
65.1 60% Contract 63.0 40%
57.0 45% 55.1 30%
48.8 30% 47.3 20%
40.7 15% 39.4 10%
32.5 0% 31.5 0%
24.4 -15% 23.6 -10%
16.3 -30% 15.8 -20%
8.1 -45% 7.9 -30%
0.0 -60% Threshold 0.0 -40%
<PAGE>
Attachment 3
MMIP PARTICIPANTS WITH CASH FLOW COMPONENT
------------------------------------------
S. C. Mason Chairman & CEO
S. S. Benedict President & COO
W. R. Graber VP & CFO
E. M. Karter VP Mfg & Technology
T. E. Palmer VP & General Counsel
C. J. Mazza VP Human Resources
W. O. Nugent VP Purchasing & Logistics
P. B. Robinson VP Strategy & Planning
G. T. Geswein Treasurer
J. D. Fuller Controller
QUARTERLY\EX-10(1).WP
051194
THE MEAD CORPORATION Exhibit (10.2)
COMPOSITE
04/28/94
RESTRICTED STOCK PLAN
---------------------
ARTICLE I. GENERAL PROVISIONS
- ---------- ------------------
Section 1. Purpose. The purpose of The Mead Corporation
---------- --------
Restricted Stock Plan (the "Plan") is to provide certain
compensation to eligible directors and employees in the form of
Common Shares ("Shares") of The Mead Corporation (the "Company")
which are restricted in accordance with the terms and conditions set
forth below and to encourage the continued high level of performance
of such directors and employees by increasing the identity of
interests of such directors and employees with the shareholders of
the Company. The Plan is intended to be an unfunded program
established for the purpose of providing compensation for eligible
directors and a select group of management employees and is exempt
from Parts 1 through 4 of Title I of the Employee Retirement Income
Security Act of 1974, as amended.
Section 2. Definitions. For purposes of the Plan, the
---------- ------------
following terms shall have the following meanings:
(a) "Board of Directors" means the Board of Directors of the
Company.
(b) "Change in Control" means the occurrence of any of the
following: (i) any "person" or "group" within the meaning of
Sections 13(d) and 14(d) (2) of the Securities Exchange Act of 1934,
as amended (the "Act"), becomes the "beneficial owner" (as defined
in Rule 13d-3 under the Act) of more than 25% of the then
outstanding voting shares of the Company otherwise than through a
transaction arranged by, or consummated with the prior approval of,
the Board of Directors, or (ii) during any period of two consecutive
years, individuals who at the beginning of such period constitute
the Board of Directors (and any new director whose election by the
Board of Directors or whose nomination for election by the Company's
shareholders was approved by a vote of at least two-thirds of the
directors then still in office who either were directors at the
beginning of such period or whose election or nomination for
election was previously so approved) cease for any reason to
constitute a majority thereof.
(c) "Committee" means the Compensation Committee of the
Board of Directors.
(d) "Company" means The Mead Corporation; however, when used
with reference to employment, "Company" also includes any
corporation, partnership or other person or entity at least 10% of
the voting or equity interest of which is owned or controlled,
directly or indirectly, by the Company.
(e) "Eligible Director" means any director of the Company
who is not also an employee of the Company.
(f) "Eligible Employee" means any employee of the Company
selected by the Committee.
(g) "Grant Date" means the date on which Restricted Shares
are to be granted pursuant to Article II, Section 1.
(h) "Market Value" means the average of the highest sale
price and the lowest sale price of a Share on the date the value of
a Share is to be determined, as reported on the New York Stock
Exchange - Composite Transactions Tape (or other similar source) or,
if no sale is reported for such date, then on the next preceding
date for which a sale is reported.
(i) "Participant" means any individual who holds Restricted
Shares granted under the Plan.
(j) "Restriction Period" means (i) in the case of Restricted
Shares granted pursuant to Article II, the period of five years from
the date the Restricted Shares are granted, and (ii) in the case of
Shares granted pursuant to Article III, the period of three, four or
five years (as determined by the Committee) from the date Restricted
Shares are granted.
(k) "Restricted Shares" means any Shares issued or delivered
pursuant to the Plan which remain subject to the restrictions set
forth in Article I, Section 5 of the Plan.
(l) "Shares" means the Common Shares, without par value, of
the Company.
Section 3. Administration. (a) The Plan shall be
---------- ---------------
administered by the Committee. Subject to the express provisions of
the Plan, the Committee and the Board of Directors shall each have
authority to construe and interpret the Plan, to prescribe, amend,
and rescind rules and regulations relating to the Plan, and to make
all other determinations necessary or advisable for administering
the Plan. The Committee or the Board of Directors may correct any
defect or supply any omission or reconcile any inconsistency in the
Plan in the manner and to the extent it shall deem expedient to
carry it into effect. The determination of the Committee or the
Board of Directors on any matters within the scope of this section
shall be conclusive. A majority of the Committee shall constitute
a quorum for meetings of the Committee, and the act of a majority of
the Committee at a meeting, or an act reduced to or approved in
writing by all members of the Committee, shall be the act of the
Committee.
In the case of Restricted Shares granted pursuant to Article III,
the Committee may in its discretion impose additional conditions or
restrictions as to the attainment of specified performance goals
during the Restriction Period for all or a portion of the shares or
all or a portion of the years in the Restriction Period.
(b) The Committee may waive or modify at any time any
condition or restriction (including, without limitation, any of the
restrictions set forth in Article I, Section 5) with respect to any
Restricted Shares issued pursuant to the Plan; provided, however,
that if such Restricted Shares are registered in the name of a
member of the Committee, such member shall not participate in the
Committee's decision.
Section 4. Shares Subject to the Plan. Subject to adjustment
---------- ---------------------------
as provided in Section 1 of Article IV, the maximum number of Shares
which may be granted as Restricted Shares under the Plan is 500,000,
and the maximum number of Shares which may be granted as Restricted
Shares to any individual pursuant to Section 2 of Article II is
10,000. Shares granted as Restricted Shares under the Plan may be
authorized and unissued Shares or Shares held in the Company's
treasury. Any Shares which are granted as Restricted Shares under
the Plan and which are thereafter forfeited by the Participant may
again be granted under the Plan as Restricted Shares.
Section 5. Terms and Conditions of Restricted Shares. (a)
---------- ------------------------------------------
Subject to the provisions of paragraph (b) of this Section 5,
Restricted Shares issued pursuant to the Plan shall be subject to
the following restrictions:
(i) the Participant shall not be entitled to receive
delivery of the certificate for such Restricted Shares until
the expiration of the Restriction Period;
(ii) such Restricted Shares shall not be sold, transferred,
assigned, pledged or otherwise encumbered or disposed of
during the Restriction Period; and
(iii) all such Restricted Shares shall be forfeited and all
right of the Participant to such Restricted Shares shall
terminate without further obligations on the part of the
Company if the Participant ceases to be a director of the
Company (in the case of a Participant who received Restricted
Shares as an Eligible Director) or an employee of the Company
(in the case of a Participant who received Restricted Shares
as an Eligible Employee) prior to the end of the Restriction
Period.
Upon the forfeiture of Restricted Shares, such Shares shall be
returned to the status of authorized and unissued Shares or treasury
Shares, as determined by the Committee.
(b) Notwithstanding the provisions of paragraph (a) of this
Section 5, in the event a Participant ceases to be a director of the
Company (in the case of a Participant who received Restricted Shares
as an Eligible Director) or an employee of the Company (in the case
of a Participant who received Restricted Shares as an Eligible
Employee) prior to the end of a Restriction Period as a result of
such Participant's death, disability or normal retirement in
accordance with the Company's policies, then the restrictions set
forth in paragraph (a) of this Section 5 shall immediately cease to
apply to (and all rights of the Participant shall immediately vest
with respect to):
(i) all of the Restricted Shares, if any, registered in the
name of such Participant which were granted pursuant to
Section 2 of Article II of the Plan or Article III of
the Plan;
(ii) a number of the Restricted Shares, if any, registered in
the name of such Participant which were granted pursuant
to Section 1(a) of Article II of the Plan (rounded to
the nearest whole share) determined as if such
restrictions had ceased with respect to 20% of such
Restricted Shares on the date on which such Restricted
Shares were granted and on each anniversary of such date
occurring prior to the Participant's death, disability
or retirement; and
(iii) a number of the Restricted Shares, if any, registered in
the name of such Participant which were granted pursuant
to Section 1(b) of Article II of the Plan (rounded to
the nearest whole share) equal to the number of
Restricted Shares which on the date such Restricted
Shares were granted had a Market Value equal to the
product of $7,500 times the number of full or partial
calendar years expiring since such Restricted Shares
were granted and prior to the Participant's death,
disability or retirement.
In the event a Participant who received Restricted Shares as an
Eligible Employee ceases to be an employee prior to the end of a
Restriction Period as a result of such Participant's early
retirement in accordance with the Company's policies, such
Restricted Shares shall not be forfeited; however, the restrictions
set forth in paragraphs (a)(i), (a)(ii) and (a)(iii) of this Section
5 shall continue until the earlier of the end of the Restriction
Period or the date of such Participant's retirement in accordance
with the Company's normal retirement policies; provided that, in any
event, all such Restricted Shares shall be forfeited and all rights
of the Participant to such Restricted Shares shall terminate without
further obligations on the part of the Company if the Participant,
directly or indirectly, individually or as an agent, officer,
director, employee, shareholder (excluding being the holder of any
stock which represents less than 1% interest in a corporation),
partner or in any other capacity whatsoever engages prior to the
time such restrictions cease to apply in any activity competitive
with or adverse to the Company's business or in the sale,
distribution, production or attempted sale or distribution of any
goods, products or services then sold or being developed by the
Company.
(c) Upon the occurrence of a Change in Control, all of the
restrictions set forth in this Section 5 shall immediately cease to
apply to all Restricted Shares issued pursuant to the Plan, except
to the extent that the lapse of such restrictions would, in the
opinion of counsel selected by the Company's independent auditors,
constitute "parachute payments" within the meaning of Section
280G(b)(2)(A) of the Internal Revenue Code (the "Code") and, when
added to any other "parachute payments" which would be received by
the Participant pursuant to the terms of any other plan, arrangement
or agreement with the Company, any person whose actions result in a
change in control of the Company or any person affiliated with the
Company or such person, would be subject to the tax imposed by
Section 4999 of the Code.
(d) At the end of the Restriction Period, or at such earlier
time as it is provided for in paragraphs (b) or (c) of this Section
5, the restrictions applicable to the Restricted Shares pursuant to
this Section 5 shall cease and a share certificate for the number of
Restricted Shares with respect to which the restrictions have ceased
shall be delivered, free of all such restrictions and all
restrictive legends, to the Participant or the Participant's
beneficiary or estate, as the case may be.
(e) If required by the Committee, each grant of Restricted
Shares shall be evidenced by a written agreement between the Company
and the Participant.
(f) In the event that the restrictions set forth in
paragraph (a) of this Section 5 shall cease to apply to any
Restricted Shares granted to Eligible Employees subject to Section
16 of the Act prior to the date which is six months after the date
of grant of such Restricted Shares, then, notwithstanding any
provision to the contrary in this Section 5, the restrictions set
forth in paragraphs (a)(i) and (a)(ii) of this Section 5 shall
continue in effect until the date which is six months after the date
of such grant.
(g) Notwithstanding any provision to the contrary in this
Section 5, but subject nonetheless to paragraph (c) of this Section
5, in the case of Restricted Shares granted pursuant to Article III,
if the Participant fails to attain specified performance goals set
forth with respect to such Restricted Shares during the Restriction
Period, the Participant will forfeit such Restricted Shares to the
extent specified in the grant of such Restricted Shares and the
right of the Participant to such Restricted Shares shall terminate
to the extent specified in the grant of such Restricted Shares
without any further obligations on the part of the Company.
Section 6. Share Certificates; Rights as a Shareholder.
---------- --------------------------------------------
(a) Upon the grant of Restricted Shares pursuant to Article
II or Article III of the Plan, the Company shall issue a share
certificate registered in the name of the Participant bearing the
following legend and any other legend required by any federal or
state securities laws:
"The transferability of this certificate and the Common Shares
represented hereby are subject to the restrictions, terms and
conditions (including forfeiture and restrictions against
sale, assignment, transfer, pledge, hypothecation and other
disposition) set forth in The Mead Corporation Restricted
Stock Plan. Copies of such Plan will be mailed to any
shareholder without charge within five days after receipt of
written request therefor address to Secretary, The Mead
Corporation, Mead World Headquarters, Courthouse Plaza
Northeast, Dayton, OH 45463."
Each such share certificate shall be retained by the Company until
the restrictions set forth in Article I, Section 5(a) cease to apply
to the Shares represented by such certificate.
(b) Upon the issuance of a share certificate with respect to
Restricted Shares pursuant to paragraph (a) of this Section 6, the
Participant shall, subject to all of the terms, conditions and
restrictions set forth in the Plan, have all of the rights of a
holder of Shares, including the right to vote and to receive
dividends and other distributions with respect thereto.
ARTICLE II. RESTRICTED SHARES FOR ELIGIBLE DIRECTORS
- ----------- ----------------------------------------
Section 1. Grant of Restricted Shares to Eligible Directors.
---------- -------------------------------------------------
(a) On the third business day of January, 1988 and on each fifth
anniversary of such date during the term of the Plan, (each such
date is hereinafter referred to as a "Grant Date"), the Company
shall grant a number of Restricted Shares to each then Eligible
Director determined by dividing $37,500 by the Market Value of a
Share on the Grant Date (rounded to the nearest whole shares).
(b) If during the term of the Plan any person becomes an
Eligible Director on a date other than a Grant Date, the Company
shall grant such person a number of Restricted Shares determined by
dividing $37,500 (less the product of $7,500 times the number of
full years since the last Grant Date) by the Market Value of a Share
(rounded to the nearest whole share) on the date of such person's
election to the Board of Directors.
Section 2. Election to Receive Compensation as Restricted
---------- ----------------------------------------------
Shares. (a) Not later than June 1 of each year during the term of
- -------
the Plan, the Committee shall cause each Eligible Director to be
furnished with an appropriate form which enables the director to
elect to receive payment in Restricted Shares of a minimum of 20% up
to a maximum of 100% (in increments of 10%) of the annual retainer
fee to be earned by such director for service on the Board of
Directors during the following calendar year which is paid on or
after the first day of such calendar year. In order to be
effective, the election form must be signed by the director and must
be returned to the Committee or its delegate not later than July 1
of the year prior to the year with respect to which the election is
being made. All such elections are irrevocable.
(b) A new Eligible Director may, by filing the prescribed
election form, elect to receive the annual retainer fee as
Restricted Shares as provided in paragraph (a) of this Section 2
only if the election form is signed and filed at least six months
prior to the date of payment of the annual retainer fee to such
director.
(c) If an Eligible Director has elected to receive all or a
portion of the annual retainer fee as Restricted Shares as provided
in this Section 2, then on the date such fee would otherwise be
payable, the Company shall grant to such director a number of
Restricted Shares determined by dividing the compensation so to be
received by the Market Value of a Share on such date such other
compensation would otherwise be payable (rounded to the nearest
whole share).
ARTICLE III. RESTRICTED SHARES FOR ELIGIBLE EMPLOYEES
- ------------ ----------------------------------------
Section 1. Grant of Restricted Shares to Eligible Employees.
---------- -------------------------------------------------
From time to time during the term of the Plan, the Committee may
determine that Restricted Shares shall be granted to Eligible
Employees either as payment for all or a portion of the compensation
to be paid to any Eligible Employee pursuant to the Company's
incentive compensation plans, or for any other reason consistent
with the purposes of the Plan. Restricted Shares to be granted as
payment for all or a portion of incentive compensation shall be
granted on the date the compensation is awarded, and the number of
Restricted Shares so granted shall be determined by dividing the
amount of such compensation by the Market Value of a Share on the
date the compensation is awarded (rounded to the nearest whole
Share).
<PAGE>
ARTICLE IV. MISCELLANEOUS
- ----------- -------------
Section 1. Adjustments Upon Changes in Capitalization. Upon
---------- -------------------------------------------
any change in the outstanding Shares by virtue of a share dividend
or split, recapitalization, merger, consolidation, combination or
exchange of shares or other similar change, the number of Restricted
Shares which may be granted under the Plan (or the class of shares
which may be granted as Restricted Shares) shall be adjusted
appropriately by the Committee, whose determination with respect to
such adjustment shall be conclusive. Unless the Committee shall
otherwise determine, any securities and other property received by
a Participant in connection with or as a result of any such change
with respect to Restricted Shares (excluding dividends paid in cash)
shall be subject to the restrictions then applicable to Restricted
Shares under the Plan (including forfeiture), and shall be deposited
promptly with the Company to be held in custody until the
restrictions cease to apply to the Restricted Shares to which such
securities or other property relates.
Notwithstanding the foregoing, however, in the event any rights to
purchase Shares are issued pursuant to the Company's Shareholder
Rights Plan (or any successor plan) with respect to Restricted
Shares, such rights shall cease to be subject to the restrictions
applicable to the underlying Restricted Shares at such time, if any,
as such rights become exercisable.
Section 2. Compliance with Laws. The issuance or delivery of
---------- ---------------------
Shares pursuant to the Plan shall be subject to, and shall comply
with, any applicable requirements of federal and state securities
laws, rules and regulations (including, without limitation, the
provisions of the Securities Act of 1933, the Securities Exchange
Act of 1934 and the rules and regulations promulgated thereunder),
any securities exchange upon which the Shares may be listed and any
other law or regulation applicable thereto, and the Company shall
not be obligated to issue or deliver any Shares pursuant to the Plan
if such issuance or delivery would violate any such requirements.
The foregoing shall not, however, be deemed to require the Company
to effect any registration of Shares under any such law or
regulation.
Section 3. Amendment and Termination. (a) The Board of
---------- --------------------------
Directors may from time to time amend the Plan, or any provision
thereof, in such respects as the Board of Directors may deem
advisable; provided, however, that any such amendment must be
approved by the holders of Shares entitling them to exercise a
majority of the voting power of the Company if such amendment would:
(i) materially increase the benefits accruing to
participants under the Plan;
(ii) materially increase the aggregate number of Shares
which may be issued and/or delivered or the number of Shares which
may be granted to any individual under the Plan;
(iii) materially modify the requirements as to
eligibility for participation in the Plan.
(b) The Plan shall terminate, and no additional
Restricted Shares shall be granted under the Plan after, December
31, 1997; provided, however, that the Board of Directors may earlier
terminate the Plan at any time.
(c) No amendment to or termination or expiration of
the Plan shall adversely affect any Restricted Shares previously
granted under the Plan without the consent of the holder thereof.
(d) Notwithstanding paragraph (a) of this Section 3,
the provisions of Section 1 of Article II may not be amended more
than once every six months other than to comport with changes in the
Code, ERISA or the rules thereunder.
