<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Schedule 13D**
Under the Securities Exchange Act of 1934
Amendment No ___
Plum Creek Timber Company, Inc.
-----------------------------------------------------------------
(Name of Issuer)
Common Stock, $.01 par value
-----------------------------------------------------------------
(Title of Class of Securities)
729251108
--------------------
(CUSIP Number)
John H. Scully
591 Redwood Highway, Suite 3215
Mill Valley, California 94941
(415) 383-6600
with a copy to:
Phillip Gordon
Altheimer & Gray
10 South Wacker Drive
Chicago, Illinois 60606
(312) 715-4000
-------------------
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
July 1, 1999
--------------------
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
Schedule because of Rule 13d-1(b)(3) or (4), check the following box. /__/
Check the following box if a fee is being paid with the statement. /__/
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
**The total number of shares of stock reported as beneficially owned by the
Reporting Persons herein is 16,511,695 shares of common stock, which constitutes
approximately 26.27% of the total number of shares of common stock outstanding
and 634,566 shares of special voting stock, which constitutes 100% of the total
number of shares of special voting stock outstanding. All ownership percentages
set forth herein assume that there are 62,822,009 shares of common stock
outstanding and 634,566 shares of special voting stock outstanding.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
<PAGE>
SCHEDULE 13D
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CUSIP NO. PAGE 1 OF ? PAGES
- ----------------------- ---------------------
- ------------------------------------------------------------------------------
NAME OF REPORTING PERSON
1 PCMC INTERMEDIATE HOLDINGS, L.P.
- ------------------------------------------------------------------------------
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP:
2 (a) [_]
(b) [X]
- ------------------------------------------------------------------------------
SEC USE ONLY
3
- ------------------------------------------------------------------------------
SOURCE OF FUNDS: NOT APPLICABLE
4
- ------------------------------------------------------------------------------
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(e) or 2(f):
[_]
5
- ------------------------------------------------------------------------------
CITIZENSHIP OR PLACE OF ORGANIZATION: DELAWARE
6
- ------------------------------------------------------------------------------
SOLE VOTING POWER: 16,333,722 COMMON STOCK (1);
7 628,220 SPECIAL VOTING STOCK (1)
NUMBER OF
SHARES -----------------------------------------------------------
SHARED VOTING POWER: -0-
BENEFICIALLY 8
OWNED BY
-----------------------------------------------------------
EACH SOLE DISPOSITIVE POWER: 16,333,722 COMMON STOCK (1);
9 628,220 SPECIAL VOTING STOCK (1)
REPORTING
PERSON -----------------------------------------------------------
SHARED DISPOSITIVE POWER: -0-
WITH 10
- ------------------------------------------------------------------------------
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON:
11 16,333,722 COMMON STOCK (1) AND 628,220 SPECIAL VOTING STOCK (1)
- ------------------------------------------------------------------------------
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES:
12
[_]
- ------------------------------------------------------------------------------
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11): 26% COMMON STOCK;
13 99% SPECIAL VOTING STOCK
- ------------------------------------------------------------------------------
TYPE OF REPORTING PERSON: PN
14
- ------------------------------------------------------------------------------
(1) POWER IS EXERCISED THROUGH ITS SOLE GENERAL PARTNER, PC ADVISORY
PARTNERS I, L.P.
<PAGE>
SCHEDULE 13D
- ----------------------- ---------------------
CUSIP NO. PAGE 1 OF 2 PAGES
- ----------------------- ---------------------
- ------------------------------------------------------------------------------
NAME OF REPORTING PERSON
1 S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
PC Advisory Partners I, L.P.
- ------------------------------------------------------------------------------
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
2 (a) [_]
(b) [x]
- ------------------------------------------------------------------------------
SEC USE ONLY
3
- ------------------------------------------------------------------------------
SOURCE OF FUNDS*
4 Not Applicable
- ------------------------------------------------------------------------------
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(e) or 2(f) [_]
5
- ------------------------------------------------------------------------------
CITIZENSHIP OR PLACE OF ORGANIZATION
6 Delaware
- ------------------------------------------------------------------------------
SOLE VOTING POWER
7 16,498,709 common stock (1) (2)
NUMBER OF 634,566 special voting stock (1) (2)
SHARES -----------------------------------------------------------
SHARED VOTING POWER
BENEFICIALLY 8 -0-
OWNED BY
-----------------------------------------------------------
EACH SOLE DISPOSITIVE POWER
9 16,498,709 common stock (1) (2)
REPORTING 634,566 special voting stock (1) (2)
PERSON -----------------------------------------------------------
SHARED DISPOSITIVE POWER
WITH 10 -0-
- ------------------------------------------------------------------------------
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
11 16,498,709 common stock (1) (2) and 634,566 special voting
stock (1) (2)
- ------------------------------------------------------------------------------
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
12
[_]
- ------------------------------------------------------------------------------
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13 26.26% common stock; 100% special voting stock.
- ------------------------------------------------------------------------------
TYPE OF REPORTING PERSON*
14 PN
- ------------------------------------------------------------------------------
(1) Solely in its capacity as the sole general partner of PCMC Intermediate
Holdings, L.P. with respect to 16,333,722 shares of common stock and
628,220 shares of special voting stock. PC Advisory Partners I, L.P.
directly holds 164,987 shares of common stock and 6,346 shares of special
voting stock.
(2) Power is exercised through its sole general partner, PC Advisory Corp. I.
<PAGE>
SCHEDULE 13D
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CUSIP NO. PAGE 1 OF ?? PAGES
- ----------------------- ---------------------
- ------------------------------------------------------------------------------
NAME OF REPORTING PERSON
1 PC Advisory Corp. I
- ------------------------------------------------------------------------------
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
2 (a) [_]
(b) [x]
- ------------------------------------------------------------------------------
SEC USE ONLY
3
- ------------------------------------------------------------------------------
SOURCE OF FUNDS*
4 Not Applicable
- ------------------------------------------------------------------------------
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(e) or 2(f) [_]
5
- ------------------------------------------------------------------------------
CITIZENSHIP OR PLACE OF ORGANIZATION
6 Delaware
- ------------------------------------------------------------------------------
SOLE VOTING POWER
7 16,498,709 common stock (1); 634,566 special voting
NUMBER OF stock (1)
SHARES -----------------------------------------------------------
SHARED VOTING POWER
BENEFICIALLY 8 -0-
OWNED BY
-----------------------------------------------------------
EACH SOLE DISPOSITIVE POWER
9 16,498,709 common stock (1); 634,566 special voting
REPORTING stock (1)
PERSON -----------------------------------------------------------
SHARED DISPOSITIVE POWER
WITH 10 -0-
- ------------------------------------------------------------------------------
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
11 16,498,709 common stock (1) and 634,566 special voting stock (1)
- ------------------------------------------------------------------------------
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
12
[_]
- ------------------------------------------------------------------------------
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13 26.26% common stock; 100% special voting stock
- ------------------------------------------------------------------------------
TYPE OF REPORTING PERSON*
14 PN
- ------------------------------------------------------------------------------
(1) Solely in its capacity as the general partner of PC Advisory Partners I,
L.P.
<PAGE>
SCHEDULE 13D
- ----------------------- ---------------------
CUSIP NO. PAGE 1 OF ?? PAGES
- ----------------------- ---------------------
- ------------------------------------------------------------------------------
NAME OF REPORTING PERSON
1 S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
John H. Scully
- ------------------------------------------------------------------------------
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP:
2 (a) [_]
(b) [X]
- ------------------------------------------------------------------------------
SEC USE ONLY
3
- ------------------------------------------------------------------------------
SOURCE OF FUNDS:
4
Not Applicable
- ------------------------------------------------------------------------------
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS or 2(e) or 2(f):
5 [_]
- ------------------------------------------------------------------------------
CITIZENSHIP OR PLACE OF ORGANIZATION
6
USA
- ------------------------------------------------------------------------------
SOLE VOTING POWER
7
NUMBER OF 7,485 common stock (2)
SHARES -----------------------------------------------------------
SHARED VOTING POWER
BENEFICIALLY 8
16,498,709 common stock (1); 634,566 special voting
OWNED BY stock (1)
-----------------------------------------------------------
EACH SOLE DISPOSITIVE POWER
9
REPORTING 7,485 common stock (2)
PERSON -----------------------------------------------------------
SHARED DISPOSITIVE POWER
WITH 10
16,498,709 common stock (1); 634,566 special voting
stock (1)
- ------------------------------------------------------------------------------
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
11
16,506,194 common stock (1) (2) and 634,566 special voting stock (1)
- ------------------------------------------------------------------------------
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES:
12
[_]
- ------------------------------------------------------------------------------
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13
26.27% common stock; 100% special voting stock
- ------------------------------------------------------------------------------
TYPE OF REPORTING PERSON:
14
IN
- ------------------------------------------------------------------------------
(1) Solely in his capacity as one of three controlling persons of PC Advisory
Corp. I with respect to 16,498,709 shares of common stock and 634,655
shares of special voting stock.
(2) 5,000 shares of common stock is held in a self administered D.L. & W., Inc.
Basic Profit Sharing Retirement Plan.
<PAGE>
SCHEDULE 13D
- ----------------------- ---------------------
CUSIP NO. PAGE 1 OF ?? PAGES
- ----------------------- ---------------------
- ------------------------------------------------------------------------------
NAME OF REPORTING PERSON
1 S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
William E. Oberndorf
- ------------------------------------------------------------------------------
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP:
2 (a) [_]
(b) [X]
- ------------------------------------------------------------------------------
SEC USE ONLY
3
- ------------------------------------------------------------------------------
SOURCE OF FUNDS:
4
Not Applicable
- ------------------------------------------------------------------------------
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(e) or 2(f):
5 [_]
- ------------------------------------------------------------------------------
CITIZENSHIP OR PLACE OF ORGANIZATION
6
USA
- ------------------------------------------------------------------------------
SOLE VOTING POWER
7
NUMBER OF 2,828 common stock
SHARES -----------------------------------------------------------
SHARED VOTING POWER
BENEFICIALLY 8
16,498,709 common stock (1); 634,566 special voting
OWNED BY stock (1)
-----------------------------------------------------------
EACH SOLE DISPOSITIVE POWER
9
REPORTING 2,828 common stock
PERSON -----------------------------------------------------------
SHARED DISPOSITIVE POWER
WITH 10
16,498,709 common stock (1); 634,566 special voting
stock (1)
- ------------------------------------------------------------------------------
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
11
16,501,537 common stock (1) and 634,566 special voting stock (1)
- ------------------------------------------------------------------------------
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES:
12
[_]
- ------------------------------------------------------------------------------
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13
26.27% common stock; 100% special voting stock
- ------------------------------------------------------------------------------
TYPE OF REPORTING PERSON:
14
IN
- ------------------------------------------------------------------------------
(1) Solely in his capacity as one of three controlling persons of SF Advisory
Corp. II with respect to 16,498,709 shares of common stock and 634,566
shares of special voting stock.
<PAGE>
SCHEDULE 13D
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CUSIP NO. PAGE 1 OF ?? PAGES
- ----------------------- ---------------------
- ------------------------------------------------------------------------------
NAME OF REPORTING PERSON
1 S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
William J. Patterson
- ------------------------------------------------------------------------------
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP:
2 (a) [_]
(b) [X]
- ------------------------------------------------------------------------------
SEC USE ONLY
3
- ------------------------------------------------------------------------------
SOURCE OF FUNDS:
4
Not Applicable
- ------------------------------------------------------------------------------
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) or 2(e) or 2(f):
5 [_]
- ------------------------------------------------------------------------------
CITIZENSHIP OR PLACE OF ORGANIZATION
6
USA
- ------------------------------------------------------------------------------
SOLE VOTING POWER
7
NUMBER OF 2,673 common stock
SHARES -----------------------------------------------------------
SHARED VOTING POWER
BENEFICIALLY 8
16,498,709 common stock (1); 634,566 special voting
OWNED BY stock (1)
-----------------------------------------------------------
EACH SOLE DISPOSITIVE POWER
9
REPORTING 2,673 common stock
PERSON -----------------------------------------------------------
SHARED DISPOSITIVE POWER
WITH 10
16,498,709 common stock (1); 634,566 special voting
stock (1)
- ------------------------------------------------------------------------------
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON:
11
16,501,382 common stock (1) and 634,566 special voting stock (1)
- ------------------------------------------------------------------------------
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES:
12
[_]
- ------------------------------------------------------------------------------
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13
26.27% common stock; 100% special voting stock
- ------------------------------------------------------------------------------
TYPE OF REPORTING PERSON:
14
IN
- ------------------------------------------------------------------------------
(1) Solely in his capacity as one of three controlling persons of PC Advisory
Corp. I with respect to 16,498,709 shares of common stock and 634,566
shares of special voting stock.
<PAGE>
Item 1. Security and Issuer.
-------------------
This statement relates to the shares of common stock, par value $.01 per
share (the "Shares") of Plum Creek Timber Company, Inc., a Delaware corporation
(the "Issuer"). The principal executive offices of the Issuer are located at
999 Third Avenue, Suite 2300, Seattle, Washington 98104-4095.
Item 2. Identity and Background.
-----------------------
(a) Pursuant to Rules 13d-1(f)(1)-(2) of Regulation 13D-G of the General
Rules and Regulations under the Securities Exchange Act of 1934, as amended (the
"Act"), the undersigned hereby file this Schedule 13D Statement on behalf of
PCMC Intermediate Holdings, L.P. ("Holdings"), PC Advisory Partners I, L.P. ("PC
Advisory Partners"), PC Advisory Corp I ("PC Advisory Corp"), John H. Scully
("JHS"), William J. Patterson ("WJP") and William E. Oberndorf ("WEO").
Holdings, PC Advisory Partners, PC Advisory Corp., JHS, WJP and WEO are
sometimes hereinafter referred to as the "Reporting Persons." The Reporting
Persons are making this single, joint filing because they may be deemed to
constitute a "group" within the meaning of Section 13(d)(3) of the Act, although
neither the fact of this filing nor anything contained herein shall be deemed to
be an admission by the Reporting Persons that a group exists.
(b)-(c)
Holdings
--------
Holdings is a Delaware limited partnership, the principal business of which
is the purchase, sale, exchange, acquisition and holding of investment
securities. The principal business address of Holdings, which also serves as
its principal office, is 999 3rd Avenue, Suite 2300, Seattle, WA, 98104.
Pursuant to Instruction C to Schedule 13D of the Act, certain information with
respect to PC Advisory Partners, the sole general partner of Holdings, is set
forth below.
PC Advisory Partners
--------------------
PC Advisory Partners is a Delaware limited partnership, the principal
business of which is serving as the sole general partner of Holdings. The
principal business address of PC Advisory Partners, which also serves as its
principal office, is 999 3rd Avenue, Suite 2300, Seattle, WA, 98104. Pursuant to
Instruction C to Schedule 13D of the Act, certain information with respect to PC
Advisory Corp. the general partner of PC Advisory Partners, is set forth below.
<PAGE>
PC Advisory Corp
----------------
PC Advisory Corp is a Delaware corporation, the principal business of which
is serving as the general partner of PC Advisory Partners. The principal
address of PC Advisory Corp, which also serves as its principal office, is 999
3rd Avenue, Suite 2300, Seattle, WA, 98104. Pursuant to Instruction C to
Schedule 13D of the Act, certain information with respect to JHS, WJP and WEO,
who are the directors, executive officers and controlling people of PC Advisory
Corp, is set forth below.
JHS
---
JHS' business address is 591 Redwood Highway, Suite 3215, Mill Valley,
California 94941. His present principal occupation is serving as a managing
director of SPO Partners & Co., a Delaware corporation ("SPO"). The principal
business of SPO is operating as an investment firm. The principal address of
SPO, which also serves as its principal office, is 591 Redwood Highway, Suite
3215, Mill Valley, California 94941. JHS is also one of three stockholders,
directors and officers of PC Advisory Corp.
WEO
---
WEO's business address is 591 Redwood Highway, Suite 3215, Mill Valley,
California 94941. His present principal occupation is serving as a managing
director of SPO. WEO is also one of three stockholders, directors and officers
of PC Advisory Corp.
WJP
---
WJP's business address is 591 Redwood Highway, Suite 3215, Mill Valley,
California 94941. His present principal occupation is serving as a managing
director of SPO. WJP is also one of three stockholders, directors and officers
of PC Advisory Corp.
(d) None of the entities or persons identified in this Item 2 has, during
the last five years, been convicted in a criminal proceeding (excluding traffic
violations or similar misdemeanors).
(e) None of the entities or persons identified in this Item 2 has, during
the last five years, been a party to a civil proceeding of a judicial or
administrative body of competent jurisdiction and as a result of such proceeding
was or is subject to a judgment, decree or final order enjoining future
violations of, or prohibiting or mandating activities subject to, federal or
state securities laws or finding any violation with respect to such laws.
<PAGE>
(f) All of the natural persons identified in this Item 2 are citizens of
the United States of America.
Item 3. Source and Amount of Funds or Other Consideration.
-------------------------------------------------
No cash funds have been used by the Reporting Persons to acquire shares of
the Issuer during the past sixty (60) days. The ownership interests in Plum
Creek Timber Company, L.P. (the "Partnership") were converted (the "Conversion")
on July 1, 1999 into ownership interests in the Issuer, through the merger of
the Partnership with and into an entity which is a wholly-owned, indirect
subsidiary of the Issuer, pursuant to an Agreement and Plan of Conversion dated
as of June 5, 1998 and amended on July 17, 1998 (the "Conversion Agreement"). In
the Conversion, (i) each of the public unitholders of the Partnership received a
share of common stock of the Issuer for each unit of the Partnership held by
such unitholder; and (ii) Plum Creek Management Company, L.P. ("PCMC")
relinquished its general partner interest in the Partnership and its interests
in Plum Creek Manufacturing, L.P. and Plum Creek Marketing, Inc. and in
consideration thereof, the partners of PCMC (which are Holdings and PC Advisory
Partners) received 27%, in the aggregate, of the Issuer's outstanding equity
interests, as reported herein. Specifically, Holdings received 16,333,722 shares
of common stock of the Issuer (26.00% of the outstanding common stock) and
628,220 shares of special voting stock of the Issuer (99.00% of the outstanding
special voting stock), and PC Advisory Partners received 164,987 shares of
common stock (0.26% of the outstanding common stock) and 6,346 shares of special
voting stock (1.00% of the outstanding special voting stock).
Item 4. Purpose of Transaction.
----------------------
The Reporting Persons acquired the shares reported herein pursuant to the
Conversion for investment purposes and to continue to influence the direction
and management of the Issuer.
Pursuant to the Issuer's Amended Certificate of Incorporation, the shares of
special voting stock carry the right to vote separately on certain matters
required to be submitted for stockholder approval, including amendments to the
Issuer's certificate of incorporation, certain issuances of shares of common
stock and certain other significant transactions. The special voting stock
otherwise carries the same voting and economic rights as shares of common stock
and will be converted into shares of common stock upon certain events. The
foregoing descriptions of the Amended Certificate of Incorporation and the
Agreement and Plan of Conversion are qualified in their entirety by reference to
the texts of such documents, which are filed as Exhibits 1 and 2 hereto,
respectively, and incorporated herein by reference.
<PAGE>
Except as set forth in this Item 4, the Reporting Persons have no present
plans or proposals that relate to or that would result in any of the actions
specified in clauses (a) through (j) of Item 4 of Schedule 13D of the Act.
Item 5. Interest in Securities of the Issuer.
------------------------------------
(a) Percentage interest calculations for each Reporting Person are based
upon the Issuer having 62,822,009 total outstanding shares of common stock and
634,566 shares of special voting stock, as indicated by the Issuer to the
Reporting Persons.
Holdings
--------
The aggregate number of Shares that Holdings owns directly is 16,333,722
shares of common stock and 628,220 shares of special voting stock, which
constitutes approximately 26% of the shares of common stock outstanding and 99%
of the shares of special voting stock outstanding.
PC Advisory Partners
--------------------
Individually, and because of its position as the sole general partner of
Holdings, PC Advisory Partners may, pursuant to Rule 13d-3 of the Act, be deemed
to be the beneficial owner of 16,498,709 shares of common stock and 634,566
shares of special voting stock, which constitutes approximately 26.26% of the
common stock outstanding and the 100% of the special voting stock outstanding.
PC Advisory Corp
----------------
Because of its position as the general partner of PC Advisory Partners, PC
Advisory Corp may, pursuant to Rule 13d-3 of the Act, be deemed to be the
beneficial owner of 16,498,709 shares of common stock and 634,566 shares of
special voting stock, which constitutes approximately 26.26% of the common stock
outstanding and 100% of the special voting stock outstanding.
