1994 GEORGIA-PACIFIC CORPORATION
REPLACEMENT EMPLOYEE STOCK OPTION
(G-P Group Stock)
THIS AGREEMENT, dated December 17, 1997, by and between GEORGIA-PACIFIC
CORPORATION, a Georgia corporation (hereinafter called the "Company"), and
(hereinafter called "Optionee");
W I T N E S S E T H:
WHEREAS, on February 2, 1994, the Optionee was granted pursuant to the
Georgia-Pacific Corporation 1994 Employee Stock Option Plan the option to
purchase from the Company up to, but not exceeding in the aggregate,
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shares of the Company's then existing common stock ("G-P Common Stock") at a
price of $75.06 per share (the "Original Option"), of which an option to
purchase from the Company up to, but not exceeding in the aggregate,
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shares of G-P Common Stock remained outstanding on December 17, 1997;
WHEREAS, the shareholders of the Company have approved, effective
December 16, 1997, a recapitalization of the Company's common stock, viz. the
conversion of each share of G-P Common Stock into one share of Georgia-Pacific
Corporation--Georgia-Pacific Group Common Stock (`G-P Group Stock'') and the
distribution of one share of Georgia-Pacific Corporation--Timber Group Common
Stock ("Timber Stock") with respect to each share of G-P Group Stock (the
"Letter Stock Transaction");
WHEREAS, as a consequence of the implementation of the Letter Stock
Transaction and as authorized under Section 9 of the agreement documenting the
Original Option, it is necessary to convert the Original Option into two
separate options (each independently exercisable), one to purchase shares of G-P
Group Stock and the other to purchase shares of Timber Stock, in each case for a
number of shares equal to the number of shares specified in the Original Option
that remain outstanding on December 17, 1997;
WHEREAS, in making the options conversion contemplated in the Letter
Stock Transaction, the exercise price for the G-P Group Stock option is equal to
the exercise price under the Original Option (the "Original Option Price")
multiplied by a fraction, the numerator of which is the average of the high and
low price for G-P Group Stock on the first date such stock is traded, regular
way, on the New York Stock Exchange (the "G-P Group Stock Price") and the
denominator of which is the sum of the G-P Group Stock Price and the average of
the high and low price for Timber Stock on the first date such stock is traded,
regular way, on the New York Stock Exchange, and the exercise price for the
Timber Stock option will equal the difference between the Original Option Price
and the exercise price for the G-P Group Stock option; and
WHEREAS, the G-P Group Stock options and the Timber Stock options
issued as replacements for the Original Option are to be deemed to be
continuations of the Original Option;
NOW, THEREFORE, in consideration of the mutual covenants and agreements
hereinafter set forth, the parties hereto do hereby mutually agree as follows:
1. This Agreement shall not be deemed to limit or restrict the right
of the Company or any Subsidiary to terminate the Optionee's employment at any
time, for any reason, with or without cause, or to limit or restrict the right
of the Optionee to terminate his employment with the Company or any Subsidiary
at any time. In the event of termination of the Optionee's employment with the
Company and all Subsidiaries, such employee shall be eligible to exercise only
options on the number of shares that have become available for purchase pursuant
to Section 2 hereof at the time of termination. Optionee's services shall be
subject to the direction of the Board of Directors of the Company or such
Subsidiary or such officer or officers as the respective Boards may designate
from time to time and shall be rendered at such locations as the respective
Boards or any such officer may determine.
2. Subject to the terms and conditions set forth herein, the Company
hereby grants to the Optionee during the period commencing on the date hereof
and ending on February 2, 1999 the option to purchase from the Company, from
time to time, as hereinafter more specifically stated, at a price of $53.41
per share, up to but not exceeding in the aggregate, shares of G-P
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Group Stock, which option may be exercised, in whole or in part, from time to
time, commencing on the date hereof, but no later than February 2, 1999. Such
period may not be extended pursuant to the provisions of Section 4.