Section 4. Notices. Each notice relating to the Plan shall
---------- --------
be in writing and delivered in person or by mail to the proper
address. Each notice shall be deemed to have been given on the date
it is delivered or mailed except that an election to receive
compensation as Restricted Shares pursuant to Article II, Section 2
shall be deemed to have been given on the date it is received by the
Committee. Each notice to the Committee shall be addressed as
follows: The Mead Corporation, Mead World Headquarters, Courthouse
Plaza Northeast, Dayton, Ohio 45463, Attention: Secretary. Each
notice to a Participant shall be addressed to the Participant's
address as set forth in the records of the Company. Anyone to whom
a notice may be given under this Plan may designate a new address by
written notice to the Company or to the Participants, as the case
may be.
Section 5. Benefits of Plan. The Plan shall inure to the
---------- -----------------
benefit of, and shall be binding upon, each successor and assign of
the Company. All rights and obligations imposed upon a Participant
and all rights granted to the Company under this Plan shall be
binding upon such Participant's heirs, legal representatives and
successors. Nothing in the Plan shall be deemed to create any
obligation on the part of the Company to nominate any director for
re-election or to continue the employment of any employee.
Section 6. Taxes. (a) The Company shall have the right to
---------- ------
require, prior to the issuance or delivery of any Restricted Shares,
payment by the Participant of any taxes required by law with respect
to the issuance or delivery of such Restricted Shares.
(b) On any date on or after January 1, 1994 that
restrictions applicable to Restricted Shares granted (or to be
granted) hereunder shall have ceased pursuant to Article I, Section
5 (the "Lapse Date"), and with respect to persons subject to Section
16 of the Securities Exchange Act of 1934, as amended (the "1934
Act") on any date thereafter through the end of the next following
period (the "Window Period") specified in Rule 16b-3(e)(3) (or any
successor rule) under the 1934 Act, the Participant to whom such
Restricted Shares were granted may elect to have the Company retain,
from the Restricted Shares to be delivered at the end of the
Restriction Period, Shares having a Market Value on the date of
delivery equal to all or any part of the federal, state and local
withholding tax payments (whether mandatory or permissive) to be
made by the Participant with respect to ceasing of the restrictions
(up to the maximum amount determined by the Participant's top
marginal tax rate) in lieu of making such payments in cash; provided
that such election may also be made in advance of the Lapse Date and
will be effective on the date specified in the notice of election
(subject, as applicable, to Section 16 of the 1934 Act), and further
provided that, with respect to a Lapse Date that has occurred or
will occur between January 1, 1994 and October 28, 1994, the
election may be made by persons subject to and in accordance with
Section 16 of the 1934 Act through the end of the first Window
Period which commences on, includes or follows October 28, 1994.
The Committee may establish from time to time rules or limitations
with respect to the right of a Participant to elect to have the
Company retain Restricted Shares in satisfaction of withholding
payments; provided, however, that, in any event, any such rules or
limitations must be in accordance with Section 16 of the 1934 Act
and any applicable rules established under such Section.
Section 7. Governing Law. All grants of Restricted Shares
---------- --------------
shall be made and accepted in the State of Ohio. The laws of the
State of Ohio shall control the interpretation and performance of
the provisions of the Plan.
Section 8. Effective Date of the Plan. The effective date of
---------- ---------------------------
the Plan shall be December 10, 1987; provided, however, that if the
Plan is not approved at the 1988 Annual Meeting of Shareholders by
the holders of at least a majority of the outstanding voting power
of the Company, the Plan shall immediately terminate. No dividends
shall be paid prior to the 1988 Annual Meeting of Shareholders with
respect to any Restricted Shares granted prior to such meeting. If
the Plan is not approved at such meeting, all Restricted Shares
granted prior thereto shall be retained by the Company, and the
Company shall pay to the Participant in whose name such Restricted
Shares were registered an amount equal to the Market Value on the
date of grant of a number of Shares equal to such number of
Restricted Shares.
<PAGE>
---------------------------------------
NOTE: (1) Adopted by the Board of Directors of the Company on
December 11, 1987.
(2) Approved by the shareholders of the Company on April 28,
1988.
(3) Addition of Article II, Section 2, subsection (d)
adopted by the Board of Directors of the Company on
December 15, 1989 (deleted February 28, 1991).
(4) Amendment to Article I, Section 2, subsection (h)
adopted by the Board of Directors of the Company on
January 25, 1990.
(5) Amendments to Article I, Section 2, subsections (d) and
(j); Article I, Section 3, subsection (a); and Article
III, Section 1; and addition of Article 2, Section 5,
subsection (g), adopted by the Board of Directors of the
Company on January 24, 1991, and approved by the
shareholders of the Company on April 25, 1991.
(6) Amendments to Article II, Section 2, subsections (a) and
(b); and addition of Article I, Section 5, subsection
(f) and Article IV, Section 3, subsection (d) adopted by
the Board of Directors of the Company on February 28,
1991.
(7) Amendments to Article I, Section 5, subsection (b); and
addition of Article I, Section 5, subsection (b)(iii),
adopted by the Board of Directors of the Company on July
23, 1992.
(8) Amendment to Article IV, Section 6, subsection (b)
adopted by the Board of Directors of the Company on
April 28, 1994.
QUARTERLY\EX-10(3).WP
050694
Exhibit (10.3)
LEASE AGREEMENT
between
THE INDUSTRIAL DEVELOPMENT BOARD OF
THE CITY OF PHENIX CITY, ALABAMA
and
MEAD COATED BOARD, INC.
Dated as of June 1, 1993
This Lease Agreement and all right, title and interest of The
Industrial Development Board of the City of Phenix City, Alabama in
any rental payments and other receipts and revenues derived under
this Lease Agreement have been assigned to AmSouth Bank N.A., as
Trustee under the Trust Indenture, dated as of even date herewith,
from The Industrial Development Board of the City of Phenix City,
Alabama, which secures $48,000,000 in aggregate principal amount of
The Industrial Development Board of the City of Phenix City,
Alabama Industrial Development Revenue Bonds (Mead Coated Board
Project), Series 1993A and Additional Bonds as permitted and
provided for under said Trust Indenture.
This instrument prepared by:
Thompson, Hine and Flory
312 Walnut Street
14th Floor
Cincinnati, Ohio 45202
<PAGE>
(PAGE NUMBER REFERENCES ARE APPLICABLE TO PAPER COPY ONLY)
LEASE AGREEMENT
TABLE OF CONTENTS
(The Table of Contents for this Lease Agreement is for convenience
of reference only and is not intended to define, limit or describe
the scope or intent of any provisions of this Lease Agreement.)
Page
ARTICLE I
DEFINITIONS AND RULES OF CONSTRUCTION. . . . . . 33
Section 1.1 - Definitions . . . . . . . . . . . . . . . . 33
Section 1.2 - Rules of Construction . . . . . . . . . . . 37
ARTICLE II
REPRESENTATIONS AND WARRANTIES. . . . . . . . 37
Section 2.1 - Representations and Warranties by the
Board. . . . . . . . . . . . . . . . . . . . . . . . 37
Section 2.2 - Representations and Warranties by the
Company. . . . . . . . . . . . . . . . . . . . . . . 39
ARTICLE III
LEASING CLAUSES AND TITLE. . . . . . . . . 41
Section 3.1 - Lease of the Project. . . . . . . . . . . . 41
Section 3.2 - Warranty of Title . . . . . . . . . . . . . 41
Section 3.3 - Quiet Enjoyment . . . . . . . . . . . . . . 41
ARTICLE IV
COMPLETION OF THE PROJECT FACILITIES;
ISSUANCE OF THE BONDS. . . . . . . . . . 41
Section 4.1 - Agreement to Acquire, Construct and
Install the Project Facilities . . . . . . . . . . . 41
Section 4.2 - Agreement to Issue Bonds; Application of
Bond Proceeds. . . . . . . . . . . . . . . . . . . . 42
Section 4.3 - Company Required to Pay Costs if Project
Fund Insufficient. . . . . . . . . . . . . . . . . . 42
Section 4.4 - Board to Pursue Remedies Against
Suppliers, Contractors and Subcontractors and Their
Sureties . . . . . . . . . . . . . . . . . . . . . . 43
Section 4.5 - Issuance of Additional Bonds. . . . . . . . 43
ARTICLE V
EFFECTIVE DATE OF THIS AGREEMENT;
DURATION OF LEASE TERM; RENTAL PROVISIONS. . . . . 43
Section 5.1 - Effective Date of This Agreement; Duration
of Lease Term. . . . . . . . . . . . . . . . . . . . 43
Section 5.2 - Delivery and Acceptance of Possession . . . 44
Section 5.3 - Rents and Other Amounts Payable . . . . . . 44
Section 5.4 - Place of Rental Payments. . . . . . . . . . 45
Section 5.5 - Obligations of Company Hereunder Absolute
and Unconditional. . . . . . . . . . . . . . . . . . 45
Section 5.6 - Company's Performance Under Indenture . . . 46
Section 5.7 - Payments in Lieu of Taxes . . . . . . . . . 46
ARTICLE VI
MAINTENANCE, MODIFICATION, TAXES AND INSURANCE. . . . 47
Section 6.1 - Maintenance and Modification of Project
Facilities by Company. . . . . . . . . . . . . . . . 47
Section 6.2 - Removal of Portions of Project. . . . . . . 48
Section 6.3 - Taxes, Other Governmental Charges and
Utility Charges. . . . . . . . . . . . . . . . . . . 48
Section 6.4 - Insurance Required. . . . . . . . . . . . . 50
Section 6.5 - Application of Net Proceeds of Insurance. . 50
Section 6.6 - Additional Provisions Respecting
Insurance. . . . . . . . . . . . . . . . . . . . . . 50
Section 6.7 - Other Board Expenses. . . . . . . . . . . . 50
Section 6.8 - Advances by Board or Trustee. . . . . . . . 51
Section 6.9 - Indemnification of Board and Trustee. . . . 51
Section 6.10 - Investment Credit. . . . . . . . . . . . . 52
ARTICLE VII
DAMAGE, DESTRUCTION AND CONDEMNATION . . . . . . 52
Section 7.1 - Damage and Destruction. . . . . . . . . . . 52
Section 7.2 - Condemnation. . . . . . . . . . . . . . . . 52
Section 7.3 - Condemnation of Company-Owned Property. . . 53
Section 7.4 - Further Assurances and Corrective
Instruments. . . . . . . . . . . . . . . . . . . . . 53
ARTICLE VIII
SPECIAL AGREEMENTS. . . . . . . . . . . 53
Section 8.1 - No Warranty of Condition or Suitability by
the Board. . . . . . . . . . . . . . . . . . . . . . 53
Section 8.2 - Inspection of the Project . . . . . . . . . 53
Section 8.3 - Company to Maintain Its Corporate
Existence; Exceptions Permitted. . . . . . . . . . . 54
Section 8.4 - Qualification in the State. . . . . . . . . 54
Section 8.5 - Granting of Easements . . . . . . . . . . . 54
Section 8.6 - Release of Certain Land . . . . . . . . . . 55
ARTICLE IX
ASSIGNMENT, SUBLEASING, PLEDGING AND SELLING;
REDEMPTION; RENT PREPAYMENT AND ABATEMENT. . . . . 56
Section 9.1 - Assignment and Subleasing . . . . . . . . . 56
Section 9.2 - Pledge under Indenture. . . . . . . . . . . 56
Section 9.3 - Restrictions on Sale of Project by Board. . 57
Section 9.4 - Redemption of Bonds . . . . . . . . . . . . 57
Section 9.5 - Prepayment of Rents . . . . . . . . . . . . 57
Section 9.6 - Rent Abatements if Bonds Paid Prior to
Maturity . . . . . . . . . . . . . . . . . . . . . . 57
Section 9.7 - Reference to Bonds Ineffective After Bonds
Paid . . . . . . . . . . . . . . . . . . . . . . . . 58
ARTICLE X
EVENTS OF DEFAULT AND REMEDIES. . . . . . . . 58
Section 10.1 - Events of Default Defined. . . . . . . . . 58
Section 10.2 - Remedies . . . . . . . . . . . . . . . . . 59
Section 10.3 - No Remedy Exclusive. . . . . . . . . . . . 60
Section 10.4 - Agreement to Pay Attorneys' Fees and
Expenses . . . . . . . . . . . . . . . . . . . . . . 60
Section 10.5 - No Additional Waiver Implied by One
Waiver . . . . . . . . . . . . . . . . . . . . . . . 60
Section 10.6 - Waiver of Appraisement, Valuation, etc.. . 60
Section 10.7 - Waiver of Events of Default. . . . . . . . 60
ARTICLE XI
OPTIONS IN FAVOR OF COMPANY; OBLIGATION TO PURCHASE PROJECT 61
Section 11.1 - General Option to Prepay Rent and
Purchase Project . . . . . . . . . . . . . . . . . . 61
Section 11.2 - Conveyance on Purchase . . . . . . . . . . 61
Section 11.3 - Relative Positions of Options and
Indenture. . . . . . . . . . . . . . . . . . . . . . 62
ARTICLE XII
MISCELLANEOUS. . . . . . . . . . . . 62
Section 12.1 - Notices. . . . . . . . . . . . . . . . . . 62
Section 12.2 - Binding Effect . . . . . . . . . . . . . . 63
Section 12.3 - Severability . . . . . . . . . . . . . . . 63
Section 12.4 - Amounts Remaining in Bond Fund . . . . . . 63
Section 12.5 - Amendments, Changes and Modifications. . . 63
Section 12.6 - Execution Counterparts . . . . . . . . . . 63
Section 12.7 - Captions . . . . . . . . . . . . . . . . . 63
Section 12.8 - Recording of Agreement . . . . . . . . . . 63
Section 12.9 - Law Governing Construction of Agreement. . 64
Section 12.10 - Net Lease . . . . . . . . . . . . . . . . 64
EXHIBIT "A" - DESCRIPTION OF PROJECT LAND. . . . . . . . . . . 67
EXHIBIT "B" - PROJECT SUMMARY. . . . . . . . . . . . . . . . . 84
<PAGE>
LEASE AGREEMENT
THIS LEASE AGREEMENT, made and entered into as of June 1,
1993, by and between THE INDUSTRIAL DEVELOPMENT BOARD OF THE CITY
OF PHENIX CITY, ALABAMA (the "Board"), a public corporation
organized and existing under the laws of the State of Alabama, as
lessor, and MEAD COATED BOARD, INC. (the "Company"), a corporation
organized and existing under the laws of the State of Delaware and
qualified to do business in the State of Alabama, as lessee;
WITNESSETH:
In consideration of the respective representations and
agreements hereinafter contained, the Board and the Company agree
as follows (provided, that in the performance of the agreements of
the Board herein contained, any obligation it may thereby incur for
the payment of money shall not be a general debt on its part but
shall be payable solely out of the rents, payments and revenues
derived from this Lease Agreement, the sale of the "Bonds" as
hereinafter defined, the insurance and condemnation awards herein
described and any other revenues arising out of or in connection
with its ownership of the "Project" as hereinafter defined):
ARTICLE I
DEFINITIONS AND RULES OF CONSTRUCTION
Section 1.1 - Definitions. In addition to the words and terms
elsewhere defined herein, the following words and terms as used
herein shall have the following meanings unless the context or use
clearly indicates another or different meaning or intent, and any
other words and terms defined in the Indenture shall have the same
meanings when used herein as assigned them in the Indenture unless
the context or use clearly indicates another or different meaning
or intent:
"Act" means the statutes codified as Code of Alabama 1975,
Title 11, Chapter 54, Article 4, as amended and supplemented and at
the time in force and effect;
"Additional Bonds" means the bonds of any series, other than
the Bonds, authorized under the Indenture and authenticated and
delivered in accordance with Section 401 of the Indenture.
"Agreement" means this Lease Agreement as it now exists and as
it may hereafter be amended pursuant to Section 12.5 of this Lease
Agreement and Article XV of the Indenture;
"Authorized Board Representative" means the person at the time
designated to act on behalf of the Board by written certificate
furnished to the Company and the Trustee containing the specimen
signature of such person and signed on behalf of the Board by its
Chairman or Vice Chairman. Such certificate may designate an
alternate or alternates;
"Authorized Company Representative" means the person at the
time designated to act on behalf of the Company by written
certificate furnished to the Board and the Trustee containing the
specimen signature of such person and signed on behalf of the
Company by the President or any Vice President of the Company.
