-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, DGBb/lqCxPrm4/3XG1AZY2OJH6xyWBoWKpFoPVGXybSmGGydRKgSyVdRbsP+i4ZI rqeJ3Ow3Vh3nGMPG/WARzA== 0000041077-97-000030.txt : 19971219 0000041077-97-000030.hdr.sgml : 19971219 ACCESSION NUMBER: 0000041077-97-000030 CONFORMED SUBMISSION TYPE: S-8 PUBLIC DOCUMENT COUNT: 18 FILED AS OF DATE: 19971218 EFFECTIVENESS DATE: 19971218 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: GEORGIA PACIFIC CORP CENTRAL INDEX KEY: 0000041077 STANDARD INDUSTRIAL CLASSIFICATION: LUMBER & WOOD PRODUCTS (NO FURNITURE) [2400] IRS NUMBER: 930432081 STATE OF INCORPORATION: GA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-8 SEC ACT: SEC FILE NUMBER: 333-42597 FILM NUMBER: 97740574 BUSINESS ADDRESS: STREET 1: 133 PEACHTREE ST NE STREET 2: 41ST FL CITY: ATLANTA STATE: GA ZIP: 30303 BUSINESS PHONE: 4045214000 MAIL ADDRESS: STREET 1: 133 PEACHTREE ST NE STREET 2: 41ST FL CITY: ATLANTA STATE: GA ZIP: 30303 S-8 1 GEORGIA-PACIFIC FORM S-8 Registration No. 333- SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM S-8 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF L933 GEORGIA-PACIFIC CORPORATION (Exact name of registrant as specified in its charter) GEORGIA 93-0432081 (State of Incorporation) (IRS Employer Identification No.) L33 PEACHTREE STREET, N.E., ATLANTA, GEORGIA 30303 (Address of Principal Executive Offices) GEORGIA-PACIFIC CORPORATION 1990 LONG-TERM INCENTIVE PLAN GEORGIA-PACIFIC CORPORATION 1993 EMPLOYEE STOCK OPTION PLAN GEORGIA-PACIFIC CORPORATION 1994 EMPLOYEE STOCK OPTION PLAN GEORGIA-PACIFIC CORPORATION 1995 SHAREHOLDER VALUE INCENTIVE PLAN, AS AMENDED AND RESTATED GEORGIA-PACIFIC CORPORATION/GEORGIA-PACIFIC GROUP 1997 LONG-TERM INCENTIVE PLAN GEORGIA-PACIFIC CORPORATION/TIMBER GROUP 1997 LONG-TERM INCENTIVE PLAN GEORGIA-PACIFIC CORPORATION SAVINGS AND CAPITAL GROWTH PLAN GEORGIA-PACIFIC CORPORATION HOURLY 401(K) SAVINGS PLAN (Full Title of The Plans) KENNETH F. KHOURY VICE PRESIDENT AND SECRETARY GEORGIA-PACIFIC CORPORATION L33 PEACHTREE STREET, N.E. ATLANTA, GEORGIA 30303 (Name and Address of Agent for Service) (404) 652-4839 (Telephone Number, including area code, of Agent for Service) CALCULATION OF REGISTRATION FEE Proposed Proposed Maximum Maximum Offering Aggregate Amount of Title of Securities Amount to be Price per Offering Registration to be Registered Registered(1) Share (2) Price Fee Georgia-Pacific Group Common Stock, par value $.80 per share 11,676,940 shares $62.00 $723,970,280 $213,571.23 Proposed Proposed Maximum Maximum Offering Aggregate Amount of Title of Securities Amount to be Price per Offering Registration to be Registered Registered(1) Share (2) Price Fee Timber Group Common Stock, par value $.80 per share 9,476,940 shares $25.125 $238,108,117.50 $70,241.90 In addition, pursuant to Rule 416(c) under the Securities Act of 1933, as amended (the "Securities Act"), this Registration Statement also covers an indeterminate amount of interests to be offered or sold pursuant to the 401(k) plans described herein. (1) This amount includes (i) 342,720 shares of Georgia-Pacific Corporation- Georgia-Pacific Group Common Stock ("G-P Group Stock") and 342,720 shares of Georgia-Pacific Corporation-Timber Group Common Stock ("Timber Group Stock") that may be acquired upon the exercise of options outstanding under the Georgia-Pacific Corporation 1990 Long-Term Incentive Plan; (ii) 31,950 shares of G-P Group Stock and 31,950 shares of Timber Group Stock that may be acquired upon the exercise of options outstanding under the Georgia-Pacific Corporation 1993 Employee Stock Option Plan; (iii) 303,200 shares of G-P Group Stock and 303,200 shares of Timber Group Stock that may be acquired upon the exercise of options outstanding under the Georgia- Pacific Corporation 1994 Employee Stock Option Plan; (iv) 4,600,000 shares of G-P Group Stock and 4,600,000 shares of Timber Group Stock that may be acquired upon the exercise of options granted under the Georgia-Pacific Corporation 1995 Shareholder Value Incentive Plan, as Amended and Restated; (v) 4,500,000 shares of G-P Group Stock that may be granted, or acquired upon the exercise of awards granted, under the Georgia-Pacific Corporation/Georgia-Pacific Group 1997 Long-Term Incentive Plan; (vi) 2,300,000 shares of Timber Group Stock that may be granted, or acquired upon the exercise of awards granted, under the Georgia-Pacific Corporation/Timber Group 1997 Long-Term Incentive Plan; (vii) 1,109,614 shares of G-P Group Stock and 1,109,614 shares of Timber Group Stock that may be offered and sold to participants in the Georgia-Pacific Corporation Savings and Capital Growth Plan; and (viii) 789,456 shares of G-P Group Stock and 789,456 shares of Timber Group Stock that may be offered and sold to participants in the Georgia-Pacific Corporation Hourly 401(k) Savings Plan. (2) Determined pursuant to Rule 457(c) and (h), based on the average of the high and low sale prices reported for shares of G-P Group Stock and Timber Group Stock on the New York Stock Exchange on December 17, 1997. PART I INFORMATION REQUIRED IN THE SECTION 10(A) PROSPECTUS The documents constituting Part I of this Registration Statement will be sent or given to participants in the Georgia-Pacific Corporation 1990 Long-Term Incentive Plan, Georgia-Pacific Corporation 1993 Employee Stock Option Plan, Georgia-Pacific Corporation 1994 Employee Stock Option Plan, Georgia-Pacific Corporation 1995 Shareholder Value Incentive Plan, as Amended and Restated, Georgia-Pacific Corporation/Georgia-Pacific Group 1997 Long-Term Incentive Plan, Georgia-Pacific Corporation/Timber Group 1997 Long-Term Incentive Plan, Georgia- Pacific Corporation Savings and Capital Growth Plan and Georgia-Pacific Corporation Hourly 401(k) Savings Plan (the "Plans") as specified by Rule 428(b)(1) under the Securities Act. PART II INFORMATION REQUIRED IN THE REGISTRATION STATEMENT Item 3. Incorporation of Documents by Reference. The following documents filed with the Securities and Exchange Commission (the `Commission'') are incorporated by reference into this Registration Statement: (a) the Annual Report on Form 10-K of Georgia-Pacific Corporation (the "Corporation") for the fiscal year ended December 31, 1996, as amended by Annual Report on Form 10-K/A filed on March 17, 1997, and as amended by Annual Report on Form 10-K/A-1 filed on March 25, 1997; (b) the Corporation's Quarterly Reports on Form 10-Q for the fiscal quarters ended March 31, 1997, June 30, 1997, and September 30, 1997; (c) the Corporation's Current Reports on Form 8-K dated September 17, 1997 and September 18, 1997 and Current Report on Form 8-K/A dated September 18, 1997; (d) the Annual Report on Form 11-K of the Georgia-Pacific Corporation Savings and Capital Growth Plan (the "Savings Plan") for the fiscal year ended December 31, 1996; (e) all other reports filed by the Savings Plan pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), since the end of the fiscal year covered by such plan's 1997 Annual Report on Form 11-K; (f) the Annual Report on Form 11-K of the Georgia-Pacific Corporation Hourly 401(k) Savings Plan (the "Hourly 401(k) Plan") for the fiscal year ended December 31, 1996; (g) all other reports filed by the Hourly 401(k) Plan pursuant to Section 13(a) or 15(d) of the Exchange Act, since the end of the fiscal year covered by the related 1997 Annual Report on Form 11-K; (h) the description of the G-P Group Stock contained in the Corporation's Registration Statement filed under Section 12 of the Exchange Act, including all amendments or reports filed for the purpose of updating such description; and (i) the description of the Timber Group Stock contained in the Corporation's Registration Statement filed under Section 12 of the Exchange Act, including all amendments or reports filed for the purpose of updating such description. All documents filed by the Corporation, the Savings Plan or the Hourly 401(k) Plan pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act after the date hereof and prior to the filing of a post-effective amendment which indicates that all securities offered hereby have been sold, or which deregisters all securities then remaining unsold, shall be deemed to be incorporated by reference herein and to be a part hereof from the date of filing of such documents with the Commission. Any statement contained in a document incorporated or deemed incorporated herein by reference shall be deemed to be modified or superseded for the purpose of this Registration Statement to the extent that a statement contained herein or in any subsequently filed document which also is, or is deemed to be, incorporated herein by reference modifies or supersedes such statement. Any such statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this Registration Statement. Item 4. Description of Securities. Not applicable. Item 5. Interests of Named Experts and Counsel. Not applicable. Item 6. Indemnification of Directors and Officers. Subsection (a) of Section 14-2-851 of the Georgia Business Corporation Code provides that a corporation may indemnify an individual who is party to a proceeding because he or she is or was a director against liability incurred in the proceeding if (1) such individual conducted himself or herself in good faith; and 2) such individual reasonably believed (A) in the case of conduct in his or her official capacity, that such conduct was in the best interests of the corporation, (B) in all other cases, that such conduct was at least not opposed to the best interests of the corporation; and (C) in the case of any criminal proceeding, that the individual had no reasonable cause to believe such conduct was unlawful. Subsection (d) of Section 14-2-851 of the Georgia Business Corporation Code provides that a corporation may not indemnify a director in connection with a proceeding by or in the right of the corporation, except for reasonable expenses incurred in connection with the proceeding if it is determined that the director has met the relevant standard of conduct, or in connection with any proceeding with respect to conduct for which he or she was adjudged liable on the basis that personal benefit was improperly received by him or her, whether or not involving action in his or her official capacity. Notwithstanding the foregoing, pursuant to Section 14-2-854 a court may order a corporation to indemnify a director if such court determines, in view of all the relevant circumstances, that it is fair and reasonable to indemnify the director even if the director has not met the relevant standard of conduct set forth in subsections (a) and (b) of Section 14-2-851 of the Georgia Business Corporation Code, failed to comply with Section 14-2-853 of the Georgia Business Corporation Code, or was adjudged liable in a proceeding referred to in paragraph (1) or (2) of subsection (d) of Section 14-2-851 of the Georgia Business Corporation Code, but if the director was adjudged so liable, the indemnification shall be limited to reasonable expenses incurred in connection with the proceeding. Section 14-2-852 of the Georgia Business Corporation Code provides that, a corporation shall indemnify a director who was wholly successful, on the merits or otherwise, in the defense of any proceeding to which he or she was a party because he or she was a director of the corporation against reasonable expenses