JHS
---
Individually and because of his position as a control person of PC Advisory
Corp, JHS may, pursuant to Rule 13d-3 of the Act, be deemed to be the beneficial
owner of 16,501,194 shares of common stock and 634,566 shares of special voting
stock, which constitutes approximately 26.27% of the common stock outstanding
and 100% of the special voting stock outstanding.
<PAGE>
WJP
---
Individually and because of his position as a control person of PC Advisory
Corp, WJP may, pursuant to Rule 13d-3 of the Act, be deemed to be the beneficial
owner of 16,501,382 shares of common stock and 634,566 shares of special voting
stock, which constitutes approximately 26.27% of the common stock outstanding
and 100% of the special voting stock outstanding.
WEO
---
Individually, and because of his position as a control person of PC
Advisory Corp I, WEO may, pursuant to Rule 13d-3 of the Act, be deemed to be the
beneficial owner of 16,501,537 shares of common stock and 634,566 shares of
special voting stock, which constitutes approximately 26.27% of the common stock
outstanding and 100% of the special voting stock outstanding.
To the best of the knowledge of each of the Reporting Persons, other than
as set forth above, none of the persons named in Item 2 hereof is the beneficial
owner of any Shares.
(b)
Holdings
--------
Holdings has the sole power to vote and the sole power to dispose of all of
the 16,333,722 shares of common stock and 628,220 shares of special voting stock
owned directly by Holdings which constitutes approximately 26% of the shares of
common stock outstanding and 99% of the shares of special voting stock
outstanding.
PC Advisory Partners
--------------------
Individually, and because of its position as the sole general partner of
Holdings, PC Advisory Partners has the sole power to vote and the sole power to
dispose of all of the 16,498,709 shares of common stock and 634,566 shares of
special voting stock owned directly by PC Advisory Partners and Holdings, which
constitutes approximately 26.26% of the common stock outstanding and 100% of the
special voting stock outstanding.
PC Advisory Corp
----------------
Because of its positions as the general partner of PC Advisory Partners, PC
Advisory Corp may, pursuant to Rule 13d-3 of the Act, have the sole power to
vote and the sole power to dispose of all 16,498,709 shares of common stock and
634,566 shares of special voting stock, which constitutes approximately 26.26%
of the common stock outstanding and 100% of the special voting stock
outstanding.
<PAGE>
JHS
---
Individually JHS has the sole power to vote and the sole power to dispose
of 7,485 shares of common stock and because of his position as a control person
of PC Advisory Corp, JHS may, pursuant to Rule 13d-3 of the Act, have the shared
power to vote and shared power to dispose of 16,498,709 shares of common stock
and 634,566 shares of special voting stock, which, in the aggregate, constitutes
approximately 27% of the common stock outstanding and 100% of the special voting
stock outstanding.
WJP
---
Individually WJP has the sole power to vote and the sole power to dispose
of 2,673 shares of common stock and because of his position as a control person
of PC Advisory Corp, WJP may, pursuant to Rule 13d-3 of the Act, have the shared
power to vote and shared power to dispose of 16,498,709 shares of common stock
and 634,566 shares of special voting stock, which, in the aggregate, constitutes
approximately 27% of the common stock outstanding and 100% of the special voting
stock outstanding.
WEO
---
Individually WEO has the sole power to vote and the sole power to dispose
of 2,828 shares of common stock and because of his position as a control person
of PC Advisory Corp I, WEO may, pursuant to Rule 13d-3 of the Act, have the
shared power to vote and shared power to dispose of 16,498,709 shares of common
stock and 634,566 shares of special voting stock, which, in the aggregate,
constitutes approximately 27% of the common stock outstanding and 100% of the
special voting stock outstanding.
(c) During the past sixty (60) days, the Reporting Persons have not
transacted in the securities of the Issuer other than pursuant to the
Conversion.
Except as set forth in this paragraph (c), to the best of the knowledge of
each of the Reporting Persons, none of the persons named in response to
paragraph (a) has effected any transactions in shares during the past sixty (60)
days.
(d) Each of the Reporting Persons affirms that except as otherwise
described herein, no person other than such Reporting Person has the right to
receive or the power to direct the receipt of distributions with respect to, or
the proceeds from the sale of, the shares owned by such Reporting Person.
(e) It is inapplicable for the purposes herein to state the date on which
the Reporting Persons ceased to be the owners of more than five percent (5%) of
the outstanding shares.
<PAGE>
Item 6. Contracts, Arrangements, Understandings or
Relationships with Respect to Securities of the Issuer.
------------------------------------------------------
Holdings, PC Advisory Partners and the Issuer are parties to a Registration
Rights Agreement dated as of July 1, 1999, pursuant to which Holdings and PC
Advisory Partners have certain registration rights pertaining to the shares of
common stock and shares of special voting stock owned by them.
The forgoing description of the Registration Rights Agreement is qualified
in its entirety by reference to the texts of such document, which is filed as
Exhibit 3 hereto, and incorporated herein by reference.
Except as set forth herein and in the Exhibits filed herewith, there are no
other contracts, arrangements, understandings or relationships of the type
required to be disclosed in response to Item 6 of Schedule 13D of the Act with
respect to the Shares owned by the Reporting Persons.
Item 7. Material to be Filed as Exhibits.
--------------------------------
Exhibit Document Description
------- --------------------
A Agreement Pursuant to Rule 13d-1(b)(1)(iii)
1 Certificate of Incorporation
2 Conversion Agreement
3 Registration Rights Agreement
<PAGE>
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
DATED: July 12, 1999
/s/Phillip Gordon
------------------------------
Phillip Gordon
Attorney-in-Fact for:
PCMC INTERMEDIATE HOLDINGS, L.P. (1)
PC ADVISORY PARTNERS, L.P. (2)
PC ADVISORY CORP. (3)
JOHN H. SCULLY (4)
WILLIAM E. OBERNDORF (5)
WILLIAM J. PATTERSON (6)
(1) A Power of Attorney authorizing Phillip Gordon to act on
behalf of PCMC Intermediate Holdings, L.P. previously
has been filed with the Securities and Exchange
Commission.
(2) A Power of Attorney authorizing Phillip Gordon to act on
behalf of PC Advisory Partners, L.P. previously has been
filed with the Securities and Exchange Commission.
(3) A Power of Attorney authorizing Phillip Gordon to act on
behalf of PC Advisory Corp. previously has been filed
with the Securities and Exchange Commission.
(4) A Power of Attorney authorizing Phillip Gordon to act on
behalf of John H. Scully previously has been filed with
the Securities and Exchange Commission.
(5) A Power of Attorney authorizing Phillip Gordon to act on
behalf of William E. Oberndorf previously has been filed
with the Securities and Exchange Commission.
(6) A Power of Attorney authorizing Phillip Gordon to act on
behalf of William J. Patterson previously has been filed
with the Securities and Exchange Commission.
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Page
Exhibit Document Description Number
- ------- -------------------- ------
<S> <C> <C>
A Agreement Pursuant to Rule 13d-1(f)(1)(iii)
1 Certificate of Incorporation
2 Conversion Agreement
3 Registration Rights Agreement
</TABLE>
<PAGE>
Exhibit A
Pursuant to Rule 13d-1(f)(1)(iii) of Regulation 13D-G of the General Rules
and Regulations of the Securities and Exchange Commission under the Securities
Exchange Act of 1934, as amended, the undersigned agrees that the statement to
which this Exhibit is attached is filed on behalf of each of them in the
capacities set forth below.
DATED: July 12, 1999
/s/ Phillip Gordon
------------------------------
Phillip Gordon
Attorney-in-Fact for:
PCMC INTERMEDIATE HOLDINGS, L.P. (1)
PC ADVISORY PARTNERS, L.P. (2)
PC ADVISORY CORP. I(3)
JOHN H. SCULLY (4)
WILLIAM E. OBERNDORF (5)
WILLIAM J. PATTERSON (6)
(1) A Power of Attorney authorizing Phillip Gordon to act on
behalf of PCMC Intermediate Holdings, L.P. previously has
been filed with the Securities and Exchange Commission.
(2) A Power of Attorney authorizing Phillip Gordon to act on
behalf of PC Advisory Partners, L.P. previously has been
filed with the Securities and Exchange Commission.
(3) A Power of Attorney authorizing Phillip Gordon to act on
behalf of PC Advisory Corp. I previously has been filed with
the Securities and Exchange Commission.
<PAGE>
(4) A Power of Attorney authorizing Phillip Gordon to act on
behalf of John H. Scully previously has been filed with the
Securities and Exchange Commission.
(5) A Power of Attorney authorizing Phillip Gordon to act on
behalf of William E. Oberndorf previously has been filed with
the Securities and Exchange Commission.
(6) A Power of Attorney authorizing Phillip Gordon to act on
behalf of William J. Patterson previously has been filed with
the Securities and Exchange Commission.
<PAGE>
EXHIBIT 1
CERTIFICATE OF INCORPORATION
OF
PLUM CREEK TIMBER COMPANY, INC.
1. FIRST: The name of the corporation is: Plum Creek Timber Company, Inc.
(hereinafter, the "Corporation").
2. SECOND: The address of the registered office of the Corporation in the
State of Delaware is The Corporation Trust Company, 1209 Orange Street, in
the City of Wilmington, County of New Castle. The name of its registered
agent at such address is The Corporation Trust Company.
3. THIRD: The nature of the business or purposes to be conducted or promoted
is to engage in any lawful act or activity for which corporations may be
organized under the General Corporation Law of the State of Delaware (the
"GCL").
4. FOURTH: A. The total number of shares of all classes of capital stock that
the Corporation shall have authority to issue is 525,634,567 shares of
which (i) 300,000,000 shares shall be shares of Common Stock, par value
$.01 per share (the "Common Stock"), and 634,566 shares shall be shares of
Special Voting Common Stock, par value $.01 per share (the "Special Voting
Stock") (the Common Stock and the Special Voting Stock being collectively
referred to herein as the "Common Equity"), (ii) 150,000,001 shares shall
be shares of Excess Stock, par value $.01 per share (the "Excess Stock"),
and (iii) 75,000,000 shares shall be shares of Preferred Stock, par value
$.01 per share (the "Preferred Stock").
B. The number of authorized shares of any class or classes of capital stock
may be increased or decreased (but not below the number of shares
thereof then outstanding) by the affirmative vote of the holders of a
majority of the total voting power of the shares of capital stock
entitled to vote thereon, voting together as a single class, and without
the vote of the holders of such class or each such class.
<PAGE>
C. The following is a statement of the powers, preferences, and relative
participating, optional or other special rights and qualifications,
limitations and restrictions of the Common Stock and Special Voting
Stock of the Corporation:
1. Except as otherwise set forth below in this Article FOURTH, the
powers, preferences and relative participating, optional or other special rights
and qualifications, limitations or restrictions of the Common Stock and Special
Voting Stock shall be identical in all respects.
2. Subject to the rights of the holders of Preferred Stock, and subject
to any other provisions of this Certificate of Incorporation, holders of Common
Stock shall be entitled to receive such dividends and other distributions in
cash, stock or property of the Corporation as may be declared thereon by the
Board of Directors of the Corporation from time to time out of assets or funds
of the Corporation legally available therefor. If any dividend or other
distribution in cash or other property is paid with respect to the Common Stock
a like dividend or other distribution shall be paid with respect to each share
of Special Voting Stock. Upon any reclassification, subdivision or combination
of Common Stock or upon payment of any in-kind dividend of additional shares of
Common Stock with respect to the Common Stock, the Special Voting Stock shall be
similarly reclassified, subdivided or combined or the Special Voting Stock will
receive the same in-kind dividend, provided, however, that such in-kind divided
shall consist of additional shares of Special Voting Stock.
3. (a) At every meeting of the stockholders of the Corporation, every
holder of Common Equity (voting together as a single class, except as set forth
below) shall be entitled to one vote in person or by proxy for each share of
Common Stock or Special Voting Stock standing in such holder's name on the
transfer books of the Corporation, provided, however, that should any Change in
Law (as defined in Article ELEVENTH) require a reduction in the number of votes
represented by the Special Voting Stock, the number of votes to which a holder
of Special Voting Stock shall, without any further action on the part of the
Corporation or the stockholders, be reduced to the extent reasonably necessary
or appropriate to maintain the Corporation's status as a REIT (as defined in
Article ELEVENTH), such reduction to be deemed to have been made as of the
effective date of such Change in Law. Except as may be otherwise required by
this Article FOURTH or applicable law, the holders of Common Stock and Special
Voting Stock shall vote together as a single class, subject to any voting rights
which may be granted to holders of Preferred Stock or Special
<PAGE>
Voting Stock, on all matters submitted to a vote of the holders of Common
Equity.
(b) Subject to any rights of the holders of Preferred Stock and
or Special Voting Stock set forth in clause (c) hereof, the provisions
of this Certificate of Incorporation shall not be modified, revised,
altered or amended, repealed or rescinded in whole or in part, without
the approval of a majority (or such greater percentage as is required
by Article TENTH of this Certificate of Incorporation) of the votes
entitled to be cast by the holders of the Common Stock and the Special
Voting Stock, voting together as a single class or, in the case of
amendments or changes to this Certificate of Incorporation to be
effected by a merger, without the approval of the agreement of merger
by a majority of the votes entitled to be cast by the holders of the
Common Stock and the Special Voting Stock, voting together as a single
class; provided, however, that with respect to any proposed amendment
of this Certificate of Incorporation (including, without limitation,
an amendment to be effected by a merger) which would increase or
decrease the par value of the shares of Common Stock or Special Voting
Stock or alter or change the powers, preferences or special rights of
the shares of Common Stock or Special Voting Stock so as to affect
them adversely, the approval of a majority of the votes entitled to be
cast by the holders of the shares affected by the proposed amendment,
voting separately as a class, shall be obtained in addition to the
approval of a majority of the votes entitled to be cast by the holders
of the Common Stock and the Special Voting Stock voting together as a
single class as hereinbefore provided. Any increase in the authorized
number of shares of any class or classes of stock of the Corporation
or creation, authorization or issuance of any additional class or
series of stock or any securities convertible into, or warrants,
options or similar rights to purchase, acquire or receive, shares of
any such class or classes of stock shall be deemed not to affect
adversely the powers, preferences or special rights of the shares of
Common Stock or Special Voting Stock.
(1) So long as the Principals (as defined in Article ELEVENTH)
Beneficially Own (as defined in Article ELEVENTH) at least five
million shares of Common Stock and/or Special Voting Stock, the
Corporation shall not enter into any Extraordinary Transaction (as
defined in Article ELEVENTH), without (in addition to any vote of the
holders of Common Equity required under this Certificate of
Incorporation, the GCL or any other applicable law) the approval of
the holders of a majority of the outstanding
<PAGE>
shares of Special Voting Stock, voting together as a separate class, provided,
however, that the Board of Directors of the Corporation, in connection with the
issuance of units of limited partnership of Plum Creek Acquisition Partners,
L.P., may issue shares of Preferred Stock with the right to vote together with
the Special Voting Stock, as a single class, with respect to any or all
Extraordinary Transactions.
4. In the event of any dissolution, liquidation or winding up of
the affairs of the Corporation, whether voluntary or involuntary, after payment
in full of the amounts required to be paid to the holders of Preferred Stock,
the remaining assets and funds of the Corporation shall be distributed pro rata
to the holders of Common Equity based on the aggregate number of shares of
Common Equity outstanding. For the purposes of this section C.4, the voluntary
sale, conveyance, lease, exchange or transfer (for cash, shares of stock,
securities or other consideration) of all or substantially all of the assets of
the Corporation or a consolidation or merger of the Corporation with one or more
other corporations (whether or not the Corporation is the corporation surviving
such consolidation or merger) shall not be deemed to be a liquidation,
dissolution or winding up, voluntary or involuntary.
5. In the event that any shares of Common Equity are converted
into or exchanged for cash, securities or other property in connection with any
consolidation of the Corporation with one or more other Persons (as hereinafter
defined) or a merger of the Corporation with another Person, unless immediately
following such event, and resulting solely from the ownership of the securities
issued in connection therewith, a majority of the total voting power of the
surviving Person in such consolidation or merger is held by Persons that were
stockholders of the Corporation immediately prior to such event, or unless the
holders of Common Equity unanimously vote otherwise, each holder of a share of
Common Stock shall be entitled to receive with respect to such share at least
the same kind and amount of shares of stock and other securities and property
(including cash) receivable upon such consolidation or merger by each holder of
a share of Special Voting Stock, and each holder of a share of Special Voting
Stock shall be entitled to receive with respect to such share the same kind and
amount of shares of stock and other securities and property (including cash)
receivable upon such consolidation or merger by a holder of a share of Common
Stock.
6. (a) Any record holder of a share of Special Voting Stock may
at any time convert such share into one share of Common Stock by surrendering
the certificate for such share, accompanied by any required tax transfer stamps
and by a written notice by such record holder to the Corporation stating that
such record holder desires to convert such share of Special Voting Stock into a
share of Common Stock and requesting that the Corporation issue such Common
Stock to the Person named therein. To the extent permitted by law, such
<PAGE>
voluntary conversion shall be deemed to have been effected at the close of
business on the date of such surrender.
(1) (i) Except as provided in paragraph (ii) below, shares of
Special Voting Stock shall automatically convert into shares of Common Stock
immediately prior to the Transfer (as hereinafter defined) of such shares of
Special Voting Stock.
(1) Shares of Special Voting Stock shall not automatically
convert to Common Stock if transferred to a Permitted Transferee.
(2) Immediately upon any such automatic conversion of the
Special Voting Stock, the rights of the holder of such share(s)
of Special Voting Stock shall cease and such holder shall be
treated for all purposes as having become the record owner of the
Common Stock issuable upon such conversion; provided, however,
that such holder shall be entitled to receive when paid any
dividends declared on the Special Voting Stock as of a record
date preceding the time of such conversion and unpaid as of the
time of such conversion.
(2) A holder of Special Voting Stock may (i) Transfer such
Special Voting Stock without automatic conversion into Common Stock only in
connection with a Transfer that meets the qualifications of section C.6(b)(ii)
above and section C.6(d) below, and under no other circumstances, or (ii)
convert such share into shares of Common Stock as provided in section C.6(a)
above. No one other than that Person in whose name the Special Voting Stock is
originally registered on the stock ledger of the Corporation, or transferees or
successive transferees who receive the Special Voting Stock in connection with
a Transfer that meets the qualifications set forth in section C.6(b)(ii) above
and section C.6(d) below, shall by virtue of the acquisition of the certificate
for the Special Voting Stock have the status of an owner or holder of such
Special Voting Stock or be recognized as such by the Corporation or be otherwise
entitled to enjoy for its, his or her own benefit the special rights and powers
of a holder of the Special Voting Stock.
A holder of Special Voting Stock may at any and all times Transfer to
any Person the Common Stock issuable upon conversion of such Special Voting
Stock, except where such Transfer is restricted by applicable law.
<PAGE>
(b) The shares of Special Voting Stock shall be transferred on
the books of the Corporation and a new certificate issued therefor, upon
presentation at the office of the Secretary of the Corporation (or at such
additional place or places as may from time to time be designated by the
Secretary of the Corporation) of the certificate for such share, in proper form
for transfer and accompanied by all requisite stock transfer tax stamps.
(3) The certificates for the shares of Special Voting Stock
shall bear a legend on the face thereof reading as follows:
"The Special Voting Stock of Plum Creek Timber Company, Inc. (the
"Corporation") represented by this certificate may not be Transferred (as
defined in the Certificate of Incorporation of this Corporation) to any person
or entity unless such Transfer meets the qualifications set forth in section
C.6(b)(ii) and (d) of Article FOURTH of the Certificate of Incorporation of this
Corporation and no person who receives this share in connection with a Transfer
that does not meet the qualifications prescribed by sections C.6(b)(ii) and (d)
of said Article FOURTH is entitled to own or to be registered as the record
holder of these shares of Special Voting Stock and such Special Voting Stock
will be automatically converted into Common Stock upon any such purported
transfer. The record holder of this certificate may at any time convert these
shares of Special Voting Stock into Common Stock, subject to compliance with
Section C.6(a) of Article FOURTH of the Certificate of Incorporation of this
Corporation. Each holder of this certificate, by accepting the same, accepts and
agrees to all of the foregoing. The Corporation will furnish without charge, to
each stockholder who so requests, a copy of the Certificate of Incorporation of
the Corporation, containing, among other things, a statement of the powers,
designations, preferences and relative, participating, optional or other special
rights of each class of stock or series thereof that the Corporation is
authorized to issue and the qualifications, limitations or restrictions of such
preferences and/or rights. Any such request shall be addressed to the Secretary
of the Corporation."
(4) For so long as shares of Special Voting Stock are
outstanding, the Corporation shall at all times reserve and keep available, out
of its authorized but unissued Common Stock, the number of shares of Common
Stock into which the Special Voting Stock shall then be convertible.