Notwithstanding anything in this Agreement to the contrary, all options granted
hereunder to the Optionee shall terminate as of his date of termination if such
termination is for Just Cause. "Just Cause" for the purposes of this
Agreement shall mean any of the following: (i) the willful and continued failure
of the Optionee to perform satisfactorily the duties consistent with his title
and position reasonably required of him by the Board or supervising management
(other than by reason of incapacity due to physical or mental illness); (ii) the
commission by the Optionee of a felony, or the perpetration by the Optionee of a
dishonest act or common law fraud against the Company or any of its
Subsidiaries; or (iii) any other willful act or omission which is injurious to
the financial condition or business reputation of the Company or any of its
Subsidiaries.
3. The option hereby granted shall be exercised by the delivery to
the Treasurer of the Company or his delegate, from time to time, of written
notice, signed by the Optionee, specifying the number of shares the Optionee
then desires to purchase, together with cash, certified check, bank draft or
postal or express money order to the order of the Company for an amount in
United States dollars equal to the sum of: (a) the option price of such shares
and (b) an amount sufficient to pay all state and federal withholding taxes
(including, without limitation, FICA) with respect to the exercise. If the
written notice is mailed, the date of its receipt by the Treasurer of the
Company or his delegate shall be considered the date of exercise of the option
by the Optionee. An exercise of stock options granted under this Agreement will
generate compensation subject to federal and state tax withholding (including,
without limitation, FICA withholding) in the calendar year of each exercise.
The Committee or the Plan Administrator may also authorize alternative
procedures for exercising options under this Agreement.
Within thirty (30) business days after any such exercise of the
option in whole or in part by the Optionee, the Company shall deliver to the
Optionee a certificate or certificates representing the aggregate number of
shares with respect to which such option shall be so exercised, registered in
the Optionee's name.
Subject to the provisions of Section 12, the Optionee shall not
have the right, in lieu of the exercise of the option, to surrender the option
granted hereby, or any portion thereof, in order to receive shares covered by
the option.
4. The option hereby granted shall terminate and be of no force or
effect upon the happening of the first to occur of the following events:
(a) The expiration of the time allowed for exercise of this
option as specified in Section 2 of this Agreement.
(b) Subject to the provisions of Section 2, the expiration of
ninety days after the date of the termination (whether voluntary or involuntary)
of the Optionee's employment with the Company and all Subsidiaries (other than
as a result of his death or permanent disability while in the Company's
employment or his retirement). During such ninety-day period, the Optionee
shall have the right to exercise this option only with respect to any or all
shares which were available for purchase by him on the date of such termination
of employment. In the event of Optionee's death or permanent disability after
termination of employment and during such ninety-day period, such deceased
Optionee's estate, personal representative or beneficiary or such disabled
Optionee or the Optionee's legal guardian or representative, as the case may be,
may exercise this option within such period with respect to any or all shares
which were available for purchase by the Optionee on the date of his termination
of employment and which had not been purchased by him prior to his death or
permanent disability.
(c) Subject to the provisions of Section 2, the expiration of
36 months after the date of the Optionee's retirement immediately following a
period of continuous employment by the Company. During such 36-month period,
the Optionee shall have the right to exercise this option only with respect to
any or all shares which were available for purchase by him on the date of such
retirement. In the event of Optionee's death or permanent disability after
retirement and during such 36-month period, such deceased Optionee's estate,
personal representative or beneficiary, or such disabled Optionee or the
Optionee's legal guardian or representative, as the case may be, may exercise
this option within such period with respect to any or all shares which were
available for purchase by the Optionee on the date of his retirement and which
had not been purchased by him prior to his death or permanent disability.
(d) Subject to the provisions of Section 2, the expiration of
36 months after the date of death or permanent disability of the Optionee during
a period of continuous employment by the Company. During such period, such
deceased Optionee's estate, personal representative or beneficiary, or such
disabled Optionee or the Optionee's legal guardian or representative, as the
case may be, may exercise this option only with respect to any or all shares
which were available for purchase by the Optionee on the date of his death or
permanent disability.
The Optionee's employment by the Company shall be deemed to
continue during such periods as he is employed by a Subsidiary. If the Optionee
shall be transferred from the Company to a Subsidiary or from a Subsidiary to
the Company or from a Subsidiary to another Subsidiary, his employment shall not
be deemed to be terminated by reason of such transfer. If, while the Optionee
is employed by a Subsidiary, such Subsidiary shall cease to be a Subsidiary and
the Optionee is not thereupon transferred to and employed by the Company or
another Subsidiary, the date that the Optionee's employer ceases to be a
Subsidiary shall be deemed to be a termination of employment, and (subject to
the provisions of Section 2) the option shall terminate 90 days or 36 months (as
the case may be) after such date, and such Optionee shall have the right with
respect to any shares available for purchase on the date of such termination of
employment to exercise his option at any time within such extended period.