Such certificate may designate an alternate or alternates;
"Board" means The Industrial Development Board of the City of
Phenix City, Alabama, a public corporation of the State, and its
successors and assigns;
"Bond Fund" means the Bond principal and interest payment fund
created pursuant to Section 702 of the Indenture and within which
have been established a general account and a special account. Any
reference herein to the "Bond Fund" without further limitation or
explanation shall be deemed to be a reference to the general
account in the Bond Fund;
"bondholder" or "holder of the Bonds" means the registered
owner of any Bond;
"Bonds" means the $48,000,000 in aggregate principal amount of
The Industrial Development Board of the City of Phenix City,
Alabama Industrial Development Revenue Bonds (Mead Coated Board
Project), Series 1993A, issued pursuant to the Indenture;
"City" means the City of Phenix City, Alabama, a municipal
corporation of the State;
"Company" means the corporation designated as such in the
first paragraph hereof and its successors and assigns, including
any surviving, resulting or transferee corporation as provided in
Section 8.3;
"default" means an event or condition the occurrence of which
would, with the lapse of time or the giving of notice or both,
become an Event of Default;
"Event of Default" means one of the events so denominated and
described in Section 10.1;
"Government Obligations" means (a) direct obligations of the
United States of America, (b) obligations unconditionally
guaranteed by the United States of America and (c) securities or
receipts evidencing ownership interests in obligations or specified
portions (such as principal or interest) of obligations described
in (a) or (b);
"Indenture" means the Trust Indenture, of even date herewith,
between the Board and the Trustee, including any indenture
supplemental thereto;
"Lease Term" means the duration of the leasehold interest
created hereby as specified in Section 5.1;
"Net Proceeds", when used with respect to any insurance or
condemnation award, means the gross proceeds from the insurance or
condemnation award with respect to which that term is used
remaining after payment of all expenses (including attorneys' fees
and any Extraordinary Expenses of the Trustee as defined in the
Indenture) incurred in the collection of such gross proceeds;
"Notes" means those unpaid and outstanding industrial
development notes issued by the Board, pursuant to resolutions of
the Board to finance the costs of the Project;
"payment in full of the Bonds" specifically encompasses the
situations described in Article X of the Indenture;
"Permitted Encumbrances" means, as of any particular time,
(a) liens for ad valorem taxes, special assessments or
other governmental charges not then delinquent or permitted to
exist as provided in Section 6.3;
(b) this Agreement and the security interests created
herein;
(c) such utility, access or other easements and rights-
of-way, restrictions, reservations, reversions and exceptions
as the Authorized Company Representative certifies will not
materially interfere with or impair the operation of the
Project (or, if it is not being operated, the operations for
which it was designed or last modified);
(d) unfiled and inchoate mechanics' and materialmen's
liens for construction work in progress;
(e) mechanics', materialmen's, suppliers' and vendors'
liens or other similar liens not then payable, and those
permitted to exist as provided in Section 6.1;
(f) such minor defects, irregularities, encumbrances,
easements, rights-of-ways and clouds on title as the
Authorized Company Representative certifies do not, in the
aggregate, materially impair the property affected thereby for
the purpose for which it was acquired or is held by the Board
or the Company;
(g) that certain Lease Agreement dated as of July 1,
1980 between Georgia Kraft Company and the Board, as amended
in an Assignment, Assumption and Amendatory Lease Agreement
dated as of January 4, 1988 among the Board, Georgia Kraft
Company and the Company;
(h) that certain Lease Agreement dated as of November 1,
1983 between Georgia Kraft Company and the Board, as amended
in an Assignment, Assumption and Amendatory Lease Agreement
dated as of January 4, 1988 among the Board, Georgia Kraft
Company and the Company;
(i) that certain Lease Agreement dated as of December 1,
1983 between Georgia Kraft Company and the Board, as amended
in an Assignment, Assumption and Amendatory Lease Agreement
dated as of January 4, 1988 among the Board, Georgia Kraft and
the Company;
(j) that certain Lease Agreement dated as of December 1,
1988 between the Company and the Board executed in connection
with the Board's Environmental Improvement Revenue Bonds (Mead
Coated Board Project), Series 1988;
(k) that certain Lease Agreement dated as of December 1,
1988 between the Company and the Board in connection with the
Board's Industrial Development Revenue Bonds (Mead Coated
Board Project), Series 1988A and other bonds of the Board, as
amended and supplemented from time to time;
(l) that certain Lease Agreement dated as of September
1, 1990 between the Company and the Board in connection with
the Board's Environmental Improvement Revenue Bonds (Mead
Coated Board Project), Series 1990A; and
(m) that certain Lease Agreement dated as of October 1,
1990 between the Company and the Board in connection with the
Board's Environmental Improvement Revenue Refunding Bonds
(Mead Coated Board Project), Series 1990B;
"person" means natural persons, firms, associations,
corporations and public bodies;
"Project" means the Project Land and the Project Facilities,
as they may at any time exist;
"Project Facilities" means the facilities acquired,
constructed and installed with proceeds from the sale of the Notes,
to the extent such Notes are refunded from the proceeds of the sale
of the Bonds, as they may at any time exist. The Project
Facilities are more fully described in the Project Summary;
"Project Fund" means the fund created pursuant to Section 601
of the Indenture;
"Project Land" means the real property described in Exhibit
"A" attached hereto and by this reference made a part hereof, less
such real property as may be released from this Agreement pursuant
to Section 8.6 or taken by the exercise of the power of eminent
domain as provided in Section 7.2;
"Project Summary" means the Project Summary prepared by the
Company, entitled "PROJECT SUMMARY - INDUSTRIAL FACILITIES-MEAD
COATED BOARD, INC. COATED LINERBOARD MILL", a copy of which is
attached hereto as "Exhibit "B" and by this reference made a part
hereof, including any amendments thereto made pursuant to the terms
thereof;
"security interest" or "security interests" shall refer to the
security interests created herein and in the Indenture and shall
have the meaning set forth in the Uniform Commercial Code of the
State;
"State" means the State of Alabama;
"Trustee" means AmSouth Bank N.A., or any co-trustee or any
successor trustee under the Indenture.
Section 1.2 - Rules of Construction. Unless the context
clearly indicates to the contrary:
(a) "Herein", "hereby", "hereunder", "hereof",
"hereinbefore", "hereinafter" and other equivalent words refer
to this Agreement and not solely to the particular Article,
Section or subdivision hereof in which such word is used.
(b) Words importing the singular number shall include
the plural number and vice versa, and any pronoun used herein
shall be deemed to cover all genders.
(c) All references herein to particular Articles or
Sections are references to Articles or Sections of this
Agreement.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
Section 2.1 - Representations and Warranties by the Board.
The Board makes the following representations and warranties as the
basis for the undertakings on its part herein contained:
(a) Organization and Authority. The Board is a public
--------------------------
corporation duly organized and validly existing under the
provisions of the Act by authority of a resolution adopted by
the Board of Commissioners of the City on June 14, 1960 and a
Certificate of Incorporation duly filed for record on October
17, 1960, in the office of the Judge of Probate of Russell
County, Alabama, which Certificate of Incorporation has not
been amended or been revoked and is of full force and effect.
The Board has all requisite power and authority under the Act
(1) to issue the Bonds, (2) to use the proceeds thereof to
refund the Notes issued to pay the cost to acquire, construct
and install the Project Facilities, (3) to own, lease,
encumber and dispose of the Project, and (4) to enter into,
and perform its obligations under, the Indenture and this
Agreement. This Agreement and the Indenture have been duly
authorized, executed and delivered by the Board and are legal,
valid and binding agreements enforceable against the Board in
accordance with their respective terms.
(b) Pending Litigation. There are no actions, suits,
------------------
proceedings, inquiries or investigations pending, or to the
knowledge of the Board threatened, against or affecting the
Board in any court or before any governmental authority or
arbitration board or tribunal, which adversely affect the
validity or enforceability of the Bonds, the Indenture, this
Agreement, or any agreement or instrument to which the Board
is a party and which is used or contemplated for use in the
consummation of the transactions contemplated hereby or
thereby.
(c) Issue, Sale and Other Transactions Are legal and
------------------------------------------------
Authorized. The issue and sale of the Bonds and the execution
----------
and delivery by the Board of the Indenture and this Agreement
and the compliance by the Board with all of the provisions of
each thereof and of the Bonds (i) are within the purposes,
powers and authority of the Board, (ii) to the best of the
knowledge of the Board, have been done in full compliance with
the provisions of the Act, are legal and will not conflict
with or constitute on the part of the Board a violation of or
a breach of or default under, or result in the creation of any
lien or encumbrance (other than Permitted Encumbrances) upon
any property of the Board under the provisions of, its
certificate of incorporation or Bylaws, or any indenture,
mortgage, deed of trust, note agreement or other agreement or
instrument to which the Board is a party or by which the Board
is bound, or any license, judgment, decree, law, statute,
order, rule or regulation of any court or governmental agency
or body having jurisdiction over the Board or any of its
activities or properties, and (iii) have been duly authorized
by all necessary corporate action on the part of the Board.
(d) Governmental Consents. Neither the nature of the
---------------------
Board nor any of its activities or properties, nor any
relationship between the Board and any other person, nor any
circumstance in connection with the offer, issue, sale or
delivery of any of the Bonds is such as to require the
consent, approval or authorization of, or the filing,
registration or qualification with, any governmental authority
on the part of the Board in connection with the execution,
delivery and performance of the Indenture and this Agreement,
or the offer, issue, sale or delivery of the Bonds, other
than (i) the filing with the Alabama Securities Commission of
the notification of the Board's intention to issue the Bonds
required by Act No. 586 enacted at the 1978 Regular Session of
the Legislature of the State and the issuance by the Director
of the Alabama Securities Commission of such Certificate of
Notification as may be required by said Act, and (ii) the due
filing and recording of this Agreement, the Indenture and the
financing statements covering the security interests created
hereunder and under the Indenture. The Board has filed the
notification referred to in (i) of the preceding sentence and
the Director of the Alabama Securities Commission has issued
a Certificate of Notification applicable to the Bonds, which
Certificate of notification has not been revoked or rescinded
and is in full force and effect.
(e) No Defaults. The Board is not in default under the
-----------
Act or under its Certificate of Incorporation or Bylaws or any
other agreement or instrument to which it is a party or by
which is bound.
(f) No Prior Pledge. Neither the Project, this
---------------
Agreement nor any of the payments to be received by the Board
under this Agreement have been mortgaged, pledged or
hypothecated in any manner or for any purpose other than as
provided in the Indenture as security of the payment of the
Bonds.
(g) Nature and Location of Project. The Project will
------------------------------
constitute a "project" within the meaning of the Act, and the
acquisition, construction and installation of the Project
Facilities is in furtherance of the public purpose of the Act.
The Project will be located within 25 miles of the corporate
limits of the City, and no part thereof is located within the
corporate limits or the police jurisdiction of any other
incorporated municipality or any county of any state other
than Russell County, Alabama.
(h) Official Action. By resolutions duly adopted on
---------------
November 3, 1987, January 20, 1988, August 31, 1988, February
27, 1991, October 22, 1991 and December 19, 1991, the Board
took official action providing for the acquisition,
construction and installation of the Project Facilities and
the financing of the Project Facilities through the issuance
of the Bonds.
Section 2.2 - Representations and Warranties by the Company.
The Company makes the following representations and warranties as
the basis for the undertakings on its part herein contained:
(a) The Company (i) is a corporation duly organized,
validly existing and in good standing under the laws of the
State of Delaware, (ii) has all requisite corporate power and
authority to carry on its business as now being conducted and
as presently proposed to be conducted, and (ii) has duly
qualified and is authorized to do business and is in good
standing as a foreign corporation in the State.
(b) The Company has the corporate power and has been
duly authorized to enter into this Agreement and to perform
all of its obligations hereunder and thereunder.
(c) The willingness of the Board to issue the Bonds for
purposes of financing costs of acquiring, constructing, and
installing the Project, and to lease the Project to the
Company, has induced the Company to locate the Project within
the State of Alabama and, more particularly, within 25 miles
of the City.
(d) The Project will create or preserve jobs and
employment opportunities within the boundaries of the State of
Alabama, thereby improving the economic welfare of the State
of Alabama and the City.
(e) The acquisition, construction, and installation of
any part of the Project was not commenced, and no item which
constitutes a part of the Project was ordered, prior to the
date of the resolution referred to in Section 2.1(h) above
that refers to such part of the Project.
(f) The Company is not subject to any contractual or
other limitation or provision of any nature whatsoever which
in any material way limits, restricts or prevents the Company
from entering into this Agreement, or performing any of its
obligations hereunder; and the execution and delivery of this
Agreement, the consummation of the transactions contemplated
hereby, and the fulfillment of or compliance with the terms
and conditions of this Agreement will not conflict with or
result in a breach of the terms, conditions or provisions of
any restriction, agreement or instrument to which the Company
is a party or by which it is bound, or constitute a default
under any of the foregoing.
(g) The acquisition, construction, and installation of
the Project will comply in all material respects with all
applicable zoning, planning, building, environmental and other
regulations of the governmental authorities having
jurisdiction of the Project, and all necessary permits,
licenses, consents and permissions necessary for the Project
have been or will be obtained.
(h) The acquisition, construction, and installation of
the Project as well as its intended use and operation are in
complete conformance with the purposes and provisions of the
Act.
(i) No event has occurred and no condition exists that
would constitute an "Event of Default" under this Agreement
which, with the lapse of time or with the giving of notice or
both, would become an "Event of Default" under this Agreement.
(j) To the best of its knowledge and belief, the Company
is not in violation of any laws, ordinances, governmental
rules or regulations to which it is subject and has not failed
to obtain any licenses, permits, franchises or other
governmental authorizations necessary to the ownership of its
properties or to the conduct of its business, which violation
or failure to obtain would reasonably be expected to
materially and adversely affect the ability of the Company to
perform its obligations under this Agreement.
ARTICLE III
LEASING CLAUSES AND TITLE
Section 3.1 - Lease of the Project. The Board hereby leases
to the Company, and the Company hereby leases from the Board, the
Project at the rent set forth in Sections 5.3 and 5.7 and in
accordance with the provisions hereof.
Section 3.2 - Warranty of Title. The Board for itself, its
successors and assigns, warrants to the Company, its successors and
assigns, that it has good and marketable fee simple title in and to
the Project Land free from all encumbrances except Permitted
Encumbrances. Upon the execution and delivery of this Agreement,
the Board agrees that it will furnish to the Company an opinion of
the Board's counsel stating that the Board holds such title in and
to the Project Land.
Section 3.3 - Quiet Enjoyment. The Board warrants and
covenants that it will defend the Company in the quiet enjoyment
and peaceable possession of the Project, and all appurtenances
thereto belonging, free from all claims of all persons whomsoever,
throughout the Lease Term, so long as the Company shall perform the
covenants, conditions and agreements to be performed by it
hereunder, or so long as the period for remedying any default in
such performance shall not have expired.
ARTICLE IV
COMPLETION OF THE PROJECT FACILITIES;
ISSUANCE OF THE BONDS
Section 4.1 - Agreement to Acquire, Construct and Install the
Project Facilities. The Board agrees that it will cause the
Project Facilities to be acquired, constructed and installed on the
Project Land, wholly within the boundary lines thereof. The
acquisition, construction and installation of the Project
Facilities will be in accordance with the Project Summary, a copy
of which is on file with the Board and the Trustee.
The Board agrees that it will enter into, or accept the
assignment of, such contracts as the Company may request in order
to effectuate the purposes of this Section but that it will not
execute any other contract or give any order for construction or
for the acquisition and installation of any equipment relating to
the Project Facilities, unless and until the Authorized Company
Representative shall have approved the same in writing.
The Board hereby makes, constitutes and appoints the Company
and The Mead Corporation as its true, lawful and agents for the
acquisition, construction and installation of the Project
Facilities, and the Company and The Mead Corporation have accepted
such agency to act and do all things on behalf of the Board, to
perform all acts and agreements of the Board hereinbefore provided
in this Section, and to bring any actions or proceedings against
any person which the Board might bring with respect thereto as the
Company and The Mead Corporation shall deem proper. The Board
hereby ratifies and confirms all actions of, and assumes and adopts
all contracts entered into by, the Company and The Mead Corporation
with respect to the Project Facilities prior to the date hereof.
This appointment of the Company and The Mead Corporation to act as
agents and all authority hereby conferred or granted is conferred
and granted irrevocably until all activities in connection with the
acquisition, construction and installation of the Project
Facilities shall have been completed, and shall not be terminated
prior thereto by act of the Board or of the Company and The Mead
Corporation. So long as the Company is not in default hereunder,
upon the completion of the Project (or at any time prior or
subsequent thereto upon the request of the Company) the Board will
assign to the Company all warranties and guarantees of all
contractors, subcontractors, suppliers, architects and engineers
for the furnishing of labor, materials or equipment or supervision
or design in connection with the Project Facilities and any rights
or causes of action arising from or against any of the foregoing.
Section 4.2 - Agreement to Issue Bonds; Application of Bond
Proceeds. In order to provide funds for the payment of the cost of
the acquisition, construction and installation of the Project
Facilities through the refunding of the Notes, the Board agrees
that it will authorize, sell and deliver the Bonds to the initial
purchasers thereof. Upon receipt of the proceeds from the sale of
the Bonds, the Board will deposit all accrued interest (if any)
received upon the sale of the Bonds in the Bond Fund and will
deposit the balance of the proceeds from said sale to the Project
Fund, to be applied to the payment of the Notes upon receipt by the
Trustee of Notes tendered for cancellation.
Section 4.3 - Company Required to Pay Costs if Project Fund
Insufficient. If the moneys in the Project Fund available for
payment of the costs of the Project Facilities should not be
sufficient to pay the costs thereof in full, and if Additional
Bonds are not issued to finance the completion of the Project
Facilities, the Company agrees to complete the Project Facilities
and to pay all that portion of the costs of the Project Facilities
as may be in excess of the moneys available therefor in the Project
Fund. The Board does not make any warranty, either express or
implied, that the moneys which will be paid into the Project Fund
and which, under the provisions hereof, will be available for
payment of the costs of refunding the Notes, will be sufficient to
pay all the costs which will be incurred in that connection. The
Company agrees that if after exhaustion of the moneys in the
Project Fund the Company should pay any portion of the costs of
refunding the Notes pursuant to the provisions of this Section, it
shall not be entitled to any reimbursement therefor from the Board
or from the Trustee or from the holders or owners of any of the
Bonds, nor shall it be entitled to any diminution in or
postponement or abatement of the rents payable under Section 5.3.
Section 4.4 - Board to Pursue Remedies Against Suppliers,
Contractors and Subcontractors and Their Sureties. At the
direction and sole cost of the Company, the Board will promptly
proceed, either separately or in conjunction with others, to
exhaust the remedies of the Board against any defaulting supplier,
contractor or subcontractor and against any surety therefor, for
the performance of any contract made in connection with the Project
Facilities. If the Company shall so notify the Board, the Company
may, in its own name or in the name of the Board, prosecute or
defend any action or proceeding or take any other action involving
any such supplier, contractor, subcontractor or surety which the
Company deems reasonably necessary, and in such event the Board
agrees to cooperate fully with the Company and to take all action
necessary, to the extent it might lawfully do so, to effect the
substitution of the Company for the Board in any such action or
proceeding. Any moneys recovered by way of damages, refunds,
adjustments or otherwise in connection with the foregoing shall be
paid to the Bond Fund.
Section 4.5 - Issuance of Additional Bonds. So long as there
shall not have occurred and be continuing an event of default
hereunder or under the Indenture, the Board shall, from time to
time at the request of the Company, use its best efforts to issue
Additional Bonds in aggregate principal amounts as requested by the
Company under the terms and conditions provided herein and in the
Indenture, but in no event shall the Board be liable for not
issuing Additional Bonds. Additional Bonds may be issued to
finance the (a) payment of outstanding Notes, (b) refunding all of
the Bonds of any one or more series then outstanding, (c) payment
of costs of the Project or (d) any combination of the foregoing;
provided, in any case, that either prior to or contemporaneously
with the issuance of Additional Bonds (i) the terms, conditions,
manner of issuance, purchase price, delivery and contemplated
disposition of the proceeds of the sale of such Additional Bonds
shall have been approved in writing by the President or any Vice
President of the Company, and (ii) the conditions specified in
Article IV of the Indenture with respect to the issuance of such
Additional Bonds shall have been satisfied.
ARTICLE V
EFFECTIVE DATE OF THIS AGREEMENT;
DURATION OF LEASE TERM; RENTAL PROVISIONS
Section 5.1 - Effective Date of This Agreement; Duration of
Lease Term. This Agreement shall become effective upon its
execution and delivery and the leasehold interest created hereby
shall then begin, and, unless sooner terminated or extended under
the provisions hereof (including particularly Articles X and XI),
shall expire upon the latter to occur of the following events: (i)
midnight, June 1, 2033, or (ii) payment in full of all Bonds and
any Additional Bonds.