<PAGE>
(5) In the event that the Principals cease to Beneficially Own at
least 5 million shares of Common Stock and/or Special Voting Stock, all of the
outstanding shares of Special Voting Stock, without any further action on the
part of the Corporation or the stockholders, shall convert into an equal number
of shares of Common Stock, and each outstanding certificate representing Special
Voting Stock shall thereafter represent the right to receive an equal number of
shares of Common Stock.
7. All rights to vote and all voting power (including, without
limitation thereto, the right to elect directors) shall be vested exclusively in
the holders of Common Equity, voting together as a single class, except as
otherwise expressly provided in this Certificate of Incorporation, in a
Preferred Stock Designation (as defined in section D of this Article FOURTH) or
as otherwise expressly required by applicable law.
D. The Board of Directors is hereby authorized to provide by resolution
or resolutions from time to time for the issuance of shares of
Preferred Stock in one or more series and, by filing a certificate
pursuant to the GCL (hereinafter, along with any similar designation
relating to any other series of Preferred Stock which may hereafter
be authorized, referred to as a "Preferred Stock Designation," each
of which shall be part of this Certificate of Incorporation), to
establish from time to time the number of shares to be included in
each such series, and to fix the designation, powers (including
voting powers), preferences and rights of the shares of each such
series and the qualifications, limitations and restrictions thereof.
2. Restrictions on Ownership and Transfer of Equity Stock.
1. (a) Limitation on Beneficial Ownership.
(i) Except as provided in section E.3 of this Article FOURTH, no
person shall Beneficially Own (as hereinafter defined) shares of Equity
Stock (as hereinafter defined) in excess of the Ownership Limit (as
hereinafter defined).
(1) Except as provided in section E.3 of this Article FOURTH, any
purported Transfer that, if effective, would result in any Person
<PAGE>
Beneficially Owning shares of Equity Stock in excess of the Ownership
Limit shall be void ab initio as to the Transfer of that number of shares of
Equity Stock which would cause the transferee to Beneficially Own Equity Stock
in excess of the Ownership Limit, and the intended transferee shall acquire no
rights in such shares of Equity Stock.
(2) Transfers Resulting in "Closely Held" Status. Any purported
Transfer of shares of Equity Stock that, if effective, would result in the
Corporation being "closely held" within the meaning of section 856(h) of the
Code (as hereinafter defined) shall be void ab initio as to the Transfer of that
number of shares of Equity Stock that would cause the Corporation to be "closely
held" within the meaning of Section 856(h) of the Code, and the intended
transferee shall acquire no rights in such shares of Equity Stock.
(3) Transfers Resulting in Ownership by fewer than 100 Persons.
Any purported Transfer of shares of Equity Stock that, if effective, would
result in shares of Equity Stock being beneficially owned by fewer than 100
persons within the meaning of Section 856(a)(5) of the Code shall be void ab
initio and the intended transferee shall acquire no rights in such shares of
Equity Stock.
(4) Transfers Resulting in Corporation Failing to Qualify as a
"Domestically Controlled REIT". Any purported Transfer of shares of Equity
Stock that, if effective, would result in the failure of the Corporation to
qualify as a "domestically controlled REIT" within the meaning of Section
897(h)(4)(B) of the Code shall be void ab initio and the intended transferee
shall acquire no rights in the shares of Equity Stock which are the subject of
such purported Transfer.
(5) Transfers Resulting in Corporation Failing to Qualify as a
REIT. Any purported Transfer of shares of Equity Stock that, if effective, would
cause the Corporation to fail to qualify as a REIT (as hereinafter defined)
shall be void ab initio and the intended transferee shall acquire no rights in
the shares of Equity Stock which are the subject of such purported Transfer.
2. Beneficial Owners Required to Provide Information.
(a) Annual Disclosure. Every Beneficial Owner of more than 3%, or
such lower percentages as are then required pursuant to regulations under the
Code, of the outstanding shares of any class or series of Equity Stock of the
Corporation shall, within 30 days after January 1 of each year, provide to the
Corporation a written statement or affidavit stating the name and address of
such Beneficial Owner, the number of shares of Equity Stock Beneficially Owned
by such Beneficial Owner and a description of how such shares are held.
<PAGE>
Each such Beneficial Owner shall provide to the Corporation such additional
information as the Corporation may request in order to determine the effect, if
any, of such Beneficial Ownership on the Corporation's status as a REIT and to
ensure compliance with the Ownership Limit.
(1) Disclosure at the Request of the Corporation. Each Person who
is a Beneficial Owner of shares of Equity Stock and each Person (including the
stockholder of record) who is holding shares of Equity Stock for a Beneficial
Owner shall provide to the Corporation a written statement or affidavit stating
such information as the Corporation may request in order to determine the
Corporation's status as a REIT and to ensure compliance with
11
the Ownership Limit. In addition, the Excluded Holder shall promptly notify the
Corporation upon any transfer of Equity Stock.
3. Waiver of the Ownership Limit. The Board of Directors, upon receipt
of a ruling from the Internal Revenue Service or an opinion of counsel or other
evidence or undertak ings acceptable to it, may, in its sole discretion, waive
the application of the Ownership Limit to a Person subject to such limit,
provided that (A) the Board of Directors obtains such representations and
undertakings from such Person as are reasonably necessary to ascertain that such
Person's Beneficial Ownership or Constructive Ownership of shares of Equity
Stock will now and in the future (i) not result in the Corporation being
"closely held" within the meaning of Section 856(h) of the Code, (ii) not result
in the shares of Equity Stock of the Corporation being Beneficially Owned by
fewer than 100 persons within the meaning of Section 856(a)(5) of the Code,
(iii) not result in the Corporation failing to qualify as a "domestically
controlled REIT" within the meaning of Section 897(h)(4)(B) of the Code and (iv)
will not otherwise result in the Corporation failing to qualify as a REIT, and
(B) such Person agrees in writing that any violation or attempted violation of
any other limitations, restrictions and conditions that the Board of Directors
may in its sole discretion impose at the time of such waiver with respect to
such Person will result, as of the time of such violation even if discovered
after such violation, in the conversion of such shares in excess of the original
limit applicable to such Person into shares of Excess Stock pursuant to section
F.1 of this Article FOURTH.
4. Settlement. Notwithstanding any provision contained herein to the
contrary, nothing in this Certificate of Incorporation shall preclude the
settlement of any transac tion entered into through the facilities of the New
<PAGE>
York Stock Exchange or any other national securities exchange or the NASDAQ
Stock Market, Inc. or any other automated quotation system. In no event shall
the existence or application of the preceding sentence have the effect of
deterring or preventing the conversion of Equity Stock into Excess Stock as
contemplated herein.
E. Excess Stock
5. (a) Transfers in Excess of Ownership Limit. If, notwithstanding the
other provisions contained in this Article FOURTH, there is a purported Transfer
or Non-Transfer Event (as hereinafter defined) such that any Person would
Beneficially Own shares of Equity Stock in excess of the Ownership Limit, then,
(i) except as otherwise provided in section E.3 of this Article FOURTH, the
Purported Record Transferee (as hereinafter defined) (and the Purported
Beneficial Transferee (as hereinafter defined), if different) shall acquire no
right or interest (or, in the case of a Non-Transfer Event, the Person holding
record title to the shares of Equity Stock Beneficially Owned by such Beneficial
Owner shall cease to own any right or interest) in such number of shares of
Equity Stock which would cause such Beneficial Owner to Beneficially Own shares
of Equity Stock in excess of the Ownership Limit, (ii) such number of shares
(rounded up to the nearest whole share) of Equity Stock in excess of the
Ownership Limit shall be automatically converted into an equal number of shares
of Excess Stock and transferred to a Trust (as hereinafter defined) in
accordance with section F.4 of this Article FOURTH and (iii) such Purported
Record Transferee (and such Purported Beneficial Transferee, if different) or,
in the case of a Non-Transfer Event, the Person who, immediately prior to such
automatic conver sion, was the holder of record title to the shares of Equity
Stock automatically converted, shall submit the certificates representing such
number of shares of Equity Stock to the Corporation, accompanied by all
requisite and duly executed assignments
12
of Transfer thereof, for registration in the name of the Trustee (as hereinafter
defined) of the Trust. Such conversion into Excess Stock and Transfer to a Trust
shall be effective as of the close of trading on the Trading Day (as hereinafter
defined) prior to the date of the purported Transfer or Non-Transfer Event, as
the case may be, even though the certificates representing the shares of Equity
Stock so converted may be submitted to the Corporation at a later date.
(1) Other Prohibited Transfers. If, notwithstanding the other
provisions contained in this Article FOURTH, there is a purported Transfer
<PAGE>
or Non-Transfer Event that, if effective, would (i) result in the Corporation
being "closely held" within the meaning of Section 856(h) of the Code, (ii)
result in the shares of Equity Stock being beneficially owned by fewer than 100
persons within the meaning of Section 856(a)(5) of the Code, (iii) result in the
Corpora tion failing to qualify as a "domestically controlled REIT" within the
meaning of Section 897(h)(4)(B) of the Code, or (iv) otherwise cause the
Corporation to fail to qualify as a REIT, then (x) the Purported Record
Transferee (and the Purported Beneficial Transferee, if different) shall acquire
no right or interest, and, in the case of a Non-Transfer Event, the Person
holding record title to the shares of Equity Stock Beneficially Owned by the
Person whose Beneficial Ownership of Equity Stock would result in any of the
events referred to in clauses (i) - (v) above shall cease to own any right or
interest, in such number of shares of Equity Stock the ownership of which would
(A) result in the Corporation being "closely held" within the meaning of Section
856(h) of the Code, (B) result in the shares of Equity Stock being beneficially
owned by fewer than 100 persons within the meaning of Section 856(a)(5) of the
Code, (C) result in the Corpora tion failing to qualify as a "domestically
controlled REIT" within the meaning of Section 897(h)(4)(B) of the Code, or (D)
otherwise cause the Corporation to fail to qualify as a REIT, (y) such number of
shares of Equity Stock (rounded up to the nearest whole share) shall be automati
cally converted into an equal number of shares of Excess Stock and transferred
to a Trust in accordance with section F.4 of this Article FOURTH and (z) the
Purported Record Transferee (and the Purported Beneficial Transferee, if
different) or, in the case of a Non-Transfer Event, the Person who, immediately
prior to such automatic conversion, was the holder of record title to the shares
of Equity Stock automatically converted, shall submit such number of shares of
Equity Stock to the Corporation, accompanied by all requisite and duly executed
assignments of Transfer thereof, for registration in the name of the Trustee of
the Trust. Such conversion into Excess Stock and Transfer to a Trust shall be
effective as of the close of trading on the Trading Day prior to the date of the
purported Transfer or Non-Transfer Event, as the case may be, even though the
certificates representing the shares of Equity Stock so converted may be
submitted to the Corporation at a later date.
(2) Conversion to Excess Stock. Upon the occurrence of such a
conversion of shares of Equity Stock into an equal number of shares of Excess
Stock, such shares of Equity Stock shall be automatically retired and canceled,
without any action required by the Board of Directors of the Corporation, and
shall thereupon be restored to the status of authorized but unissued shares of
the particular class or series of Equity Stock from which such Excess Stock was
converted and may be reissued by the Corporation as that particular class or
series of Equity Stock.
6. Remedies for Breach. If the Corporation, or its designees, shall at
any time determine in good faith that a Transfer has taken place in
<PAGE>
violation of section E.1 of this Article FOURTH or that a Person intends to
acquire or has attempted to acquire Beneficial Ownership or Constructive
Ownership of any shares of Equity Stock in violation of section E.1 of this
Article FOURTH, the Corporation shall take such action as it deems advisable to
refuse to give effect to or to prevent such Transfer or acquisition, including,
but not limited to, refusing to give effect to such Transfer on the stock
transfer books of the Corporation or instituting proceedings to enjoin such
Transfer or acquisition, but the failure to take any such action shall not
affect the automatic conversion of shares of Equity Stock into Excess Stock and
their Transfer to a Trust in accordance with section F.4.
7. Notice of Restricted Transfer. Any Person who acquires or attempts
to acquire shares of Equity Stock in violation of section E.1 of this Article
FOURTH, or any Person who owns shares of Equity Stock that were converted into
shares of Excess Stock and transferred to a Trust pursuant to section F.4 of
this Article FOURTH, shall immediately give written notice to the Corporation of
such event and shall provide to the Corporation such other information as the
Corporation may request in order to determine the effect, if any, of such
Transfer or Non-Transfer Event, as the case may be, on the Corporation's status
as a REIT.
8. Transfer in Trust. Upon any purported Transfer or Non-Transfer
Event that results in Excess Stock pursuant to section F.1 of this Article
FOURTH, (i) the Corporation shall create, or cause to be created, a Trust, and
shall designate a Trustee and name a Beneficiary (as hereinafter defined)
thereof and (ii) such Excess Stock shall be automatically transferred to such
Trust to be held for the exclusive benefit of the Beneficiary. Any conversion of
shares of Equity Stock into shares of Excess Stock and transfer to a Trust shall
be effective as of the close of trading on the Trading Day prior to the date of
the purported Transfer or Non-Transfer Event that results in the conversion.
Shares of Excess Stock so held in trust shall be issued and outstanding shares
of stock of the Corporation.
9. Dividend Rights. Each share of Excess Stock shall be entitled to
the same dividends and distributions (as to both timing and amount) as may be
declared by the Board of Directors of the Corporation with respect to each share
of Equity Stock which was converted into such Excess Stock. The Trustee, as
record holder of the shares of Excess Stock, shall be entitled to
<PAGE>
receive all dividends and distributions and shall hold all such dividends or
distributions in trust for the benefit of the Beneficiary. The Prohibited Owner
(as hereinafter defined) with respect to such shares of Excess Stock shall repay
to the Trust the amount of any dividends or distributions received by it (i)
that are attributable to any shares of Equity Stock that have been converted
into shares of Excess Stock and (ii) the record date of which was on or after
the date that such shares were converted into shares of Excess Stock. The
Corporation shall take all measures that it determines are reasonably necessary
to recover the amount of any such dividend or distribution paid to a Prohibited
Owner, including, if necessary, withholding any portion of future dividends or
distributions payable on shares of Equity Stock Beneficially Owned by the Person
who, but for the provisions of this Article FOURTH, would Constructively Own or
Beneficially Own the shares of Equity Stock that were converted into shares of
Excess Stock; and, as soon as reason ably practicable following the
Corporation's receipt or withholding thereof, shall pay over to the Trust for
the benefit of the Beneficiary the dividends so received or withheld, as the
case may be.
10. Liquidation of the Corporation. In the event of any voluntary or
involun tary liquidation of, or winding up of, or any distribution of the assets
of, the Corporation, each holder of shares of Excess Stock shall be entitled to
receive, ratably with each other holder of shares of the same class and series
of Equity Stock which was converted into such Excess Stock, that portion of the
assets of the Corporation that is available for distribution to the holders of
the same class and series of Equity Stock which was converted into such Excess
Stock. The Trust shall distribute to the Prohibited Owner the amounts
14
received upon such liquidation, dissolution, or winding up, or distribution;
provided, however, that the Prohibited Owner shall not be entitled to receive
amounts in excess of, in the case of a purported Transfer in which the
Prohibited Owner gave value for shares of Equity Stock and which Transfer
resulted in the conversion of such shares of Equity Stock into shares of Excess
Stock, the product of (x) the price per share, if any, such Prohibited Owner
paid for the shares of Equity Stock and (y) the number of shares of Equity Stock
which were so converted into Excess Stock, and, in the case of a Non-Transfer
Event or purported Transfer in which the Prohibited Owner did not give value for
such shares (e.g., if the shares were received through a gift or devise) and
which Non-Transfer Event or purported Transfer, as the case may be, resulted in
the conversion of the shares into shares of Excess Stock, the product of (x) the
<PAGE>
price per share equal to the Market Price (as hereinafter defined) on the date
of such Non-Transfer Event or purported Transfer and (y) the number of shares of
Equity Stock which were so converted into Excess Stock. Any remaining amount in
such Trust shall be distributed to the Beneficiary.
11. Voting Rights. Each share of Excess Stock shall entitle the holder
to no voting rights other than those voting rights which accompany a class of
capital stock under Delaware law. The Trustee, as record holder of the Excess
Stock, shall be entitled to vote all shares of Excess Stock. Any vote by a
Prohibited Owner as a purported holder of shares of Equity Stock prior to the
discovery by the Corporation that such shares of Equity Stock have been
converted into shares of Excess Stock shall, subject to applicable law, be
rescinded and shall be void ab initio with respect to such shares of Excess
Stock.
12. Restrictions on Transfer. (a) As soon as practicable after the
Trustee acquires Excess Stock and complies with the last sentence of this
Section 8(a), but in an orderly fashion so as not to materially adversely affect
the trading price of the same class and series of Equity Stock from which such
Excess Stock was converted, the Trustee shall designate one or more Persons as
Permitted Transferees (as hereinafter defined) and sell to such Permitted
Transferees any shares of Excess Stock held by the Trustee; provided, however,
that (i) any Permitted Transferee so designated purchases for valuable
consideration (whether in a public or private sale) the shares of Excess Stock
and (ii) any Permitted Transferee so designated may acquire the shares of the
same class and series of Equity Stock from which such Excess Stock was converted
without violating any of the restrictions set forth in section E.1 of this
Article FOURTH and without such acquisition resulting in the conversion of such
shares of Equity Stock into shares of Excess Stock and the Transfer of such
shares to a Trust pursuant to sections F.1 and F.4 of this Article FOURTH. The
Trustee shall have the exclusive and absolute right to designate Permitted
Transferees of any and all shares of Excess Stock. Prior to any Transfer by the
Trustee of shares of Excess Stock to a Permitted Transferee, the Trustee shall
give not less than five Trading Days prior written notice to the Corporation of
such intended Transfer and the Corporation must have waived in writing its
purchase rights under section F.10 of this Article FOURTH if such intended
Transfer would occur during the 90-day period referred to therein.
(1) Upon the designation by the Trustee of a Permitted Transferee
in accordance with the provisions of this section F.8, the Trustee shall cause
to be Transferred to the Permitted Transferee shares of Excess Stock acquired by
the Trustee pursuant to section F.4 of this Article FOURTH. Upon such Transfer
of shares of Excess Stock to the Permitted Transferee, such shares of Excess
Stock shall be automatically converted into an equal number of shares of Equity
Stock of the same class and series from which
<PAGE>
such Excess Stock was converted. Upon the occurrence of such a conversion of
shares of Excess Stock into an equal number of shares of Equity Stock, such
shares of Excess Stock shall be automatically retired and canceled, without any
action required by the Board of Directors of the Corporation, and shall
thereupon be restored to the status of authorized but unissued shares of Excess
Stock and may be reissued by the Corporation as Excess Stock. The Trustee shall
(i) cause to be recorded on the stock transfer books of the Corporation that the
Permitted Transferee is the holder of record of such number of shares of Equity
Stock, and (ii) distribute to the Beneficiary any and all amounts held with
respect to such shares of Excess Stock after making payment to the Prohibited
Owner pursuant to section F.9 of this Article FOURTH.
(2) If the Transfer of shares of Excess Stock to a purported
Permitted Transferee would or does violate any of the transfer restrictions set
forth in Section E.1 of this Article FOURTH, such Transfer shall be void ab
initio as to that number of shares of Excess Stock that cause the violation of
any such restriction when such shares are converted into shares of Equity Stock
(as described in section 8(b) above) and the purported Permitted Transferee
shall be deemed to be a Prohibited Owner and shall acquire no rights in such
shares of Excess Stock or Equity Stock. Such shares of Equity Stock shall be
automatically converted into Excess Stock and transferred to the Trust from
which they were originally Transferred. Such conversion and transfer to the
Trust shall be effective as of the close of trading on the Trading Day prior to
the date of the Transfer to the purported Permitted Transferee and the
provisions of this Article FOURTH shall apply to such shares, including, without
limitation, the provisions of sections F.8 through F.10 with respect to any
future transfer of such shares by the Trust.