incurred by the director in connection with the proceeding. Section 14-2-857 of the Georgia Business Corporation Code provides that a corporation may indemnify and advance expenses to an officer of the corporation who is a party to a proceeding because he or she is an officer of the corporation to the same extent as a director. If the officer is not a director, (or if the officer is a director but the sole basis on which he or she is made a party to the proceeding is an act or omission solely as an officer) to such further extent as may be provided by the articles of incorporation, the bylaws, a resolution of the board of directors, or contract except for liability arising out of conduct that constitutes (1) appropriation, in violation of their duties, of any business opportunity of the corporation, (2) acts or omissions which involve intentional misconduct or a knowing violation of law, (3) the types of liability set forth in Section 14-2-832 of the Georgia Business Corporation Code or (4) receipt of an improper personal benefit. An officer of a corporation who is not a director is entitled to mandatory indemnification under Section 14-2-852 of the Georgia Business Corporation Code and may apply to a court under Section 14-2-854 of the Georgia Business Corporation Code for indemnification, in each case to the same extent to which a director may be entitled to indemnification under those provisions. Finally, a corporation may also indemnify an employee or agent who is not a director to the extent, consistent with public policy, that may be provided by its articles of incorporation, bylaws, general or specific action by its board of directors or contract. In accordance with Article VI of the Corporation's Bylaws, every person (and the heirs and personal representatives of such person) who is or was a director, officer, employee or agent of the Corporation, or of any other corporation, partnership, joint venture, trust or other enterprise in which he served as such at the request of the Corporation, shall be indemnified by the Corporation against any and all liability and expense (including, without limitation, counsel fees and disbursements, and amounts of judgments, fines or penalties against, or amounts paid in settlement by, a director, officer, employee or agent) actually and reasonably incurred by him in connection with or resulting from any threatened, pending or completed claim, action, suit or proceeding, whether civil, criminal, administrative or investigative or in connection with any appeal relating thereto, in which he may become involved, as a party or otherwise, or with which he may be threatened, by reason of his being or having been a director, officer, employee or agent of the Corporation or such other corporation, partnership, joint venture, trust or other enterprise, or by reason of any action taken or omitted by him in his capacity as such whether or not he continues to be such at the time such liability or expense shall have been incurred. Every person (and the heirs and personal representatives of such person), to the extent that such person has been successful on the merits or otherwise with respect to any claim, action, matter, suit or proceeding is entitled to indemnification as of right for expenses (including attorneys' fees) actually and reasonably incurred by him in connection therewith. Except as provided in the preceding sentence, upon receipt of a claim for indemnification under Article VI of the Corporation's Bylaws, the Corporation shall proceed as follows, or as otherwise permitted by applicable law. If the claim is made by a director or officer of the Corporation, the Board of Directors, by a majority vote of a quorum consisting of directors who were not parties to the applicable action, suit or proceeding, shall determine whether the claimant met the applicable standard of conduct as set forth in subparagraphs (A) and (B) below. If such quorum is not obtainable or, even if obtainable, a quorum of disinterested directors so directs, such determination shall be made by independent legal counsel (who may be the regular inside or outside counsel of the Corporation) in a written opinion. If such determination has not been made within 90 days after the claim is asserted, the claimant shall have the right to require that the determination be submitted to the shareholders at the next regular meeting of shareholders by vote of a majority of the shares entitled to vote thereon. If a claim is made by a person who is not a director or officer of the Corporation, the Chief Executive Officer and the general counsel of the Corporation shall determine, subject to applicable law, the manner in which there shall be made the determination as to whether the claimant met the applicable standard of conduct as set forth in subparagraphs (A) and (B) below. In the case of each claim for indemnification, the Corporation shall pay the claim to the extent the determination is favorable to the person making the claim. (A) In the case of a claim, action, suit or proceeding other than by or in the right of the Corporation to procure a judgment in its favor, the director, officer, employee or agent must have acted in a manner he reasonably believed to be in or not opposed to the best interests of the Corporation, and, in addition, in any criminal action or proceeding, had no reasonable cause to believe that his conduct was unlawful. In addition, any director seeking indemnification must not have been adjudged liable on the basis that any personal benefit was received by him. For the purpose of this subparagraph (A), the termination of any claim, action, suit or proceeding, civil, criminal or administrative, by judgment, order, settlement (either with or without court approval) or conviction, or upon a plea of guilty or nolo contendere or its equivalent, shall not create a presumption that a director, officer, employee or agent did not meet the standards of conduct set forth in this subparagraph. (B) In the case of a claim, action, suit or proceeding by or in the right of the Corporation to procure a judgment in its favor, the director, officer, employee or agent must have acted in good faith in a manner he reasonably believed to be in or not opposed to the best interests of the Corporation; provided, however, that no indemnification under this subparagraph (B) shall be made (1) with regard to any claim, issue or matter as to which such director, officer, employee or agent shall have been adjudged to be liable to the Corporation unless and only to the extent that the court in which such action or suit was brought shall determine that, despite the adjudication of liability but in view of all the circumstances of the case, such director, officer, employee or agent is fairly and reasonably entitled to indemnity for such expenses which the court shall deem proper, or (2) for amounts paid, or expenses incurred, in connection with the defense or settlement of any such claim, action, suit or proceeding, unless a court of competent jurisdiction has approved indemnification with regard to such amounts or expenses. Pursuant to Article VI of the Corporation's Bylaws, expenses incurred by any person who is or was a director, officer, employee or agent of the Corporation with respect to any claim, action, suit or proceeding of the character described in the first sentence of the preceding paragraph shall be advanced by the Corporation prior to the final disposition thereof upon receipt of an undertaking by or on behalf of the recipient to repay such amount if it shall be ultimately determined that he is not entitled to indemnification. Indemnification and advancement of expenses pursuant to Article VI of the Corporation's Bylaws is not exclusive of any rights to which any such director, officer, employee or other person may otherwise be entitled by contract or by law. The Corporation carries insurance policies insuring its liability to officers and directors under the foregoing indemnity and insuring its officers and directors against liability incurred in their capacity as such. Item 7. Exemption from Registration Claimed. Not applicable. Item 8. Exhibits. Exhibit No. Description 4.1 Articles of Incorporation, restated as of December 16, 1997. 4.2 Bylaws, as amended to date. (Filed as Exhibit 3 to the Corporation's Form 8-A as filed with the Commission on November 25, 1997, and incorporated herein by this reference thereto). 4.3 Rights Agreement, dated as of December 16, 1997, between Georgia- Pacific Corporation and First Chicago Trust Company of New York, with form of G-P Rights Certificate attached as Exhibit A-1, Form of Timber Rights Certificate attached as Exhibit A-2, Series B Preferred Stock Designation attached as Exhibit B-1 and Series C Preferred Stock Designation attached as Exhibit B-2 (Filed as Exhibit 4.3(ii) to the Corporation's Amendment No. 1 to Registration Statement on Form S-4 dated October 29, 1997). 5 Opinion of James F. Kelley, Esq. 23 Consent of Arthur Andersen LLP. 23.1 Consent of James F. Kelley, Esq. (see Exhibit 5) 24 Powers of Attorney. 99.1 1990 Long-Term Incentive Plan. (Filed as Exhibit 10.5(i) to the Corporation's Annual Report on Form 10-K for the year ended December 31, 1996, and incorporated herein by this reference thereto). 99.2 Amendment No. 1 to 1990 Long-Term Incentive Plan. (Filed as Exhibit 10.5(ii) to the Corporation's Annual Report on Form 10-K for the year ended December 31, 1996, and incorporated herein by this reference thereto). 99.3 Amendment No. 2 to the 1990 Long-Term Incentive Plan (Filed as Exhibit 10.8(iii) to the Corporation's Quarterly Report on Form 10-Q for the quarter ended March 31, 1995, and incorporated herein by this reference thereto). 99.4 1993 Employee Stock Option Plan (Filed as Exhibit 4.3 to the Corporation's Form S-8 as filed with the Commission on February 23, 1993, and incorporated herein by this reference thereto). 99.5 Form of Replacement Option Under the 1993 Employee Stock Option Plan (Georgia-Pacific Group Stock). 99.6 Form of Replacement Option Under the 1993 Employee Stock Option Plan (Timber Stock). 99.7 1994 Employee Stock Option Plan (Filed as Exhibit 4.3 to the Corporation's Form S-8 as filed with the Commission on March 25, 1994, and incorporated herein by this reference thereto). 99.8 Form of Replacement Option Under the 1994 Employee Stock Option Plan (Georgia-Pacific Group Stock). 99.9 Form of Replacement Option Under the 1994 Employee Stock Option Plan (Timber Stock). 99.10 Georgia-Pacific Corporation 1995 Shareholder Value Incentive Plan, as Amended and Restated Effective December 16, 1997. (Filed as Exhibit 10.8(iv) to the Corporation's Amendment No. 2 to Registration Statement on Form S-4 as filed with the Commission on November 7, 1997.) 99.11 Form of Replacement Option Under the 1995 Shareholder Value Incentive Plan (Georgia-Pacific Group Stock) (1995 Grant). 99.12 Form of Replacement Option Under the 1995 Shareholder Value Incentive Plan (Timber Stock) (1995 Grant). 99.13 Form of Replacement Option Under the 1995 Shareholder Value Incentive Plan (Georgia-Pacific Group Stock) (1996 Grant). 99.14 Form of Replacement Option Under the 1995 Shareholder Value Incentive Plan (Timber Stock) (1996 Grant). 99.15 Form of Replacement Option Under the 1995 Shareholder Value Incentive Plan (Georgia-Pacific Stock) (1997 Grant). 