Section 5.2 - Delivery and Acceptance of Possession. The
Board agrees to deliver to the Company sole and exclusive
possession of the Project (subject to the right of the Trustee to
enter thereon for inspection purposes and to the other provisions
of Section 8.2) on the Completion Date and the Company agrees to
accept possession of the Project upon such delivery; provided,
however, that the Company shall be permitted such possession of the
Project prior to the Completion Date as shall not interfere with
the acquisition, construction and installation of the Project
Facilities.
Section 5.3 - Rents and Other Amounts Payable. On December 1,
1993, and June 1 and December 1 in each year thereafter until
payment in full of the Bonds, the Company shall pay to the Trustee,
for the account of the Board, as rent for the Project, a sum of
money equal to the amount payable on such date as principal of and
interest on the Bonds, as provided in the Indenture. In any event,
on each date on which a payment of principal or interest is payable
on the Bonds, if at any such date the amount of money available in
the Bond Fund is insufficient to make required payments of
principal and interest on such date, the Company shall forthwith
pay to the Trustee, in immediately available funds, the amount of
any such deficiency.
Anything herein to the contrary notwithstanding, any amount of
money at any time held by the Trustee in the Bond Fund shall be
credited against the next succeeding payment of rent and shall
reduce the payment to be then made by the Company; and further, if,
and for so long as, the amount held by the Trustee in the Bond Fund
should be sufficient to pay at the times required the principal of
and the interest on all Bonds then remaining unpaid, the Company
shall not be obligated to make any further rental payments under
the provisions of this Section.
The Company agrees to pay to the Trustee until the principal
of and the interest on the Bonds shall have been paid in full (i)
an amount equal to the annual fee of the Trustee for the Ordinary
Services of the Trustee rendered and its Ordinary Expenses incurred
under the Indenture, (ii) the reasonable fees and charges of the
Trustee and any other paying agent for acting as paying agent and
as bond registrar and the reasonable fees of Trustee's counsel as
provided in the Indenture, as and when the same become due, and
(iii) the reasonable fees and charges of the Trustee for
Extraordinary Services rendered by it and Extraordinary Expenses
incurred by it, as such terms are defined in the Indenture, as and
when the same become due; provided, that the Company may, without
precipitating an Event of Default hereunder, withhold such payment
to contest in good faith the necessity for any such Extraordinary
Services and Extraordinary Expenses and the reasonableness of any
such fees, charges or expenses.
If the Company should fail to make any of the payments
required in this Section, the item or installment which the Company
has failed to make shall continue as an obligation of the Company
until the same shall have been fully paid, and the Company agrees
to pay the same (in the case of interest, to the extent permitted
by law) with interest thereon at the rate per annum equal to one
percent per annum over the applicable interest rate borne by the
Bonds, calculated as described in the Indenture. The provisions of
this Section shall be subject to the provisions of Section 9.6.
Section 5.4 - Place of Rental Payments. The rents provided
for in Section 5.3 and the interest on delinquent rents shall be
paid directly to the Trustee for the account of the Board and will
be deposited in the Bond Fund. The other payments provided for in
Section 5.3 shall be paid directly to the Trustee for its own use
or for disbursement to any other paying agent, as the case may be.
Section 5.5 - Obligations of Company Hereunder Absolute and
Unconditional. Subject to the provisions of Section 9.6, the
obligations of the Company to make the payments required in Section
5.3 and to perform and observe the other agreements on its part
contained herein shall be absolute and unconditional. Until such
time as payment in full of the Bonds shall have been made, the
Company (i) will not suspend or discontinue any payments provided
for in Section 5.3 except to the extent the same have been prepaid,
(ii) will perform and observe all of its other agreements contained
herein, (iii) will not suspend or discontinue any payments provided
for in Section 5.3 because of any right of set off which the
Company may have against the Board, the Trustee or the holder of
any Bond (provided that nothing herein shall prevent the assertion
of any claim by the Company by separate suit or compulsory
counterclaim) and (iv) except as provided in Section 11.1 will not
terminate the Lease Term for any cause, including, without limiting
the generality of the foregoing, failure of the Board to complete
the Project Facilities, failure of the Board's title in and to the
Project or any part thereof, any acts or circumstances that may
constitute failure of consideration, eviction or constructive
eviction, destruction of or damage to the Project, commercial
frustration of purpose, any change in the tax or other laws of the
United States of America or of the State or any political
subdivision of either or any failure of the Board to perform and
observe any agreement, whether express or implied, or any duty,
liability or obligation arising out of or in connection herewith or
with the Indenture. Nothing contained in this Section shall be
construed to release the Board from the performance of any of the
agreements on its part herein contained; and if the Board should
fail to perform any such agreement, the Company may institute such
action against the Board as the Company may deem necessary to
compel performance or recover its damages for nonperformance so
long as such action shall not do violence to the agreements on the
part of the Company contained in the preceding sentence. The
Company may, however, at its own cost and expense and in its own
name or in the name of the Board, prosecute or defend any action or
proceeding or take any other action involving third persons which
the Company deems reasonably necessary in order to insure the
completion of the acquisition, construction and installation of the
Project Facilities or to secure or protect its right of possession,
occupancy and use of the Project hereunder, and in such event the
Board hereby agrees to cooperate fully with the Company and to take
all lawful action which is required to effect the substitution of
the Company for the Board in any such action or proceeding if the
Company shall so request.
Nothing contained herein shall be construed to be a waiver of
any rights which the Company may have against the Board under this
Agreement, or against other persons under this Agreement, the
Indenture, or otherwise, or under any provision of law.
Section 5.6 - Company's Performance Under Indenture. The
Company agrees, for the benefit of the holders from time to time of
the Bonds, to do and perform all acts and things contemplated in
the Indenture to be done or performed by it.
Section 5.7 - Payments in Lieu of Taxes. The Board and the
Company acknowledge that, under present law, the Project, as long
as it is owned by the Board, is exempt from ad valorem taxation by
the State of Alabama or any political or taxing subdivision
thereof, including Russell County.
The Company agrees that it will make payments in lieu of taxes
("PILOT Payments"), consisting of payments in fixed, specified
amounts ("Fixed Payments") and payments in amounts determined by
formula as set forth below ("Variable Payments"), so long as the
Bonds and any Additional Bonds are outstanding and subject to the
provisions of the last paragraph of this Section 5.7, in the
amounts and at the times and in the manner set forth below. The
PILOT Payments shall be payable on July 1 and August 15, 1993 and
on August 15 of each subsequent year, commencing August 15, 1994.
The Fixed Payments shall be payable to Russell County and
shall be in the following amounts: $55,000 on July 1, 1993;
$145,000 on August 15, 1993; $200,000 on August 15, 1994; $50,000
on each of August 15, 1995, August 15, 1996, August 15, 1997 and
August 15, 1998; and $100,000 on August 15 of each subsequent year,
commencing August 15, 1999.
The aggregate Variable Payments for each year shall be in an
amount equal to 60% of the "education taxes" (as defined below)
that would be payable with respect to the Project leased under the
Lease, calculated as of the December 31 of the second preceding
calendar year (each December 31, an "Assessment Date") with respect
to those portions of the Project capitalized for financial
accounting purposes and leased under this Agreement on such
Assessment Date. For purposes of this Section 5.7, "education
taxes" means the ad valorem taxes then currently levied on property
situated in Russell County to support public schools in Russell
County (i.e., the levy for the Russell County Board of Education
and the Russell County countywide schools levy levied as of the
applicable Assessment Date), which taxes would be assessed against
the Project if the Project was not exempt from ad valorem taxes.
The Variable Payment due on August 15, 1994 (with respect to the
December 31, 1992 Assessment Date) and August 15, 1995 shall be
distributed as follows: 60% to the Phenix City Board of Education
and 40% to the Russell County Board of Education. The Variable
Payments due on December 15, 1996 and thereafter shall be
distributed as follows: 55% to the Phenix City Board of Education,
35% to the Russell County Board of Education, 5% of the Calculation
Amount to the City of Phenix City and 5% of the Calculation Amount
to Russell County.
The calculation of the amount of PILOT Payments due shall be
made by the Company and by March 15 of each year, the Company will
provide to the Board and each recipient of PILOT Payments a report
of the amount due on the next succeeding August 15. The Company's
calculations of the PILOT Payments, absent manifest error, shall be
conclusive and binding upon the Board and all recipients of PILOT
Payments.
The Board acknowledges that the obligation of the Company to
made any payment of PILOT Payments as additional rent provided for
in this section is conditioned upon the Project remaining exempt
from ad valorem taxation throughout the period or term to which the
Project so becomes subject to ad valorem taxation.
ARTICLE VI
MAINTENANCE, MODIFICATION, TAXES AND INSURANCE
Section 6.1 - Maintenance and Modification of Project
Facilities by Company.
(a) Throughout the Lease Term, the Company shall at its
own expense (i) keep the Project Facilities in as reasonably
safe condition as the operation thereof will permit, and (ii)
keep the Project Facilities in good repair and in good
operating condition, making from time to time all necessary
repairs thereto and renewals and replacements thereof.
(b) The Company may from time to time, in its sole
discretion and at its own expense, make any additions,
modifications or improvements to the Project Facilities,
including installation of additional machinery, equipment, and
related property that do not impair the effective use of the
Project Facilities. All machinery, equipment and related
personal property so installed by the Company shall not be
subject to this Agreement but shall be subject to the
Landlord's Lien created under the Code of Alabama 1975,
Section 35-9-60. All such machinery, equipment and related
personal property may be modified or removed at any time while
there exists no event of default hereunder; provided, that any
damage to the Project Facilities occasioned by such
modification or removal shall be repaired by the Company at
its own expense.
(c) The Company shall not permit any mechanics',
materialmen's, suppliers', vendors' or other similar liens to
be established or remain against the Project for labor or
materials furnished or services rendered in connection with
any additions, modifications, improvements, repairs, renewals
or replacements so made by it; provided, that if the Company
shall first notify the Trustee of its intention so to do, the
Company may in good faith contest any mechanics',
materialmen's, suppliers', vendors' or other similar liens
filed or established against the Project, and in such event
may permit the items so contested to remain undischarged and
unsatisfied during the period of such contest and any appeal
therefrom unless the Board of the Trustee shall notify the
Company that by nonpayment of any such items the lien or
security interests afforded by this Agreement or the Indenture
as to any part of the Project or the rents, payments and
revenues from the Project will be materially endangered or the
Project or any part thereof or the rents, payments and
revenues from the Project will be subject to loss or
forfeiture, in which event the Company shall promptly pay and
cause to be satisfied and discharged all such unpaid items.
The Board will cooperate fully with the Company in any such
contest.
Section 6.2 - Removal of Portions of Project. The Board shall
not be under any obligation to renew, repair or replace any
inadequate, obsolete, worn out, unsuitable, undesirable,
inappropriate or unnecessary items of machinery or equipment
comprising the Project Facilities. If the Company in its sole
discretion determines that any such items have become inadequate,
obsolete, worn out, unsuitable, undesirable, inappropriate or
unnecessary for its purposes at such time, the Company may remove
such items from the Project and (on behalf of the Board) sell,
trade in, or otherwise dispose of them (as a whole or in part)
without any responsibility or accountability to the Board or the
Trustee therefor, provided that such removal does not impair the
operation of the Project Facilities.
The removal of any portion of the Project Facilities pursuant
to the provisions of this Section shall not entitle the Company to
any diminution in or postponement or abatement of the rents payable
under Section 5.3.
The Company shall promptly report to the Trustee each such
removal, substitution, sale, trade-in or other disposition.
Section 6.3 - Taxes, Other Governmental Charges and Utility
Charges. The Company agrees to pay promptly as and when the same
shall become due and payable, each and every lawful cost, expense
and obligation of every kind and nature, foreseen or unforeseen,
for the payment of which the Board or the Company is or shall
become liable by reason of its estate or interest in the Project or
any portion thereof, by reason of any right or interest of the
Board or the Company in or under this Agreement, or by reason of or
in any manner connected with or arising out of the possession,
operation, maintenance, alteration, repair, rebuilding or use of
the Project or any part thereof. The Company also agrees to pay
and discharge all lawful real estate taxes, personal property
taxes, water charges, sewer charges, assessments and all other
lawful governmental taxes, impositions and charges of every kind
and nature, ordinary and extraordinary, general or special,
foreseen or unforeseen, whether similar or dissimilar to any of the
foregoing, and all applicable interest and penalties thereon, if
any, which at any time during the term of this Agreement shall be
or become due and payable by the Board or the Company and which
shall be lawfully levied, assessed or imposed
(a) upon or with respect to, or shall be or become liens
upon, the Project or any portion thereof or any interest of
the Board or the Company therein or under this Agreement;
(b) upon or with respect to the income or profits of the
Board from the Project or under this Agreement;
(c) upon or with respect to the possession, operation,
management, maintenance, alterations, repair, rebuilding, use
or occupancy of the Project or any portion thereof; or
(d) upon this transaction or any document to which the
Board or the Company is a party creating or transferring an
interest or an estate in the Project;
under or by virtue of any present or future law, statute,
ordinance, regulation or other requirement of any governmental
authority, whether federal, state, county, city, municipal, school
or otherwise.
The Company also agrees to pay any special assessments for
public improvements or benefits for which the Company would have
otherwise have been liable had it in fact been the owner of the
Project.
The Company shall, at its sole cost and expense, procure or
cause to be procured any and all necessary building permits, other
permits, licenses and other authorizations required for the lawful
and proper construction, use, occupation, operation and management
of the Project. The Company also agrees to pay or cause to be paid
all lawful charges for gas, water, sewer, electricity, light, heat,
power, telephone and other utility and service used, rendered or
supplied to, upon or in connection with the Project and the Board
will cooperate with the Company in securing such permits, licenses
and authorizations.
The Company may, at its own expense and in its own name and
behalf or in the name and behalf of the Board, in good faith
contest any such taxes, assessments and other charges and, in the
event of any such contest, may permit the taxes, assessments and
other charges so contested to remain unpaid during the period of
such contest and any appeal therefrom unless the Board or the
Trustee shall notify the Company that by nonpayment of any such
items the lien or security interests afforded by this Agreement or
the Indenture as to any part of the Project or the rents, payments
and revenues derived from the Project will be materially endangered
or the Project or any part thereof will be subject to loss or
forfeiture, in which event such taxes, assessments or charges shall
be paid promptly. The Board shall cooperate fully with the Company
in any such contest. If the Company shall fail to pay any of the
foregoing items required by this Section to be paid by the Company
and shall not cure any failure within any applicable curative
provisions provided herein, the Board or the Trustee may (but shall
be under no obligation to) pay the same, and any amounts so
advanced therefor by the Board or the Trustee shall become an
additional obligation of the Company to the one making the
advancement, which amounts, together with interest thereon at the
rate of interest borne by the Bonds from the date thereof, the
Company agrees to pay.
Section 6.4 - Insurance Required. Throughout the Lease Term
the Company shall keep the Project continuously insured (or
maintain programs of self-insurance) against such risks as are
customarily insured against by businesses of like size and type.
Section 6.5 - Application of Net Proceeds of Insurance. The
insurance carried pursuant to the provisions of Section 6.4 shall
be applied as follows: (i) the Net Proceeds of casualty insurance
shall be applied as provided in Section 7.1, and (ii) the Net
Proceeds of public liability insurance shall be applied toward
extinguishment or satisfaction of the liability with respect to
which such insurance proceeds may be paid.
Section 6.6 - Additional Provisions Respecting Insurance. All
insurance, if any, required in Section 6.4 may be taken out and
maintained in insurance companies selected by the Company and may
be written with deductible amounts comparable to those on similar
policies carried by other companies engaged in businesses similar
in size and type and other respects as the Company. The insurance
hereby required may be contained in blanket policies or self-
insurance programs now or hereafter maintained by the Company.
Section 6.7 - Other Board Expenses. Anything to the contrary
herein notwithstanding, the Company shall pay any reasonable and
necessary expenses not specifically mentioned herein which are
incurred by the Board in connection with the Project, this
Agreement, the Indenture, any financing statements or the Bonds,
and which are not payable from the Project Fund pursuant to Section
4.2.
Section 6.8 - Advances by Board or Trustee. If the Company
fails to maintain the insurance coverage required hereby or fails
to keep the Project Facilities in as reasonably safe condition as
its operating conditions will permit, or fails to keep the Project
Facilities in good repair and good operating condition and shall
not cure any failure within any applicable curative provisions
provided herein, the Board or the Trustee may (but unless
satisfactorily indemnified shall be under no obligation to) take
out policies of insurance and pay the premiums on the same or make
the required repairs, renewals and replacements; and all amounts so
advanced therefor by the Board or the Trustee will become an
additional obligation of the Company to the one making the
advancement, which amounts, together with interest thereon at the
rate of interest borne by the Bonds from the date thereof, the
Company agrees to pay.
Section 6.9 - Indemnification of Board and Trustee. The
Company will also pay and discharge and will indemnify and hold
harmless the Issuer and the members, officers, agents and employees
of the Issuer from (a) any condition of the Project caused by the
Company, (b) any liens, taxes, assessments, impositions and other
charges upon payments by the Company to the Issuer hereunder, (c)
any breach or default on the part of the Company in the performance
of any of its obligations hereunder, (d) any act of negligence of
the Company or of its agents, contractors, servants, employees or
licensees, (e) any act of negligence of any assignee or sublessee
of the Company, or of any agents, contractors, servants, employees
or licensees of any assignee or sublessee of the Company and (f)
any and all liability, damages, costs and expenses arising out of
or resulting from the acquisition, construction and installation of
the Project or the use or operation of the Project or any other
activity carried out thereon or in connection therewith or the
transactions contemplated by this Agreement and the Indenture,
including the reasonable fees and expenses of counsel, except as
the same may arise out of the negligence or misconduct on the part
of the Issuer. If any such lien or charge is sought to be imposed
upon payments, or any such taxes, assessments, impositions or other
charges are sought to be imposed, or any such liability, damages,
costs and expenses are sought to be imposed, the Issuer will give
prompt notice to the Company, and the Company shall have the sole
right and duty to assume, and will assume, the defense thereof,
with full power to litigate, compromise or settle the same in its
sole discretion. The indemnification provided by the Section shall
survive the termination of this Agreement.
The Company agrees to indemnify the Trustee, and to hold it
harmless against, any loss, liability or expense incurred without
negligence or bad faith on its part, arising out of or in
connection with the acceptance or administration of the Indenture,
including the reasonable costs and expenses of defending itself
against any claim or liability in connection with the exercise or
performance of any of its powers or duties thereunder or hereunder.
Section 6.10 - Investment Credit. The Board agrees that any
investment tax credit with respect to the Project or any part
thereof shall be made available to the Company, and the Board will
fully cooperate with the Company in any effort by the Company to
avail itself of any such investment tax credit, but neither the
Board nor the Trustee shall have any responsibility or liability
for the Company's failure to receive any such investment tax
credit. The Board agrees to cause the Trustee to cooperate in
making any investment tax credit available to the Company.