13. Any Prohibited Owner shall be entitled (following acquisition of
the shares of Excess Stock and subsequent designation of and sale of Excess
Stock to a Permitted Transferee in accordance with section F.8 of this Article
FOURTH or following the acceptance of the offer to purchase such shares in
accordance with section F.10 of this Article FOURTH) to receive from the Trustee
following the sale or other disposition of such shares of Excess Stock the
lesser of (a)(i) in the case of a purported Transfer in which the Prohibited
Owner gave value for shares of Equity Stock and which Transfer resulted in the
conversion of such shares into shares of Excess Stock, the product of (x) the
price per share, if any, such Prohibited Owner paid for the shares of Equity
Stock and (y) the number of shares of Equity Stock which were so converted into
<PAGE>
Excess Stock and (ii) in the case of a Non-Transfer Event or purported Transfer
in which the Prohibited Owner did not give value for such shares (e.g., if the
shares were received through a gift or devise) and which Non-Transfer Event or
purported Transfer, as the case may be, resulted in the conversion of such
shares into shares of Excess Stock, the product of (x) the price per share equal
to the Market Price on the date of such Non-Transfer Event or purported Transfer
and (y) the number of shares of Equity Stock which were so converted into Excess
Stock or (b) the proceeds received by the Trustee from the sale or other
disposition of such shares of Excess Stock in accordance with section F.8 or
section F.10 of this Article FOURTH. Any amounts received by the Trustee in
respect of such shares of Excess Stock which are in excess of such amounts to be
paid to the Prohibited Owner pursuant to this section F.9 shall be distributed
to the Beneficiary in accordance with the provisions of section F.8 of this
Article FOURTH. The Trustee and the Trust shall not be liable for, and each
Beneficiary and Prohibited Owner shall be deemed to have irrevocably waived, any
claim by a Beneficiary or Prohibited Owner arising out of the disposition of
shares of Excess Stock, except for claims arising out of the gross negligence or
willful misconduct of, or any failure to make payments in accordance with this
section F of this Article FOURTH by, such Trustee.
14. Purchase Right in Stock Transferred to Trustee. Shares of Excess
Stock shall be deemed to have been offered for sale to the Corporation, or its
designee, at a price per share equal to the lesser of (a) the price per share in
the transaction that created such shares of Excess Stock (or, in the case of a
Non-Transfer Event or Transfer in which the Prohibited Owner did not give value
for the shares (e.g., if the shares were received through a gift or devise), the
Market Price on the date of such Non Transfer Event or Transfer in which the
Prohibited Owner did not give value for the shares) or (b) the Market Price on
the date the Corporation, or its designee, accepts such offer. The Corporation
shall have the right to accept such offer for a period of 90 days following the
later of (x) the date of the Non-Transfer Event or purported Transfer which
results in such shares of Excess Stock or (y) the date the Board of Directors of
the Corporation first determined that a Transfer or Non-Transfer Event resulting
in shares of Excess Stock has occurred, if the Corporation does not receive a
notice of such Transfer or Non-Transfer Event pursuant to section F.3 of this
Article FOURTH.
3. Remedies Not Limited. Except as set forth in section E.4 of this
Article FOURTH, nothing contained in this Article FOURTH shall limit
the authority of the Corporation to take such other action
<PAGE>
as it deems necessary or advisable to protect the Corporation and the
interests of its stockholders by preservation of the Corporation's
status as a REIT and to ensure compliance with the Ownership Limit.
4. Ambiguity. In the case of an ambiguity in the application of any of
the provisions of this Article FOURTH, including any definition
contained in Article ELEVENTH hereof, the Board of Directors shall
have the power to determine the application of the provisions of this
Article FOURTH with respect to any situation based on the facts known
to it and any such determination made in good faith shall be binding
on all stockholders of the Corporation.
5. Legend. Each certificate for shares of Equity Stock shall bear
the following legend:
"The shares of Plum Creek Timber Company, Inc. (the "Corporation")
represented by this certificate are subject to restrictions set forth
in the Corporation's Certificate of Incorporation which prohibit in
general (a) any Person from Beneficially Owning shares of Equity Stock
in excess of the Ownership Limit and (b) any Person from acquiring or
maintaining any ownership interest in the capital stock of the
Corporation that is inconsistent with (i) the requirements of the Code
pertaining to real estate investment trusts or (ii) the Certificate of
Incorporation of the Corpo ration, and the holder of this certificate
by his acceptance hereof consents to be bound by such restrictions.
Any purported transfer of Equity Stock in violation of such
restrictions shall be void ab initio and the Equity Stock in violation
of such restrictions, whether as a result of a Transfer or the Non-
Transfer Event, shall be automatically converted into shares of Excess
Stock and transferred to a Trust for disposition as provided in the
Certificate of Incorporation. Capitalized terms used in this paragraph
and not defined herein are defined in the Corporation's Certificate of
Incorporation. The Corporation will furnish without charge, to each
stockholder who so requests, a copy of the Certificate of
Incorporation of the Corporation, containing, among other things, a
statement of the powers, designations, preferences and relative,
participating, optional or other special
<PAGE>
rights of each class of stock or series thereof that the Corporation
is authorized to issue and the qualifications, limitations or
restrictions of such preferences and/or rights. Any such request shall
be addressed to the Secretary of the Corporation.
F. Each provision of this Article FOURTH shall be severable and any
such provision determined to be invalid by a court having
jurisdiction shall in no way affect the validity of any other
provision.
5. FIFTH: A. At all times subsequent to the date of filing of this
Certificate of Incorporation with the Secretary of State for the State
of Delaware, the directors shall be classified, with respect to the
term for which they severally hold office, into three classes,
designated "Class I," "Class II" and "Class III," respectively. The
initial Class I Directors shall serve for a term expiring at the first
annual meeting of stockholders; the initial Class II Directors shall
serve for a term expiring at the second annual meeting of
stockholders; and the initial Class III Directors shall serve for a
term expiring at the third annual meeting of stockholders. At each
annual meeting of stockholders, the successor or successors of the
class of directors whose term expires at that meeting shall be elected
by a plurality of the votes of the shares present in person or
represented by proxy at such meeting and entitled to vote on the
election of directors, and shall hold office for a term expiring at
the annual meeting of stockholders held in the third year following
the year of their election. The directors elected to each class shall
hold office until their successors are duly elected and qualified or
until their earlier resignation or removal. The Board of Directors
shall have the authority, upon the approval and at the direction of a
majority of its members, to designate a Nominating Committee and one
or more committees, each committee to consist of one or more of the
directors of the Corporation as selected by a majority of the members
of the Board of Directors. To the extent permitted by law and provided
in the resolution authorizing such committee, any such committee shall
have and may exercise all the powers and authority of the Board of
Directors in the management of the business and affairs of the
Corporation.
Notwithstanding the foregoing, whenever, pursuant to the provisions of
Article FOURTH of this Certificate, the holders of any one or more series
of Preferred Stock shall have the right, voting separately as a series or
together
<PAGE>
with holders of other such series, to elect directors at an annual or
special meeting of stockholders, the election, term of office, filling of
vacancies and other features of such directorships shall be governed by the
terms of this Certificate of Incorporated, including any Preferred Stock
Designation applicable thereto.
During any period when the holders of any series of Preferred Stock
have the right to elect additional directors as provided for or fixed
pursuant to the provisions of Article FOURTH of this Certificate of
Incorporation, then upon commencement and for the duration of the
period during which such right continues: (a) the then otherwise total
authorized number of directors of the Corporation shall automatically
be increased by such specified number of directors, and the holders of
such Preferred Stock shall be entitled to elect the additional
directors so provided for or fixed pursuant to said provisions and (b)
each such additional director shall serve until such director's
successor shall have been duly elected and qualified, or until such
director's right to hold such office terminates pursuant to said
provisions, whichever occurs earlier, subject to such director's
earlier death, disqualification, resignation or removal. Except as
otherwise provided by the Board of Directors in the resolution or
resolutions establishing such series, whenever the holders of any
series of Preferred Stock having such right to elect additional
directors are divested of such right pursuant to the provisions of
such stock, the terms of office of all such additional directors
elected by the holders of such stock, or elected to fill any vacancies
resulting from the death, resignation, disqualification or removal of
such additional directors, shall forthwith terminate and the total
authorized number of directors of the Corporation shall be reduced
accordingly.
B. Subject to the rights, if any, of the holders of any series of
Preferred Stock to elect directors and to remove any director whom
such holders have the right to elect, any director (including persons
elected by directors to fill vacancies in the Board of Directors) may
be removed from office (a) only with cause and (b) only by the
affirmative vote of the holders of at least 66 2/3% of the total
voting power of the shares of capital stock of the Corporation then
entitled to vote at a meeting of the stockholders called for that
purpose. At least 30 days prior to any meeting of stockholders at
which it is proposed that any director be
<PAGE>
removed from office, written notice of such proposed removal shall
be sent to the director whose removal will be considered at the
meeting. For purposes of this Certificate of Incorporation,
"cause," with respect to the removal of any director, shall mean
only (i) conviction of a felony, (ii) declaration of unsound mind
by order of a court, (iii) gross dereliction of duty, (iv)
commission of any act involving moral turpitude or (v) commission
of an act that constitutes intentional misconduct or a knowing
violation of law if such action in either event results both in an
improper substantial personal benefit to such director and a
material injury to the Corporation.
1. Subject to the rights, if any, of the holders of any series of
Preferred Stock to elect directors and to fill vacancies in the
Board of Directors relating thereto, any and all vacancies in the
Board of Directors, however occurring, including, without
limitation, through death, resignation, removal, an increase in
the number of directors or otherwise may be filled only by a
majority of the directors then in office, though less than a
quorum, or by a sole remaining director, and the directors so
chosen shall hold office until the end of the term of the class to
which they are appointed and until their successors are duly
elected and qualified, or until their earlier death, resignation
or removal. Any director appointed in accordance with the
preceding sentence shall hold office for the remainder of the full
term of the class of directors in which such director was
appointed or until such director's earlier resignation or removal.
If such director was designated by the Principals, pursuant to the
Conversion Agreement or such increase in the number of directors
would result in the Principals no longer having designated a
majority of the Board of Directors at a time when the Principals
are entitled under the Conversion Agreement to designate a
majority of the Board of Directors, such vacancy shall be filled
by a designee of the Principals. Subject to the rights, if any, of
the holders of any series of Preferred Stock, when the number of
directors is increased or decreased, the Board of Directors shall
determine the class or classes to which the increased or decreased
number of directors shall be apportioned; provided, however, that
no decrease in the number of directors shall shorten the term of
any incumbent director. In the event of a vacancy in the Board of
Directors, the remaining directors, except as otherwise provided
by law, may exercise the powers of the full Board of Directors
until such vacancy is filled.
<PAGE>
6. SIXTH: Any action required to be taken at any annual or special
meeting of stockholders of the Corporation, or any action which may be
taken at any annual or special meeting of the stockholders, may be
taken only at a duly called annual or special meeting of stock holders
and may not be taken by written consent of the stockholders in lieu of
such meeting.
7. SEVENTH: The Board of Directors is expressly authorized to make, amend
or repeal the bylaws of the Corporation, without any action on the
part of the stockholders, solely by the affirmative vote of at least
662/3% of the directors of the Corporation then in office. In addition
to any other vote required by law, the bylaws may be amended or
repealed by the stockholders by the affirmative vote of the holders of
shares representing at least 662/3% of the combined voting power of
the outstanding shares of capital stock of the corporation entitled to
vote.
8. EIGHTH: No director of the Corporation shall be liable to the
Corporation or its stock holders for monetary damages for breach of
fiduciary duty as a director, except for liability (i) for any breach
of the director's duty of loyalty to the Corporation or its
stockholders, (ii) for acts or omissions not in good faith or which
involve intentional misconduct or a knowing violation of law, (iii)
under Section 174 of the GCL, or (iv) for any transaction from which
the director derived an improper personal benefit.
If the GCL hereafter is amended to further eliminate or limit the
liability of directors, then the liability of a director of the
Corporation, in addition to the limitation on personal liability provided
herein, shall be limited to the fullest extent permitted by the amended
GCL. Any repeal or modification of this Article EIGHTH by the stockholders
of the Corporation shall be prospective only, and shall not adversely
affect any limitation on the liability of a director of the Corporation
existing at the time of such repeal or modification.
9. NINTH. The Corporation shall seek to satisfy the requirements for
qualification as a REIT under the Code until such time as the Board of
Directors shall determine otherwise, such determination being approved
by the affirmative vote of at least 66 2/3% of the directors of the
Corporation then in office.
10. TENTH. In addition to any other vote required by law, the amendment or
repeal of, or adoption of any provisions inconsistent with, Articles
FIFTH, SIXTH, SEVENTH, EIGHTH, NINTH or this Article TENTH or any term
defined in Article ELEVENTH to the extent such term is used in any
such Article shall require the approval of the holders of at least
66 2/3% of the total voting power of the shares of capital stock
entitled to vote
<PAGE>
thereon, voting as a single class.
11. ELEVENTH. For purposes of this Certificate of Incorporation, the
following terms shall have the meanings set forth below:
"Affiliate" shall mean, with respect to any Person or Persons, (i) any
natural person who is related by blood or marriage to any such Person, (ii)
any trust of which there are no principal beneficiaries other than any such
Person or Permitted Transferees of such Person, (iii) any charitable
foundation over which any such Person has discretionary authority, (iv) any
heirs or executors of any such Person and (v) if such Person is either of
the PCMC Partners, any entity of which a majority of the total outstanding
voting equity or a majority of the value of the outstanding ownership
interests is owned by the PCMC Partners.
"Beneficial Ownership," shall be calculated as follows:
(1) when used in Section C of Article FOURTH or any defined term
used therein, shares of Common Equity received by the PCMC Partners
pursuant to the terms of the Conversion Agreement shall be deemed to
be 100% Beneficially Owned by the Principals so long as (i) the PCMC
Partners shall maintain their, respective, Beneficial Ownership of
such securities and the Princi pals and their Permitted Transferees
maintain their collective voting and dispositive power with respect to
such securities or (ii) if such securities are distributed by the PCMC
Partners, the Principals and their Permitted Transferees Beneficially
Own and maintain substantially all of their collective opportunity for
gain and risk of loss with respect to such securities; provided
however, that for purposes of subsection (i) above, in the event that
the Principals Transfer voting interests or the opportunity for gain
and risk of loss in the PCMC Partners, other than Transfers of voting
interests and the opportunity for gain and risk of loss to any Person
that holds an ownership interest in the PCMC Partners as of the
Closing Date (as defined in the Conversion Agreement), such 100%
deemed Beneficial Ownership by the Principals shall be reduced by such
Transferred amount, and provided further, that if the PCMC Partners
Transfer any such securities to a Person in which it owns a majority
of
<PAGE>
the voting power and economic value, the PCMC Partners will be deemed
to Beneficially Own that same percentage of the total number of shares
of Common Equity held by such Person;
(2) when used in sections E and F of Article FOURTH or in any
defined term used therein, shall mean ownership of Equity Stock by a
Person who would be treated as an owner of Equity Stock either
directly or indirectly under Section 542(a)(2) of the Code, taking
into account, for this purpose, constructive ownership determined
under Section 544 of the Code, as modified by Section 856(h) of the
Code (except where expressly provided other wise); and
(3) when used elsewhere in this Certificate of Incorpora tion,
shall mean beneficial ownership determined under Rule 13d-3 under the
Exchange Act (as hereinafter defined).
The terms "Beneficial Owner," "Beneficially Owns" and "Beneficially
Owned" shall have the correlative meanings.
"Beneficiary" shall mean, with respect to any Trust, one or more
organizations described in each of Section 170(b)(1)(A) (other than clauses
(vii) and (viii) thereof) and Section 170(c)(2) of the Code that are named
by the Corporation as the beneficiary or beneficiaries of such Trust, in
accordance with the provisions of section F.4 of Article FOURTH.
"Change in Law" shall mean any change in the Code or the regulations
promulgated thereunder that would require a reduction in the number of
votes represented by the Special Voting Stock in order to maintain the
Corporation's status as a REIT.
"Code" shall mean the Internal Revenue Code of 1986, as amended.
"Constructive Ownership" shall mean ownership of shares of Equity
Stock by a Person who is or would be treated as a direct or indirect owner
of such shares of Equity Stock through the application of Section 318 of
the Code. The terms "Constructive Owner," "Constructively Owns" and
"Constructively Owned" shall have correlative meanings.
"Conversion Agreement" shall mean the Agreement and Plan of
Conversion, dated as of June 5, 1998, by and among Plum Creek Timber
Company, L.P., the
<PAGE>
Corporation and PCMC, as amended by the Amended and Restated Agreement and Plan
of Conversion, dated as of July 17, 1998.
"Equity Stock" shall mean the Common Stock, the Special Voting Stock
and the Preferred Stock of the Corporation.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
"Excluded Holder" shall mean Mr. John H. Scully, Mr. William J.
Patterson and Mr. William E. Oberndorf and their respective Affiliates,
collectively.
"Extraordinary Transaction" shall mean any transaction (i) which
requires the vote of all stockholders of the Corporation (other than the
election of directors) under the GCL, (ii) which requires stockholder approval
pursuant to Rule 312.03(c) or (d) of the New York Stock Exchange Listed Company
manual (or the equivalent rule, if any, of any stock exchange or automated
quotation system on which the Corporation may be listed), or (iii) pursuant to
which an amend ment to the bylaws of the Corporation would be effected by vote
of its stockholders.
"Market Price" of Equity Stock on any date shall mean the average of
the closing price for shares of such Equity Stock for the five consecutive
Trading Days ending on the Trading Day immediately prior to such date. The
"Closing Price" on any date shall mean the last sale price, regular way, or, in
case no such sale takes place on such day, the average of the closing bid and
asked prices, regular way, in either case as reported in the principal
consolidated transactions reporting system with respect to securities listed or
admitted to trading on the New York Stock Exchange or, if the shares of Equity
Stock are not listed or admitted to trading on the New York Stock Exchange, as
reported in the principal consolidated transaction reporting system with respect
to securities listed on the principal national securities exchange on which the
shares of Equity Stock are listed or admitted to trading or, if the shares of
Equity Stock are not listed on admitted to trading on any national securities
exchange, the last quoted price, or if not so quoted, the average of the high
bid and low asked prices in the over-the-counter market, as reported by the
Nasdaq Stock Market, Inc. or, if such system is no longer in use, the principal
other automated quotation system that may be in use or, if the shares of Equity
Stock are not quoted by any such organization, the average of the closing bid
and asked prices as furnished by a professional market maker selected by the
Board of Directors making a market in the shares of Equity Stock.
<PAGE>
"Non-Transfer Event" shall mean an event other than a purported
Transfer that would cause or result in an increase in the percentage of any
Person's Beneficial Ownership of the outstanding shares of Equity Stock.
"Ownership Limit" shall mean (i) with respect to Persons other than
the Excluded Holder (a) with respect to the Common Equity, 5% of the lesser of
(1) the total number of shares of Common Stock outstanding (assuming all shares
of Special Voting Stock have been converted into Common Stock), or (2) the value
of the outstanding shares of Common Stock (assuming all shares of Special Voting
Stock have been converted into Common Stock), or (b) with respect to Preferred
Stock, 5% of the lesser of (1) the total number of shares of Preferred Stock
outstanding, or (2) the value of the outstanding shares of Preferred Stock (or
such other number or value of Preferred Stock as the Board of Directors may
determine in fixing the terms of the Preferred Stock); and (ii) with respect to
the Excluded Holder, the Ownership Limit shall be the lesser of 27% of the
outstanding Common Stock and the lowest percentage of the outstanding Common
Stock either Beneficially Owned or Constructively Owned by the Excluded Holder
at any time (assuming all shares of Special Voting Stock are converted into
Common Stock in accordance with the terms hereof).
"PCMC Partners" shall mean PC Advisory Partners I, L.P., a Delaware
limited partner ship, and PC Intermediate Holdings, L.P., a Delaware limited
partnership.
"Permitted Transferee" shall mean
(4) when used in section C of Article FOURTH or any defined term
used therein, with respect to any Person or Persons, (a) any natural
person who is related by blood or marriage to any such Person, (b) any
trust or partnership of which there are no principal beneficiaries or
partners, as the case maybe, other than any such Person or Permitted
Transferees of such Person, (c) any charitable foundation over which
any such Person has discretionary authority, and (d) any heirs or
executors of any such Person; and
(5) when used elsewhere in this Certificate of Incorpora tion,
any Person designated as a Permitted Transferee in accordance with the
provisions of section F.8 of Article FOURTH.
"Person" shall mean (a) an individual or any corporation, partnership,
estate, trust, association, private foundation, joint stock company or any other
entity and (b) a "group" as the term is used for purposes of Section 13(d)(3) of
<PAGE>
the Exchange Act; but shall not include an underwriter that participates in a
public offering of Equity Stock for a period of 90 days following purchase by
such underwriter of such Equity Stock.
"Principals" shall mean Mr. John H. Scully, Mr. William J. Patterson
and Mr. William E. Oberndorf, collectively.
"Prohibited Owner" shall mean, with respect to any purported Transfer
or Non-Transfer Event, any Person who is prevented from becoming or remaining
the owner of record title to shares of Equity Stock by the provisions of section
F.1 of Article FOURTH.
"Purported Beneficial Transferee" shall mean, with respect to any
purported Transfer of Beneficial Ownership of shares of Equity Stock that
results in the automatic conversion of such shares into Excess Stock, the
purported transferee of Beneficial Ownership of such shares if such purported
Transfer had been valid under Section E.1 of Article FOURTH.