99.16 Form of Replacement Option Under the 1995 Shareholder Value Incentive Plan (Timber Stock) (1997 Grant). 99.17 Form of Special Replacement Option Under the 1995 Shareholder Value Incentive Plan (1997 Grant). 99.18 Form of Special Replacement Option Under the Amended 1995 Shareholder Value Incentive Plan (Timber Stock) (1997 Grant). 99.19 Georgia-Pacific Corporation/Georgia-Pacific Group 1997 Long-Term Incentive Plan. (Filed as Exhibit 10.10(i) to the Corporation's Amendment No. 2 to Registration Statement on Form S-4 as filed with the Commission on November 7, 1997.) 99.20 Georgia-Pacific Corporation/Timber Group 1997 Long-Term Incentive Plan. (Filed as Exhibit 10.10(ii) to the Corporation's Amendment No. 2 to Registration Statement on Form S-4 as filed with the Commission on November 7, 1997.) 99.21 Form of Timber Group 1997 Long-Term Incentive Plan Option. The Registrant will submit or has submitted the Savings Plan and the Hourly 401(k) Plan (the "Savings Plans") and any amendments thereto to the Internal Revenue Service ("IRS") in a timely manner and has made or will make all changes required by the IRS in order to qualify the Savings Plans under Section 401 of the Internal Revenue Code of 1986, as amended. Item 9. Undertakings. The undersigned Registrant hereby undertakes: (1) To file, during any period in which offers or sales are being made, a post-effective amendment to this Registration Statement: (i) To include any prospectus required by Section 10(a)(3) of the Securities Act; (ii) To reflect in the prospectus any facts or events arising after the effective date of this Registration Statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in this Registration Statement; (iii) To include any material information with respect to the plan of distribution not previously disclosed in this Registration Statement or any material change to such information in this Registration Statement; provided, however, that the undertakings set forth in paragraphs (i) and (ii) above do not apply if the information required to be included in a post-effective amendment by those paragraphs is contained in periodic reports filed by the registrant pursuant to Section 13 or Section 15(d) of the Exchange Act that are incorporated by reference in this registration statement. (2) That, for the purpose of determining any liability under the Securities Act, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. (4) That, for purposes of determining any liability under the Securities Act, each filing of the registrant's annual report pursuant to Section 13(a) or Section 15(d) of the Exchange Act (and, where applicable, each filing of an employee benefit plan's annual report pursuant to Section 15(d) of the Exchange Act) that is incorporated by reference in this registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue. SIGNATURES The Registrant. Pursuant to the requirements of the Securities Act of 1933, as amended, the Registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-8 and has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Atlanta, State of Georgia, on this 18th day of December, 1997. GEORGIA-PACIFIC CORPORATION (Registrant) By: /s/ John F. McGovern John F. McGovern Executive Vice President - Finance and Chief Financial Officer Pursuant to the requirements of the Securities Act of 1933, as amended, this Registration Statement has been signed by the following persons in the capacities and on the date indicated. Signature Title Date As officers or directors of GEORGIA-PACIFIC CORPORATION /s/ A. D. Correll Director, Chairman, December 18, 1997 A. D. Correll Chief Executive Officer and President (Principal Executive Officer) /s/ John F. McGovern Executive Vice President - December 18, 1997 John F. McGovern Finance and Chief Financial Officer (Principal Financial Officer) /s/ James E. Terrell Vice President and December 18, 1997 James E. Terrell Controller (Principal Accounting Officer) * Director December 18, 1997 Robert Carswell * Director December 18, 1997 Jane Evans * Director December 18, 1997 Donald V. Fites * Director December 18, 1997 Harvey C. Fruehauf, Jr. * Director December 18, 1997 Richard V. Giordano * Director December 18, 1997 David R. Goode * Director December 18, 1997 T. Marshall Hahn, Jr. * Director December 18, 1997 M. Douglas Ivester * Director December 18, 1997 Francis Jungers * Director December 18, 1997 Louis W. Sullivan * Director December 18, 1997 James B. Williams *By: /s/ James F. Kelley James F. Kelley As Attorney-in-Fact for the Directors above beside whose names an asterisk appears. Savings and Capital Growth Plan. Pursuant to the requirements of the Securities Act of 1933, as amended, the Georgia-Pacific Corporation Savings and Capital Growth Plan has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Atlanta, State of Georgia, on the 18th day of December, 1997. GEORGIA-PACIFIC CORPORATION SAVINGS AND CAPITAL GROWTH PLAN By: GEORGIA-PACIFIC CORPORATION Plan Administrator By: /s/ Rebecca M. Crockford Rebecca M. Crockford Vice President - Compensation and Benefits Hourly 401(k) Savings Plan. Pursuant to the requirements of the Securities Act of 1933, as amended, the Georgia-Pacific Corporation Hourly 401(k) Savings Plan has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Atlanta, State of Georgia, on the 18th day of December, 1997. GEORGIA-PACIFIC CORPORATION HOURLY 401(k) SAVINGS PLAN By: GEORGIA-PACIFIC CORPORATION Plan Administrator By: /s/ Rebecca M. Crockford Rebecca M. Crockford Vice President - Compensation and Benefits INDEX TO EXHIBITS Exhibit No. Sequentially Numbered Description 4.1 Articles of Incorporation, restated as of December 16, 1997. * 4.2 Bylaws, as amended to date. (Filed as Exhibit 3 to the Corporation's Form 8-A as filed with the Commission on November 25, 1997, and incorporated herein by this reference thereto). 4.3 Rights Agreement, dated as of December 16, 1997, between Georgia- Pacific Corporation and First Chicago Trust Company of New York, with form of G-P Group Rights Certificate attached as Exhibit A- 1, Form of Timber Group Rights Certificate attached as Exhibit A- 2, Series B Preferred Stock Designation attached as Exhibit B-1 and Series C Preferred Stock Designation attached as Exhibit B-2. (Filed as Exhibit 4.3(ii) to the Corporation's Amendment No. 1 to Registration Statement on Form S-4 dated October 29, 1997). 5 Opinion of James F. Kelley, Esq. * 23 Consent of Arthur Andersen LLP. * 23.1 Consent of James F. Kelley, Esq. * (see Exhibit 5) 24 Powers of Attorney. * 99.1 1990 Long-Term Incentive Plan. (Filed as Exhibit 10.5(i) to the Corporation's Annual Report on Form 10-K for the year ended December 31, 1996, and incorporated herein by this reference thereto). 99.2 Amendment No. 1 to 1990 Long-Term Incentive Plan. (Filed as Exhibit 10.5(ii) to the Corporation's Annual Report on Form 10-K for the year ended December 31, 1996, and incorporated herein by this reference thereto). 99.3 Amendment No. 2 to the 1990 Long-Term Incentive Plan (Filed as Exhibit 10.8(iii) to the Corporation's Quarterly Report on Form 10-Q for the quarter ended March 31, 1995, and incorporated herein by this reference thereto). 99.4 1993 Employee Stock Option Plan (Filed as Exhibit 4.3 to the Corporation's Form S-8 as filed with the Commission on February 23, 1993, and incorporated herein by this reference thereto). 99.5 Form of Replacement Option Under the 1993 Employee Stock Option Plan (Georgia-Pacific Group Stock). * 99.6 Form of Replacement Option Under the 1993 Employee Stock Option Plan (Timber Stock). * 99.7 1994 Employee Stock Option Plan (Filed as Exhibit 4.3 to the Corporation's Form S-8 as filed with the Commission on March 25, 1994, and incorporated herein by this reference thereto). 99.8 Form of Replacement Option Under the 1994 Employee Stock Option Plan (Georgia-Pacific Group Stock). * 99.9 Form of Replacement Option Under the 1994 Employee Stock Option Plan (Timber Stock). * 99.10 Georgia-Pacific Corporation 1995 Shareholder Value Incentive Plan, as Amended and Restated Effective December 16, 1997. (Filed as Exhibit 10.8(iv) to the Corporation's Amendment No. 2 to Registration Statement on Form S-4 as filed with the Commission on November 7, 1997.) 99.11 Form of Replacement Option Under the Shareholder Value Incentive Plan (Georgia-Pacific Group Stock) (1995 Grant). * 99.12 Form of Replacement Option Under the Shareholder Value Incentive Plan (Timber Stock) (1995 Grant). * 99.13 Form of Replacement Option Under the Shareholder Value Incentive Plan (Georgia-Pacific Group Stock) (1996 Grant). * 99.14 Form of Replacement Option Under the Shareholder Value Incentive Plan (Timber Stock) (1996 Grant). * 99.15 Form of Replacement Option Under the Shareholder Value Incentive Plan (Georgia-Pacific Group Stock) (1997 Grant). * 99.16 Form of Replacement Option Under the Shareholder Value Incentive Plan (Timber Stock) (1997 Grant). * 99.17 Form of Special Replacement Option Under the 1995 Shareholder Value Incentive Plan (1997 Grant). * 99.18 Form of Special Replacement Option Under the Amended 1995 Shareholder Value Incentive Plan (Timber Stock) (1997 Grant).* 99.19 Georgia-Pacific Corporation/Georgia-Pacific Group 1997 Long-Term Incentive Plan. (Filed as Exhibit 10.10(i) to the Corporation's Amendment No. 2 to Registration Statement on Form S-4 as filed with the Commission on November 7, 1997.) 99.20 Georgia-Pacific Corporation/Timber Group 1997 Long-Term Incentive Plan. (Filed as Exhibit 10.10(ii) to the Corporation's Amendment No. 2 to Registration Statement on Form S-4 as filed with the Commission on November 7, 1997.) 99.21 Form of Timber Group 1997 Long-Term Incentive Plan Option. * *Filed by EDGAR. EX-5 2 JAMES F. KELLEY OPINION/CONSENT GEORGIA-PACIFIC CORPORATION Law Department 133 Peachtree Street, N.E. P.O. Box 105605 James F. Kelley Atlanta, Georgia Senior Vice 30348-5605 President - Law Telephone (404) and General Counsel 652-5440 Facsimile (404) 584-1461 December 18, 1997 To the Board of Directors of Georgia-Pacific Corporation Ladies and Gentlemen: As Senior Vice President - Law and General Counsel of Georgia-Pacific Corporation, a Georgia corporation (the "Corporation"), I have reviewed the proceedings relative to the authorization of the Georgia-Pacific Corporation 1990 Long-Term Incentive Plan, the Georgia-Pacific Corporation 1993 Employee Stock Option Plan, the Georgia-Pacific Corporation 1994 Employee Stock Option Plan, the Georgia-Pacific Corporation 1995 Shareholder Value Incentive Plan, as Amended and Restated, the Georgia-Pacific Corporation/Georgia-Pacific Group 1997 Long-Term Incentive Plan and the Georgia-Pacific Corporation/Timber Group 1997 Long-Term Incentive Plan (collectively, the "Option Plans"), together with the Georgia-Pacific Corporation Savings and Capital Growth Plan and the Georgia-Pacific Corporation Hourly 401(k) Plan (together, the "Savings Plans" and, collectively with the Option Plans, the "Plans") of the Corporation pursuant to which the Corporation proposes (i) to grant to certain officers and key employees options to purchase and (ii) to enable eligible employees participating in the Savings Plans to purchase up to an aggregate of 11,676,940 shares of Georgia-Pacific Corporation - Georgia-Pacific Group Common Stock, par value $.80 per share ("G-P Group Common Stock"), and up to an aggregate of 9,476,940 shares of Georgia-Pacific Corporation - Timber