ARTICLE VII
DAMAGE, DESTRUCTION AND CONDEMNATION
Section 7.1 - Damage and Destruction. If prior to payment in
full of the Bonds the Project Facilities are destroyed (in whole or
in part) or are damaged by fire or other casualty, the Company, or
the Board at the Company's direction, (i) shall promptly replace,
repair, rebuild or restore the property damaged or destroyed to
substantially the same condition as existed prior to the event
causing such damage or destruction, with such changes, alterations
and modifications (including the substitution and addition of other
property) as may be desired by the Company and as will not impair
the operation of the Project Facilities, and (ii) shall apply for
such purpose so much as may be necessary of any Net Proceeds of
insurance resulting from claims for such losses, as well as any
additional moneys of the Company necessary therefor. All Net
Proceeds of insurance resulting from claims for such losses shall
be paid to the Company. If said Net Proceeds are not sufficient to
pay in full the costs of such replacement, repair, rebuilding or
restoration, the Company shall nonetheless complete the work
thereof and shall pay that portion of the costs thereof in excess
of the amount of said Net Proceeds. The Company shall not, by
reason of the payment of such excess costs be entitled to any
reimbursement from the Board or any abatement, diminution or
postponement of the amounts payable under Section 5.3.
Section 7.2 - Condemnation. If the title in and to, or the
temporary use of, the Project or any part thereof shall be taken
under the exercise of the power of eminent domain by any
governmental body or by any other person acting under governmental
authority, the Company shall be obligated to continue to pay the
rents specified in Section 5.3. The Board, the Company and the
Trustee shall cause the Net Proceeds received by them or any of
them, from any award made in such eminent domain proceeding, to be
paid to and held by the Company and applied in one or more of the
following ways at the election of the Company:
(a) the restoration of the Project to substantially the
same condition as existed prior to the exercise of such power
of eminent domain;
(b) the acquisition, by construction or otherwise, of
other industrial facilities suitable for the Company's
operations at the Project (which facilities will be deemed a
part of the Project and available for use and occupancy by the
Company and will be leased to the Company hereunder without
the payment of any rents other than herein provided to the
same extent as if such other improvements were specifically
described herein); provided, that such facilities will be
acquired subject to no liens, security interests or
encumbrances prior to the lien afforded by this Agreement and
the Indenture, other than Permitted Encumbrances; or
(c) payment into the Bond Fund to provide for payment in
full of the Bonds at the earliest date that the Bonds may be
called for redemption.
The Board shall cooperate fully with the Company in the
handling and conduct of any prospective or pending eminent domain
proceeding with respect to the Project or any part thereof and
shall, to the extent it may lawfully do so, permit the Company to
litigate in any such proceeding in the name and on behalf of the
Board. In no event will the Board voluntarily settle, or consent
to the settlement of, any prospective or pending eminent domain
proceeding with respect to the Project or any part thereof without
the written consent of the Company.
Section 7.3 - Condemnation of Company-Owned Property. The
Company shall be entitled to the proceeds of any condemnation award
or portion thereof made for damages to or taking of its own
property or for damages on account of the taking of or interference
with the Company's rights to possession, use or occupancy of the
Project.
Section 7.4 - Further Assurances and Corrective Instruments.
The Board and the Company agree that they will, from time to time,
execute, acknowledge and deliver, or cause to be executed,
acknowledged and delivered, such supplements hereto and such
further instruments as may reasonably be required for correcting
any inadequate or incorrect description of the Project herein
described or intended so to be or for carrying out the intention of
or facilitating the performance of this Agreement.
ARTICLE VIII
SPECIAL AGREEMENTS
Section 8.1 - No Warranty of Condition or Suitability by the
Board. THE BOARD MAKES NO WARRANTY, EITHER EXPRESS OR IMPLIED, AS
TO THE CONDITION OF THE PROJECT OR THAT IT WILL BE SUITABLE FOR THE
COMPANY'S PURPOSES OR NEEDS. The Company releases the Board from,
agrees that the Board shall not be liable for and agrees to hold
the Board harmless against, any loss that may be occasioned by any
cause whatsoever pertaining to the Project or the use thereof.
Section 8.2 - Inspection of the Project. The Company agrees
that the Authorized Board Representative and any duly authorized
agent of the Trustee shall have the right at all reasonable times
to enter upon, examine and inspect the Project without interference
or prejudice to the operations of the Company. The Company further
agrees that any authorized agent of the Board or the Trustee shall
have such rights of access to the Project as may be reasonable and
necessary for the proper maintenance of the Project in the event of
the failure by the Company to perform its obligations under Section
6.1.
Section 8.3 - Company to Maintain Its Corporate Existence;
Exceptions Permitted. The Company agrees that it will maintain its
corporate existence, will not dissolve or otherwise dispose of all
or substantially all of its assets and will not consolidate with or
merge into another corporation or permit one or more other
corporations to consolidate with or merge into it; provided that
the Company may, without violating the agreement contained in this
Section 8.3, consolidate with or merge into another corporation
incorporated and existing under the laws of one of the states of
the United States of America or the District of Columbia (a
"domestic corporation"), or permit one or more other domestic
corporations to consolidate with or merge into it, or sell or
otherwise transfer to another domestic corporation all or
substantially all of its assets as an entirety and thereafter
dissolve, provided, if the Company is not the surviving, resulting
or transferee corporation, as the case may be, such surviving,
resulting or transferee corporation assumes in writing all of the
obligations of the Company under the Agreement and qualifies to do
business in the State. Notwithstanding the foregoing, the Company
shall not dissolve or otherwise dispose of all or substantially all
of its assets and shall not consolidate with or merge into another
corporation or permit one or more other corporations to consolidate
with or merge into it if, after giving effect to such action, a
default would result under this Agreement or the Indenture.
Section 8.4 - Qualification in the State. The Company agrees
(except as may be otherwise permitted pursuant to the provisions of
Section 8.3) that throughout the Lease Term it will continue to be
a corporation either organized under the laws of the State or duly
qualified to do business in the State as a foreign corporation.
Section 8.5 - Granting of Easements. If no Event of Default
shall have happened and be continuing, the Company may at any time
or times cause to be granted easements (including party wall
agreements), licenses, rights-of-way (temporary or perpetual and
including the dedication of public highways) and other rights or
privileges in the nature of easements with respect to any property
included in the Project Land and such grant will be free from any
lien or security interest created by this Agreement and the
Indenture, or the Company may cause to be released existing
easements, licenses, rights-of-way and other rights or privileges
in the nature of easements, held with respect to any property
included in the Project Land with or without consideration and the
Board agrees that it shall execute and deliver and will cause and
direct the Trustee to execute and deliver any instrument necessary
or appropriate to confirm and grant or release any such easement,
license, right-of-way or other right or privilege upon receipt of:
(i) a copy of the instrument of grant or release, and (ii) a
written application signed by the president or any vice president
of the Company requesting the execution and delivery of such
instrument and stating that such grant or release is not
detrimental to the proper conduct of the business of the Company,
and that such grant or release will not impair the effective use or
interfere with the operations of the Project Facilities and will
not materially weaken, diminish or impair the security intended to
be given by or under this Agreement and the Indenture.
Section 8.6 - Release of Certain Land. Notwithstanding any
other provision hereof, the parties hereto reserve the right to
amend this Agreement at any time and from time to time by mutual
agreement for the purpose of effecting the release of and removal
of (i) any unimproved part of the Project Land (on which no
component of the Project Facilities is located but on which
parking, transportation or utility facilities may be located) on
which the Board proposes to construct improvements for lease or
sale to another person or persons under another and different
agreement, or (ii) any part of the Project Land with respect to
which the Board proposes to grant an easement or convey a fee
interest or other title to a railroad or other public or private
carrier or to any public utility or public body in order that
transportation facilities or services by rail, water, road or other
means or utility services for the Project may be provided,
increased or improved; provided, that if at the time any such
amendment is made any of the Bonds are outstanding, there shall be
deposited with the Trustee the following:
(a) a copy of such amendment as executed;
(b) a resolution of the Board (i) stating that the Board
is not in default under any of the provisions hereof or of the
Indenture and that the Company is not to the knowledge of the
Board in default under any of the provisions hereof, (ii)
giving an adequate legal description of that portion of the
Project Land to be released, (iii) stating the purpose for
which the Board desires the release, (iv) stating that the
improvements which will be constructed or the facilities and
services which will be provided, increased or improved will be
such as will promote at least one of the public purposes of
the Board, and (v) requesting such release;
(c) a certificate of the president or any vice president
of the Company indicating approval of such amendment and
stating that the Company is not in default under any of the
provisions hereof;
(d) a copy of the agreement between the Board and such
other person wherein the Board agrees to construct
improvements on the portion of the Project Land so requested
to be released and agrees to lease or sell the same to such
other person, and wherein such other person agrees to lease or
purchase the same from the Board, or a copy of the instrument
granting the easement or conveying the title or other interest
to a railroad, public utility or public body; and
(e) a certificate of the Authorized Company
Representative, dated not more than 60 days prior to the date
of such amendment and stating that (i) the portion of the
Project Land so proposed to be released is necessary or
desirable for railroad, utility services or roads to benefit
the Project or is not otherwise needed for the operation of
the Project Facilities for the purposes hereinabove stated,
and (ii) the release so proposed to be made will not impair
the usefulness of the Project Facilities and will not destroy
the means of ingress thereto and egress therefrom.
No release effected under this Section shall entitle the Company to
any diminution in or postponement or abatement of the rents payable
under Section 5.3.
ARTICLE IX
ASSIGNMENT, SUBLEASING, PLEDGING AND SELLING;
REDEMPTION; RENT PREPAYMENT AND ABATEMENT
Section 9.1 - Assignment and Subleasing. This Agreement may
be assigned by the Company without the necessity of obtaining the
consent of the Board or the Trustee, subject, however, to the
following conditions:
(a) no assignment (other than pursuant to Section 8.3)
or sublease shall relieve the Company from primary liability
for any of its obligations hereunder, and if any such
assignment occurs, the Company shall continue to remain
primarily liable for payment of the rents specified in Section
5.3 and for performance and observance of the other agreements
on its part herein provided to be performed and observed by
it; and
(b) the Company shall, within 30 days after the delivery
thereof, furnish or cause to be furnished to the Board and to
the Trustee a true and complete copy of each such assignment
or sublease, as the case may be, together with any instrument
of assumption.
Section 9.2 - Pledge under Indenture. Under the terms of the
Indenture, the Board shall assign and create a security interest
with respect to its interest in, and pledge all rents, revenues and
receipts arising out of or in connection with its ownership of, the
Project to the Trustee, as security for the payment of the
principal of and interest on the Bonds, but the Indenture and said
assignment and pledge shall be subject and subordinate to this
Agreement.
Section 9.3 - Restrictions on Sale of Project by Board. The
Board agrees that, except as set forth in Section 9.2 or as
otherwise provided in the Agreement and Indenture, it shall not (i)
sell (other than as contemplated herein), assign, transfer or
convey the Project during the Lease Term, (ii) create or suffer to
be created any debt, lien or charge on the rents, payments and
revenues arising out of or in connection with its ownership of the
Project, or (iii) take any other action which might reasonably be
construed as tending to cause or induce the levy or assessment of
ad valorem taxes on the Project or on its title in and to the
Project. If the laws of the State at the time permit such action
to be taken, nothing contained in this Section shall prevent the
consolidation of the Board with, or the merger of the Board into,
or the transfer of the Project as an entirety to, any public
corporation whose property and income are not subject to taxation
and which has corporate authority to carry on the business of
owning and leasing the Project; provided (a) that no such action
shall be taken without the prior written consent of the Company,
unless such action shall be required by law, and (b) that upon any
such consolidation, merger or transfer, the due and punctual
payment of the principal of and the interest on the Bonds, and the
due and punctual performance and observance of all the agreements
hereof to be kept and performed by the Board, shall be expressly
assumed in writing by the corporation resulting from such
consolidation or surviving such merger or to which the Project
shall be transferred as an entirety.
Section 9.4 - Redemption of Bonds. The Board, at the request
at any time of the Company and if the same are then redeemable,
shall forthwith take all steps that may be necessary under the
applicable redemption provisions of the Indenture to effect
redemption of all or any portion of the Bonds, as may be specified
by the Company, on the earliest applicable redemption date on which
such redemption may be made under such applicable provisions or
upon the date set for the redemption by the Company pursuant to
Sections 7.2 or 11.1. As long as the Company is not in default
hereunder and the Board is not obligated to call Bonds pursuant to
the terms of the Indenture, the Board shall not redeem any Bond
prior to its respective stated maturity unless requested to do so
in writing by the Company.
Section 9.5 - Prepayment of Rents. There is expressly
reserved to the Company the right, and the Company is authorized
and permitted, at any time it may choose, so long as it is not in
default hereunder, to prepay all or any part of the rents and other
payments payable under Section 5.3, and the Board agrees that the
Trustee may accept such prepayment when the same is tendered by the
Company. All prepaid rents shall be credited on the rents
specified in Section 5.3, and at the election of the Company shall
be used for the redemption or purchase of Bonds in the manner and
to the extent provided in the Indenture.
Section 9.6 - Rent Abatements if Bonds Paid Prior to Maturity.
If at any time the Indenture is discharged in accordance with
Article X of the Indenture, and if the Company is not at the time
otherwise in default hereunder, the Company shall be entitled to
use and occupy the Project, without the payment of rent during the
interval (but otherwise on the terms and conditions hereof), from
the date on which such moneys are in the Bond Fund to and including
the later to occur of either (i) midnight, June 1, 2033 or (ii)
payment in full of all Bonds and any Additional Bonds.
Section 9.7 - Reference to Bonds Ineffective After Bonds Paid.
Upon payment in full of the Bonds and all fees and charges of the
Trustee, all references herein to the Bonds and the Trustee shall
be ineffective and neither the Trustee nor the holders of any of
the Bonds shall thereafter have any rights hereunder, saving and
excepting those that shall have theretofore vested. Reference is
hereby made to Section 1002 of the Indenture which sets forth the
conditions upon the existence or occurrence of which payment in
full of the Bonds shall be deemed to have been made.
ARTICLE X
EVENTS OF DEFAULT AND REMEDIES
Section 10.1 - Events of Default Defined. The following shall
be Events of Default hereunder and the term Event of Default shall
mean, whenever it is used herein, any one or more of the following
events:
(a) Failure by the Company to make any payment required
under Section 5.3 on or before the date that the payment is
due and continuance of such failure for ten Business Days
after receipt of notice of such failure from the Trustee.
(b) Failure by the Company to observe and perform any
other covenant, condition or agreement on its part under this
Agreement (other than as referred to in subsection (a) of this
Section), for a period of ninety (90) days after written
notice, specifying such failure and requesting that it be
remedied, shall be given to the Company by the Trustee, unless
the Trustee shall agree in writing to an extension of such
time prior to its expiration; provided, however, if the
failure stated in the notice cannot be remedied within the
applicable period, the Board and the Trustee will not
unreasonably withhold their consent to an extension of such
time if it is possible to correct such failure and corrective
action is instituted by the Company within the applicable
period and diligently pursued until the default is corrected;
(c) Any warranty, representation or other statement by
or on behalf of the Company contained in this Agreement, or
any instrument furnished in compliance with or in reference to
this Agreement or the Indenture, is false or misleading in any
material respect; or
(d) The dissolution or liquidation of the Company or the
filing by the Company of a voluntary petition in bankruptcy,
or the commission by the Company of any act of bankruptcy, or
adjudication of the Company as a bankrupt, or assignment by
the Company for the benefit of its creditors, or the entry by
the Company into an agreement of composition with its
creditors, or the approval by a court of competent
jurisdiction of a petition applicable to the Company in any
proceeding for its reorganization instituted under the
provisions of the Federal bankruptcy statutes, as amended, or
under any similar act which may hereafter be enacted. The
term "dissolution or liquidation of the Company", as used in
this subsection, shall not be construed to include the
cessation of the corporate existence of the Company resulting
from a merger or consolidation of the Company into or with
another corporation or a dissolution or liquidation of the
Company following a transfer of all or substantially all of
its assets as an entirety.
Section 10.2 - Remedies. Whenever any Event of Default shall
have happened and be continuing, the Trustee, as the assignee of
the Board under the Indenture, shall have the following rights and
remedies:
(a) The Trustee may, and upon the written request of the
holders of not less than twenty-five percent (25%) in
outstanding principal amount of the Bonds, shall by notice in
writing delivered to the Company, declare all installments of
rent payable under Section 5.3 for the remainder of the Lease
Term to be immediately due and payable. Upon such
acceleration, the amount then due and payable by the Company
as accelerated rent shall be the sum required to provide for
payment in full of the Bonds on the earliest possible date on
which such payment can be made. Such sums as may then become
payable shall be paid into the Bond Fund and after payment in
full of the Bonds and payment of any cost occasioned by such
Event of Default, any excess moneys in the Bond Fund shall be
returned to the Company as an overpayment of rent.
Notwithstanding the foregoing, upon the occurrence of an Event
of Default by reason of the occurrence of any event specified
for Section 10.1(d), all installments of rent payable under
Section 5.3 for the remainder of the Lease Term shall
automatically become and be immediately due and payable
without any action by the Trustee or the Board being
necessary.
(b) The Trustee may take whatever action at law or in
equity may appear necessary or desirable to collect the rents
and any other payments then due and thereafter to become due,
or to enforce performance and observance of any covenant,
condition or agreement of the Company hereunder;
(c) The Trustee may exercise any remedies provided for
in the Indenture and, with respect to any security interest,
the rights of a secured party under the Uniform Commercial
Code of the State.
Any amounts collected pursuant to action taken under this Section
shall be paid into the Bond Fund and applied in accordance with the
provisions of the Indenture or, if payment in full of the Bonds has
been made, shall be paid to the Company.
Section 10.3 - No Remedy Exclusive. No remedy herein
conferred upon or reserved to the Board or the Trustee is intended
to be exclusive of any other available remedy or remedies, but each
and every such remedy shall be cumulative and shall be in addition
to every other remedy given hereunder or now or hereafter existing
at law or in equity or by statute. No delay or omission to
exercise any right or power accruing upon the occurrence of any
Event of Default shall impair any such right or power or shall be
construed to be a waiver thereof, but any such right or power may
be exercised from time to time and as often as may be deemed
expedient. In order to entitle the Board or the Trustee to
exercise any remedy reserved to it in this Article, it shall not be
necessary to give any notice, other than such notice or notices as
may be herein expressly required. Such remedies as are reserved to
the Board in this Article shall also extend to the Trustee, and the
Trustee and the holders of the Bonds shall be deemed third-party
beneficiaries of all agreements herein contained.
Section 10.4 - Agreement to Pay Attorneys' Fees and Expenses.