"Purported Record Transferee" shall mean, with respect to any
purported Transfer of Beneficial Ownership of shares of Equity Stock that
results in the automatic conversion of such shares into Excess Stock, the
purported record transferee of such shares if such purported Transfer had been
valid under Section E.1 of Article FOURTH.
"REIT" shall mean a real estate investment trust under Section 856 et
seq. of the Code.
"Subsidiary" shall mean any Person in which the Corporation
beneficially owns, directly or indirectly, more than 50% of the voting power of
the outstanding voting equity securities.
"Trading Day" shall mean a day on which the principal national
securities exchange on which any of the shares of Equity Stock are listed or
admitted to trading is open for the transaction of business or, if none of the
shares of Equity Stock are listed or admitted to trading on any national
securities exchange, any day other than a Saturday, a Sunday or a day on which
banking institutions in the State of New York are authorized or obligated by law
or executive order to close.
"Transfer" (as a noun) shall mean any sale, transfer, gift,
assignment,
<PAGE>
devise or other disposition of Beneficial Ownership of Equity Stock, whether
voluntary or involuntary and whether by operation of law or otherwise.
"Transfer" (as a verb) shall have the correlative meaning.
"Trust" shall mean any separate trust created and administered in
accordance with the terms of section F of Article FOURTH, for the exclusive
benefit of any Beneficiary.
"Trustee" shall mean any Person, unaffiliated with both the
Corporation and any Prohibited Owner (and, if different than the Prohibited
Owner, the Person who would have had Beneficial Ownership of the Shares that
would have been owned of record by the Prohibited Owner), designated by the
Corporation to act as trustee of any Trust, or any successor trustee thereof.
<PAGE>
EXHIBIT 2
AMENDED AND RESTATED
AGREEMENT AND PLAN OF CONVERSION
AMENDED AND RESTATED AGREEMENT AND PLAN OF CONVERSION, dated as of July
17, 1998, by and among Plum Creek Timber Company, Inc., a Delaware corporation
(the "Corporation"); Plum Creek Timber Company, L.P., a Delaware limited
partnership (the "Partnership"); and Plum Creek Management Company, L.P., a
Delaware limited partnership ("PCMC"). This Amended and Restated Agreement and
Plan of Conversion amends and restates the Agreement and Plan of Conversion,
dated as of June 5, 1998, as amended on July 17, 1998.
WHEREAS, the parties hereto desire to convert the ownership interests in
the Partnership to ownership interests in a corporation which would elect to be
subject to taxation as a real estate investment trust for purposes of the
Internal Revenue Code of 1986, as amended (the "Code"), pursuant to the
provisions of this Agreement and the other agreements referred to herein;
WHEREAS, the conversion described above, including the Merger (as
hereinafter defined) and each of the other transactions set forth in Article I
shall be referred to herein as the "Conversion";
WHEREAS, to that end, the Corporation has been formed and the Corporation
has (i) formed Plum Creek Timber Company I, L.L.C., a single member Delaware
limited liability company and a wholly-owned subsidiary of the Corporation ("LLC
I"), and (ii) together with LLC I, formed Plum Creek Acquisition Partners, L.P.,
a Delaware limited partnership ("Merger LP"), whose 99% limited partner is the
Corporation and whose 1% general partner is LLC I; and
WHEREAS, PCMC and the Partnership hold a 2% general partner interest and
98% limited partner interest, respectively, in Plum Creek Manufacturing, L.P. a
Delaware limited partnership (the "Manufacturing Partnership").
NOW, THEREFORE, in consideration of the mutual representations, warranties,
covenants, agreements and conditions contained herein, and in order to set forth
the terms and conditions of the Conversion and the mode of carrying the same
into effect, the parties hereto, intending to be legally bound, hereby agree as
follows:
<PAGE>
ARTICLE I
THE CONVERSION
SECTION 1.1 The Recapitalization. The Partnership and PCMC shall
--------------------
recapitalize Plum Creek Marketing, Inc., a Delaware corporation ("Marketing"),
as follows (collectively, the "Recapitalization"):
(a) Prior to the Effective Time (as defined below), the Partnership
and PCMC, as the 96% and 4% stockholders, respectively, of Marketing, shall
cause Marketing to amend its Certificate of Incorporation (the "Marketing
Charter Amendment") to create two classes of common stock: voting common stock
(the "Voting Common Stock") and nonvoting common stock (the "Nonvoting Common
Stock"). The Nonvoting Common Stock and the Voting Common Stock will participate
pro rata in all cash dividends paid by Marketing to its common stockholders, but
the Nonvoting Common Stock will have no right to vote on the election of
directors of Marketing or on any other transaction for which stockholders of
Marketing may otherwise be given the right to vote pursuant to applicable law.
The Marketing Charter Amendment will also provide that each outstanding share of
Marketing's common stock, par value $.01 per share, will be reclassified into
9.9 shares of Nonvoting Common Stock.
(b) Concurrently with the effectiveness of the Marketing Charter
Amendment under the Delaware General Corporation Law, Marketing shall issue 10
shares of the Voting Common Stock, representing 1% in number of shares of its
outstanding common stock, to members of management of the Partnership for their
fair market value, as determined by the Partnership and agreed to by the other
parties, with no single member holding in excess of 20% of such Voting Common
Stock. The terms of any acquisition of securities by management pursuant to this
section (including the terms of any financing obtained from the Partnership, the
Corporation or any of their respective subsidiaries with respect thereto) shall
be subject to the reasonable approval of the parties.
SECTION 1.2 The Corporate Subsidiary Formation. Immediately before the
----------------------------------
Effective Time, PCMC shall cause the Manufacturing Partnership to contribute the
Manufacturing Assets (as defined below) to three newly-formed, Delaware
corporations (the "Corporate Subsidiaries") in exchange for 990 shares of
nonvoting common stock of each of the Corporate Subsidiaries (representing 99%
in number of shares of the outstanding common stock), and members of the
management of the Partnership shall acquire a total of 10 shares of the voting
common stock (representing 1% in number of shares of the outstanding common
stock) of each of the Corporate Subsidiaries for their fair market value, as
determined by the Partnership and agreed to by the other parties,
2
<PAGE>
with no single member holding in excess of 20% of such voting common stock. The
terms of any acquisition of securities by management pursuant to this section
(including the terms of any financing obtained from the Partnership, the
Corporation or their respective subsidiaries with respect thereto) shall be
subject to the reasonable approval of the parties. "Manufacturing Assets" means
substantially all of the assets and liabilities of the Manufacturing Partnership
relating to its manufacturing operations, to be specified on a schedule to be
provided by the Partnership within 90 days after the date hereof, but in no
event later than 20 days before mailing of the Proxy Statement/Prospectus (as
hereinafter defined).
SECTION 1.3 The Mergers. Subject to the terms and conditions of this
-----------
Agreement and the Merger Agreement referred to below:
(a) The Partnership Merger. At the Effective Time (as defined below),
----------------------
the Partnership shall be merged (the "Partnership Merger") with and into Merger
LP pursuant to an Agreement and Plan of Merger substantially in the form
attached hereto as Annex 1 (the "Partnership Merger Agreement"), and the
separate existence of the Partnership shall cease. Merger LP shall be the
surviving entity in the Partnership Merger and shall continue to be governed by
the laws of the State of Delaware, and all rights, privileges, immunities and
franchises of the Partnership and Merger LP shall vest in Merger LP and continue
unaffected by the Partnership Merger. The manner of converting the securities of
the Partnership and Merger LP shall be substantially as set forth in Section 5
of the Partnership Merger Agreement.
(b) The PCMC Merger. Concurrently with the Partnership Merger, PCMC
---------------
shall be merged (the "PCMC Merger" and, together with the Partnership Merger,
the "Mergers") with and into the Corporation pursuant to an Agreement and Plan
of Merger substantially in the form attached hereto as Annex 4 (the "PCMC Merger
Agreement" and, together with the Partnership Merger Agreement, the "Merger
Agreements"), and the separate existence of PCMC shall cease. The Corporation
shall be the surviving entity in the PCMC Merger and shall continue to be
governed by the laws of the State of Delaware, and all rights, privileges,
immunities and franchises of PCMC and the Corporation shall vest in the
Corporation and continue unaffected by the PCMC Merger. The manner of converting
the securities of PCMC and the Corporation shall be substantially as set forth
in Section 5 of the PCMC Merger Agreement. The parties acknowledge that,
immediately following consummation of the Mergers, PC Advisory Partners I, L.P.,
a Delaware limited partnership ("PCAP") and PC Intermediate Holdings, L.P., a
Delaware limited partnership ("PCIH" and, together with PCAP, the
3
<PAGE>
"PCMC Partners"), will hold 27% of the aggregate outstanding equity of the
Corporation.
SECTION 1.4 Approvals and Timing
--------------------
(a) Limited Partner Approval. The Partnership and PCMC shall submit
------------------------
the proposed Conversion to the Unitholders for approval and adoption at a
meeting to be held following completion and requisite dissemination of the Proxy
Statement/Prospectus (as hereafter defined). In connection with such meeting,
the Partnership shall take such reasonable steps as shall be necessary or
appropriate for the prompt preparation and filing by the Partnership of a proxy
statement (the "Proxy Statement") under the Securities Exchange Act of 1934 (the
"Exchange Act") and by the Corporation of a registration statement and
prospectus (the "Prospectus") under the Securities Act of 1933 (the "Securities
Act"), with the SEC and shall cause such Proxy Statement/Prospectus to be mailed
to the Unitholders as soon as practicable.
(b) Approval by Other Parties. PC Advisory Corp I, a Delaware
-------------------------
corporation ("Corp I"), as the sole general partner of PCAP, as the sole general
partner of PCMC, and as the sole general partner of the Partnership on the one
hand, and the Corporation, on its own behalf and as the sole member of LLC I,
and as the general partner of Merger LP, shall approve, adopt, execute and
deliver each of the Merger Agreements prior to the Filing Date.
(c) Closing and Effective Time. Subject to the satisfaction of the
--------------------------
conditions contained in Article IV hereof, the parties shall hold a closing (the
"Closing") on (i) the later of (A) the business day following the meeting of the
Unitholders to consider and vote upon the Conversion or (B) the business day on
which the last of the conditions set forth in Article IV is fulfilled or waived
or (ii) at such other date as the parties hereto may agree (the "Closing Date"),
at 10:00 a.m. (local time) at the offices of Skadden, Arps, Slate, Meagher &
Flom LLP, 300 South Grand Avenue, Suite 3400, Los Angeles, California, or at
such other place or time as the parties hereto may agree. The Mergers shall
become effective upon the filing of the certificates of merger related thereto
(the "Effective Time"). At the Closing, the parties shall take appropriate steps
to cause the transactions constituting the Conversion set forth in this Article
I (including the Mergers) to be effected. All such transactions shall be deemed
to have occurred sequentially on the Closing Date (except for the Mergers which
shall be deemed to have occurred simultaneously), and, if any single transaction
is not effected, then none of such transactions shall be effective.
4
<PAGE>
ARTICLE II
REPRESENTATIONS AND WARRANTIES
SECTION 2.1 Representations and Warranties by the Partnership and the
---------------------------------------------------------
Corporation. The Partnership and the Corporation represent and warrant to PCMC
- -----------
that:
(a) Organization and Good Standing. The Partnership is a limited
------------------------------
partnership duly formed, validly existing and in good standing under the laws of
the State of Delaware. The Corporation is a corporation duly incorporated,
validly existing and in good standing under the laws of the State of Delaware.
On the Closing Date, the Certificate of Incorporation and Bylaws of the
Corporation then in effect will be in substantially the form attached hereto as
Annexes 2 and 3, respectively. On the Closing Date, Merger LP will be a limited
partnership duly formed, validly existing and in good standing under the laws of
the State of Delaware.
(b) Capitalization. The sole general partner of the Partnership is
--------------
PCMC and, as of June 2, 1998, there are issued and outstanding 46,323,300 Units.
The authorized capital stock of the Corporation consists of 1,000 shares of
common stock, par value $.01 per share (the "Common Stock"), of which 100 shares
are outstanding and owned by the Partnership. Immediately following the
Effective Time, PCMC will hold 27% of the aggregate outstanding equity of the
Corporation. On the Closing Date, the sole general partner of Merger LP will be
LLC I, and the sole member of LLC I will be the Corporation.
There is no outstanding option, warrant or other agreement or
commitment (other than the Merger Agreement) to which either the Partnership or
the Corporation is a party or by which either of them is bound providing for the
issuance of any additional securities of the Partnership, Merger LP or the
Corporation.
(c) Authorization. The execution, delivery and performance of this
-------------
Agreement have been duly and validly authorized by all necessary action on the
part of the Partnership and the Corporation, other than the approval of the
Conversion by the Unitholders. This Agreement has been duly executed and
delivered by the Partnership and the Corporation and is enforceable against each
of them in accordance with its terms, except as the enforceability thereof may
be limited by (i) bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium or other similar laws now or hereafter in effect relating to or
affecting creditors' rights generally, (ii) public policy, applicable law
relating to fiduciary duties and the judicial imposition of an implied covenant
of good faith and fair dealing and except as rights to indemnity or contribution
may be
5
<PAGE>
limited by applicable law or (iii) general principles of equity (regardless of
whether such enforceability is considered in a proceeding at law or in equity).
(d) Consents and Approvals; No Violation. Except as set forth in
------------------------------------
Schedule 2.1(d), neither the execution and delivery of this Agreement by the
- ---------------
Partnership or the Corporation nor the consummation of the transactions
contemplated hereby will (i) conflict with or result in any breach of any
provision of the Partnership Agreement; (ii) require any consent, approval,
authorization or permit of, or filing with or notification to, any governmental
or regulatory authority or body, except (A) pursuant to the Securities Act and
the Exchange Act or the rules and requirements of any national securities
exchange or the National Association of Securities Dealers, Inc., (B) the filing
of a certificate of merger pursuant to the Delaware Revised Uniform Limited
Partnership Act (the "Delaware RULPA"), (C) filings under state securities laws
or in connection with maintaining the good standing and qualification of Merger
LP and the Corporation following the Effective Time, (D) Hart-Scott-Rodino
Premerger Notification Act filings, if any, or (E) where the failure to obtain
such consent, approval, authorization or permit, or to make such filing or
notification, would not in the aggregate have a material adverse effect on the
Partnership or the Corporation; (iii) result in a default (or give rise to any
right of termination, unilateral modification or amendment, cancellation or
acceleration) under any of the terms, conditions or provisions of any note,
license, agreement or other instrument or obligation to which the Partnership or
any of its subsidiaries is a party or by which the Partnership, the Corporation
or any of their respective subsidiaries or assets may be bound (collectively,
the "Material Agreements"), except for such defaults (or rights of termination,
unilateral modification or amendment, cancellation or acceleration) which in the
aggregate would not have a material adverse effect on the Partnership, the
Corporation or any of their respective subsidiaries; or (iv) violate any order,
writ, injunction, decree, judgment, ordinance, statute, rule or regulation
applicable to the Partnership or the Corporation or any of their respective
properties or businesses, except for violations (other than of orders, writs,
injunctions or decrees) which would not in the aggregate have a material adverse
effect on the Partnership or the Corporation.
SECTION 2.2 Representations and Warranties by PCMC. PCMC represents and
--------------------------------------
warrants to the other parties that:
(a) Organization and Good Standing. It is a limited partnership
------------------------------
duly organized, validly existing and in good standing under the laws of the
State of Delaware.
6
<PAGE>
(b) Authorization. The execution, delivery and performance of this
-------------
Agreement have been duly and validly authorized by all necessary action on the
part of PCMC.
(c) Consents and Approvals; No Violation. Neither the execution and
------------------------------------
delivery of this Agreement by it nor the consummation of the transactions
contemplated hereby will (i) conflict with or result in any breach of any
provision of the Agreement of Limited Partnership or the Certificate of Limited
Partnership of PCMC; (ii) require any consent, approval, authorization or permit
of, or filing with or notification to, any governmental or regulatory authority
or body, except (A) pursuant to the Securities Act and the Exchange Act or the
rules and requirements of any national securities exchange or the National
Association of Securities Dealers, Inc., (B) the filing of certificates of
merger pursuant to the Delaware RULPA, (C) filings under the state securities
laws or in connection with maintaining the good standing and qualification of
Merger LP and the Corporation following the Effective Time, (D) Hart-Scott-
Rodino Premerger Notification Act filings, if any, or (E) where the failure to
obtain such consent, approval, authorization or permit, or to make such filing
or notification, would not in the aggregate have a material adverse effect on
PCMC; (iii) result in a default (or give rise to any right of termination,
unilateral modification or amendment, cancellation or acceleration) under any of
the terms, conditions or provisions of any note, license, agreement or other
instrument or obligation to which PCMC or its subsidiaries is a party or by
which they or its assets may be bound, except for such defaults (or rights of
termination, unilateral modification or amendment, cancellation or acceleration)
which in the aggregate would not have a material adverse effect on PCMC, or any
of its subsidiaries; or (iv) violate any order, writ, injunction, decree,
judgment, ordinance, statute, rule or regulation applicable to PCMC or any of
its properties or businesses, except for violations (other than of orders,
writs, injunctions or decrees) which would not in the aggregate have a material
adverse effect on PCMC.
(d) Ownership Interests; Title. PCMC is the owner of record and
--------------------------
beneficially of (i) the general partner interests in the Partnership and the
Manufacturing Partnership, and (ii) the 4 shares of common stock of Marketing.
PCMC has not received any notice of any adverse claim to the ownership of such
general partner interest and/or common stock and does not have any reason to
know of such adverse claim that may be justified. On the date of the Closing,
PCMC shall have good and transferable title to such interests and common stock,
free and clear of all liens.
(e) Ownership in PCMC. As promptly as possible following execution of
-----------------
this Agreement, PCMC shall deliver a schedule of Messrs. Scully, Patterson and
Oberndorf's direct and indirect ownership interests in PCMC to the
7
<PAGE>
Special Committee (as hereinafter defined), which ownership interests shall not
change prior to the Closing Date. The schedule shall also set forth those direct
and indirect ownership interests in PCMC not owned by Messrs. Scully, Patterson
and Oberndorf, which schedule shall be updated to reflect transfers between the
date of this Agreement and the Closing Date.
ARTICLE III
ADDITIONAL COVENANTS AND AGREEMENTS
SECTION 3.1 Affiliates. Prior to the Closing Date, the Partnership shall
----------
deliver to the Corporation a letter identifying all persons who are, at the time
the Conversion is submitted for approval to the limited partners of the
Partnership, "affiliates" of the Partnership for purposes of Rule 145 under the
Securities Act. The Partnership shall use its reasonable efforts to cause each
such person to deliver to the Corporation on or prior to the Closing Date
executed affiliates' letters in customary form.
SECTION 3.2 Fees and Expenses. Whether or not the Conversion is
-----------------
consummated, all costs and expenses incurred in connection with this Agreement
and the transactions contemplated hereunder, to the extent such costs and
expenses are not incurred on behalf of and for the benefit of the Partnership,
shall be paid by the party incurring such cost or expense.
SECTION 3.3 Stock Exchange Listing. The Corporation shall use its best
----------------------
efforts to cause the Common Stock to be issued in the Conversion to be approved
for listing on the New York Stock Exchange and the Pacific Stock Exchange,
subject to official notice of issuance, prior to the Closing Date. The
Partnership shall cause the Units to be delisted at or immediately after the
Effective Time.
SECTION 3.4 Indemnification.