Optionee's date of termination or retirement shall be deemed to
be his last day worked. For purposes of this Agreement, "retirement" shall mean
voluntary or involuntary (other than for Just Cause) termination of employment
with the Company and all Subsidiaries after having attained age 65 or having
attained age 55 and having accrued 10 years of service for vesting purposes
under the Company's salaried retirement plans. The Optionee's date of permanent
disability shall be the last day of his salary continuation period under the
Corporation's policy providing for salary continuation for salaried employees
who are medically unable to work because of illness or injury, and Optionee
shall be deemed "permanently disabled" on that date only if he would be "totally
disabled" pursuant to the standards set forth in the Georgia-Pacific Corporation
Long-Term Disability Plan, whether or not Optionee is covered under that plan.
The Plan Administrator (as hereinafter defined) shall have
absolute and uncontrolled discretion to determine whether any authorized leave
of absence or absence on military or government service taken by the Optionee
shall constitute a termination of employment for the purposes of this Agreement.
5. Whenever the word `Optionee'' is used in any provision of this
Agreement under circumstances where the provision should logically be construed
to apply to the executors, the administrators, or the person or persons to whom
this option may be transferred by will or by the laws of descent and
distribution, it shall be deemed to include such person or persons.
6. This option is not transferable by the Optionee except by will or
the laws of descent and distribution and, during the Optionee's lifetime, may be
exercised only by him or by his legal guardian or representative. No assignment
or transfer of this option or the rights represented thereby, whether voluntary,
involuntary, or by operation of law or otherwise, except by will or the laws of
descent and distribution, shall vest in the assignee or transferee any interest
or right herein whatsoever, and immediately upon any attempt to assign or
transfer this option, or the right to cash bonuses hereunder, this option shall
terminate and be of no force or effect.
7. The Optionee shall not be deemed for any purpose to be a
stockholder of the Company with respect to any shares covered by this Agreement
as to which the option hereby granted shall not have been exercised and payment
and delivery made as herein provided. No adjustment shall be made for dividends
or other rights for which the record date is prior to the date the shares are
issued to Optionee.
8. The existence of this option shall not affect in any way the
right or power of the Company or its stockholders to make or authorize any and
all adjustments, recapitalizations, reorganizations or other changes in the
Company's capital structure or its business, or any merger or consolidation of
the Company, or any issue of bonds, debentures, preferred or preference stocks
ahead of or affecting G-P Group Stock, the rights thereof, or the dissolution or
liquidation of the Company, or any sale or transfer of all or part of its assets
or business, or any other corporate act or proceeding, whether of a similar
character or otherwise.
9. The shares with respect to which this option is granted are
shares of G-P Group Stock as constituted on the date of this Agreement, but if,
and whenever, after December 17, 1997, and prior to the delivery by the Company
of all of the shares of G-P Group Stock with respect to which this option is
granted, the Company shall effect a change in the par value of G-P Group Stock,
or a change in the number of shares of G-P Group Stock having par value into the
same or a different number of shares without par value, or a subdivision or
consolidation of shares, or other capital readjustment, the payment of a stock
dividend, or other increase or reduction of the number of shares of G-P Group
Stock outstanding, without the receipt of consideration by the Company, then (a)
in the event of any increase in the number of such shares outstanding, the
number of shares of G-P Group Stock then remaining subject to this option shall
be proportionately increased, and the cash consideration payable per share shall
be proportionately reduced, (b) in the event of a reduction in the number of
such shares outstanding, the number of shares of G-P Group Stock then remaining
subject to this option shall be proportionately reduced, and the cash
consideration payable per share shall be proportionately increased, and (c) in
the event of no change in the number of shares outstanding in connection with a
change in par value of G-P Group Stock or a change from par value to no par
value, the shares resulting from any such change shall be deemed to be G-P Group
Stock under this Agreement.