If there should occur an Event of Default hereunder and the Board
or the Trustee should employ attorneys or incur other expenses for
the collection of rents or the enforcement of performance or
observance of any agreement on the part of the Company herein
contained, the Company agrees that it will on demand therefor pay
to the Board or the Trustee the reasonable fee of such attorneys
and such other reasonable expenses so incurred by the Board or the
Trustee.
Section 10.5 - No Additional Waiver Implied by One Waiver. If
any agreement contained herein should be breached by either party
and thereafter waived by the other party, such waiver shall be
limited to the particular breach so waived and shall not be deemed
to waive any other breach hereunder.
Section 10.6 - Waiver of Appraisement, Valuation, etc. If
there should occur an Event of Default hereunder, the Company
agrees to waive, to the extent it may lawfully do so, the benefit
of all appraisement, valuation, stay, extension or redemption laws
now or hereafter in force, and all right of appraisement and
redemption to which it may be entitled.
Section 10.7 - Waiver of Events of Default. Notwithstanding
anything herein to the contrary, the Trustee shall be deemed to
have waived any Event of Default hereunder and its consequences and
to have rescinded any acceleration of the rents and other amounts
payable under this Agreement whenever the Trustee has waived such
Event of Default pursuant to the Indenture.
ARTICLE XI
OPTIONS IN FAVOR OF COMPANY; OBLIGATION TO PURCHASE PROJECT
Section 11.1 - General Option to Prepay Rent and Purchase
Project. At any time, the Company shall have, and is hereby
granted, the option to prepay the rent payable under Section 5.3,
in whole or in part. To exercise the option granted in this
paragraph, the Company shall, on or before the 20th day next
preceding the date set for redemption of the Bonds (which shall be
an interest payment date if less than all the Bonds are to be
redeemed), give written notice to the Board and the Trustee of its
intention to exercise the option granted in this section on such
date and shall specify therein the principal amount of Bonds to be
redeemed with the moneys received upon such prepayment. Upon the
exercise of such option, the Company shall direct the Trustee to
redeem Bonds in the principal amount and on the date specified in
the notice referred to in the preceding sentence and shall make
arrangements satisfactory to the trustee for the giving of the
required notice of redemption of Bonds. The purchase price which
shall be paid to the trustee by the Company in the event of its
exercise of the option granted in this paragraph shall be the sum
of the principal amount of the Bonds to be redeemed plus accrued
interest thereon to the redemption date plus all fees and expenses
of the trustee and the paying agent accrued and to accrue through
such redemption date.
The Company shall have the option to purchase the Project at
any time, in the event that the Indenture is discharged pursuant to
Article IX of the Indenture, by the Company (i) depositing
irrevocably with the Trustee either moneys in an amount which shall
be sufficient, or Government Obligations the principal of and
interest on which when due will provide moneys which, together with
the moneys, if any, deposited with or held by the Trustee at the
same time and available for such purpose shall be sufficient
pursuant to the Indenture, to pay the principal of and interest on
all of the Bonds due and to become due on or prior to the
redemption date (if the Bonds are to be redeemed) or maturity
thereof; (ii) paying to the trustee all Trustee's fees and expenses
due in connection with the payment or redemption of any such Bonds,
and, (iii) if any Bonds are to be redeemed on any date prior to
their maturity, giving the Trustee irrevocable instructions to
redeem such Bonds on such date and either evidence satisfactory to
the Trustee that all redemption notices required by the Indenture
have been given or irrevocable power authorizing the Trustee to
give such redemption notices.
Section 11.2 - Conveyance on Purchase. At the closing of any
purchase of the Project as provided hereunder, the Board shall upon
receipt of the purchase price deliver to the Company documents
conveying to the Company good and marketable fee simple title in
and to the Project, subject to the following: (a) those liens,
security interests and encumbrances (if any) to which such title in
and to said property was subject at the effective date of this
Agreement but excluding this Agreement and the Indenture; (b) those
liens and encumbrances created by the Company or to the creation or
suffering of which the Company consented; (c) those liens and
encumbrances resulting from the failure of the Company to perform
or observe any of its agreements contained herein; and (d)
Permitted Encumbrances other than this Agreement and the Indenture.
Section 11.3 - Relative Positions of Options and Indenture.
The options granted to the Company in this Article shall be and
remain prior and superior to the Indenture and may be exercised
whether or not there exists an Event of Default hereunder, provided
that the existence of such Event of Default will not result in
nonfulfillment of any condition to the exercise of any such option.
ARTICLE XII
MISCELLANEOUS
Section 12.1 - Notices. All notices, certificates or other
communications hereunder shall be sufficiently given and shall be
deemed given when mailed by registered or certified mail, return
receipt requested, postage prepaid, addressed as follows:
(a) If to the Board - The Industrial Development
Board of the City of
Phenix City, Alabama
c/o Mr. Kenneth A. Roberts
Community Bank
2301 Airport Thruway
Columbus, Georgia 31904
with a copy to
R. Michael Raiford, Esq.
501 14th Street
Phenix City, Alabama 36267
(b) If to the Company - Mead Coated Board, Inc.
Mead World Headquarters
Dayton, Ohio 45463
Attention: Treasurer
with a copy to:
Thompson, Hine and Flory
312 Walnut Street
14th Floor
Cincinnati, Ohio 45202
Attention: Robert A. Selak
(c) If to the Trustee - AmSouth Bank N.A.
1901 Sixth Avenue North
Birmingham, Alabama 35203
Attention: Corporate Trust
Department
A duplicate copy of each notice, certificate or other communication
given hereunder by either the Board, the Company or the Trustee to
any one of the others shall also be given to all of the others.
The Board, the Company and the Trustee may, by notice given
hereunder, designate any further or different addresses to which
subsequent notices, certificates or other communications shall be
sent.
Section 12.2 - Binding Effect. This Agreement shall inure to
the benefit of and shall be binding upon the Board, the Company and
their respective successors and assigns. To the extent provided
herein and in the Indenture, the Trustee and the holders of the
Bonds shall be deemed to be third party beneficiaries hereof, but
nothing herein contained shall be deemed to create any right in, or
to be for the benefit of, any other person not a party hereto.
Section 12.3 - Severability. If any provision hereof shall be
held invalid or unenforceable by any court of competent
jurisdiction, such holding shall not invalidate or render
unenforceable any other provision hereof.
Section 12.4 - Amounts Remaining in Bond Fund. Subject to and
in accordance with the terms and conditions of Section 709 of the
Indenture, certain surplus moneys remaining in the two accounts in
the Bond Fund shall belong to and be paid to the Company by the
Trustee as an overpayment of rents.
Section 12.5 - Amendments, Changes and Modifications. Except
as otherwise provided herein or in the Indenture, subsequent to the
date of issuance and delivery of the Bonds and prior to their
payment in full, this Agreement may not be effectively amended or
terminated without the written consent of the Trustee.
Section 12.6 - Execution Counterparts. This Agreement 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.
Section 12.7 - Captions. The captions and headings herein are
for convenience only and in no way define, limit or describe the
scope or intent of any provisions hereof.
Section 12.8 - Recording of Agreement. This Agreement and
every assignment and modification hereof shall be recorded in the
Office of the Judge of Probate of Russell County, Alabama, or in
such other office as may be at the time provided by law as the
proper place for such recordation.
Section 12.9 - Law Governing Construction of Agreement. This
Agreement shall be governed by, and construed in accordance with,
the laws of the State.
Section 12.10 - Net Lease. This Agreement shall be deemed a
"net lease", and the Company shall pay absolutely net during the
Lease Term the rents specified herein, without abatement, deduction
or set-off other than those herein expressly provided.
IN WITNESS WHEREOF, the Board and the Company have caused this
Agreement to be executed in their respective corporate names as of
the date first above written.
THE INDUSTRIAL DEVELOPMENT
BOARD OF THE CITY OF
PHENIX CITY, ALABAMA
By: /s/ Kenneth A. Roberts
-----------------------------
Chairman
MEAD COATED BOARD, INC.
By: /s/ William R. Graber
-----------------------------
Treasurer
<PAGE>
ACKNOWLEDGMENT OF BOARD
STATE OF GEORGIA )
)
COUNTY OF MUSCOGEE )
I, a Notary Public in and for said County in said State,
hereby certify that Kenneth A. Roberts, whose name as Chairman of
the Board of Directors of THE INDUSTRIAL DEVELOPMENT BOARD OF THE
CITY OF PHENIX CITY, ALABAMA, a public corporation and
instrumentality under the laws of the State of Alabama, is signed
to the foregoing instrument and who is known to me, acknowledged
before me on this day that, being informed of the contents of the
said instrument, he, as such officer and with full authority,
executed the same voluntarily for and as the act of said public
corporation.
GIVEN under my hand and seal of office, this 27th day of
April, 1994.
/s/ Linda Boyd
---------------------------------
Notary Public
(SEAL)
My commission expires: 12-17-96
--------
<PAGE>
ACKNOWLEDGMENT OF COMPANY
STATE OF OHIO )
)
COUNTY OF MONTGOMERY)
I, a Notary Public in and for said County in said State,
hereby certify that William R. Graber, whose name as Treasurer of
MEAD COATED BOARD, INC., a corporation organized and existing under
the laws of the State of Delaware, is signed to the foregoing
instrument and who is known to me, acknowledged before me on this
day that, being informed of the contents of the said instrument, he
or she, as such officer and with full authority, executed the same
voluntarily for and as the act of said corporation.
GIVEN under my hand and seal of office, this 27th day of
April, 1994.
/s/ Robert A. Selak
---------------------------------
Notary Public
(SEAL)
My commission expires: ROBERT A. SELAK, Attorney at Law
Notary Public, State of Ohio
My Commission has no expiration date.
Section 147.03 O.R.C.
<PAGE>
EXHIBIT "A"
to
Lease Agreement between
THE INDUSTRIAL DEVELOPMENT BOARD OF
THE CITY OF PHENIX CITY, ALABAMA
and
MEAD COATED BOARD, INC.
dated as of June 1, 1993
DESCRIPTION OF PROJECT LAND
---------------------------
The Project Land includes the following property:
The following real estate and premises situated in the
County of Russell and State of Alabama:
Eight hundred eighty four and 47/100 (884.47) acres located in
Sections 32, 33, 21, 28, and 27, Township 14 North, Range 30
East, and Section 5, Township 13 North, Range 30 East, and
beginning at the Southwest corner of Section 32, Township 14
North, Range 30 East, Russell County, Alabama, run thence
North 00 degrees 38 minutes East a distance of 354.26 feet
along a fence line to a concrete monument, thence North 37
degrees 57 minutes 25 seconds East a distance of 2086.55 feet
to a point, thence North 57 degrees 13 minutes East a distance
of 4397.87 feet to a point, thence North 01 degrees 38 minutes
East a distance of 970.55 feet to a point, thence North 37
degrees 53 minutes East a distance of 1948.85 feet to a point,
thence North 00 degrees 37 minutes West a distance of 2783.92
feet to a point, thence North 45 degrees 16 minutes East a
distance of 1570.95 feet to a concrete monument, thence North
00 degrees 27 minutes East a distance of 621.32 feet to a
concrete monument, thence South 88 degrees 26 minutes 40
seconds East a distance of 1048.15 feet to a concrete
monument, thence South 00 degrees 41 minutes 10 seconds East
a distance of 601.95 feet to a concrete monument, thence South
89 degrees 33 minutes 20 seconds East along the north line of
Section 28, Township 14 North, Range 30 East a distance of
1915.88 feet to a concrete monument, said monument being the
northeast corner of said Section 28, which is the northwest
corner of Section 27, in Township 14 North, Range 30 East,
thence South 89 degrees 33 minutes 20 seconds East along the
North line of said Section 27 to the boundary line between the
State of Georgia, and the State of Alabama; thence Southerly
and Southwesterly along said line between the State of Alabama
and the State of Georgia, as the same runs, to the northerly
and southerly line along the west side of Section 5, Township
13 North, Range 30 East, run thence North 00 degrees 28
minutes East along the West line of said Section 5, to a point
marked by an iron pipe; thence North 00 degrees 28 minutes
East along the west line of said Section 5 a distance of
2825.00 feet to the northwest corner of Section 5, and the
point of beginning. (The Portion of said line from the
northerly line of a public road known as the Ferry Road to the
northwest corner of said Section 5, which is the southwest
corner of Section 32, Township 14 North, Range 30 East, being
along an old fence.)
There is hereby expressly excepted from said described
lands those lands heretofore taken in fee simple by
condemnation by the United States of America and subject to
flowage easements taken by the United States of America by
condemnation and subject to the easement rights (a) for right
of way for railroad purposes and (b) for a public road over
and through said described lands, such public road right of
way having been conveyed by the W.C. Bradley Company, to
Russell County, Alabama, by deed recorded in Deed Record 387,
pages 787-788, in the office of the Judge of Probate in and
for Russell County, Alabama.
Said described lands hereby conveyed contain in the
aggregate according to survey made, eight hundred eighty four
and 47/100ths (884.47) acres (the "1993 Leased Land");
less and except the following property:
PARCEL 1
Beginning at a point which is 743.81 feet east and 477.58 feet
south of the northwest corner of section 28, Township 14
North, Range 30 East, Russell County, Alabama, which section
corner is marked by a concrete monument, this point thus
determined, being the northwest corner of the property to be
conveyed, then proceeding south 128.84 feet, then east 85.0
feet, then north 128.84 feet, then west 85.0 feet to the point
of beginning.
PARCEL 2
Beginning at a point which is 928.0 feet South and 1479.0 feet
East of the Northwest corner of Section 28 in Township 14
North, Range 30 East, Russell County, Alabama, which corner is
marked by a concrete monument, then proceeding North a
distance of 120.0 feet, then West 100.0 feet, then South 120.0
feet, then East 100.0 feet to the point of beginning.
PARCEL 3
At the Southwest corner of Section 22, Township 14 North,
Range 30 East, Russell County, Alabama as the point of
beginning, run along the South line of Section 22 N89
degrees-50'E 976.85 feet to the property line of the United States
Government; thence along said property line N2 degrees-50'W
1296.69 feet to a branch which runs into Bluff Creek; thence along
said branch the following courses; N41 degrees-41'W 340.67
feet; S85 degrees-42'W 324.22 feet; S81 degrees-08'W 330.0 feet; N25
degrees-48'W 145.58 feet; S76 degrees-52'W 198.66 feet; N44 degrees-03'W
152.62 feet; S46 degrees-35'Q 84.21 feet; S21 degrees-00'E 83.39 feet; N82
degrees-27'W 94.15 feet; S7 degrees-51'E 148.82 feet; S66 degrees-39'W
386.20 feet; S62 degrees-55'W 237.23 feet; S65 degrees-05'W 232.38 feet;
S74 degrees-24'W 408.97 feet; S51 degrees-52'W 371.60 feet; S19 degrees-42'
W 231.02 feet; S62 degrees-26'W 198.83 feet; N85 degrees-48'W 229.54 feet;
S89 degrees-23'W 159.01 feet; N83 degrees-01'W 327.29 feet; S80 degrees-02'
W 437.03 feet; thence S59 degrees-27'W 318.79 feet; thence S3 degrees-28'E
199.83 feet; thence S1 degrees-16'E 607.22 feet; thence N87 degrees-24'E
343.43 feet; thence N82 degrees-04'E 516.01 feet; thence N70 degrees-45'E
540.58 feet; thence N89 degrees-18'E 472.15 feet; thence N0 degrees-01'E
400.58 feet; thence S89 degrees-59'E 446.0 feet; thence S0 degrees-01'W
395.0 feet; thence N89 degrees-18'E 171.06 feet; thence N46 degrees-28'E
463.45 feet to the South line of Section 21; thence along said Section line
S90 degrees-48'E 749.92 feet to the point of beginning and containing
121.14 acres more or less.
PARCEL 4A
All that tract or parcel of land situated lying and being in
Section 28, Township 14 North, Range 30 East, Russell County,
Alabama, and being more particularly described as follows: To
find the point of beginning, commence at the northwest corner
of Section 28, Township 14 North, Range 30 East, which corner
is marked by a concrete monument and, from said point, thence
running South 89 degrees 33 minutes 20 seconds East, along the
North line of said Section 28, a distance of 1,250.03 feet to
an iron pin, said iron pin being the beginning point of the
property herein conveyed; and from said point of beginning
running thence South 89 degrees 33 minutes 20 seconds East,
along the North line of said Section 28, a distance of 400.0
feet to a point; thence running South 01 degrees 02 minutes 40
seconds West a distance of 704.0 feet, more or less, to a
point; thence running South 45 degrees 16 minutes 00 seconds
West a distance of 560.0 feet, more or less, to an iron pin;
thence running North 01 degrees 02 minutes 40 seconds East a
distance of 1,076.19 feet to the point of beginning. The
property herein described is bounded on the West and South by
property of Grantee herein, on the North and East by property
of Grantor herein and said described tract contains 8.2 acres,
more or less.