---------------
(a) The Partnership shall, and from and after the Effective Time, the
Corporation shall, indemnify, defend and hold harmless each person who is now,
or has been at any time prior to the date of this Agreement or who becomes prior
to the Effective Time, an officer, director, partner, shareholder, agent or
fiduciary of the Partnership, PCMC, Merger LP or the Corporation (the
"Companies") or an affiliate of such person (collectively, the "Indemnified
Parties") against all losses, claims, damages, costs, expenses, liabilities or
judgments, or amounts that are paid in settlement with the approval of the
indemnifying party (which approval shall not be unreasonably withheld) of, or in
connection with, any claim, action, suit, proceeding or investigation ("Proceed-
8
<PAGE>
ing") based in whole or in part out of the fact that such person is or was an
officer, director, partner, shareholder, agent or fiduciary of one or more of
the Companies or an affiliate of such person, whether pertaining to any matter
existing or occurring at or prior to the Effective Time and whether asserted or
claimed prior to, or at or after, the Effective Time ("Indemnified Liabilities")
in each case to the full extent a partnership or a corporation is permitted
under Delaware law to indemnify such persons or entities; and the Partnership
(and after the Effective Time, the Corporation) will pay or reimburse expenses
in advance of the final disposition of any such Proceeding to each Indemnified
Party to the full extent permitted by law upon receipt of an undertaking to
repay such expenses if and when requested to do so under applicable law. Without
limiting the foregoing, in the event any such Proceeding is brought against any
Indemnified Party (whether arising before or after the Effective Time), (i) the
Indemnified Parties may retain counsel satisfactory to them, (ii) the
Partnership (and after the Effective Time, the Corporation) shall pay all
reasonable fees and expenses of such counsel for the Indemnified Parties
promptly as statements therefor are received, and (iii) the Partnership (and
after the Effective Time, the Corporation) will use all reasonable efforts to
assist in the vigorous defense of any such matter, provided that neither the
Partnership nor the Corporation shall be liable for any settlement of any claim
effected without its written consent, which consent, however, shall not be
unreasonably withheld. Any Indemnified Party wishing to claim indemnification
under this Section 3.4, upon learning of any Proceeding, shall notify the
Partnership (and after the Effective Time, the Corporation) (but the failure so
to notify the Partnership or the Corporation, as the case may be, shall not
relieve the Partnership or the Corporation from any liability which it may have
under this Section 3.4 except to the extent such failure prejudices the
indemnifying party) and shall deliver to the Partnership (and after the
Effective Time, the Corporation) the undertaking referred to above. The
Indemnified Parties as a group may retain only one law firm to represent them
with respect to each such matter unless there is, under applicable standards of
professional conduct, a conflict on any significant issue between the positions
of any two or more Indemnified Parties.
(b) The provisions of this Section 3.4 are intended to be for the
benefit of, and shall be enforceable by, each Indemnified Party and the
Indemnified Party's heirs, representatives, successors and assigns.
SECTION 3.5 Control Rights.
--------------
(a) For purposes of this Section 3.5, the following terms shall have
the meanings set forth below:
9
<PAGE>
"Beneficial Ownership" shall mean ownership of a security by a person
who would be treated as an owner of such security, either directly or
indirectly, under section 542(a)(2) of the Code, taking into account for this
purpose, the constructive ownership rules of section 544 of the Code, as
modified by section 856(h) of the Code.
"Extraordinary Transaction" shall mean any transaction (i) which
requires the vote of all stockholders of the Corporation (other than the
election of directors) under the Delaware General Corporation Law, (ii) which
requires stockholder approval pursuant to Rule 312.03(c) or (d) of the New York
Stock Exchange Listed Company Manual (or the equivalent rule, if any, of any
stock exchange or automated quotation system on which the Corporation may be
listed), or (iii) pursuant to which an amendment to the bylaws of the
Corporation would be effected by vote of its stockholders.
"First Threshold Amount" shall mean 5 million shares of Common Stock
and /or shares of Special Voting Stock, in the aggregate, subject to adjustment
for any stock split, stock dividend, reverse stock split, combination,
recapitalization, reclassification or like transaction as contemplated in
Section 6.8.
"Independent Directors" shall mean those members of the Board of
Directors of the Corporation that are neither (i) members of the Corporation's
management, nor (ii) designated pursuant to the terms of this Section 3.5.
"Permitted Transferee" shall mean, with respect to any Person or
Persons, (i) any natural person who is related by blood or marriage to any such
Person, (ii) any trust or partnership of which there are no principal
beneficiaries or partners, as the case may be, other than any such Person or
Permitted Transferees of such Person, (iii) any charitable foundation over which
any such Person has discretionary authority, and (iv) any heirs or executors of
any such Person.
"Principals" means Messrs. Scully, Patterson and Oberndorf,
collectively.
"Second Threshold Amount" shall mean 3 million shares of Common Stock,
in the aggregate, subject to adjustment for any stock split, stock dividend,
reverse stock split, combination, recapitalization, reclassification or like
transaction as contemplated in Section 6.8.
10
<PAGE>
"Threshold Amount" shall mean either the First Threshold Amount or the
Second Threshold Amount, as applicable.
"Transfer" shall mean any sale, transfer, gift, assignment, devise or
other disposition of Beneficial Ownership of a security, whether voluntary or
involuntary and whether by operation of law or otherwise, including without
limitation, a put, call, swap or other transaction that would cause the holder
not to retain substantially all the opportunity for gain and substantially all
the risk of loss with respect to such security.
(b) The Corporation hereby agrees to take all action necessary such
that, prior to each meeting of the Corporation's stockholders at which directors
of the Corporation are to be elected, the Board of Directors of the Corporation
(the "Board") shall (i) include the number of designees (if any) determined in
accordance with the next two sentences that have been designated by the
Principals and shall not have been rejected by the Corporation for cause (based
on a reasonable application of the definition thereof contained in the
Certificate of Incorporation of the Corporation) in each slate of proposed
directors put forth by the Corporation to its stockholders, and (ii) use its
best efforts to cause such designees to be recommended by the Board for election
in any proxy solicitation materials disseminated by the Corporation in
connection with such meeting. Subject to paragraph (d) below, for so long as the
Principals Beneficially Own at least the First Threshold Amount of Common Stock
and/or shares of Special Voting Stock in the aggregate at the time such slate of
Board nominees is determined, the Principals shall be entitled to designate
nominees constituting a majority of the Board, provided, however, that pursuant
to this sentence, the Principals shall not be entitled to have more than the
minimum number of designees required such that (assuming the election of such
designees to the Board) all of the Principals' nominees will constitute the
smallest number of directors necessary to represent a majority of the Board at
any time. Subject to paragraph (d) below, for so long as the Principals
Beneficially Own less than the First Threshold Amount but at least the Second
Threshold Amount of Common Stock in the aggregate at the time such slate of
Board nominees is determined, the Principals shall be entitled to designate two
nominees to the Board, provided, however, that pursuant to this sentence, the
Principals shall not be entitled to have more than the minimum number of
designees required such that (assuming the election of such designees to the
Board) all of the Principals' nominees will constitute two members of the Board
at any time. Unless the Corporation shall have received written notice to the
contrary from the Principals at least 10 business days prior to the date that
stockholder proposals would be required to be submitted pursuant to the Exchange
Act, the Corporation shall nominate the designee(s) for that
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<PAGE>
annual meeting of its stockholders, whose terms would otherwise expire at such
meeting.
Subject to the limitation provided in paragraph (d) below, in
calculating the Beneficial Ownership for purposes of the previous paragraph and
paragraph (d) below, shares of Special Voting Stock and shares of Common Stock
received by the PCMC Partners pursuant to the terms of this Agreement and the
Merger Agreements and owned by the PCMC Partners on the Closing Date shall be
deemed to be 100% Beneficially Owned by the Principals for purposes of this
Section 3.5, so long as (i) the PCMC Partners shall maintain their Beneficial
Ownership of such securities and the Principals and their Permitted Transferees
maintain their collective voting and dispositive power with respect to such
securities or (ii) if such securities are distributed by the PCMC Partners, the
Principals and their Permitted Transferees Beneficially Own the applicable
Threshold Amount and maintain substantially all of their collective opportunity
for gain and risk of loss with respect to such securities; provided however,
that for purposes of subsection (i) above, in the event that the Principals
voting interests or the opportunity for gain and risk of loss in the PCMC
Partners, other than Transfers of voting interests and the opportunity for gain
and risk of loss to any Person that holds an ownership interest in the PCMC
Partners as of the Effective Date, such 100% deemed Beneficial Ownership by the
Principals shall be reduced by such Transferred amount, and provided further,
-------- -------
that if the PCMC Partners Transfer any such securities to a Person in which they
own a majority of the voting power and economic value, the PCMC Partners will be
deemed to Beneficially Own that same percentage of the total shares of Special
Voting Stock and/or shares of Common Stock held by such Person.
(c) Initially, the Principals shall designate one Class I director,
two Class II directors and two Class III directors (each as defined in the
Bylaws of the Corporation), and, so long as they are capable, Messrs. Scully,
Patterson and Oberndorf shall be designated as a Class I, Class II and Class III
director, respectively. Upon the death, resignation or removal of a nominee
designated by the Principals in accordance with the preceding paragraph, the
Corporation shall use its best efforts to have the vacancy filled by a person
designated by the Principals consistent with the standard set forth in paragraph
(b) above.
(d) If the Beneficial Ownership calculated as aforesaid shall at any
time drop below a Threshold Amount, the Principals shall permanently lose any
rights that are conditioned on ownership in excess of such Threshold Amount,
regardless of whether any person shall acquire additional shares of Special
Voting Stock and/or Common Stock which would otherwise cause the Beneficial
Ownership to exceed such Threshold Amount.
12
<PAGE>
(e) Within 20 days of any request by the Corporation, the Principals
shall provide reasonable documentation to the Corporation (which shall be kept
confidential and used solely for the purpose of verifying the Beneficial
Ownership of the Principals and their Permitted Transferees) so that the
Corporation may determine its obligations under this Section 3.5.
(f) The rights set forth in this Section 3.5 are nontransferable, and
shall not inure to the benefit of any successor or assign of the Principals.
(g) Upon the death of any of the Principals, the rights set forth in
this Section 3.5 shall not transfer to the heirs or executors of such decedent,
but shall instead be exercisable by the surviving member(s) of the Principals,
collectively, provided, that, the calculation of the Threshold Amounts shall
-------- ----
continue to be based on the Beneficial Ownership of shares of Special Voting
Stock and/or shares of Common Stock by such decedent's heirs and executors.
Upon the death of the last of the Principals, the rights set forth in this
Section 3.5 shall terminate.
(h) In the event that any Permitted Transferee ceases to be a
Permitted Transferee, any shares of Special Voting Stock and/or shares of Common
Stock held by such Person shall be deemed to have been Transferred to a Person
that is not a Permitted Transferee for purposes of calculating the Threshold
Amounts.
ARTICLE IV
CONDITIONS TO THE CONVERSION
SECTION 4.1 Conditions to Each Party's Obligation to Effect the
---------------------------------------------------
Conversion. The respective obligations of the parties to effect the Conversion
- ----------
shall be subject to the satisfaction, on or before the Closing Date, of each of
the following conditions:
(a) Limited Partner Approval. The Conversion shall have been
------------------------
approved and adopted by Unitholders holding at least 66 2/3% of the outstanding
Units.
(b) Approvals. All authorizations, consents and permits required
---------
to perform this Agreement and the Merger Agreements and the transactions contem
plated hereby and thereby under the Material Agreements or under applicable law
shall have been obtained and the required statutory waiting period under the
Hart-Scott-
13
<PAGE>
Rodino Antitrust Improvements Act of 1976, if applicable, shall have expired or
been terminated.
(c) Registration Statement. The Registration Statement filed pursuant
----------------------
to Section 1.4(a) shall have become effective under the Securities Act and shall
not be the subject of any stop order or proceeding seeking a stop order.
(d) Blue Sky Compliance. The Corporation shall have complied with all
-------------------
requirements of state securities or "blue sky" laws with respect to the issuance
of the securities in the Conversion.
(e) Special Committee Determination. The Special Committee of the
-------------------------------
board of directors of Corp I (the "Special Committee") shall not have withdrawn
its determination that the Conversion is fair to the Unitholders.
(f) Fairness Opinion. Neither the fairness opinion delivered to the
----------------
Partnership by Merrill Lynch & Co. and to be included as an exhibit to the Proxy
Statement/Prospectus nor the fairness opinion delivered to the Special Committee
by Salomon Smith Barney, Inc. and to be included as an exhibit to the Proxy
Statement/Prospectus shall have been rescinded prior to the Closing Date.
(g) Tax Opinion. Skadden, Arps, Slate, Meagher & Flom LLP shall have
-----------
delivered a substantially unqualified opinion to the parties, generally to the
effect that (i) the Corporation has been organized in conformity with the
requirements for qualification as a REIT under the Code, (ii) the Corporation's
planned method of operation, as well as the planned methods of operation of
Merger LP and the Corporate Subsidiaries will enable the Corporation to meet the
requirements for qualification and taxation as a REIT, (iii) the distribution of
REIT shares to the partners of the Partnership and PCMC as a result of the
Partnership Merger and the PCMC Merger, respectively, will generally not be
subject to United States federal income tax, except with respect to particular
partners in light of their individual circumstances and (iv) the
recapitalization of Marketing will not result in gain or loss to Marketing, the
Partnership or the holders of shares of Marketing stock, provided, however, that
the opinions set forth in clauses (iii) and (iv) shall not be required to the
extent that the Partnership receives a private letter ruling from the Internal
Revenue Service that, to the reasonable satisfaction of PCMC, addresses the
subjects of clauses (iii) and (iv). Such opinion shall be based upon customary
letters of representation from the officers of the Corporation, other
transferors and major equity holders and may make customary assumptions,
including that the Corporation has no present plan or intention to issue equity
for cash or other property following the Merger.
14
<PAGE>
(h) Registration Rights Agreements. The Corporation and the PCMC
------------------------------
Partners shall have entered into a Registration Rights Agreement on usual and
customary terms reasonably satisfactory to the parties hereto, the provisions of
which shall include one Common Stock demand registration per six-month period
commencing twelve months after the Effective Time (with each demand covering not
less than 1 million shares of Common Stock), customary piggyback registration
rights and customary indemnification for violations of the Securities Act and
the Exchange Act. All such registration rights may also be exercised by the
Principals and their Permitted Transferees. In addition, the Corporation shall
be responsible for customary costs of registration, other than broker's fees,
discounts, transfer taxes or other selling expenses and the expenses of legal
counsel to the selling stockholders.
(i) Issuance of Subsidiary Securities. The Manufacturing Partnership
---------------------------------
and members of the management of the Partnership shall have consummated the
acquisition of securities of the Corporate Subsidiaries and Marketing.
(j) Certificate of Incorporation and By-Laws. The Corporation's
----------------------------------------
Certificate of Incorporation and By-Laws shall be in effect in substantially the
form attached hereto as Annexes 2 and 3, respectively.
(k) Representations and Warranties. The representations and
------------------------------
warranties made by the parties to this Agreement shall be true and correct on
the Closing Date in all material respects.
(l) Other Documentation. The parties hereto shall have entered into
-------------------
such other agreements as are contemplated by the Conversion on terms reasonably
satisfactory to the parties hereto.
ARTICLE V
TERMINATION AND ABANDONMENT
SECTION 5.1 Termination and Abandonment. This Agreement may be terminated
---------------------------
and the Conversion may be abandoned at any time prior to the Effective Time,
whether before or after approval by the Unitholders, by action of the Board of
Directors of Corp I.
SECTION 5.2 Amendment. This Agreement may not be amended except by an
---------
instrument in writing signed on behalf of each of the parties hereto (or, in the
case of a dissolution of PCMC, signed by each of the Principals in lieu of
PCMC); provided,
15
<PAGE>
however, that after approval of the Conversion by the Unitholders, no amendment
may be made which decreases the amount or changes the type of consideration to
which the Unitholders are entitled under this Agreement, increases the amount
payable, in any material respect, or changes the type of consideration to which
the PCMC Partners are entitled under this Agreement, or otherwise adversely
affects the rights of the Unitholders without the further approval of the
Unitholders; provided, further, that following the Effective Time and for so
long as the Principals Beneficially Own at least the Second Threshold Amount (as
such terms are defined in Section 3.5), this Agreement may only be amended with
the further consent of a majority of the members of a committee of the members
of the Board of Directors of the Corporation that have not been designated by
the Principals.
SECTION 5.3 Waiver. Any time prior to the Effective Time, whether before
------
or after the meeting referred to in Section 1.4(a), any party hereto may waive
compliance with any of the agreements of any other party or with any conditions
to the obligations of such party; provided, however, that after approval of the
Conversion by the Unitholders, no waiver may be given which materially adversely
affects the rights of the Unitholders without the further approval of the
Unitholders. Any agreement on the part of a party hereto to any such extension
or waiver shall be valid if set forth in an instrument in writing signed on
behalf of such party by a duly authorized officer.
ARTICLE VI
MISCELLANEOUS
SECTION 6.1 Notices. Any notices or other communications required or
-------
permitted hereunder shall be sufficiently given if sent by telecopy or facsimile
transmission (with hard copy to follow), registered or certified mail, postage
prepaid, or Federal Express or similar overnight delivery services addressed, in
the case of all parties at
16
<PAGE>
EXHIBIT 3
- --------------------------------------------------------------------------------
REGISTRATION RIGHTS AGREEMENT
Dated as of July 1, 1999
between
PLUM CREEK TIMBER COMPANY, INC.
and
THE PARTIES NAMED HEREIN
- --------------------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
-----------------
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Section 1. Definitions............................................ 1
Section 2. Demand Registrations................................... 4
Section 3. Piggyback Registrations................................ 7
Section 4. Hold-back Agreements................................... 8
Section 5. Registration Procedures................................ 9
Section 6. Registration Expenses.................................. 14
Section 7. Indemnification........................................ 15
Section 8. Rules 144 and 144A..................................... 18
Section 9. Underwritten Registrations............................. 18
Section 10. Covenants of Holders................................... 19
Section 11. Miscellaneous.......................................... 19
</TABLE>
i
<PAGE>
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (the "Agreement") is made and
entered into as of July 1, 1999, by and among PLUM CREEK TIMBER COMPANY, INC., a
Delaware corporation (the "Company"), and each of the parties from time to time
executing a signature page hereto (each an "Investor" and collectively the
"Investors").
WHEREAS, pursuant to an Amended and Restated Agreement and Plan of
Conversion, dated as of July 17, 1998 (the "Conversion Agreement"), by and among
the Company, Plum Creek Timber Company, L.P., and Plum Creek Management Company,
L.P., the Company has agreed to issue to the Investors, upon the terms and
subject to the conditions set forth in the Conversion Agreement, shares of
common stock, par value $.01 per share, of the Company and shares of special
voting stock, par value $.01 per share, of the Company (the "Special Voting
Stock");
WHEREAS, in the Conversion Agreement, the Company has agreed to
provide the registration rights set forth in this Agreement; and
WHEREAS, the execution and delivery of this Agreement is a condition
to the Closing (as defined in the Conversion Agreement).
NOW THEREFORE, in consideration of the mutual covenants and
agreements set forth herein, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto,
intending to be legally bound hereby, agree as follows:
Section 1. Definitions.
As used in this Agreement, the following terms shall have the meanings
set forth below:
"Charter" means the Certificate of Incorporation of the Company, as
amended from time to time.
"Commission" means the Securities and Exchange Commission or any other
Federal agency at the time administering the Securities Act.
<PAGE>
"Common Stock" means the Company's common stock, par value $.01 per
share, or any other shares of capital stock or other securities of the Company
into which such shares of Common Stock shall be reclassified or changed,
including, by reason of a merger, consolidation, reorganization or
recapitalization. If the Common Stock has been so reclassified or changed, or
if the Company pays a dividend or makes a distribution on the Common Stock in
shares of capital stock, or subdivides (or combines) its outstanding shares of
Common Stock into a greater (or smaller) number of shares of Common Stock, a
share of Common Stock shall be deemed to be such number of shares of stock and
amount of other securities to which a holder of a share of Common Stock
outstanding immediately prior to such change, reclassification, exchange,
dividend, distribution, subdivision or combination would be entitled.
"Delay Period" has the meaning set forth in Section 2(d) of this
Agreement.
"Demand Notice" has the meaning set forth in Section 2(a) of this
Agreement.
"Demand Registration" has the meaning set forth in Section 2(a) of
this Agreement.
"Effectiveness Period" has the meaning set forth in Section 2(d) of
this Agreement.
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations of the Commission thereunder.
"Holder" means a person who owns Registrable Securities and is either
(i) an Investor or a Permitted Transferee of an Investor that has agreed to be
bound by the terms of this Agreement as if such person were an Investor, (ii)
upon the death of any Holder, the executor of the estate of such Holder or such
Holder's heirs, devisees, legatees or assigns or (iii) upon the disability of
any Holder, any guardian or conservator of such Holder.
"Interruption Period" has the meaning set forth in Section 5(o) of
this Agreement.
"Losses" has the meaning set forth in Section 7(a) of this Agreement.
2
<PAGE>
"Misstatement/Omission" has the meaning set forth in Section 7(a) of
this Agreement.
"NASD" means the National Association of Securities Dealers, Inc.
"Other Security Holders" has the meaning set forth in Section 2(b) of
this Agreement.
"Permitted Transferee" means, with respect to any Person or Persons,
(i) any natural person who is related by blood or marriage to any such Person,
(ii) any trust or partnership of which there are no principal beneficiaries or
partners, as the case may be, other than any such Person or Permitted
Transferees of such Person, (iii) any charitable foundation over which any such
Person has discretionary authority, (iv) any other Person that directly or
indirectly controls or is controlled by or is under common control with such
Person, (v) any partners or members of such Person, and (vi) any heirs or
executors of any such Person.
"Person" means any natural person, corporation, partnership, firm,
association, trust, government, governmental agency, limited liability company
or any other entity, whether acting in an individual, fiduciary or other
capacity.