Group Common Stock, par value $.80 per share ("Timber Group Common Stock"), subject to adjustment upon the occurrence of certain events. I am of the opinion that the shares of G-P Group Common Stock and Timber Group Common Stock (i) issuable upon the exercise of the options pursuant to the Option Plans and (ii) to be purchased pursuant to the Savings Plans, all as described in the Registration Statement on Form S-8 filed on December 18, 1997 (the "Registration Statement"), under the Securities Act of 1933, as amended, have been duly authorized and, when issued in accordance with the provisions of the respective Plans, will be legally and validly issued, fully paid and nonassessable. I hereby consent to the filing of this opinion as an Exhibit to the Registration Statement. I am a member of the bar of the State of New York and do not hold myself out to be an expert on the laws of any other state. I express no opinion on the laws of any jurisdiction other than the laws of the State of New York and the federal laws of the United States. Insofar as this opinion relates to matters of Georgia law, I have relied on an opinion of even date addressed to me by an attorney in the Law Department of the Corporation licensed to practice law in the State of Georgia. Very truly yours, /s/James F. Kelley James F. Kelley Senior Vice President - Law and General Counsel EX-23 3 CONSENT OF ARTHUR ANDERSEN CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS As independent public accountants, we hereby consent to the incorporation by reference in the Registration Statement of (i) our reports dated February 7, 1997 included in Georgia-Pacific Corporation's Annual Report on Form 10-K for the year ended December 31, 1996, as amended by Georgia-Pacific's Annual Report on Form 10-K/A filed on March 17, 1997 and its Annual Report on Form 10-K/A-1 filed on March 25, 1997, (ii) our report dated April 29, 1997 on the financial statements of the Georgia-Pacific Corporation Savings and Capital Growth Plan and included in that Plan's Annual Report on Form 11-K for the year ended December 31, 1996, and (iii) our report dated April 29, 1997 on the financial statements of the Georgia-Pacific Corporation Hourly 401(k) Savings Plan included in that Plan's Annual Report on Form 11-K for the year ended December 31, 1996, and to all references to our Firm included in this Registration Statement. /s/ARTHUR ANDERSEN LLP ARTHUR ANDERSEN LLP Atlanta, Georgia December 18, 1997 EX-24 4 POWERS OF ATTORNEY POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS that the undersigned director or officer, or both, of Georgia-Pacific Corporation, a Georgia corporation (the "Corporation"), hereby constitutes and appoints A. D. Correll, James F. Kelley and Kenneth F. Khoury, and each of them, his or her true and lawful attorney-in-fact and agent to sign (1) any and all amendments to, and supplements to any prospectus contained in, the Registration Statements on Form S-3 Nos. 333-01785 and 33- 64673 (related to $500,000,000 aggregate principal amount of debt securities of the Corporation), the Registration Statements on Form S-8, No. 33-60933 (related to the 1995 Employee Stock Purchase Plan), Nos. 2-99380, 33-58664 and 33-52823 (related to the 1984, 1993 and 1994 Employee Stock Option Plans), No. 33-48328 (related to the Georgia-Pacific Corporation Savings and Capital Growth Plan), No. 33-52815 (related to the Georgia-Pacific Corporation Hourly 401(k) Savings Plan) and No. 33-59057 (related to the 1995 Shareholder Value Incentive Plan) filed with the Securities and Exchange Commission (the "Commission"), and any and all instruments and documents filed as a part of or in connection with such amendments or supplements; (2) the Corporation's Annual Report on Form 10-K for the year ended December 31, 1996; (3) a Registration Statement on Form S-8 related to the offering of 2,000,000 shares of the Common Stock of the Corporation to the employees of the Corporation and its subsidiaries under the Corporation's 1997 Employee Stock Purchase Plan, and any and all amendments to, and supplements to any prospectus contained in, such Registration Statement and any and all instruments and documents filed as a part of or in connection with such amendments or supplements; and (4) any other reports or registration statements to be filed by the Corporation with the Commission and/or any national securities exchange under the Securities Exchange Act of 1934, as amended, and any and all amendments thereto, and any and all instruments and documents filed as part of or in connection with such reports or registration statements or reports or amendments thereto; and in connection with the foregoing, to do any and all acts and things and execute any and all instruments which such attorneys-in-fact and agents may deem necessary or advisable to enable this Corporation to comply with the securities laws of the United States and of any State or other political subdivision thereof; hereby ratifying and confirming all that such attorneys-in-fact and agents, or any one of them, shall do or cause to be done by virtue hereof. IN WITNESS WHEREOF, the undersigned has subscribed these presents this 4th day of February, 1997. /s/ ROBERT CARSWELL ROBERT CARSWELL POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS that the undersigned director or officer, or both, of Georgia-Pacific Corporation, a Georgia corporation (the "Corporation"), hereby constitutes and appoints A. D. Correll, James F. Kelley and Kenneth F. Khoury, and each of them, his or her true and lawful attorney-in-fact and agent to sign (1) any and all amendments to, and supplements to any prospectus contained in, the Registration Statements on Form S-3 Nos. 333-01785 and 33- 64673 (related to $500,000,000 aggregate principal amount of debt securities of the Corporation), the Registration Statements on Form S-8, No. 33-60933 (related to the 1995 Employee Stock Purchase Plan), Nos. 2-99380, 33-58664 and 33-52823 (related to the 1984, 1993 and 1994 Employee Stock Option Plans), No. 33-48328 (related to the Georgia-Pacific Corporation Savings and Capital Growth Plan), No. 33-52815 (related to the Georgia-Pacific Corporation Hourly 401(k) Savings Plan) and No. 33-59057 (related to the 1995 Shareholder Value Incentive Plan) filed with the Securities and Exchange Commission (the "Commission"), and any and all instruments and documents filed as a part of or in connection with such amendments or supplements; (2) the Corporation's Annual Report on Form 10-K for the year ended December 31, 1996; (3) a Registration Statement on Form S-8 related to the offering of 2,000,000 shares of the Common Stock of the Corporation to the employees of the Corporation and its subsidiaries under the Corporation's 1997 Employee Stock Purchase Plan, and any and all amendments to, and supplements to any prospectus contained in, such Registration Statement and any and all instruments and documents filed as a part of or in connection with such amendments or supplements; and (4) any other reports or registration statements to be filed by the Corporation with the Commission and/or any national securities exchange under the Securities Exchange Act of 1934, as amended, and any and all amendments thereto, and any and all instruments and documents filed as part of or in connection with such reports or registration statements or reports or amendments thereto; and in connection with the foregoing, to do any and all acts and things and execute any and all instruments which such attorneys-in-fact and agents may deem necessary or advisable to enable this Corporation to comply with the securities laws of the United States and of any State or other political subdivision thereof; hereby ratifying and confirming all that such attorneys-in-fact and agents, or any one of them, shall do or cause to be done by virtue hereof. IN WITNESS WHEREOF, the undersigned has subscribed these presents this 4th day of February, 1997. /s/ JANE EVANS JANE EVANS POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS that the undersigned director or officer, or both, of Georgia-Pacific Corporation, a Georgia corporation (the "Corporation"), hereby constitutes and appoints A. D. Correll, James F. Kelley and Kenneth F. Khoury, and each of them, his or her true and lawful attorney-in-fact and agent to sign (1) any and all amendments to, and supplements to any prospectus contained in, the Registration Statements on Form S-3 Nos. 333-01785 and 33- 64673 (related to $500,000,000 aggregate principal amount of debt securities of the Corporation), the Registration Statements on Form S-8, No. 33-60933 (related to the 1995 Employee Stock Purchase Plan), Nos. 2-99380, 33-58664 and 33-52823 (related to the 1984, 1993 and 1994 Employee Stock Option Plans), No. 33-48328 (related to the Georgia-Pacific Corporation Savings and Capital Growth Plan), No. 33-52815 (related to the Georgia-Pacific Corporation Hourly 401(k) Savings Plan) and No. 33-59057 (related to the 1995 Shareholder Value Incentive Plan) filed with the Securities and Exchange Commission (the "Commission"), and any and all instruments and documents filed as a part of or in connection with such amendments or supplements; (2) the Corporation's Annual Report on Form 10-K for the year ended December 31, 1996; (3) a Registration Statement on Form S-8 related to the offering of 2,000,000 shares of the Common Stock of the Corporation to the employees of the Corporation and its subsidiaries under the Corporation's 1997 Employee Stock Purchase Plan, and any and all amendments to, and supplements to any prospectus contained in, such Registration Statement and any and all instruments and documents filed as a part of or in connection with such amendments or supplements; and (4) any other reports or registration statements to be filed by the Corporation with the Commission and/or any national securities exchange under the Securities Exchange Act of 1934, as amended, and any and all amendments thereto, and any and all instruments and documents filed as part of or in connection with such reports or registration statements or reports or amendments thereto; and in connection with the foregoing, to do any and all acts and things and execute any and all instruments which such attorneys-in-fact and agents may deem necessary or advisable to enable this Corporation to comply with the securities laws of the United States and of any State or other political subdivision thereof; hereby ratifying and confirming all that such attorneys-in-fact and agents, or any one of them, shall do or cause to be done by virtue hereof. IN WITNESS WHEREOF, the undersigned has subscribed these presents this 4th day of February, 1997. /s/ DONALD V. FITES DONALD V. FITES POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS that the undersigned director or officer, or both, of Georgia-Pacific Corporation, a Georgia corporation (the "Corporation"), hereby constitutes and appoints A. D. Correll, James F. Kelley and Kenneth F. Khoury, and each of them, his or her true and lawful attorney-in-fact and agent to sign (1) any and all amendments to, and supplements to any prospectus contained in, the Registration Statements on Form S-3 Nos. 333-01785 and 33- 64673 (related to $500,000,000 aggregate principal amount of debt securities of the Corporation), the Registration Statements on Form S-8, No. 33-60933 (related to the 1995 Employee Stock Purchase Plan), Nos. 2-99380, 33-58664 and 33-52823 (related to the 1984, 1993 and 1994 Employee Stock Option Plans), No. 33-48328 (related to the Georgia-Pacific Corporation Savings and Capital Growth Plan), No. 33-52815 (related to the Georgia-Pacific Corporation Hourly 401(k) Savings Plan) and No. 33-59057 (related to the 1995 Shareholder Value Incentive Plan) filed with the Securities and Exchange Commission (the "Commission"), and any and all instruments and documents filed as a part of or in connection with such amendments or supplements; (2) the Corporation's Annual Report on Form 10-K for the year ended December 31, 1996; (3) a Registration Statement on Form S-8 related to the offering of 2,000,000 shares of the Common Stock of the Corporation to the employees of the Corporation and its subsidiaries under the Corporation's 1997 Employee Stock Purchase Plan, and any and all amendments to, and supplements to any prospectus contained in, such Registration Statement and any and all instruments and documents filed as a part of or in connection with such amendments or supplements; and (4) any other reports or registration statements to be filed by the Corporation with the Commission and/or any national securities exchange under the Securities Exchange Act of 1934, as amended, and any and all amendments thereto, and any and all instruments and documents filed as part of or in connection with such reports or registration statements or reports or amendments thereto; and in connection with the foregoing, to do any and all acts and things and execute any and all instruments which such attorneys-in-fact and agents may deem necessary or advisable to enable this Corporation to comply with the securities laws of the United States and of any State or other political subdivision thereof; hereby ratifying and confirming all that such attorneys-in-fact and agents, or any one of them, shall do or cause to be done by virtue hereof. IN WITNESS WHEREOF, the undersigned has subscribed these presents this 4th day of February, 1997. /s/ HARVEY C. FRUEHAUF, JR. HARVEY C. FRUEHAUF, JR. POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS that the undersigned director or officer, or both, of Georgia-Pacific Corporation, a Georgia corporation (the "Corporation"), hereby constitutes and appoints A. D. Correll, James F. Kelley and Kenneth F. Khoury, and each of them, his or her true and lawful attorney-in-fact and agent to sign (1) any and all amendments to, and supplements to any prospectus contained in, the Registration Statements on Form S-3 Nos. 333-01785 and 33- 64673 (related to $500,000,000 aggregate principal amount of debt securities of the Corporation), the Registration Statements on Form S-8, No. 33-60933 (related to the 1995 Employee Stock Purchase Plan), Nos. 2-99380, 33-58664 and 33-52823 (related to the 1984, 1993 and 1994 Employee Stock Option Plans), No. 33-48328 (related to the Georgia-Pacific Corporation Savings and Capital Growth Plan), No. 33-52815 (related to the Georgia-Pacific Corporation Hourly 401(k) Savings Plan) and No. 33-59057 (related to the 1995 Shareholder Value Incentive Plan) filed with the Securities and Exchange Commission (the "Commission"), and any and all instruments and documents filed as a part of or in connection with such amendments or supplements; (2) the Corporation's Annual Report on Form 10-K for the year ended December 31, 1996; (3) a Registration Statement on Form S-8 related to the offering of 2,000,000 shares of the Common Stock of the Corporation to the employees of the Corporation and its subsidiaries under the Corporation's 1997 Employee Stock Purchase Plan, and any and all amendments to, and supplements to any prospectus contained in, such Registration Statement and any and all instruments and documents filed as a part of or in connection with such amendments or supplements; and (4) any other reports or registration statements to be filed by the Corporation with the Commission and/or any national securities exchange under the Securities Exchange Act of 1934, as amended, and any and all amendments thereto, and any and all instruments and documents filed as part of or in connection with such reports or registration statements or reports or amendments thereto; and in connection with the foregoing, to do any and all acts and things and execute any and all instruments which such attorneys-in-fact and agents may deem necessary or advisable to enable this Corporation to comply with the securities laws of the United States and of any State or other political subdivision thereof; hereby ratifying and confirming all that such attorneys-in-fact and agents, or any one of them, shall do or cause to be done by virtue hereof. IN WITNESS WHEREOF, the undersigned has subscribed these presents this 4th day of February, 1997. /s/ RICHARD V. GIORDANO RICHARD V. GIORDANO POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS that the undersigned director or officer, or both, of Georgia-Pacific Corporation, a Georgia corporation (the "Corporation"), hereby constitutes and appoints A. D. Correll, James F. Kelley and Kenneth F. Khoury, and each of them, his or her true and lawful attorney-in-fact and agent to sign (1) any and all amendments to, and supplements to any prospectus contained in, the Registration Statements on Form S-3 Nos. 333-01785 and 33- 64673 (related to $500,000,000 aggregate principal amount of debt securities of the Corporation), the Registration Statements on Form S-8, No. 33-60933 (related to the 1995 Employee Stock Purchase Plan), Nos. 2-99380, 33-58664 and 33-52823 (related to the 1984, 1993 and 1994 Employee Stock Option Plans), No. 33-48328 (related to the Georgia-Pacific Corporation Savings and Capital Growth Plan), No. 33-52815 (related to the Georgia-Pacific Corporation Hourly 401(k) Savings Plan) and No. 33-59057 (related to the 1995 Shareholder Value Incentive Plan) filed with the Securities and Exchange Commission (the "Commission"), and any and all instruments and documents filed as a part of or in connection with such amendments or supplements; (2) the Corporation's Annual Report on Form 10-K for the year ended December 31, 1996; (3) a Registration Statement on Form S-8 related to the offering of 2,000,000 shares of the Common Stock of the Corporation to the employees of the Corporation and its subsidiaries under the Corporation's 1997 Employee Stock Purchase Plan, and any and all amendments to, and supplements to any prospectus contained in, such Registration Statement and any and all instruments and documents filed as a part of or in connection with such amendments or supplements; and (4) any other reports or registration statements to be filed by the Corporation with the Commission and/or any national securities exchange under the Securities Exchange Act of 1934, as amended, and any and all amendments thereto, and any and all instruments and documents filed as part of or in connection with such reports or registration statements or reports or amendments thereto; and in connection with the foregoing, to do any and all acts and things and execute any and all instruments which such attorneys-in-fact and agents may deem necessary or advisable to enable this Corporation to comply with the securities laws of the United States and of any State or other political subdivision thereof; hereby ratifying and confirming all that such attorneys-in-fact and agents, or any one of them, shall do or cause to be done by virtue hereof. IN WITNESS WHEREOF, the undersigned has subscribed these presents this 4th day of February, 1997. /s/ DAVID R. GOODE DAVID R. GOODE POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS that the undersigned director or officer, or both, of Georgia-Pacific Corporation, a Georgia corporation (the "Corporation"), hereby constitutes and appoints A. D. Correll, James F. Kelley and Kenneth F. Khoury, and each of them, his or her true and lawful attorney-in-fact and agent to sign (1) any and all amendments to, and supplements to any prospectus contained in, the Registration Statements on Form S-3 Nos. 333-01785 and 33- 64673 (related to $500,000,000 aggregate principal amount of debt securities of the Corporation), the Registration Statements on Form S-8, No. 33-60933 (related to the 1995 Employee Stock Purchase Plan), Nos. 2-99380, 33-58664 and 33-52823 (related to the 1984, 1993 and 1994 Employee Stock Option Plans), No. 33-48328 (related to the Georgia-Pacific Corporation Savings and Capital Growth Plan), No. 33-52815 (related to the Georgia-Pacific Corporation Hourly 401(k) Savings Plan) and No. 33-59057 (related to the 1995 Shareholder Value Incentive Plan) filed with the Securities and Exchange Commission (the "Commission"), and any and all instruments and documents filed as a part of or in connection with such amendments or supplements; (2) the Corporation's Annual Report on Form 10-K for the year ended December 31, 1996; (3) a Registration Statement on Form S-8 related to the offering of 2,000,000 shares of the Common Stock of the Corporation to the employees of the Corporation and its subsidiaries under the Corporation's 1997 Employee Stock Purchase Plan, and any and all amendments to, and supplements to any prospectus contained in, such Registration Statement and any and all instruments and documents filed as a part of or in connection with such amendments or supplements; and (4) any other reports or registration statements to be filed by the Corporation with the Commission and/or any national securities exchange under the Securities Exchange Act of 1934, as amended, and any and all amendments thereto, and any and all instruments and documents filed as part of or in connection with such reports or registration statements or reports or amendments thereto; and in connection with the foregoing, to do any and all acts and things and execute any and all instruments which such attorneys-in-fact and agents may deem necessary or advisable to enable this Corporation to comply with the securities laws of the United States and of any State or other political subdivision thereof; hereby ratifying and confirming all that such attorneys-in-fact and agents, or any one of them, shall do or cause to be done by virtue hereof. IN WITNESS WHEREOF, the undersigned has subscribed these presents this 4th day of February, 1997. /s/ T. MARSHALL HAHN, JR. T. MARSHALL HAHN, JR. POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS that the undersigned director or officer, or both, of Georgia-Pacific Corporation, a Georgia corporation (the "Corporation"), hereby constitutes and appoints A. D. Correll, James F. Kelley and Kenneth F. Khoury, and each of them, his or her true and lawful attorney-in-fact and agent to sign (1) any and all amendments to, and supplements to any prospectus contained in, the Registration Statements on Form S-3 Nos. 333-01785 and 33- 64673 (related to $500,000,000 aggregate principal amount of debt securities of the Corporation), the Registration Statements on Form S-8, No. 33-60933 (related to the 1995 Employee Stock Purchase Plan), Nos. 2-99380, 33-58664 and 33-52823 (related to the 1984, 1993 and 1994 Employee Stock Option Plans), No. 33-48328 (related to the Georgia-Pacific Corporation Savings and Capital Growth Plan), No. 33-52815 (related to the Georgia-Pacific Corporation Hourly 401(k) Savings Plan) and