PARCEL 4B
Commencing at the Northwest corner of Section 28 in Township
14 North, Range 30 East, Russell County, Alabama, which corner
is marked by a concrete monument and proceeding east along the
north line of said Section 28, which is the north property
line of Georgia Kraft Company, a distance of two hundred
forth-nine and ninety-six hundredths (249.96) feet to the
point of intersection with the east right-of-way line of the
Central of Georgia Railroad which point is marked by an iron
pin, said iron pin being the point of beginning of the
property herein conveyed. From said point of beginning
running thence over and along the west boundary of said tract
number one, which is the east right-of-way line of the Central
of Georgia Railroad which is fifty feet from and parallel to
the center line of the main line track, on a bearing of south
one degree, two minutes and forty seconds west (S 1 degrees 02'40"
W) a distance of sixteen hundred forty-three and fifty-nine
hundredths (1643.59) feet to a point, thence along the west
boundary of the said tract number one, which is the east
right-of-way line of the Central of Georgia Railroad and is
fifty (50) feet from and concentric with the center line of
the main line track, following a circular curve to the right,
having a radius of eight hundred sixty-four and forty-nine
hundredths (864.49) feet for an arc distance of three hundred
seventy-two and forty-three hundredths (372.43) feet to an
iron pin marking the southwest corner of said tract number one
which is the point where the east right-of-way line of the
Central of Georgia Railroad main line terminates on the north
right-of-way line of the spur track serving the Georgia Kraft
Company mill, said point being fifty (50) feet from the center
line of the main line track and twenty-five (25) feet from the
center line of the aforesaid spur track; thence along the
south boundary of said tract number one, which is the north
right-of-way line of the spur track serving the Georgia Kraft
Company mill and is twenty-five (25) feet from and parallel to
the center line of the aforesaid spur track, on a bearing of
north fifty-one degrees, fifty-two minutes and ten seconds
east (N 51 degrees 52' 10" E) for a distance of thirteen-hundred
fifty-nine and ninety-three hundredths (1359.93) feet to an
iron pin marking the south-east corner of said tract number
one; thence along the east line of said tract number one on a
bearing of north zero degrees and thirty-seven minutes west (N
0 degrees 37' W) a distance of fifty-three and fifty-six hundredths
(53.56) feet to an iron pin; thence along the east boundary of
said tract number one on bearing of north forty-five degrees
and sixteen minutes east a distance of thirty-seven and eighty
hundredths (37.80) feet to an iron pin; thence along the east
boundary of said tract number one on a bearing of north one
degree, two minutes and forty seconds east (N 1 degrees 02' 40" E) a
distance of one thousand seventy-six and nineteen hundredths
(1076.19) feet to an iron pin marking the north east corner of
said tract number one and being on the north line of the
aforesaid Section 28; on a bearing of north eighty-nine
degrees thirty-three minutes and twenty seconds West (N 89 degrees
33' 20" W) a distance of one thousand and seven hundredths
(1000.07) feet to the point of beginning. The above described
boundaries of said tract number one enclose thirty-five and
fifty-one hundredths (35.51) acres, more or less;
excepting from the foregoing description of Parcel 4A and
Parcel 4B the following described Tracts A, B and C:
TRACT A
A 200 foot wide strip of land for a road right-of-way situated
in Sections 20, 28 and 29, Township 14 North, Range 30 East,
in Russell County, Alabama, and being 100 feet on either side
of and contiguous with the following described centerline:
Commence at the Northeast corner of Section 20, Township 14
North, Range 30 East and run North 86 degrees 56 minutes West
for a distance of 751.7 feet; thence South 33 degrees 37
minutes West for a distance of 2187.0 feet; thence South 18
degrees 31 minutes West for a distance of 856.7 feet; thence
South 19 degrees 29 minutes West for a distance of 507.5 feet;
thence South 89 degrees 26 minutes East for a distance of
91.80 feet; thence from the last described course turn left
151 degrees 00 minutes and run Northwesterly 138.20 feet to a
point in the center of Alabama Highway No. 165 and the point
of beginning for said centerline; thence turn right 180
degrees 00 minutes and run Southeasterly along said centerline
230.00 feet to the point of a curve to the right; said curve
having a 17 degrees 32 minutes 16 seconds degrees of curvature
and an included angle of 62 degrees 45 minutes; thence
continue along said curve an arc distance of 359.20 feet to
the point of tangent to said curve; thence continue tangent to
last described curve Southerly a distance of 1719.47 feet to
the point of a curve to the left; said curve having a 10
degrees 00 minutes 14 seconds degrees of curvature and an
included angle of 27 degrees 25 minutes 40 seconds; thence
continue along said curve an arc distance of 274.51 feet to
the point of tangent to said curve; thence continue tangent to
the last described curve Southeasterly 1097.83 feet to the
point of a curve to the left; said curve having a 12 degrees
30 minute degrees of curvature and an included angle of 101
degrees 50 minutes 41 seconds; thence continue along said
curve an arc distance of 816.38 feet to the point of tangent
to said curve; thence continue tangent to last described curve
Northeasterly 1351.87 feet to the point of a curve to the
right; said curve having a 22 degrees 31 minutes 55 seconds
degrees of curvature and an included angle of 37 degrees 53
minutes 10 seconds; thence continue along said curve an arc
distance of 168.14 feet to the intersection of said curve and
the centerline of existing railroad; said intersection being
the end of said centerline of roadway description.
Said strip of land lying in Sections 20, 28 and 29, Township
14 North, Range 30 East, Russell County, Alabama and
containing 27.62 acres more or less.
TRACT B
Beginning at a point which is 743.81 feet east and 477.58 feet
south of the northwest corner of Section 28, Township 14
North, Range 30 East, Russell County, Alabama, which section
corner is marked by a concrete monument, this point thus
determined, being the northwest corner of the property to be
conveyed, then proceeding south 128.84 feet, then east 85.0
feet, then north 128.84 feet, then west 85.0 feet to the point
of beginning.
TRACT C
Beginning at a point which is 928.0 feet South and 1479.0 feet
East of the Northwest corner of Section 28 in Township 14
North, Range 30 East, Russell County, Alabama, which corner is
marked by a concrete monument, then proceeding North a
distance of 120.0 feet, then West 100.0 feet, then South 120.0
feet, then East 100.0 feet to the point of beginning.
PARCEL 5
WASTE WOOD CONVEYOR TO SCALPER (C-28506) AREA AND
TRUCK DUMPER (C-28505) AREA
All that portion of land and structures lying 9' on each
side of the following described centerline and also including
any specifically noted areas which extend beyond said
centerline strip:
Commence at a monument having grid coordinates N 792,350.00,
E 234,500.00, of the West Zone of the State of Georgia
Coordinate System; and lying in Section 28, T 14 N, R 30 E,
County of Russell, State of Alabama; thence N 31 degrees 59' 52' E,
291.25' to the point of beginning; thence S 0 degrees 00' W, 231.00'
to a point on the north side of a rectangular area (Truck Dumper) bounded
by a N 792,366.0, N 792,326.5, and E 234,642.0, and E 234,765.5, said
rectangular area being the point of ending; said land being 0.21 +/- acres;
NO. 1 BARK TRANSFER CONVEYOR (C-28503) AREA,
NO. 2 BARK TRANSFER CONVEYOR (C-28504) AREA,
BARK HOG STRUCTURE (C-28534) AREA
AND REFUSE CONVEYOR SCALPER (C-28533) AREA
All that portion of land and structures lying 9' on each
side of the following described centerline and also including
any specifically noted areas which extend beyond said
centerline strip:
Commence at a monument having grid coordinates N 792,350.00,
E 234,500.00, of the West Zone of the State of Georgia
Coordinate System; and lying in Section 28, T 14 N, R 30 E,
County of Russell, State of Alabama; thence N 31 degrees 59' 52" E,
291.25' to the point of beginning; thence S 8 degrees 20' 17" W,
284.46' to the center of a rectangular area which is parallel
to the last said course 22' north to south by 15' east to
west; thence S 81 degrees 39' 40" E, 843.58' to a parallel
rectangular area (Bark Hog Structure) 26.00' north to south
(10.00' lying south of last said course) by 37.50'; thence
continue along last said course 27.00'; thence N 45 degrees 07'
38" E, 350.71' to the point of ending; said land being 0.63 +
acres;
NO. 2 TURBINE AREA
All that portion of land, and structures lying thereon,
in Section 28, T 14 N, R 30 E, County of Russell, State of
Alabama, more particularly described as follows:
Commence at a monument having grid coordinates N 793,150.19,
E 233,250.02 of the West Zone of the State of Georgia
Coordinate System; thence S 25 degrees 19' 16" E, 663.98' to the
point of beginning (N 792,550.0 E 233,534.0); thence S 0 degrees 00'
W, 50.00'; thence N 90 degrees 00' E, 121.00'; thence N 0 degrees 00' W,
50.00'; thence N 90 degrees 00' W, 121.00' to the point of beginning;
said land being 0.14 +/- acres;
SANITARY PACKAGE TREATMENT PLANT AREA
All that portion of land, and structures lying thereon,
in Section 28, T 14 N, R 30 E, County of Russell, State of
Alabama, more particularly described as follows:
Commence at a monument having grid coordinates N 792,350.00,
E 234,500.00, of the West Zone of the State of Georgia
Coordinate System; thence S 48 degrees 35' 13" W, 1186.73' to the
point of beginning (N 791,565.0. E 233,610.0); thence S 0' 00"
W, 12.00'; thence N 90 degrees 00' W, 64.00'; thence N. 0' 00" W
12.00'; thence N 90' 00" E, 64.00' to the point of beginning;
said land being 0.02 +/- acres; and
NO. 3 BARK BOILER AREA
All that portion of land, and structures lying thereon,
in Section 28, T 14 N, R 30 E, County of Russell, State of
Alabama, more particularly described as follows:
Commence at a monument having grid coordinates N 793,150.19,
E 233,250.02 of the West Zone of the State of Georgia
Coordinate System; thence S 29 degrees 39' 25" E, 461.76' to the
point of beginning (N 792,748.92, E 233,478.50); thence N 90 degrees
00' E, 73.57'; thence S 0 degrees 00' W, 34.50'; thence N 90 degrees 00' W,
11.82'; thence S 0 degrees 00' W, 143.17'; thence N 90 degrees 00' W,
90.62'; thence N 0 degrees 00" W, 83.08'; thence N 90 degrees 00" E,
28.87'; thence N 0 degrees 00' W, 94.59' to the point of beginning;
said land being 0.32 +/- acres;
PARCEL 6
NEW RECLAIM PLATE FEED AND CONVEYOR AREA (C-28511),
CHIPS CONVEYOR TO SCREEN HOUSE AREA (C-28513),
AND CHIPS SCREEN HOUSE AREA (C-28515)
All that portion of land and structures lying 13' on each
side of the following described centerline and also including
any specifically noted areas which extend beyond said
centerline strip:
Commence at a monument having grid coordinates N 792,350.00,
E 234,500.00, of the West Zone of the State Georgia Coordinate
System; and lying in Section 28, T 14 N, R 30 E, County of
Russell, State of Alabama; thence N 63 degrees 51' 31" E, 790.90' to
the point of beginning; thence N 90 degrees 00' W, 82.00; thence S 0'
00" W, 8.75'; thence N 90 degrees 00' W, 232.22'; thence S 15 degrees 17'
15" E, 479.72' to a point on the northmost side of a rectangular area
(Chip Screen House) which parallels last said course and is 75.0' north to
south (7.00' of which is west of last said course) by 49.0' east to west;
said rectangular area being the point of ending; said land being 0.56 +
acres;
CHIPS CONVEYOR TO PINE STORAGE AREA (C-28538)
All that portion of land and structures lying 14' on each
side of the following described centerline:
Commence at a monument having grid coordinates N 792,350.00,
E 234,500.00, of the West Zone of the State of Georgia
Coordinate System; and lying in Section 28, T 14 N, R 30 E,
County of Russell, State of Alabama; thence N 45 degrees 24' 34" E,
692.79' to the point of beginning; thence S 36 degrees 51' 02" E,
454.94' to the point of ending; said land being 0.29 +/- acres;
CHIPPER DISCHARGE CONVEYOR AREA (C-28536) AND CHIPS TO
HARDWOOD STORAGE CONVEYOR AREA (C-28537)
All that portion of land and structures lying 14' on each
side of the follo December 19, 1991, the Board took official
action providing for the acquisition, construction and
installation of the Project Facilities and the financing of
the Project Facilities through the issuance of the Bonds.
Section 2.2 - Representations and Warranties by the Company.
The Company makes the following representations and warranties as
the basis for the undertakings on its part herein contained:
(a) The Company (i) is a corporation duly organized,
validly existing and in good standing under the laws of the
State of Delaware, (ii) has all requisite corporate power and
authority to carry on its business as now being conducted and
as presently proposed to be conducted, and (ii) has duly
qualified and is authorized to do business and is in good
standing as a foreign corporation in the State.
(b) The Company has the corporate power and has been
duly authorized to enter into this Agreement and to perform
awing described centerline and also including any specifically
noted areas which extend beyond said centerline strip:
Commence at a monument having grid coordinates N 792,350.00,
E 234,500.00, of the West Zone of the State of Georgia
Coordinate System; and lying in Section 28, T 14 N, R 30 E,
County of Russell, State of Alabama; thence N 71 degrees 34' 06" E,
600.24' to the point of beginning; thence S 71 degrees 04' 32" E,
640.91'; thence N 50 degrees 08' 32" E, 61.59' to the point of
ending; said land being 0.45 +/- acres;
CHIP CONVEYOR TO DIGESTER AREA (C-28521),
CHIP CONVEYOR TO SURGE BIN AREA (C-28519),
AND CHIP SILO AREA (C-28520)
All that portion of land and structures lying 14' on each
side of the following described centerline and also including
any specifically noted areas which extend beyond said
centerline strip:
Commence at a monument having grid coordinates N 792,350.00,
E 234,500.00,ng (N 792,374.0, E 234,473.25); thence S 0 degrees 00'
W, 133.50'; thence N 90 degrees 00' W, 103.39'; thence S 0 degrees 00' W,
103.50'; thence 90 degrees 00' W, 48.00'; thence N 0 degrees 00' W, 55.75';
thence N 90 degrees 00' W, 80.00; thence S 0 degrees 00' W, 42.75'; thence
N 90 degrees 00' W, 63.00; thence N 0 degrees 00' W, 110.00'; thence N45
degrees 00' E, 55.00'; thence N0 degrees 00' W, 23.11'; thence 90
degrees 00' E, 23.00'; thence N 0 degrees 00' W, 23.25'; thence N90 degrees
00' E, 170.00'; thence N 0 degrees 00' W, 28.75'; thence N 90 degrees 00'
E, 62.50' to the point of beginning; said area being 1.01 +/- acres;
MILL WATER COOLING TOWER AND NEW REACTOR CLARIFIER AREA
All that portion of and, and structures lying thereon, in
Section 28, T 14 N, R 30 E, County of Russell, State of
Alabama, more particularly described as follows:
Commence at a monument having grid coordinates N 792,350.00,
E 234,500.00, of the West Zone of the State of Georgia
Coordinate System; thence S 48 degrees 46' 07" W, 591.71' to the
point of beginning (N 791, 960.0 E 234,055.0); thence S 0 degrees 00'
W, 170.00'; thence N 90 degrees 00' W, 111.00; thence 0 degrees 00' W,
170.00'; thence N 90 degrees 00' E, 111.00' to the point of
beginning; said land being 0.43 +/- acres;
TURPENTINE RECOVERY FACILITY AREA
All that portion of land, and structures lying thereon,
in Section 28, T 14 N, R 30 E, County of Russell, State of
Alabama, more particularly described as follows:
Commence at a monument having grid coordinates N 792,350.00,
E 234,500.00, of the West Zone of the State of Georgia
Coordinate System; thence S 63 degrees 26' 06" W, 11.18' to the point
of beginning (N 792,345.0, E 234, 490.0); thence N 0' 00" W,
30.00'; thence N 90 degrees 00" E, 20.00'; thence S 0 degrees 00' W,
30.00'; thence N 90 degrees 00' W, 20.00' to the point of beginning;
said land being 0.01 +/- acres;
LOG STORAGE AREA (C-28522), LOG FEED DECKS AREA (C-28523),
DRUM AREA (C-28525, VIBRATING CONVEYORS AREA (C-28532),
CHIPPER POWER FEED ROLLS AREA (C-28528), CHIP BLDG.
AREA (C-28535), AND BARK COLLECTING CONVEYOR AREA (C-28531)
All that portion of land, and structures lying thereon,
in Section 28, T 14 N, R 30 E, County of Russell, State of
Alabama, more particularly described as follows:
Commence at a monument having grid coordinates N 792,350.00,
E 234,500.00, of the West Zone of the State of Georgia
Coordinate System; thence N 80 degrees 22' 54" E, 879.79' to the
point of beginning; thence N 0 degrees 00' W, 326.00'; thence N 90 degrees
00' E, 711.08'; thence S 0 degrees 00' W, 326.00'; thence N 90
degrees 00'W, 328.00'; thence S 0 degrees 00' W, 188.00'; thence N 90
degrees 00' W, 50.00'; thence N 0 degrees 00' W, 188.00'; thence N 90
degrees 00' W, 333.08' to the point of beginning; said land being 5.54 +/-
acres;
AREA "B" MAINTENANCE SHOP AREA
All that portion of land, and structures lying thereon,
in Section 28, T 14 N, R 30 E, County of Russell, State of
Alabama, more particularly described as follows:
Commence at a monument having grid coordinates N 792,350.00,
E 234,500.00, of the West Zone of the State of Georgia
Coordinate System; thence S 11 degrees 04' 57" W, 197.69' to
the point of beginning (N 792,156.0, E 234,462.0); thence S 0
degrees 00" W, 82.00'; thence N 90 degrees 00" w, 52.00'; thence N 0
degrees 00' W, 82.00'; thence N 90 degrees 00' E, 52.00 to the point of
beginning' said land being 0.10 +/- acres;
NEW LIME KILN/RECAUSTICIZING
All that portion of land, and structures lying thereon,
in Section 28, T 14 N, R 30 E, County of Russell, State of
Alabama, more particularly described as follows:
Commence at a monument having grid coordinates N 793,150.19,
E 233,250.02 of the West Zone of the State of Georgia
Coordinate System; thence N 70 degrees 51' 29" E, 267.79' to the
point of beginning (N 793,238.0 E 233,503.0); thence N 90 degrees 00'
E, 399.23'; thence S 0 degrees 00' W, 50.00'; thence N 90 degrees 00' W,
10.00'; thence S 0 degrees 00' W, 40.00'; thence N 90 degrees
00' W, 136.23'; thence N 0 degrees 00' W, 80.00'; thence N 90 degrees
00' W, 50.00'; thence S 0 degrees 00' W, 10.00'; thence N 90 degrees
00' W, 54.00'; thence S 0 degrees 00' W, 40.00'; thence N 90 degrees 00' E,
65.00'; thence S 0 degrees 00' W, 30.00'; thence N 90 degrees 00' W,
150.00'; thence N 0 degrees 00' W, 17.00'; thence N 90 degrees 00' W,
64.00'; thence N 0 degrees 00' W, 73.00' to the point of beginning; said
land being 0.657, more or less acres, less than and except all structures
not included in the Mead Corporation Contract No. 21-3097A.