"Piggyback Registration" has the meaning set forth in Section 3(a) of
this Agreement.
"Registrable Securities" means (i) the shares of Common Stock issued
to the Investors pursuant to the Conversion Agreement, (ii) the shares of Common
Stock issuable upon Conversion of the Special Voting Stock and (iii) any Common
Stock issued or issuable with respect to such Common Stock referred to above by
way of stock dividends or stock splits or in connection with a combination of
shares, recapitalization, merger, consolidation, or other reorganization or
otherwise. As to any particular Registrable Securities, such securities will
cease to be Registrable Securities when (i) they have been distributed to the
public pursuant to an offering registered under the Securities Act, (ii) they
have been distributed to the public pursuant to Rule 144 (or any successor
provision) under the Securities Act or (iii) they are eligible for immediate
sale pursuant to Rule 144(k) under the Securities Act.
"Registration Statement" means any registration statement under the
Securities Act of the Company that covers any of the Registrable Securities
pursuant to the provisions of this Agreement, including the related prospectus
and any information
3
<PAGE>
deemed to be a part of such prospectus pursuant to Rule 430A under the
Securities Act, all amendments and supplements to such registration statement or
prospectus, including pre- and post-effective amendments (including any
registration statement filed pursuant to Rule 462(b) under the Securities Act),
all exhibits thereto and all material incorporated by reference or deemed to be
incorporated by reference in such registration statement.
"Required Investors" means Holders of at least 25% of the aggregate
amount of all Registrable Securities.
"Securities Act" means the Securities Act of 1933, as amended, or any
similar Federal statute, and the rules and regulations of the Commission
promulgated thereunder.
"Special Voting Stock" has the meaning set forth in the recitals
hereto.
Unless otherwise stated, other capitalized terms contained herein have
the meanings set forth in the Conversion Agreement.
Section 2. Demand Registrations.
(a) The Holders shall have the right, commencing on the first
anniversary of the date hereof by written notice (the "Demand Notice") given to
the Company, to request the Company to register under and in accordance with the
provisions of the Securities Act all or part of the Registrable Securities
designated by such Holders (a "Demand Registration"). Upon receipt of any such
Demand Notice from any Holder, the Company will promptly notify all other
Holders of the receipt of such Demand Notice and allow them the opportunity to
include Registrable Securities held by them in the proposed registration by
submitting their own Demand Notice. Notwithstanding anything herein to the
contrary, the Company shall not be required to honor a request for a Demand
Registration if the Registrable Securities requested by the initiating Holders
to be so registered does not constitute at least one million shares (or any
lesser number constituting all of the then-remaining shares) of Common Stock
(subject to adjustment in the event of any reclassification, recapitalization,
stock split, combination or exchange of the Common Stock, or any dividend on the
Common Stock payable in stock or other securities). The Holders shall not be
entitled to make a Demand Notice prior to six months following the last date the
Company is required to keep a previously demanded Registration Statement
effective pursuant to Section 2(d) hereof.
4
<PAGE>
(b) Subject to paragraph (a) above, as soon as practicable, but
in any event within 60 days of the date on which the Company first receives a
Demand Notice pursuant to Section 2(a) hereof, the Company shall file with the
Commission a Registration Statement on the appropriate form for the registration
and sale of the total number of Registrable Securities specified in such Demand
Notice in accordance with the intended method or methods of distribution
specified by the Holders in such Demand Notice. Subject to paragraph (h) below,
the Company may include in such registration other securities for sale for its
own account or for the account of any other holders of Common Stock ("Other
Security Holders"). The Company shall use reasonable best efforts to cause such
Registration Statement to be declared effective by the Commission as soon as
reasonably practicable.
(c) Subject to Section 2(d), upon the occurrence of any event
that would cause the Registration Statement (A) to contain a material
misstatement or omission or (B) to be not effective and usable for resale of
Registrable Securities during the period that such Registration Statement is
required to be effective and usable, the Company shall file an amendment to the
Registration Statement as soon as reasonably practicable, in the case of clause
(A), correcting any such misstatement or omission and, in the case of either
clause (A) or (B), use reasonable best efforts to cause such amendment to be
declared effective and such Registration Statement to become usable as soon as
reasonably practicable thereafter.
(d) The Company agrees to use reasonable best efforts to keep
any Registration Statement filed pursuant to this Section 2 continuously
effective and usable for the sale of Registrable Securities (i) until 180 days
from the date on which the Commission declares such Registration Statement
effective, or (ii) until all the Registrable Securities covered by such
Registration Statement have been sold pursuant to such Registration Statement,
if earlier, in either case as such period may be extended pursuant to this
Section 2. Notwithstanding the foregoing, the Company shall have the right to
delay the filing of any Registration Statement otherwise required to be prepared
and filed by the Company pursuant to this Section 2, or to suspend the use of
any Registration Statement, for a period not in excess of 90 days (a "Delay
Period") if any executive officer of the Company determines that in such
executive officer's reasonable judgment and good faith the registration and
distribution of the Registrable Securities covered or to be covered by such
Registration Statement would materially interfere with any pending financing,
acquisition, reorganization or other material transaction involving the Company
or any of its subsidiaries or would require disclosure of any other material
corporate development that the Company is not otherwise required or
5
<PAGE>
prepared to disclose. The Company will promptly give the Holders written notice
of such determination and an approximation of the period of the anticipated
delay; provided, however, that the aggregate number of days included in all
Delay Periods during any consecutive 12 months shall not exceed the aggregate of
(x) 180 days minus (y) the number of days occurring during all Interruption
Periods (as defined in Section 5(o) hereof) during such consecutive 12 months.
Each Holder agrees to cease all public disposition efforts under such
Registration Statement with respect to Registrable Securities held by such
Holder immediately upon receipt of notice of the beginning of any Delay Period.
The Company shall provide written notice to the Holders of the end of each Delay
Period. The time period for which the Company is required to maintain the
effectiveness of a Registration Statement referred to above shall be extended by
the aggregate number of days of all Delay Periods and Interruption Periods
affecting such Registration, and such period and any extension thereof is
hereinafter referred to as the "Effectiveness Period."
(e) The Company shall not enter into any agreement granting any
Other Security Holder piggyback rights to include such Other Security Holder's
securities in any registration in which the Holders have the right to include
Registrable Securities on a priority basis more favorable to such Other Security
Holder than is provided to the Holders pursuant to Section 3(b).
(f) Holders of a majority in number of the Registrable
Securities to be included in a Demand Registration pursuant to this Section 2
may, at any time prior to the effective date of the Registration Statement in
respect thereof, revoke such request by providing a written notice to the
Company to such effect; provided, however, that any such revocation shall be
counted as a demand under this section if such revocation occurs after the
Company has filed a registration statement.
(g) Preemption of Demand Registration. Notwithstanding anything
---------------------------------
to the contrary contained herein, after receiving a written request for a Demand
Registration, the Company may elect to effect an underwritten primary
registration in lieu of the Demand Registration if the Company's Board of
Directors believes that such primary registration would be in the best interests
of the Company. If the Company so elects to effect a primary registration, the
Company shall give prompt written notice (which shall be given not later than 20
days after the date of the Demand Notice) to all holders of the Registrable
Securities of its intention to effect such a registration and shall afford the
holders of the Registrable Securities the rights contained in Section 3 with
respect to Piggyback Registrations. In the event that the Company so elects to
effect a primary registration after receiving a request for a Demand
Registration, the
6
<PAGE>
Company shall use reasonable best efforts to have the Registration Statement
declared effective by the Commission as soon as reasonably practicable. In
addition, the request for a Demand Registration shall be deemed to have been
withdrawn and such primary registration shall not be deemed to be a Demand
Registration.
(h) Priority in Cutback. If a Demand Registration is an
-------------------
underwritten offering and includes securities for sale by the Company, and the
managing underwriter (such underwriters to be chosen by the Holders included in
such registration, subject to the Company's reasonable approval) advises the
Company, in writing, that, in its good faith judgment, the number of securities
requested to be included in such registration exceeds the number which can be
sold in such offering without materially and adversely affecting the
marketability of the offering, then the Company will include in any such
registration the maximum number of shares which the managing underwriter advises
the Company can be sold in such offering allocated as follows: first the
-----
Registrable Securities requested to be included in such registration by the
Holders, pro rata on the basis of the number of Registrable Securities requested
--- ----
to be included by such Holders, second the securities requested to be included
------
in such registration by the Company for its own account, and third the
-----
securities requested to be included in such registration by the Company for the
account of Other Security Holders.
Section 3. Piggyback Registrations.
(a) Right to Piggyback. Whenever the Company proposes to
------------------
register any of its equity securities under the Securities Act (other than a
registration on Form S-4 relating solely to a transaction described in Rule 145
of the Securities Act or a registration on Form S-8 or any successor forms
thereto), whether or not for sale for its own account, the Company will give
prompt written notice of such proposed filing to all Holders at least 30 days
before the anticipated filing date. Such notice shall offer such Holders the
opportunity to register such amount of Registrable Securities as they shall
request (a "Piggyback Registration"). Subject to Sections 3(b) and 3(c) hereof,
the Company shall include in each such Piggyback Registration all Registrable
Securities with respect to which the Company has received written requests for
inclusion therein within 28 days after such notice has been given by the Holders
to the Company. If the Registration Statement relating to the Piggyback
Registration is to cover an underwritten offering, such Registrable Securities
shall be included in the underwriting on the same terms and conditions as the
securities otherwise being sold through the underwriters. Each Holder shall be
permitted to withdraw all or part of the Registrable
7
<PAGE>
Securities from a Piggyback Registration at any time prior to the effective time
of such Piggyback Registration.
(b) Priority on Primary Registrations. If a Piggyback
---------------------------------
Registration is an underwritten primary registration on behalf of the Company,
by or through one or more underwriters of recognized standing and the managing
underwriters advise the Company in writing that in their good faith judgment the
number of securities requested to be included in such registration exceeds the
number which can be sold in such offering without materially and adversely
affecting the marketability of the offering, then the Company will include in
the Registration Statement relating to such registration (i) first, the
securities the Company proposes to sell, (ii) second, the Registrable Securities
requested to be included in such registration by the Holders thereof, reduced,
if necessary, on a pro rata basis, based on the amount of Registrable Securities
requested to be included therein, and (iii) third, if no Registrable Securities
were excluded pursuant to this Section 3(b), securities other than Registrable
Securities requested to be included in such registration by Other Security
Holders; provided, that if such registration contemplates an "over-allotment
option" on the part of underwriters, to the extent such over-allotment option is
exercised and Holders were excluded from registering any Registrable Securities
pursuant to the priority provisions of this Section 3(b), then the over-
allotment option shall be exercised first with respect to the Registrable
Securities and the Principal Securities on a pro rata basis to the extent of any
exclusion.
(c) Priority on Secondary Registrations. If a Piggyback
-----------------------------------
Registration is an underwritten secondary registration on behalf of Other
Security Holders, by or through one or more underwriters of recognized standing
and the managing underwriter(s) advise the Company in writing that in their good
faith judgment the number of securities requested to be included in such
registration exceeds the number which can be sold in such offering without
materially and adversely affecting the marketability of the offering, the
Company will include in such registration, the securities owned by such Other
Security Holders and the Registrable Securities requested to be included in such
registration by the Holders thereof, reduced, in each case, on a pro rata basis,
based on the amount of Registrable Securities owned by each such other Security
Holder or Holder.
Section 4. Hold-back Agreements.
(a) The Company agrees (i) if so required by the managing
underwriter of an underwritten offering effected pursuant to a Registration
under
8
<PAGE>
Section 2 or 3 hereof, not to effect any public or private sale or distribution
of securities of the same type (including any underlying securities) as the
Registrable Securities included in such underwritten registration, or any
securities convertible into or exchangeable or exercisable for such securities,
during the seven days prior to the pricing of such offering and until the
earlier of (A) the end of the 180-day period beginning on the date of pricing of
such offering (except as part of such underwritten offering and except pursuant
to registrations on Form S-4 or Form S-8 (or any successor form to such Form)),
unless the managing underwriter for such offering otherwise agrees, and (B) the
abandonment of such offering, and (ii) to use reasonable best efforts to cause
each holder of securities of the same type as the securities included in such
underwritten offering, or any securities convertible into or exchangeable or
exercisable for such securities, in each case purchased from the Company at any
time after the date of this Agreement (other than in a registered public
offering) to agree not to effect any public or private sale or distribution or
otherwise dispose (including sales pursuant to Rule 144 under the Securities
Act) of any such securities during such period (except as part of such
underwritten registration, if otherwise permitted), unless the managing
underwriter for such offering otherwise agrees.
(b) If the Company registers securities of the Company in connection
with an underwritten public offering of Common Stock solely by the Company, the
Holders, if so requested by the managing underwriter of such underwrit ten
offering, agree not to effect any public sale or distribution of any of the
Registrable Securities, including any sale pursuant to Rule 144 under the
Securities Act (other than as a part of such underwritten public offering)
without the consent of the Company or such managing underwriter during the
period commencing on a date specified by the underwriter, such date not to
exceed seven days prior to the effective date of such registration statement,
and ending on the earlier of (A) 180 days after the pricing of such offering,
(B) the abandonment of such offering and (C) the first date on which the Company
or any affiliate or executive officer of the Company is permitted to sell shares
of Common Stock of the Company.
Section 5. Registration Procedures.
Whenever the Company is required to register Registrable Securities
pursuant to Section 2 or 3 hereof, the Company will use reasonable best efforts
to effect the registration to permit the sale of such Registrable Securities in
accordance with the intended method or methods of disposition thereof, and
pursuant thereto the Company will as expeditiously as possible:
9
<PAGE>
(a) prepare and file with the Commission a Registration Statement with
respect to such Registrable Securities as prescribed by Section 2 or 3 on a form
available for the sale of the Registrable Securities by the holders thereof in
accordance with the intended method or methods of distribution thereof and use
reasonable best efforts to cause each such Registration Statement to become and
remain effective within the time periods and otherwise as provided herein;
(b) prepare and file with the Commission such amendments, (including
post-effective amendments) to the Registration Statement and such supplements to
the Prospectus as may be necessary to keep such Registration Statement effective
and to comply with the provisions of the Securities Act with respect to the
disposition of all securities covered by such Registration Statement until such
time as all of such securities have been disposed of in accordance with the
intended methods of disposition by the seller or sellers thereof set forth in
such Registration Statement;
(c) furnish to each selling Holder of Registrable Securities covered
by a Registration Statement and to each underwriter, if any, such number of
copies of such Registration Statement, each amendment and post-effective
amendment thereto, the Prospectus included in such Registration Statement
(including each preliminary prospectus and any supplement to such Prospectus and
any other prospectus filed under Rule 424 of the Securities Act), in each case
including all exhibits, and such other documents as such Holder may reasonably
request in order to facilitate the disposition of the Registrable Securities
owned by such Holder or to be disposed of by such underwriter (the Company
hereby consenting to the use in accordance with all applicable law of each such
Registration Statement (or amendment or post-effective amendment thereto) and
each such Prospectus (or preliminary prospectus or supplement thereto) by each
such Holder and the underwriters, if any, in connection with the offering and
sale of the Registrable Securities covered by such Registration Statement or
Prospectus);
(d) use reasonable best efforts to register or qualify and, if
applicable, to cooperate with the selling Holders, the underwriters, if any, and
their respective counsel in connection with the registration or qualification
(or exemption from such registration or qualification) of, the Registrable
Securities for offer and sale under the securities or blue sky laws of such
jurisdictions as any selling Holder or managing underwriters (if any) shall
reasonably request, to keep each such registration or qualification (or
exemption therefrom) effective during the period such Registration Statement is
required to be kept effective and to do any and all other acts or things
necessary or advisable to enable the disposition in such jurisdictions of the
Securities
10
<PAGE>
covered by the applicable Registration Statement; provided, that the Company
will not be required to (i) qualify generally to do business in any jurisdiction
where it would not otherwise be required to qualify but for this paragraph or
(ii) consent to general service of process or taxation in any such jurisdiction
where it is not so subject;
(e) use reasonable best efforts to cause all such Registrable
Securities to be listed on each securities exchange on which securities of the
same class as the Registrable Securities are then listed and, if not so listed,
to be listed on the NASD automated quotation system and, if listed on the NASD
automated quotation system, use reasonable best efforts to secure designation of
all such Registrable Securities covered by such Registration Statement as a
NASDAQ Security within the meaning of Rule 11Aa3-l under the Exchange Act or,
failing that, to secure NASDAQ authorization for such Registrable Securities
and, without limiting the generality of the foregoing, to arrange for at least
two market makers to register as such with respect to such Registrable
Securities with the NASD;
(f) provide a transfer agent and registrar for all such Registrable
Securities and a CUSIP number for all such Registrable Securities not later than
the effective date of such Registration Statement;
(g) comply with all applicable rules and regulations of the
Commission, and make available to its security holders an earnings statement
satisfying the provisions of Section 11(a) of the Securities Act and Rule 158
thereunder (or any similar rule promulgated under the Securities Act) no later
than 45 days after the end of any 12-month period (or 90 days after the end of
any 12-month period if such period is a fiscal year) (or in each case within
such extended period of time as may be permitted by the Commission for filing
the applicable report with the Commission) (i) commencing at the end of any
fiscal quarter in which Registrable Securities are sold to underwriters in an
underwritten offering or (ii) if not sold to underwriters in such an offering,
commencing on the first day of the first fiscal quarter of the Company after the
effective date of a Registration Statement, which earnings statement shall cover
said 12-month periods;
(h) use reasonable best efforts to prevent the issuance of any order
suspending the effectiveness of a Registration Statement or suspending the
qualification (or exemption from qualification) of any of the Registrable
Securities included therein for sale in any jurisdiction, and, in the event of
the issuance of any stop order suspending the effectiveness of a Registration
Statement, or of any order suspending the qualification of any Registrable
Securities included in such Registration
11
<PAGE>
Statement for sale in any jurisdiction, the Company will use reasonable best
efforts promptly to obtain the withdrawal of such order at the earliest possible
moment;
(i) obtain "cold comfort" letters and updates thereof (which letters
and updates (in form, scope and substance) shall be reasonably satisfactory to
the managing underwriters, if any, and the Holders) from the independent
certified public accountants of the Company (and, if necessary, any other
independent certified public accountants of any subsidiary of the Company or of
any business acquired by the Company for which financial statements and
financial data are, or are required to be, included in the Registration
Statement), addressed to each of the underwriters, if any, and each selling
Holder of Registrable Securities, such letters to be in customary form and
covering matters of the type customarily covered in "cold comfort" letters in
connection with underwritten offerings and such other matters as the
underwriters, if any, or the Holders of a majority of the Registrable Securities
being sold may reasonably request;
(j) obtain opinions of independent counsel to the Company and updates
thereof (which counsel and opinions (in form, scope and substance) shall be
reasonably satisfactory to the managing underwriters, if any, and the Holders of
a majority of the Registrable Securities being sold), addressed to each selling
Holder and each of the underwriters, if any, covering the matters customarily
covered in opinions of issuer's counsel requested in underwritten offerings,
such as the effectiveness of the Registration Statement and such other matters
as may be requested by such counsel and underwriters, if any;
(k) promptly notify the selling Holders and the managing underwriters,
if any, and confirm such notice in writing,
(1) when a Prospectus or any supplement or post-effective
amendment to such Prospectus has been filed, and, with respect to a
Registration Statement or any post-effective amendment thereto, when the
same has become effective,
(2) of any request by the Commission or any other Federal or
state governmental authority for amendments or supplements to a
Registration Statement or related Prospectus or for additional information,
12
<PAGE>
(3) of the issuance by the Commission of any stop
order suspending the effectiveness of a Registration Statement or
of any order preventing or suspending the use of any Prospectus
or the initiation of any proceedings by any Person for that
purpose,
(4) of the receipt by the Company of any notification
with respect to the suspension of the qualification or exemption
from qualification of a Registration Statement or any of the
Registrable Securities for offer or sale under the securities or
blue sky laws of any jurisdiction, or the contemplation,
initiation or threatening, of any proceeding for such purpose,
and
(5) of the happening of any event or the existence of
any facts that make any statement made in such Registration
Statement or Prospectus untrue in any material respect or that
require the making of any changes in such Registration Statement
or Prospectus so that it will not contain any untrue statement of
a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made (in the
case of any Prospectus), not misleading (which notice shall be
accompanied by an instruction to the selling Holders and the
managing underwriters, if any, to suspend the use of the
Prospectus until the requisite changes have been made);
(l) if requested by the managing underwriters, if any, or a Holder of
Registrable Securities being sold, promptly incorporate in a prospectus,
supplement or post-effective amendment such information as the managing
underwrit ers, if any, and the Holders of a majority of the Registrable
Securities being sold reasonably request to be included therein relating to the
sale of the Registrable Securities, including, without limitation, information
with respect to the number of shares of Registrable Securities being sold to
underwriters, the purchase price being paid therefor by such underwriters and
with respect to any other terms of the underwritten offering of the Registrable
Securities to be sold in such offering, and make all required filings of such
prospectus, supplement or post-effective amendment promptly following
notification of the matters to be incorporated in such supplement or post-
effective amendment;
13
<PAGE>
(m) furnish to each selling Holder of Registrable Securities and the
managing underwriter, without charge, at least one signed copy of the
Registration Statement;
(n) as promptly as practicable upon the occurrence of any event
contemplated by clause 5(k)(5) above, prepare a supplement or post-effective
amendment to the Registration Statement or the Prospectus, or any document
incorporated therein by reference, or file any other required document so that,
as thereafter delivered to the purchasers of the Registrable Securities being
sold hereunder, the Prospectus will not contain an untrue statement of a
material fact or an omission to state a material fact required to be stated in a
Registration Statement or Prospectus or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading; and
(o) if such offering is an underwritten offering, enter into such
agreements (including an underwriting agreement in form, scope and substance as
is customary in underwritten offerings) and take all such other appropriate and
reasonable actions requested by the Holders owning a majority of the Registrable
Securities being sold in connection therewith or by the managing underwriters
(including cooperating in reasonable marketing efforts, including participation
by senior executives of the Company in any "roadshow" or similar meeting with
potential investors) in order to expedite or facilitate the disposition of such
Registrable Securities, and in such connection, provide indemnification
provisions and procedures substantially to the effect set forth in Section 7
hereof with respect to all parties to be indemnified pursuant to said Section.