10. After a merger of one or more corporations into the Company, or
after a consolidation of the Company and one or more corporations in which the
Company shall be the surviving corporation, the Optionee shall, at no additional
cost, be entitled upon any exercise of this option, to receive (subject to any
required action by stockholders), in lieu of the number of shares as to which
this option shall then be so exercised, the number and class of shares of stock
or other securities to which the Optionee would have been entitled pursuant to
the terms of the agreement of merger or consolidation if, immediately prior to
such merger or consolidation, the Optionee had been the holder of record of a
number of shares of G-P Group Stock equal to the number of shares as to which
this option may be so exercised. The Plan Administrator shall determine, in its
absolute and uncontrolled discretion, the adjustments to be made and the extent
thereof.
11. Anything in this Agreement to the contrary notwithstanding:
(a) In the event of a merger in which the Company is not the
survivor or a sale of substantially all of the assets of the Company, the
Optionee shall have the right, commencing thirty (30) days prior to such merger
or sale of assets, to exercise this option immediately on a fully-vested basis
regardless of any exercise restriction contained in Section 2 of this Agreement;
and
(b) In the event that a Change in Control shall occur, the
Optionee shall have the right immediately after the effective date of such
Change in Control, until such time as this option would otherwise expire
according to Section 4 of this Agreement, to exercise this option on a fully-
vested basis each outstanding option which was granted to him under this
Agreement regardless of any exercise restriction contained in Section 2 of this
Agreement.
As used in this Agreement, a "Change in Control" shall mean a change in
control of a nature that would be required to be reported in response to Item
6(e) of Schedule 14A of Regulation 14A promulgated under the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), or any successor provision
thereto, whether or not the Company is then subject to such reporting
requirement; provided, however, that, without limitation, a Change in Control
shall be deemed to have occurred if (A) any individual, partnership, firm,
corporation, association, trust, unincorporated organization or other entity, or
any syndicate or group deemed to be a person under Section 14(d)(2) of the
Exchange Act, is or becomes the "beneficial owner" (as defined in Rule 13d-3 of
the General Rules and Regulations under the Exchange Act), directly or
indirectly, of securities of the Company representing 30% or more of the
combined voting power of the Company's then outstanding securities entitled to
vote in the election of directors of the Company; or (B) during any period of
two (2) consecutive years (not including any period prior to the adoption of the
Plan), individuals who at the beginning of such period constituted the Board of
Directors and any new directors, whose election by the Board of Directors or
nomination for election by the Company's stockholders was approved by a vote of
at least three quarters (3/4) of the directors then still in office who either
were directors at the beginning of the period or whose election or nomination
for election was previously so approved, cease for any reason to constitute a
majority thereof; provided, further, that a change in control shall not be
deemed to be a Change in Control for purposes of this Agreement if the Board of
Directors has approved such change in control prior to either (i) the occurrence
of any of the events described in the foregoing clauses (A) and (B) or (ii) the
commencement by any person other than the Company of a tender offer for G-P
Group Stock not approved by the Board of Directors prior to such commencement.
12. In the event that a Change in Control (as defined in Section 11
above) shall occur, the Optionee shall have the right to exercise this option
and receive from the Company an amount in cash, in a lump sum, for each share of
G-P Group Stock covered by such options, equal to the difference between the
then current exercise price of such option and the greater of: (i) the highest
price per share paid for the purchase of G-P Group Stock in connection with the
Change in Control and (ii) the highest closing price per share paid for the
purchase of G-P Group Stock on the principal exchange on which G-P Group Stock
is listed, or, if G-P Group Stock is not listed, on the NASD automatic quotation
system, during the 90-day period immediately preceding the Change in Control.