No. 33-59057 (related to the 1995 Shareholder Value Incentive Plan) filed with the Securities and Exchange Commission (the "Commission"), and any and all instruments and documents filed as a part of or in connection with such amendments or supplements; (2) the Corporation's Annual Report on Form 10-K for the year ended December 31, 1996; (3) a Registration Statement on Form S-8 related to the offering of 2,000,000 shares of the Common Stock of the Corporation to the employees of the Corporation and its subsidiaries under the Corporation's 1997 Employee Stock Purchase Plan, and any and all amendments to, and supplements to any prospectus contained in, such Registration Statement and any and all instruments and documents filed as a part of or in connection with such amendments or supplements; and (4) any other reports or registration statements to be filed by the Corporation with the Commission and/or any national securities exchange under the Securities Exchange Act of 1934, as amended, and any and all amendments thereto, and any and all instruments and documents filed as part of or in connection with such reports or registration statements or reports or amendments thereto; and in connection with the foregoing, to do any and all acts and things and execute any and all instruments which such attorneys-in-fact and agents may deem necessary or advisable to enable this Corporation to comply with the securities laws of the United States and of any State or other political subdivision thereof; hereby ratifying and confirming all that such attorneys-in-fact and agents, or any one of them, shall do or cause to be done by virtue hereof. IN WITNESS WHEREOF, the undersigned has subscribed these presents this 4th day of February, 1997. /s/ M. DOUGLAS IVESTER M. DOUGLAS IVESTER POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS that the undersigned director or officer, or both, of Georgia-Pacific Corporation, a Georgia corporation (the "Corporation"), hereby constitutes and appoints A. D. Correll, James F. Kelley and Kenneth F. Khoury, and each of them, his or her true and lawful attorney-in-fact and agent to sign (1) any and all amendments to, and supplements to any prospectus contained in, the Registration Statements on Form S-3 Nos. 333-01785 and 33- 64673 (related to $500,000,000 aggregate principal amount of debt securities of the Corporation), the Registration Statements on Form S-8, No. 33-60933 (related to the 1995 Employee Stock Purchase Plan), Nos. 2-99380, 33-58664 and 33-52823 (related to the 1984, 1993 and 1994 Employee Stock Option Plans), No. 33-48328 (related to the Georgia-Pacific Corporation Savings and Capital Growth Plan), No. 33-52815 (related to the Georgia-Pacific Corporation Hourly 401(k) Savings Plan) and No. 33-59057 (related to the 1995 Shareholder Value Incentive Plan) filed with the Securities and Exchange Commission (the "Commission"), and any and all instruments and documents filed as a part of or in connection with such amendments or supplements; (2) the Corporation's Annual Report on Form 10-K for the year ended December 31, 1996; (3) a Registration Statement on Form S-8 related to the offering of 2,000,000 shares of the Common Stock of the Corporation to the employees of the Corporation and its subsidiaries under the Corporation's 1997 Employee Stock Purchase Plan, and any and all amendments to, and supplements to any prospectus contained in, such Registration Statement and any and all instruments and documents filed as a part of or in connection with such amendments or supplements; and (4) any other reports or registration statements to be filed by the Corporation with the Commission and/or any national securities exchange under the Securities Exchange Act of 1934, as amended, and any and all amendments thereto, and any and all instruments and documents filed as part of or in connection with such reports or registration statements or reports or amendments thereto; and in connection with the foregoing, to do any and all acts and things and execute any and all instruments which such attorneys-in-fact and agents may deem necessary or advisable to enable this Corporation to comply with the securities laws of the United States and of any State or other political subdivision thereof; hereby ratifying and confirming all that such attorneys-in-fact and agents, or any one of them, shall do or cause to be done by virtue hereof. IN WITNESS WHEREOF, the undersigned has subscribed these presents this 4th day of February, 1997. /s/ FRANCIS JUNGERS FRANCIS JUNGERS POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS that the undersigned director or officer, or both, of Georgia-Pacific Corporation, a Georgia corporation (the "Corporation"), hereby constitutes and appoints A. D. Correll, James F. Kelley and Kenneth F. Khoury, and each of them, his or her true and lawful attorney-in-fact and agent to sign (1) any and all amendments to, and supplements to any prospectus contained in, the Registration Statements on Form S-3 Nos. 333-01785 and 33- 64673 (related to $500,000,000 aggregate principal amount of debt securities of the Corporation), the Registration Statements on Form S-8, No. 33-60933 (related to the 1995 Employee Stock Purchase Plan), Nos. 2-99380, 33-58664 and 33-52823 (related to the 1984, 1993 and 1994 Employee Stock Option Plans), No. 33-48328 (related to the Georgia-Pacific Corporation Savings and Capital Growth Plan), No. 33-52815 (related to the Georgia-Pacific Corporation Hourly 401(k) Savings Plan) and No. 33-59057 (related to the 1995 Shareholder Value Incentive Plan) filed with the Securities and Exchange Commission (the "Commission"), and any and all instruments and documents filed as a part of or in connection with such amendments or supplements; (2) the Corporation's Annual Report on Form 10-K for the year ended December 31, 1996; (3) a Registration Statement on Form S-8 related to the offering of 2,000,000 shares of the Common Stock of the Corporation to the employees of the Corporation and its subsidiaries under the Corporation's 1997 Employee Stock Purchase Plan, and any and all amendments to, and supplements to any prospectus contained in, such Registration Statement and any and all instruments and documents filed as a part of or in connection with such amendments or supplements; and (4) any other reports or registration statements to be filed by the Corporation with the Commission and/or any national securities exchange under the Securities Exchange Act of 1934, as amended, and any and all amendments thereto, and any and all instruments and documents filed as part of or in connection with such reports or registration statements or reports or amendments thereto; and in connection with the foregoing, to do any and all acts and things and execute any and all instruments which such attorneys-in-fact and agents may deem necessary or advisable to enable this Corporation to comply with the securities laws of the United States and of any State or other political subdivision thereof; hereby ratifying and confirming all that such attorneys-in-fact and agents, or any one of them, shall do or cause to be done by virtue hereof. IN WITNESS WHEREOF, the undersigned has subscribed these presents this 4th day of February, 1997. /s/ LOUIS W. SULLIVAN LOUIS W. SULLIVAN POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS that the undersigned director or officer, or both, of Georgia-Pacific Corporation, a Georgia corporation (the "Corporation"), hereby constitutes and appoints A. D. Correll, James F. Kelley and Kenneth F. Khoury, and each of them, his or her true and lawful attorney-in-fact and agent to sign (1) any and all amendments to, and supplements to any prospectus contained in, the Registration Statements on Form S-3 Nos. 333-01785 and 33- 64673 (related to $500,000,000 aggregate principal amount of debt securities of the Corporation), the Registration Statements on Form S-8, No. 33-60933 (related to the 1995 Employee Stock Purchase Plan), Nos. 2-99380, 33-58664 and 33-52823 (related to the 1984, 1993 and 1994 Employee Stock Option Plans), No. 33-48328 (related to the Georgia-Pacific Corporation Savings and Capital Growth Plan), No. 33-52815 (related to the Georgia-Pacific Corporation Hourly 401(k) Savings Plan) and No. 33-59057 (related to the 1995 Shareholder Value Incentive Plan) filed with the Securities and Exchange Commission (the "Commission"), and any and all instruments and documents filed as a part of or in connection with such amendments or supplements; (2) the Corporation's Annual Report on Form 10-K for the year ended December 31, 1996; (3) a Registration Statement on Form S-8 related to the offering of 2,000,000 shares of the Common Stock of the Corporation to the employees of the Corporation and its subsidiaries under the Corporation's 1997 Employee Stock Purchase Plan, and any and all amendments to, and supplements to any prospectus contained in, such Registration Statement and any and all instruments and documents filed as a part of or in connection with such amendments or supplements; and (4) any other reports or registration statements to be filed by the Corporation with the Commission and/or any national securities exchange under the Securities Exchange Act of 1934, as amended, and any and all amendments thereto, and any and all instruments and documents filed as part of or in connection with such reports or registration statements or reports or amendments thereto; and in connection with the foregoing, to do any and all acts and things and execute any and all instruments which such attorneys-in-fact and agents may deem necessary or advisable to enable this Corporation to comply with the securities laws of the United States and of any State or other political subdivision thereof; hereby ratifying and confirming all that such attorneys-in-fact and agents, or any one of them, shall do or cause to be done by virtue hereof. IN WITNESS WHEREOF, the undersigned has subscribed these presents this 4th day of February, 1997. /s/ JAMES B. WILLIAMS JAMES B. WILLIAMS EX-4.1 5 RESTATED ARTICLES OF INCORPORATION RESTATED ARTICLES OF INCORPORATION OF GEORGIA-PACIFIC CORPORATION PURSUANT TO SECTION 14-2-1007 OF THE GEORGIA BUSINESS CORPORATION CODE I. The name of the Corporation is: "GEORGIA-PACIFIC CORPORATION." II. These Restated Articles of Incorporation were approved by the Board of Directors of the Corporation at a special meeting on September 17, 1997. These Restated Articles of Incorporation contain amendments requiring shareholder approval, which amendments were duly approved at a special meeting of the shareholders of the Corporation on December 16, 1997 in accordance with the provisions of Section 14-2-1003 of the Georgia Business Corporation Code. These Restated Articles of Incorporation restate all the provisions of the prior Restated Articles of Incorporation of the Corporation dated October 30, 1989 so that, as amended and restated, these Restated Articles of Incorporation read as follows: RESTATED ARTICLES OF INCORPORATION OF GEORGIA-PACIFIC CORPORATION ARTICLE I. The name of the Corporation is: "GEORGIA-PACIFIC CORPORATION." ARTICLE II. The Corporation is organized pursuant to the provisions of the Georgia Business Corporation Code. ARTICLE III. The aggregate number of shares of capital stock which the Corporation shall have authority to issue is 685,000,000 shares