The above shall be done at each closing under such underwriting or similar
agreement, or as and to the extent required thereunder.
Each Holder agrees by acquisition of such Registrable Securities that,
upon receipt of written notice from the Company of the happening of any event of
the kind described in Section 5(k), such Holder will forthwith discontinue
disposition of such Registrable Securities covered by such Registration
Statement until such Holder's receipt of the copies of the supplemented or
amended Registration Statement contemplated by Section 5(n), or until it is
advised in writing by the Company that the use of the applicable Prospectus may
be resumed, and has received copies of any additional or supplemental filings
that are incorporated or deemed to be incorporated by reference in such
prospectus (such period during which disposition is discontinued being an
"Interruption Period"), and, if so directed by the Company, such Holder will
deliver to the Company all copies of the Prospectus covering such Registrable
Securities current at the time of receipt of such notice.
14
<PAGE>
Section 6. Registration Expenses.
The Company shall bear all expenses incurred in connection with the
registration or attempted registration of the Registrable Securities pursuant to
Sections 2 and 3 of this Agreement as provided herein. Such expenses shall
include, without limitation, all printing, legal and accounting expenses
incurred by the Company and all registration and filing fees imposed by the
Commission, any state securities commission or the New York Stock Exchange or,
if the Common Stock is not then listed on the New York Stock Exchange, the
principal national securities exchange or national market system on which the
Common Stock is then traded or quoted. Notwithstanding the foregoing sentence,
Holders shall be responsible for any pro rata share of brokerage or underwriting
commissions and taxes of any kind (including, without limitation, transfer
taxes) with respect to any disposition, sale or transfer of Registrable
Securities and for any legal, accounting and other expenses incurred by them in
connection with any Registration Statement.
Section 7. Indemnification.
(a) Indemnification by the Company. The Company agrees to
------------------------------
indemnify, to the fullest extent permitted by law, each Holder, each affiliate
of a Holder and each officer, director, employee, counsel, agent or
representative of such Holder and its affiliates and each Person who controls
any such Person (within the meaning of either Section 15 of the Securities Act
or Section 20 of the Exchange Act) against, and hold it and them harmless from,
all losses, claims, damages, liabilities, costs (including, without limitation,
costs of preparation and attorneys' fees and disbursements) and expenses,
including expenses of investigation (collectively, "Losses") arising out of,
caused by or based upon any untrue or alleged untrue statement of material fact
contained in any Registration Statement, or any omission or alleged omission of
a material fact required to be stated therein or necessary to make the
statements therein not misleading (a "Misstatement/Omission"), or any violation
or alleged violation by the Company of the Securities Act, the Exchange Act, any
state securities law, or any rule or regulation promulgated under the Securities
Act, the Exchange Act or any state securities law, except that the Company shall
not be liable insofar as such Misstatement/Omission or violation is made in
reliance upon and in conformity with information furnished in writing to the
Company by such Holder expressly for use therein; provided, further that the
Company shall not be liable for a Holder's failure to deliver or cause to be
delivered (to the extent such delivery is required under the Securities Act) the
Prospectus contained in the Registration Statement, furnished to it by the
Company at or prior to the time such action is required by the Securities Act to
the person claiming
15
<PAGE>
a Misstatement/Omission if such Misstatement/Omission was corrected in such
Registration Statement. In connection with an underwritten offering, the Company
will indemnify such underwriters, selling brokers, dealer managers and similar
securities industry professionals participating in the distribution, their
officers and directors and each Person who controls such underwriters (within
the meaning of either Section 15 of the Securities Act or Section 20 of the
Exchange Act) to the same extent as provided above with respect to the
indemnification of the Holders. This indemnity shall be in addition to any other
indemnification arrangements to which the Company may otherwise be party.
(b) Indemnification by the Holders. In connection with any
------------------------------
Registration Statement in which a Holder is participating, each such Holder
agrees to indemnify, to the fullest extent permitted by law the Company and each
affiliate, employee, counsel, agent, representative, director or officer of the
Company and each Person who controls the Company (within the meaning of either
Section 15 of the Securities Act or Section 20 of the Exchange Act) against, and
hold it harmless from, any Losses arising out of or based upon (i) any
Misstatement/Omission contained in the Registration Statement, if and to the
extent that such Misstatement/Omission arose out of or was based upon
information furnished in writing by such Holder for use therein, or (ii) the
failure by the Holder to deliver or cause to be delivered (to the extent such
delivery is required under the Securities Act) the Prospectus contained in the
Registration Statement, furnished to it by the Company at or prior to the time
such action is required by the Securities Act to the person claiming a
Misstatement/Omission if such Misstatement/Omission was corrected in such
Registration Statement. Notwithstanding the foregoing, the obligation to
indemnify will be individual (several and not joint) to each Holder and will be
limited to the net amount of proceeds (net of payment of all expenses) received
by such Holder from the sale of Registrable Securities pursuant to such
Registration Statement giving rise to such indemnification obligation.
(c) Conduct of Indemnification Proceedings. In case any action, claim
--------------------------------------
or proceeding shall be brought against any Person entitled to indemnifica tion
hereunder, such indemnified party shall promptly notify each indemnifying party
in writing, and such indemnifying party shall assume the defense thereof,
including the employment of counsel reasonably satisfactory to such indemnified
party and payment of all fees and expenses incurred in connection with the
defense thereof. The failure to so notify such indemnifying party shall not
affect any obligation it may have to any indemnified party under this Agreement
or otherwise except to the extent that (as finally determined by a court of
competent jurisdiction (which determination is not subject to review or appeal))
such failure materially prejudiced such indemnifying party. Each
16
<PAGE>
indemnified party shall have the right to employ separate counsel in such
action, claim or proceeding and participate in the defense thereof, but the fees
and expenses of such counsel shall be at the expense of each indemnified party
unless: (i) such indemnifying party has agreed to pay such expenses; (ii) such
indemnifying party has failed promptly to assume the defense and employ counsel
reasonably satisfactory to such indemnified party; or (iii) the named parties to
any such action, claim or proceeding (including any impleaded parties) include
both such indemnified party and such indemnifying party or an affiliate or
controlling person of such indemnifying party, and such indemnified party shall
have been advised in writing by counsel that either (x) there may be one or more
legal defenses available to it which are different from or in addition to those
available to such indemnifying party or such affiliate or controlling person or
(y) a conflict of interest may exist if such counsel represents such indemnified
party and such indemnifying party or its affiliate or controlling person;
provided, however, that such indemnifying party shall not, in connection with
any one such action or proceeding or separate but substantially similar or
related actions or proceedings in the same jurisdiction arising out of the same
general allegations or circumstances, be responsible hereunder for the fees and
expenses of more than one separate firm of attorneys (in addition to any local
counsel), which counsel shall be designated by such indemnified party.
No indemnified party shall be liable for any settlement effected
without its written consent. Each indemnifying party agrees, jointly and
severally, that it will not, without the indemnified party's prior written
consent, consent to entry of any judgment or settle or compromise any pending or
threatened claim, action or proceeding in respect of which indemnification or
contribution may be sought hereunder unless the foregoing contains an
unconditional release, in form and substance reasonably satisfactory to the
indemnified parties, of the indemnified parties from all liability and
obligation arising therefrom. The indemnifying party's liability to any such
indemnified party hereunder shall not be extinguished solely because any other
indemnified party is not entitled to indemnity hereunder.
(d) Survival. The indemnification provided for under this
--------
Agreement will (i) remain in full force and effect regardless of any
investigation made by or on behalf of the indemnified party or any officer,
director or controlling Person of such indemnified party, (ii) survive the
transfer of securities and (iii) survive the termination of this Agreement.
(e) Right to Contribution. If the indemnification provided for
---------------------
in this Section 7 is unavailable to, or insufficient to hold harmless, an
indemnified party
17
<PAGE>
under Section 7(a) or Section 7(b) above in respect of any Losses referred to in
such Sections, then each applicable indemnifying party shall have an obligation
to contribute to the amount paid or payable by such indemnified party as a
result of such Losses in such proportion as is appropriate to reflect the
relative fault of the Company, on the one hand, and of the Holder, on the other,
in connection with the Misstatement/Omission which resulted in such Losses,
taking into account any other relevant equitable considerations. The amount paid
or payable by a party as a result of the Losses referred to above shall be
deemed to include, subject to the limitations set forth in Section 7(c) above,
any legal or other fees or expenses reasonably incurred by such party in
connection with any investigation, lawsuit or legal or administrative action or
proceeding.
The relative fault of the Company, on the one hand, and of the Holder,
on the other, shall be determined by reference to, among other things, whether
the relevant Misstatement/Omission relates to information supplied by the
Company or by the Holder and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such Misstatement/Omission.
The Company and each Holder agree that it would not be just and
equitable if contribution pursuant to this Section 7(e) were determined by pro
rata allocation or by any other method of allocation which does not take account
of the equitable considerations referred to above. Notwithstanding the
provisions of this Section 7(e), a Holder shall not be required to contribute
any amount in excess of the amount by which (i) the amount (net of payment of
all expenses) at which the securities that were sold by such Holder and
distributed to the public were offered to the public exceeds (ii) the amount of
any damages which such Holder has otherwise been required to pay by reason of
such Misstatement/Omission.
No Person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Securities Act) shall be entitled to contribution from
any Person who was not guilty of such fraudulent misrepresentation.
Section 8. Rules 144 and 144A.
The Company shall timely file the reports required to be filed by it
under the Securities Act and the Exchange Act (including but not limited to the
reports under sections 13 and 15(d) of the Exchange Act referred to in
subparagraph (c) of Rule 144 adopted by the Commission under the Securities Act)
and the rules and regulations adopted by the Commission thereunder (or, if the
Company is not required to file such
18
<PAGE>
reports, it will, upon the request of any holder of Registrable Securities, make
publicly available other information) and will take such further action as any
holder of Registrable Securities may reasonably request, all to the extent
required from time to time to enable such Holder to sell Registrable Securities
without registration under the Securities Act within the limitation of the
exemptions provided by (a) Rule 144 and Rule 144A under the Securities Act, as
such Rules may be amended from time to time, or (b) any similar rule or
regulation hereafter adopted by the Commission.
Section 9. Underwritten Registrations.
In the case of any underwritten offering pursuant to a Demand
Registration under Section 2, the managing or lead underwriter or underwriters
thereof shall be selected by the Holders included in such registration, subject
to the Company's reasonable approval. No Person may participate in any
registration hereunder which is underwritten unless such Person (i) agrees to
sell such Person's securities on the basis provided in any underwriting
arrangements approved by the Person or Persons entitled hereunder to approve
such arrangements and (ii) completes and executes all questionnaires, powers of
attorney, customary indemnities, underwriting agreements and other documents
required under the terms of such underwriting arrangements; provided, that no
Holder included in any underwritten registration shall be required to make any
representations or warranties to the Company or the underwriters other than
representations and warranties regarding such Holder and such Holder's intended
method of distribution.
Section 10. Covenants of Holders.
Each of the Holders hereby agrees (a) to cooperate with the Company
and to furnish to the Company all such information in connection with the
preparation of the Registration Statement and any filings with any state
securities commissions as the Company may reasonably request, (b) to the extent
required by the Securities Act, to deliver or cause delivery of the prospectus
contained in the Registration Statement, any amendment or supplement thereto, to
any purchaser of the Registrable Securities covered by the Registration
Statement from the Holder and (c) to notify the Company within three months
after any sale of Registrable Securities by such Holder or, in the case of a
sale of all or substantially all of the Registrable Securities owned by a
Holder, within ten days after such sale.
19
<PAGE>
Section 11. Miscellaneous.
(a) No Inconsistent Agreements. The Company will not hereafter
--------------------------
enter into any agreement with respect to its securities which is inconsistent
with, adversely effects or violates the rights granted to the Holders in this
Agreement.
(b) Remedies. Any Person having rights under any provision of
--------
this Agreement will be entitled to enforce such rights specifically to recover
damages caused by reason of any breach of any provision of this Agreement and to
exercise all other rights provided in the Conversion Agreement or granted by
law. The parties hereto agree and acknowledge that money damages may not be an
adequate remedy for any breach of the provisions of this Agreement and hereby
agree to waive the defense in any action for specific performance or injunctive
relief that a remedy at law would be adequate. Accordingly, any party may in its
sole discretion apply to any court of law or equity of competent jurisdiction
(without posting any bond or other security) for specific performance and for
other injunctive relief in order to enforce or prevent violation of the
provisions of this Agreement.
(c) Amendments and Waivers. Except as otherwise provided herein,
----------------------
the provisions of this Agreement, including the provisions of this sentence, may
be amended, modified, supplemented or waived only upon the prior written consent
of the Company and Holders of a majority of the outstanding Registrable
Securities.
(d) Successors and Assigns. This Agreement shall be binding upon
----------------------
and inure to the benefit of the successors and assigns of the Company. This
Agreement may only be assigned by any Holder to any other Holder, unless
otherwise consented to by the Company (such consent not to be unreasonably
withheld) and any other attempted assignment hereof by any Holder will be void
and of no effect and shall terminate all obligations of the Company hereunder
with respect to such Holder. None of the rights of any Investor or Holder may be
assigned other than to a Holder who agrees in writing to be bound by this
Agreement. The Company shall be given written notice by the transferring
Investor or Holder at the time of the transfer stating the name and address of
the transferee and identifying the Registrable Securities transferred, provided,
--------
that failure to give such notice shall not affect the validity of such transfer
- ----
or assignment.
(e) Severability. In the event that any one or more of the
------------
provisions contained herein, or the application thereof in any circumstances, is
held invalid, illegal or unenforceable in any respect for any reason, the
validity, legality and
20
<PAGE>
enforceability of any such provision in every other respect and of the remaining
provisions hereof shall not be in any way impaired or affected, it being
intended that the rights and privileges of the parties hereto shall be
enforceable to the fullest extent permitted by law.
(f) Counterparts. This Agreement may be executed in any number
------------
of counterparts, any one of which need not contain the signatures of more than
one party, but each of which when so executed shall be deemed to be an original
and all such counterparts taken together shall constitute one and the same
Agreement.
(g) Descriptive Headings: Interpretation. The descriptive
------------------------------------
headings of this Agreement are inserted for convenience of reference only and
shall not limit or otherwise affect the meaning hereof. The use of the word
"including" in this Agreement shall be by way of example rather than by
limitation.
(h) Notices. All notices, demands or other communications to be
-------
given or delivered under or by reason of the provisions of this Agreement shall
be in writing and shall be deemed to have been given when delivered personally
to the recipient, sent to the recipient by reputable air courier guaranteeing
overnight delivery (charges prepaid), mailed to the recipient by certified or
registered mail, return receipt requested and postage prepaid or sent by
telecopier. Such notices, demands and other communications shall be sent to each
Investor at the address indicated below such Investor's name on the signature
pages to the Purchase Agreement and to the Company at the address indicated
below:
Plum Creek Timber Company, Inc.
999 Third Avenue, Suite 2300
Seattle, Washington 98104
(206) 467-3799 (fax)
Attention: President and Chief Executive Officer
with a copy (which shall not constitute notice) to:
Skadden, Arps, Slate, Meagher & Flom LLP
300 South Grand Avenue, Suite 3400
Los Angeles, California 90071
(213) 687-5600 (fax)
Attention: Jonathan H. Grunzweig, Esq.
21
<PAGE>
or to such other address or to the attention of such other person as the
recipient party has specified by prior written notice to the sending party. Any
notice, demand or other communication given hereunder will be deemed to have
been given as of the date so delivered; as of the first business day after being
delivered to an overnight air courier guaranteeing overnight delivery; on the
fifth business day after being mailed; or when transmission completed, if
telecopied; as the case may be.
(i) GOVERNING LAW; SUBMISSION TO JURISDICTION. THIS AGREEMENT
-----------------------------------------
SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE
STATE OF NEW YORK. THE COMPANY HEREBY IRREVOCABLY SUBMITS TO THE EXCLUSIVE
JURISDICTION OF ANY WASHINGTON STATE COURT SITTING IN THE CITY OF SEATTLE OR ANY
FEDERAL COURT SITTING IN THE CITY OF SEATTLE IN RESPECT OF ANY SUIT, ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT AND THE REGISTRABLE
SECURITIES, AND IRREVOCABLY ACCEPTS FOR ITSELF AND IN RESPECT OF ITS PROPERTY,
GENERALLY AND UNCONDITIONALLY, JURISDICTION OF THE AFORESAID COURTS. EACH PARTY
AGREES THAT IT WILL NOT COMMENCE ANY SUCH SUIT, ACTION OR PROCEEDING IN ANY
OTHER JURISDICTION. EACH PARTY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT IT MAY
EFFECTIVELY DO SO UNDER APPLICABLE LAW, ANY OBJECTION WHICH IT MAY NOW OR
HEREAFTER HAVE TO THE LAYING OF THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING
BROUGHT IN ANY SUCH COURT AND ANY CLAIM THAT ANY SUCH SUIT, ACTION OR PROCEEDING
HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
(j) Entire Agreement. This Agreement is intended by the parties
----------------
as a final expression of their agreement and intended to be a complete and
exclusive statement of the agreement and understanding of the parties hereto in
respect of the subject matter contained herein. This Agreement supersedes all
prior agreements and understandings between the parties with respect to such
subject matter.
(k) Attorneys' Fees. In any action or proceeding brought to
---------------
enforce any provision of this Agreement, or where any provision hereof is
validly asserted as a defense, the prevailing party, as determined by the court,
shall be entitled to recover reasonable attorneys' fees in addition to any other
available remedy.
22
<PAGE>
IN WITNESS WHEREOF the parties hereto have or have caused this
Registration Rights Agreement to be duly executed as of the date first above
written.
THE COMPANY:
PLUM CREEK TIMBER COMPANY, INC.
By: _______________________________________________
Name:
Title:
THE INVESTORS:
PC ADVISORY PARTNERS I, L.P.
By: _______________________________________________
Name:
Title:
Address for notices:
-------------------
c/o SPO Partners Co.
591 Redwood Highway
Suite 3215
Mill Valley, California 94941
(415) 383-5126 (fax)
Attention: President and Chief Executive Officer
With a copy (which shall not constitute notice) to:
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Sullivan & Cromwell
1888 Century Park East
21/st/ Floor
Los Angeles, California 90067
(310) 712-8800 (fax)
Attention: Alison Ressler, Esq.
<PAGE>
PCMC INTERMEDIATE HOLDINGS, L.P.
By: _______________________________________________
Name:
Title:
Address for Notices:
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c/o SPO Partners Co.
591 Redwood Highway
Suite 3215
Mill Valley, California 94941
(415) 383-5126 (fax)
Attention: President and Chief Executive Officer
With a copy (which shall not constitute notice) to:
---------------------------------------------------
Sullivan & Cromwell
1888 Century Park East
21/st/ Floor
Los Angeles, California 90067
(310) 712-8800 (fax)
Attention: Alison Ressler, Esq.
<PAGE>
Registration Rights Agreement
Holder Signature Page
HOLDER
___________________________________________________
Name:
Address for Notice:
___________________________________________________
___________________________________________________
___________________________________________________
___________________________________________________