The Optionee may elect to receive such cash payment only during the 30-day
period commencing upon the effective date of the Change in Control, and such
election shall be effective with respect to all shares of G-P Group Stock with
respect to then outstanding options (to the extent not already exercised) which
were granted under this Agreement. Upon an election to receive such cash
payment, this option shall be deemed to have been fully exercised. In the event
a Change in Control shall occur and this Section 12 shall become effective, the
Company shall pay a cash bonus on the date any cash payment is made under this
Section 12 in an amount equal to the product of such cash payment and the Bonus
Factor. For purposes of this Section 12, the "Bonus Factor" is the decimal
equivalent of the fraction
T
1 - T
where T equals the sum of the highest statutory marginal federal and Georgia
income tax rates, expressed in decimal form, applicable to individuals resident
in Georgia on personal service income. For purposes of calculating the fraction
described in this Section, the "highest statutory marginal federal and Georgia
tax rates . . . on personal service income" shall be the appropriate rates in
effect on the date on which the affected cash payment is made (taking into
account any retroactive changes in the specified tax rates). If the Optionee is
employed by a Subsidiary, the Company shall pay such cash bonus as an agent for
the Subsidiary, which shall reimburse the Company. In all cases, the Company
shall hold and deposit such cash bonus with the appropriate taxing authorities
as withholding taxes.
13. In the event that Sections 11 or 12 of this Agreement shall
become applicable, Section 15 of this Agreement shall not be effective.
14. Anything in this Agreement to the contrary notwithstanding, if,
at any time specified herein for the exercise of this option or the delivery of
shares to the Optionee, any law or regulations of any governmental authority
having jurisdiction in the matter shall require either the Company or the
Optionee to take any action or refrain from action in connection therewith or to
delay such exercise, then the delivery of such shares on such exercise shall be
deferred until such action shall have been taken or such restriction on action
shall have been removed.
15. Subject to Section 13 of this Agreement, as conditions precedent
to the granting of the option and all other rights provided hereunder, the
Optionee and any other person who acquires any rights hereunder agrees that any
dispute or disagreement which shall arise under, or as a result of, or pursuant
to, this Agreement may be determined, either by the Plan Administrator
constituted under the Plan (the "Plan Administrator") or by the Compensation
Committee of the Company's Board of Directors (the "Committee") in the Plan
Administrator's or the Committee's absolute and uncontrolled discretion; and
that any such determination or interpretation of the terms of this Agreement or
any other determination by either such Plan Administrator or the Committee shall
be final, binding and conclusive on all persons affected thereby. Questions
regarding the options granted under this Agreement and the administration of the
Georgia-Pacific Corporation 1994 Employee Stock Option Plan may be addressed to
the Treasurer's Department of the Company.
16. Anything in this Agreement to the contrary notwithstanding, the
Company and Optionee acknowledge and agree that the Plan was not intended to
provide for the issuance of "incentive stock options" as defined in Section
422 of the Internal Revenue Code of 1986, as amended, and that the options
granted pursuant to this Agreement are not "incentive stock options" as so
defined.
17. Any notice which either party hereto may be required or permitted
to give to the other shall be in writing, and may be delivered personally or by
mail, postage prepaid, addressed as follows: Georgia-Pacific Corporation, x00
Xxxxxxxxx Xxxxxx, X.X., Xxxxxxx, Xxxxxxx 00000, Attention: Vice President and
Treasurer, or at such other address as the Company, by notice to the Optionee,
may designate in writing from time to time; to the Optionee at the address
indicated in the Optionee's then current personnel records, or at such other
address as the Optionee, by notice to the Treasurer of the Company at the above
address, may designate in writing from time to time. Such notices shall be
deemed given upon receipt.
IN WITNESS WHEREOF, the Company has caused this Agreement to be
executed by its duly authorized officers, under its corporate seal, and the
Optionee has executed this Agreement, as of this day and year first above
written.
GEORGIA-PACIFIC CORPORATION
By:
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A. D. Xxxxxxx
Chairman, Chief
Executive Officer
and President
ATTEST:
W. Xxxxx Xxxxxxx, III, Assistant Secretary
OPTIONEE
NOTE: PLEASE COMPLETE THE ATTACHED PERSONAL DATA SHEET.
OPTIONEE'S PERSONAL DATA
(Please Print)
Full Name
ADDRESS:
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SOCIAL SECURITY NUMBER:
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DATE OF BIRTH:
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Month, Day and Year
DIVISION: LOCATION:
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PLEASE NOTE THAT YOUR BENEFICIARY(IES) FOR PURPOSES OF THIS REPLACEMENT OPTION
WILL BE THE SAME AS THOSE YOU SELECTED FOR THE ORIGINAL OPTION UNLESS YOU NOTIFY
THE TREASURER'S DEPARTMENT.