of which 400,000,000 shares shall be shares of a class of common stock designated as "Common Stock" having a par value of $.80 per share (the "Existing Common Stock"), 250,000,000 shares shall be shares of a class of common stock designated as "Georgia-Pacific Corporation-Timber Group Common Stock," having a par value of $.80 per share (the "Timber Stock), 10,000,000 shares shall be shares of a class of preferred stock, without par value per share (the "Preferred Stock"), and 25,000,000 shares shall be shares of a class of junior preferred stock, without par value per share (the "Junior Preferred Stock"). As of the effective date of the Articles, and without any further action on the part of the Corporation or its shareholders, each share of the Existing Common Stock then authorized shall automatically be redesignated and changed into one fully paid and nonassessable share of "Georgia-Pacific Corporation-Georgia-Pacific Group Common Stock", having a par value of $.80 per share (the "Georgia-Pacific Group Stock", and together with the Timber Stock, the "Common Stock"). Reference to the Articles or these Articles of Incorporation shall refer to these Restated Articles of Incorporation as the same may be amended from time to time. Certain capitalized terms used in Articles IV and V shall have the meanings set forth in Section F. of Article V. The authorized but unissued shares of Preferred Stock, Junior Preferred Stock and Common Stock shall be available for issue and sale at any time and from time to time, either in whole or in part, and upon such terms and conditions and, in the case of the Preferred Stock and Junior Preferred Stock, for such consideration, not less than the par value thereof, if any, as may be provided by the Board of Directors of the Corporation. ARTICLE IV. The following is a description of the terms, provisions, preferences, rights, voting powers, restrictions and qualifications of the Preferred Stock: A. Dividends on the Preferred Stock shall be cumulative. B. At any time after full cumulative dividends for all previous dividend periods shall have been paid on the Preferred Stock and each other class of stock (if any) ranking prior to or on a parity with the Preferred Stock as to dividends, and after declaring and setting aside a sum sufficient for the payment in full of the quarterly dividends on the Preferred Stock and each such other class of stock for the then current dividend period, then, but not prior thereto, out of any funds of the Corporation lawfully available therefor, dividends may be declared on the class or classes of stock junior to the Preferred Stock as to dividends, subject to the respective terms and provisions (if any) applying thereto. If at any time the Corporation shall fail to pay full cumulative dividends on any shares of the Preferred Stock, thereafter until such dividends shall have been paid or declared and set apart for payment, the Corporation shall not purchase, redeem or otherwise acquire for consideration any shares of any class of stock then outstanding and ranking on a parity with or junior to the Preferred Stock. C. In the event of any voluntary or involuntary dissolution, liquidation or winding up of the affairs of the Corporation, after payment or provision for payment of the debts, preferred stock senior to the Preferred Stock and other liabilities of the Corporation and before any distribution to the holders of the Common Stock, the Junior Preferred Stock or any other subordinate preferred stock, the holders of each series of the Preferred Stock shall be entitled to receive out of the net assets of the Corporation an amount in cash for each share equal to the amount fixed and determined by the Board of Directors in the resolution providing for the issuance of the particular series of Preferred Stock, plus all dividends accumulated and unpaid on each such share of Preferred Stock up to the date fixed for distribution, and no more. If the above-stated amount payable in such event to the holders of the Preferred Stock cannot be paid in full, the holders of the shares of Preferred Stock shall share ratably in any distribution of assets in proportion to the sums which would have been paid to them upon such distribution if all sums payable were paid and discharged in full. Neither the merger or consolidation of the Corporation, nor the sale, lease or conveyance of all or a part of its assets, shall be deemed to be a liquidation, dissolution or winding up of the affairs of the Corporation. D. The Preferred Stock shall rank prior to the Common Stock and the Junior Preferred Stock both as to dividends and assets, and any class or classes of stock shall be deemed to rank (i) prior to the Preferred Stock either as to dividends or assets if the holders of such class or classes shall be entitled to the receipt of dividends or of amounts distributable upon liquidation, dissolution or winding up, as the case may be, in preference or priority to the holders of the Preferred Stock; (ii) on a parity with the Preferred Stock either as to dividends or assets, whether or not the dividend rates, dividend payment dates or redemption or liquidation prices per share thereof be different from those of the Preferred Stock, if the holders of such class or classes of stock shall be entitled to the receipt of dividends or of amounts distributable upon liquidation, dissolution or winding up, as the case may be, in proportion to their respective dividend rates or liquidation prices, without preference or priority one over the other with respect to the holders of the Preferred Stock; and (iii) junior to the Preferred Stock either as to dividends or assets, if the rights of the holders of such class or classes shall be subject or subordinate to the rights of the holders of the Preferred Stock in respect of the receipt of dividends or of amounts distributable upon liquidation, dissolution or winding up, as the case may be. E. All shares of Preferred Stock shall be identical except that the Board of Directors of the Corporation is hereby expressly authorized and empowered to divide the class of Preferred Stock into one or more series, and, prior to the issuance of any of such shares in any particular series, to fix and determine, in the manner provided by law, the number of shares to constitute such series as well as the provisions of such series described in clauses (a) through (h) below, and, after a series has been established hereunder by the Board of Directors and unless otherwise specifically provided in the original resolution establishing such series, to increase or decrease at any time and from time to time, in the manner provided by law, the number of shares included in such series (but not below the number of shares thereof then issued) by subsequent resolutions adopted by the Board of Directors (provided, however, that the Board of Directors shall not be authorized to increase or decrease the number of shares included in the Series A Adjustable Rate Convertible Preferred Stock, in the Series B Adjustable Rate Convertible Preferred Stock or in the Series B Adjustable Rate Convertible Preferred Stock (2nd Issue)): (a) The distinctive designation of such series; (b) The rate of dividends, the times of payment and date from which the dividends shall be accumulated; (c) Whether shares can be redeemed and, if so, the redemption price and terms and conditions of redemption; (d) The amount payable upon shares in the event of voluntary or involuntary liquidation; (e) Purchase, retirement or sinking fund provisions, if any, for the redemption or purchase of shares; (f) The terms and conditions, if any, on which shares may be converted; (g) Whether or not shares have voting rights, and the extent of any such voting rights (including, without limitation, the right to elect directors); and (h) Any other preferences, rights, restrictions and qualifications of shares of such class or series permitted by law and these Articles of Incorporation. F. Each share of Preferred Stock within an individual series shall be identical in all respects with the other shares of such series, except for such changes in dates from which dividends shall first accrue and other details which because of the passage of time are required to be made in order for the substantive rights of the holders of the shares of such series to be identical. The following is a description of the terms, provisions, preferences, rights, voting powers, restrictions and qualifications of the Junior Preferred Stock: A. Dividends on the Junior Preferred Stock shall be cumulative. B. At any time after full cumulative dividends for all previous dividend periods shall have been paid on the Junior Preferred Stock and each other class of stock ranking prior to or on a parity with the Junior Preferred Stock as to dividends, and after declaring and setting aside a sum sufficient for the payment in full of the quarterly dividends on the Junior Preferred Stock and each such other class of stock for the then current dividend period, then, but not prior thereto, out of any funds of the Corporation lawfully available therefor, dividends may be declared on the class or classes of stock junior to the Junior Preferred Stock as to dividends, subject to the respective terms and provisions (if any) applying thereto. If at any time the Corporation shall fail to pay full cumulative dividends on any shares of the Junior Preferred Stock, thereafter until such dividends shall have been paid or declared and set apart for payment, the Corporation shall not purchase, redeem or otherwise acquire for consideration any shares of any class of stock then outstanding and ranking on a parity with or junior to the Junior Preferred Stock. C. In the event of any voluntary or involuntary dissolution, liquidation or winding up of the affairs of the Corporation, after payment or provision for payment of the debts, the Preferred Stock, any other preferred stock senior to the Junior Preferred Stock and other liabilities of the Corporation and before any distribution to the holders of the Common Stock or any subordinate preferred stock, the holders of each series of the Junior Preferred Stock shall be entitled to receive out of the net assets of the Corporation an amount in cash for each share equal to the amount fixed and determined by the Board of Directors in the resolution providing for the issuance of the particular series of Junior Preferred Stock, plus all dividends accumulated and unpaid on each such share of Junior Preferred Stock up to the date fixed for distribution, and no more. If the above-stated amount payable in such event to the holders of the Junior Preferred Stock cannot be paid in full, the holders of the shares of Junior Preferred Stock shall share ratably in any distribution of assets in proportion to the sums which would have been paid to them upon such distribution if all sums payable were paid and discharged in full. Neither the merger or consolidation of the Corporation, nor the sale, lease or conveyance of all or a part of its assets, shall be deemed to be a liquidation, dissolution or winding up of the affairs of the Corporation. D. The Junior Preferred Stock shall rank prior to the Common Stock both as to dividends and assets, and any class or classes of stock shall be deemed to rank (i) prior to the Junior Preferred Stock either as to dividends or