NO. 2 RECOVERY BOILER AREA
All that portion of land, and structures lying thereon,
in Section 28, T 14 N, R 30 E, County of Russell, State of
Alabama, more particularly described as follows:
Commence at a monument having grid coordinates N 793,150.19,
E 233,250.02, of the West Zone of the State of Georgia
Coordinate System; thence S 40 degrees 16' 34" E, 439.77' to the
point of beginning (N 792,814.67, E 233,534.32'); thence N 90 degrees
00' E, 36.30'; thence N 0 degrees 00' W, 20.50'; thence N 90 degrees 00' E,
72.26'; thence N 0 degrees 00' W, 14.83'; thence N 90 degrees 00' E,
110.50'; thence S 0 degrees 00' W, 42.58'; thence N 90 degrees 00' E,
26.00'; thence S 0 degrees 00' W, 81.00' thence N 90 degrees 00' W, 51.00'
thence N 0 degrees 00" W, 25.12'; thence N 90 degrees 00' W, 72.26'; thence
N 90 degrees 00' W, 20.50'; thence N 0 degrees 00' W, 36.30'; thence N 0
degrees 00' W, 34.00' to the point of beginning' said land being 0.47
+/- acres;
NEW EVAPORATORS AND NEW TANKS AREA
All that portion of land, and structures lying thereon,
in Section 28, T 14 N, R 30 E, County of Russell, State of
Alabama, more particularly described as follows:
Commence at a monument having grid coordinates N 793,150.19;
E 233,250.02, of the West Zone of the State of Georgia
Coordinate System; thence S 62 degrees 01' 33" E, 637.83' to the
point of beginning (N 792,851.0, E 233,813.33); thence N 90 degrees
00' E, 246.67'; thence along an arc South and East 53.41' having a radius
of 34.00' with a central angle of 90 degrees 00'; thence S 0 degrees 00'
W, 135.33'; thence along an arc South and West 53.41' having a radius of
34.00' with a central angle of 90 degrees 00'; thence N 90 degrees 00' W,
34.00'; thence N 0 degrees 00' W, 99.79'; thence N 90 degrees 00' W,
69.00'; thence N 59 degrees 47' 19" W, 91.42'; thence N 90 degrees 00' W,
64.67'; thence N 0 degrees 00' W, 57.54' to the point of beginning; said
land being 0.72 +/- acres;
PARCEL 7
LIME MUD WASTE DISPOSAL FACILITIES
All that portion of land, and structures lying thereon,
in Section 28, T 14 N, R 30 E, County of Russell, State of
Alabama, more particularly described as follows:
Commence at a monument having grid coordinates N 793,150.19,
E 233, 250.02 of the West Zone of the State of Georgia
Coordinate System; thence N 86 degrees 38' 59" E, 253.41' to the
point of beginning (N 793,165.00 E 233,503.00); thence N 90 degrees
00' E, 64.00'; thence S 0 degrees 00' E, 17.00'; thence N 90 degrees 00' E,
150.00; thence N 0 degrees 00' E, 30.00'; thence N 90 degrees
00' W, 65.00'; thence N 0 degrees 00' E, 40.00'; thence N 90 degrees 00' E,
54.00'; thence N 0 degrees 00' E, 10.00'; thence N 90 degrees 00' E,
50.00'; thence S 0 degrees 00' E, 80.00'; thence N 90 degrees 00' E,
136.23'; thence N 0 degrees 00' E, 40.00'; thence N 90 degrees 00' E,
75.00'; thence S 0 degrees 00' E, 78.00;' thence N 90 degrees 00' W,
464.23'; thence 0 degrees 00' E, 55.00'; to the point of beginning; said
land being 0.633 more or less acres, less than and except all structures
not included in the Mead Corporation Contract No. 21-3097A.
PARCEL 8A
A tract of land situated in the Northwest Quarter of the
Northeast Quarter (NW 1/4 of NE 1/4) and the Southwest Quarter
of the Northeast Quarter (SW 1/4 of NE 1/4) of Section 28,
Township 14 North, Range 30 East, Russell County, Alabama,
being more particularly described as follows:
Commence at the Northwest corner of Section 28 Township 14
North, Range 30 East; thence run South 89 degrees 33 minutes
20 seconds East along the North Boundary of such Section 28 a
distance of 2806.62 feet to a point; thence turn right and run
due South a distance of 1210.86 feet to a point at the western
end of the Bark Handling System, such point being the
beginning of the tract of land herein described.
Begin at such point of beginning, turn an angle to the left
and run North 45 degrees 00 minutes East a distance of 63.64
feet to a point; thence turn an angle to the right 45 degrees
00 minutes and run easterly a distance of 310.00 feet to a
point; thence turn an angle to the right 45 degrees 00 minutes
and run southeasterly a distance of 63.64 feet to a point;
thence turn an angle to the left 45 degrees 00 minutes and run
easterly a distance of 270.00 feet to a point; thence turn an
angle to the right 90 degrees 00 minutes and run southerly a
distance of 155.00 feet to a point; thence turn an angle to
the left 90 degrees 00 minutes and run easterly a distance of
136.00 feet to a point; thence turn an angle to the right 90
degrees 00 minutes and run southerly a distance of 94.35 feet
to a point; thence turn an angle to the right 30 degrees 00
minutes and run southwesterly a distance of 263.00 feet to a
point; thence turn an angle to the left 30 degrees 00 minutes
and run southerly a distance of 132.88 feet to a point; thence
turn an angle to the right 90 degrees 00 minutes and run
westerly a distance of 84.50 feet to a point; thence turn an
angle to the right 90 degrees 00 minutes and run northerly a
distance of 405.00 feet to a point; thence turn an angle to
the left 90 degrees 00 minutes and run westerly a distance of
120.00 feet to a point; thence turn an angle to the right 90
degrees 00 minutes and run northerly a distance of 115.00 feet
to a point; thence turn an angle to the left 90 degrees 00
minutes and run westerly a distance of 470.00 feet to a point;
thence turn an angle to the right 90 degrees 00 minutes and
run northerly a distance of 90.00 feet to the point of
beginning.
PARCEL 8B
A tract of land situated in the Northeast Quarter of the
Northwest Quarter (NE 1/4 of NW 1/4) and the Southeast Quarter
of the Northwest Quarter (SE 1/4 of NW 1/4) of Section 28,
Township 14 North, Range 30 East, Russell County, Alabama,
being more particularly described as follows:
Commence at the Northwest corner of Section 28, Township 14
North, Range 30 East; thence run South 89 degrees 33 minutes
20 seconds East along the North Boundary of such Section 28 a
distance of 2290.86 feet to a point; thence turn right and run
due South a distance of 1225.36 feet to a point at the
Northeast corner of the #2 Bark Boiler Building, such point
being the point of beginning of the tract of land herein
described.
Being at such point of beginning, continue due South a
distance of 95.75 feet to a point; thence turn an angle to the
right 90 degrees 00 minutes and run westerly a distance of
67.50 feet to a point; thence turn an angle to the right 90
degrees 00 minutes and run northerly a distance of 95.75 feet
to a point; thence turn an angle to the right 90 degrees 00
minutes and run easterly a distance of 15.00 feet to a point;
thence turn an angle to the left 90 degrees 00 minutes and run
northerly a distance of 40.00 feet to a point; thence turn an
angle to the right 90 degrees 00 minutes and run easterly a
distance of 34.50 feet to a point; thence turn an angle to the
right 90 degrees 00 minutes and run southerly a distance of
40.00 feet to a point; thence turn an angle to the left 90
degrees 00 minutes and run easterly a distance of 18.00 feet
to the point of beginning.
PARCEL 9
All that portion of land, and structures lying thereon,
in Section 28, T14N, R 30 E, County of Russell, State of
Alabama, more particularly described as follows:
Commence at a monument having grid coordinates N 794,023.97,
E 232,940.10 of the West Zone of the State of Georgia
Coordinate System; thence S 52 degrees 11' 16" E 381.63' to the point
of beginning (N 793,790.00 E 233,241.60); thence N 90 degrees 00' 00"
E 760.00'; thence S 0 degrees 00' 00" E 102.00'; thence N 90 degrees 00'
00" E 128.04'; thence S 0 degrees 00' 00" E 960.48' (at existing
utility bridge)' the N 90 degrees 00' 00" W 13.00'; thence N 0 degrees
00' 00" W 672.48', thence N 90 degrees 00' 00 W 875.04'; thence N 0
degrees 00' 00" E 390.00' to the point of beginning; said land being
7.85 +/- acres; less than and except any structures not included in the
Mead Corporation Contract No. 21-4162;
(collectively, (Parcels 1 through 9) the "Other Leased Land")
together with the following easements:
(a) An easement and right for pedestrian and vehicular
traffic to use all present and future walks, railroads, roads,
driveways and docks upon the Other Leased Land in order to
provide all necessary or convenient ingress or egress between
the 1993 Leased Land and railroads, public roads and highways
and the Chattahoochee River and to permit passage between the
1993 Leased Land and the Other Leased Land;
(b) An easement and right for the passage of pedestrians
and vehicles and for the construction, erection, installation,
operation, maintenance, renewal, replacement and use of
material conveying systems, including without limitation
pipelines, through any part of the Other Leased Land necessary
or convenient in order to assure the passage of equipment, raw
materials, items in the process of manufacture, and finished
products from the 1993 Leased Land to the Other Leased Land,
including without limitation such rights and easements as are
necessary for the movement of personnel, vehicles and
materials among and between the various parcels of land
comprising the Other Leased Land in order to permit and
facilitate the operation of the Project;
(c) An easement and right to erect, install, construct,
maintain, renew, replace and use on, over and under any part
of the Other Leased Land, such pipes, conduits, and wires as
are necessary or convenient to insure access to and an
adequate system for or supply of gas, oil, steam, compressed
air, process and space heat, water, fire protection, sewage
and industrial waste disposal, electricity, communications,
instrumentation and control, and other similar facilities to
the 1993 Leased Land and the Project including, without
limitation, the right to make connections with machinery,
equipment, pipes, conduits and wires, structures and other
improvements and appurtenances thereto, on the Other Leased
Land; and
(d) An easement and right to create and maintain upon
the Other Leased Land encroachments of equipment, structures
or other improvements which will be included on the 1993
Leased Land and within the Project as presently planned, and
any similar replacements or substitutions of portions of the
Project for as long as any such equipment, structures or other
improvements remain standing, including without limitation the
rights of lateral or party wall support, and to connect any
such equipment, structure or other improvements to any
structure or improvement on the Other Leased Land;
but subject to the following easements over the 1993 Leased Land in
favor of the Other Leased Land:
(a) An easement and right for pedestrian and vehicular
traffic to use all present and future walks, railroads, roads,
driveways and docks upon the 1993 Leased Land in order to
provide all necessary or convenient ingress and egress among
and between all portions of the Other Leased Land and between
the Other Leased Land and the 1993 Leased Land, including
without limitation portions on which additional improvements
may be erected, and railroads, public works and highways and
the Chattahoochee River and to permit passage among and
between the various parcels of land comprising the Other
Leased Land;
(b) An easement and right for the passage of
pedestrians, vehicles, and for the construction, installation,
operation, maintenance, renewal, replacement and use of
material conveyance systems, including without limitation,
pipelines, through any part of the 1993 Leased Land necessary
or convenient in order to assure the passage of equipment, and
finished products from one portion of the Other Leased Land to
another or between the Other Leased Land and the 1993 Leased
Land, including, without limitation such rights and easements
as are necessary for the movement of personnel, vehicles and
material among and between the various parcels of land
comprising the Other Leased Land in order to permit and
facilitate the operation of any facilities located on the
Other Leased Land;
(c) An easement and right to erect, install, construct,
maintain, renew, replace and use on, over and under any part
of the 1993 Leased Land, such pipes, conduits, and wires and
appurtenances as are necessary or convenient to assure access
to and an adequate system for or supply of gas, oil, steam,
compressed air, process and space heat, water, fire
protection, sewage and industrial waste disposal, electricity,
communications, instrumentation and control, and other similar
facilities to the Other Leased Land, including without
limitation, the right to make connections with machinery,
equipment, pipes, conduits and wires, structures and other
improvements and appurtenances thereto, on the 1993 Leased
Land; and
(d) An easement and right to maintain any present
equipment, structures or other improvements included within
the facilities presently located on the Other Leased Land as
encroachments upon the 1993 Leased Land as long as any such
equipment, structures or other improvements remain standing,
and to construct and maintain similar encroachments on the
1993 Leased Land in respect of any additional improvements
constructed adjacent to the 1993 Leased Land, as long as any
such additional improvements remain standing, including
without limitation the rights of lateral or party wall
support, and to connect such additional improvements to any
structure or any improvements on the 1993 Leased Land.
subject in all cases to the following:
(1) Lease Agreement dated as of November 1, 1983 between the
Board, as lessor, and the Company (as assignee of Georgia
Kraft Company), as lessee, as amended and supplemented from
time to time relating to the Board's Industrial Development
Revenue Bonds (Georgia Kraft Project), Series 1983;
(2) Lease Agreement dated as of December 1, 1983 between the Board
as lessor, and the Company (as assignee of Georgia Kraft
Company), as lessee, as amended and supplemented from time to
time, relating to the Board's Environmental Improvement
Revenue Bonds (Georgia Kraft Project), Series 1983;
(3) Lease Agreement dated as of December 1, 1985 between the
Board, as lessor, and the Company (as assignee of Georgia
Kraft Company), as lessee, as amended and supplemented from
time to time, relating to the Board's Environmental
Improvement Revenue Refunding Bonds (Georgia Kraft Project),
Series 1985;
(4) Lease Agreement dated as of July 1, 1986 between the Board, as
lessor, and the Company (as assignee of Georgia Kraft
Company), as lessee, as amended and supplemented from time to
time, relating to the Board's Industrial Development Revenue
Bonds (Georgia Kraft Project), Series 1986;
(5) Lease Agreement dated as of December 1, 1988 between the
Board, as lessor, and the Company, as lessee, as amended and
supplemented from time to time, relating to the Board's
Environmental Improvement Revenue Bonds (Mead Coated Board
Project), Series 1988;
(6) Lease Agreement dated as of June 1, 1990 between the Board, as
lessor, and Industrial Warehouse Services, Inc., as lessee, as
amended and supplemented from time to time, relating to the
Board's First Mortgage Revenue Bonds (Industrial Warehouse
Services, Inc.), Series 1990;
(7) Lease Agreement dated as of December 1, 1988 between the
Board, as lessor, and the Company, as lessee, as amended and
supplemented from time to time, relating to the Board's
Industrial Development Revenue Bonds (Mead Coated Board
Project), Series 1988A, 1989A, 1989B, 1989C, 1989D, 1989E,
1900A and 1991A;
(8) Lease Agreement dated as of September 1, 1990 between the
Board, as lessor, and the Company, as lessee, as amended and
supplemented from time to time, relating to the Board's
Environmental Improvement Revenue Bonds (Mead Coated Board
Project), Series 1990A;
(9) Lease Agreement dated as of October 1, 1990 between the Board,
as lessor, and the Company, as lessee, as amended and
supplemented from time to time, relating to the Board's
Environmental Improvement Revenue Refunding Bonds (Mead Coated
Board Project), Series 1990B; and
(10) Lease Agreement dated as of June 1, 1993 between the Board, as
lessor, and the Company, as lessee, as amended and
supplemented from time to time, relating to the Board's
Environmental Improvement Revenue Bonds (Mead Coated Board
Project), Series 1993A.
<PAGE>
EXHIBIT "B"
to
Lease Agreement between
THE INDUSTRIAL DEVELOPMENT BOARD OF
THE CITY OF PHENIX CITY, ALABAMA
and
MEAD COATED BOARD, INC.
dated as of June 1, 1993
PROJECT SUMMARY - INDUSTRIAL FACILITIES
RUSSELL COUNTY, ALABAMA
The Project is an expansion of and improvements to an existing
coated linerboard mill (the "Mill") in Russell County, Alabama
owned in part by the Board and leased to the Company and owned
in part by the Company.
QUARTERLY\EX-10(3).WP
051194
Exhibit (11.1)
THE MEAD CORPORATION AND CONSOLIDATED SUBSIDIARIES
- --------------------------------------------------
CALCULATION OF PRIMARY NET EARNINGS PER COMMON AND COMMON EQUIVALENT SHARE
- ---------------------------------------------------------------------------
(All amounts in thousands, except per share amounts)
First Quarter Ended
---------------------
April 3, April 4,
1994 1993
------- -------
NET EARNINGS APPLICABLE TO COMMON AND COMMON
EQUIVALENT SHARES $27,616 $25,597
======= =======
AVERAGE NUMBER OF COMMON AND COMMON EQUIVALENT
SHARES OUTSTANDING:
Average number of common shares outstanding 59,252 58,830
Dilutive effect of stock options after
application of treasury stock method 594 548
------- -------
AVERAGE NUMBER OF COMMON AND COMMON
EQUIVALENT SHARES OUTSTANDING 59,846 59,378
======= =======
PRIMARY NET EARNINGS PER COMMON AND COMMON
EQUIVALENT SHARE $.46 $.43
==== ====
QUARTERLY\EX-11(1).WP
051194
Exhibit (11.2)
THE MEAD CORPORATION AND CONSOLIDATED SUBSIDIARIES
- --------------------------------------------------
CALCULATION OF FULLY DILUTED NET EARNINGS PER COMMON AND COMMON
- ---------------------------------------------------------------
EQUIVALENT SHARE (1)
- --------------------
(All amounts in thousands, except per share amounts)
First Quarter Ended
---------------------
April 3, April 4,
1994 1993
------- -------
NET EARNINGS APPLICABLE TO COMMON AND COMMON
EQUIVALENT SHARES $27,616 $25,597
======= =======
AVERAGE NUMBER OF SHARES OUTSTANDING ON A
FULLY DILUTED BASIS:
Shares used in calculating primary earnings
per share 59,846 59,378
Additional dilutive effect of stock options after
application of treasury stock method 83
------- -------
AVERAGE NUMBER OF SHARES OUTSTANDING ON A
FULLY DILUTED BASIS 59,846 59,461
======= =======
FULLY DILUTED NET EARNINGS PER COMMON AND
COMMON EQUIVALENT SHARE $.46 $.43
==== ====
(1) This calculation is submitted in accordance with 17 CFR 229.601(b)(11)
although not required by APB Opinion No. 15 because it results in dilution
of less than 3%.
QUARTERLY\EX-11(2).WP
051194
Exhibit (11.3)
THE MEAD CORPORATION AND CONSOLIDATED SUBSIDIARIES
- ---------------------------------------------------
CALCULATION OF FULLY DILUTED NET EARNINGS PER COMMON AND COMMON
- ---------------------------------------------------------------
EQUIVALENT SHARE (1)
- --------------------
(All amounts in thousands, except per share amounts)
First Quarter Ended
---------------------
April 3, April 4,
1994 1993
------- -------
NET EARNINGS APPLICABLE TO COMMON AND COMMON
EQUIVALENT SHARES $27,616 $25,597
ADJUSTMENT FOR OTHER POTENTIALLY DILUTIVE
SECURITIES - Interest savings (net of tax) on
Convertible Subordinated Debentures as if converted
at the beginning of the period 1,431 1,454
------- -------
NET EARNINGS APPLICABLE TO COMMON AND COMMON
EQUIVALENT SHARES ON A FULLY DILUTED BASIS $29,047 $27,051
======= =======
AVERAGE NUMBER OF SHARES OUTSTANDING ON A
FULLY DILUTED BASIS:
Shares used in calculating primary earnings
per share 59,846 59,378
Dilutive effect of stock options after
application of treasury stock method 83
Adjustment for other potentially dilutive
securities - Dilutive effect of Convertible
Subordinated Debentures as if converted at the
beginning of the period 2,630 2,630
------- -------
AVERAGE NUMBER OF SHARES OUTSTANDING ON A
FULLY DILUTED BASIS 62,476 62,091
======= =======
FULLY DILUTED NET EARNINGS PER COMMON AND
COMMON EQUIVALENT SHARE $.46 $.44
==== ====
(1) This calculation is submitted in accordance with 17 CFR 229.601(b)(11)
although it is contrary to paragraph 40 of APB Opinion No. 15 because it
produces an antidilutive result.
QUARTERLY\EX-11(3).WP
051194