assets if the holders of such class or classes shall be entitled to the receipt of dividends or of amounts distributable upon liquidation, dissolution or winding up, as the case may be, in preference or priority to the holders of the Junior Preferred Stock; (ii) on a parity with the Junior Preferred Stock either as to dividends or assets, whether or not the dividend rates, dividend payment dates or redemption or liquidation prices per share thereof be different from those of the Junior Preferred Stock, if the holders of such class or classes of stock shall be entitled to the receipt of dividends or of amounts distributable upon liquidation, dissolution or winding up, as the case may be, in proportion to their respective dividend rates or liquidation prices, without preference or priority one over the other with respect to the holders of the Junior Preferred Stock; and (iii) junior to the Junior Preferred Stock either as to dividends or assets, if the rights of the holders of such class or classes shall be subject or subordinate to the rights of the holders of the Junior Preferred Stock in respect of the receipt of dividends or of amounts distributable upon liquidation, dissolution or winding up, as the case may be. E. All shares of Junior Preferred Stock shall be identical except that the Board of Directors of the Corporation is hereby expressly authorized and empowered to divide the class of Junior Preferred Stock into one or more series, and, prior to the issuance of any of such shares in any particular series, to fix and determine, in the manner provided by law, the number of shares to constitute such series as well as the provisions of such series described in clauses (a) through (h) below, and, after a series has been established hereunder by the Board of Directors and unless otherwise specifically provided in the original resolution establishing such series, to increase or decrease at any time and from time to time, in the manner provided by law, the number of shares included in such series (but not below the number of shares thereof then issued) by subsequent resolutions adopted by the Board of Directors: (a) The distinctive designation of such series; (b) The rate of dividends, the times of payment and the date from which the dividends shall be accumulated; (c) Whether shares can be redeemed and, if so, the redemption price and terms and conditions of redemption; (d) The amount payable upon shares in the event of voluntary or involuntary liquidation; (e) Purchase, retirement or sinking fund provisions, if any, for the redemption or purchase of shares; (f) The terms and conditions, if any, on which shares may be converted; (g) Whether or not shares have voting rights, and the extent of any such voting rights (including, without limitation, the right to elect directors); and (h) Any other preferences, rights, restrictions and qualifications of shares of such class or series, permitted by law and these Articles of Incorporation. F. Each share of the Junior Preferred Stock within an individual series shall be identical in all respects with the other shares of such series, except for such changes in dates from which dividends shall first accrue and other details which because of the passage of time are required to be made in order for the substantive rights of the holders of the shares of such series to be identical. G. The Board of Directors of the Corporation is hereby expressly authorized and empowered to declare and pay dividends, in the manner provided by law, in shares of Junior Preferred Stock in respect to any class of stock of the Corporation, without the consent of any of the holders of Junior Preferred Stock then outstanding. The Corporation shall have the full power to purchase and otherwise acquire and dispose of its own shares and securities granted by the laws of the State of Georgia and shall have the right to purchase its shares out of its unreserved and unrestricted capital surplus available therefor, out of its unreserved and unrestricted earned surplus available therefor, as well as out of any other funds legally available therefor. Any Preferred Stock and Junior Preferred Stock reacquired by the Corporation shall automatically be cancelled upon such reacquisition but shall remain as authorized Preferred Stock and Junior Preferred Stock hereunder. No holder of any stock of any class of the Corporation shall, as such holder, have any preemptive or preferential right of subscription for any stock of any class of the Corporation or for any obligations convertible into stock or for any right of subscription for, or any warrant or option for, the purchase of any thereof, other than such (if any) as the Board of Directors of the Corporation in its discretion may determine from time to time. The following are the voting powers, designation, preferences and relative, participating, optional and other special rights, and qualifications, limitations and restrictions, in addition to those previously set forth in this Article IV, of "Series A Junior Preferred Stock": Section 1. Designation and Amount. The shares of such series shall be designated as "Series A Junior Preferred Stock" and the number of shares constituting such series shall be zero. Section 2. Dividends and Distributions. (A) Subject to the prior and superior rights of the holders of any shares of any other series of Junior Preferred Stock or any other shares of preferred stock of the Corporation ranking prior and superior to the shares of Series A Junior Preferred Stock with respect to dividends, each holder of one one-hundredth (1/100) of a share (a "Unit") of Series A Junior Preferred Stock shall be entitled to receive, when, as and if declared by the Board of Directors out of funds legally available for that purpose, (i) quarterly dividends payable in cash on the first day of January, April, July and October in each year (each such date being a "Quarterly Dividend Payment Date"), commencing on the first Quarterly Dividend Payment Date after the first issuance of such Unit of Series A Junior Preferred Stock, in an amount per Unit (rounded to the nearest cent) equal to the greater of (a) $0.35 or (b) subject to the provision for adjustment hereinafter set forth, the aggregate per share amount of all cash dividends declared on shares of the Common Stock since the immediately preceding Quarterly Dividend Payment Date or, with respect to the first Quarterly Dividend Payment Date, since the first issuance of a Unit of Series A Junior Preferred Stock, and (ii) subject to the provision for adjustment hereinafter set forth, quarterly distributions (payable in kind) on each Quarterly Dividend Payment Date in an amount per Unit equal to the aggregate per share amount of all non-cash dividends or other distributions (other than a dividend payable in shares of Common Stock or a subdivision of the outstanding shares of Common Stock, by reclassification or otherwise) declared on shares of Common Stock since the immediately preceding Quarterly Dividend Payment Date, or with respect to the first Quarterly Dividend Payment Date, since the first issuance of a Unit of Series A Junior Preferred Stock. In the event that the Corporation shall at any time after July 31, 1989 (the "Rights Declaration Date") (i) declare any dividend on outstanding shares of Common Stock payable in shares of Common Stock, (ii) subdivide outstanding shares of Common Stock or (iii) combine outstanding shares of Common Stock into a smaller number of shares, then in each such case the amount to which the holder of a Unit of Series A Junior Preferred Stock was entitled immediately prior to such event pursuant to the preceding sentence shall be adjusted by multiplying such amount by a fraction the numerator of which shall be the number of shares of Common Stock that are outstanding immediately after such event and the denominator of which shall be the number of shares of Common Stock that were outstanding immediately prior to such event. (B) The Corporation shall declare a dividend or distribution on Units of Series A Junior Preferred Stock as provided in paragraph (A) above immediately after it declares a dividend or distribution on the shares of Common Stock (other than a dividend payable in shares of Common Stock); provided, however, that, in the event no dividend or distribution shall have been declared on the Common Stock during the period between any Quarterly Dividend Payment Date and the next subsequent Quarterly Dividend Payment Date, a dividend of $0.35 per Unit on the Series A Junior Preferred Stock shall nevertheless be payable on such subsequent Quarterly Dividend Payment Date. (C) Dividends shall begin to accrue and shall be cumulative on each outstanding Unit of Series A Junior Preferred Stock from the Quarterly Dividend Payment Date next preceding the date of issuance of such Unit of Series A Junior Preferred Stock, unless the date of issuance of such Unit is prior to the record date for the first Quarterly Dividend Payment Date, in which case, dividends on such Unit shall begin to accrue from the date of issuance of such Unit, or unless the date of issuance is a Quarterly Dividend Payment Date or is a date after the record date for the determination of holders of Units of Series A Junior Preferred Stock entitled to receive a quarterly dividend and before such Quarterly Dividend Payment Date, in either of which events such dividends shall begin to accrue and be cumulative from such Quarterly Dividend Payment Date. Accrued but unpaid dividends shall not bear interest. Dividends paid on Units of Series A Junior Preferred Stock in an amount less than the aggregate amount of all such dividends at the time accrued and payable on such Units shall be allocated pro rata on a unit-by- unit basis among all Units of Series A Junior Preferred Stock at the time outstanding. The Board of Directors may fix a record date for the determination of holders of Units of Series A Junior Preferred Stock entitled to receive payment of a dividend or distribution declared thereon, which record date shall be no more than 30 days prior to the date fixed for the payment thereof. Section 3. Voting Rights. The holders of Units of Series A Junior Preferred Stock shall have the following voting rights: (A) Subject to the provision for adjustment hereinafter set forth, each Unit of Series A Junior Preferred Stock shall entitle the holder thereof to one vote on all matters submitted to a vote of the shareholders of the Corporation. In the event the Corporation shall at any time after the Rights Declaration Date (i) declare any dividend on outstanding shares of Common Stock payable in shares of Common Stock, (ii) subdivide outstanding shares of Common Stock or (iii) combine the outstanding shares of Common Stock into a smaller number of shares, then in each such case the number of votes per Unit to which holders of Units of Series A Junior Preferred Stock were entitled immediately prior to such event shall be adjusted by multiplying such number by a fraction the numerator of which shall be the number of shares of Common Stock outstanding immediately after such event and the denominator of which shall be the number of shares of Common Stock that were outstanding immediately prior to such event. (B) Except as otherwise provided herein or by law, the holders of Units of Series A Junior Preferred Stock and the holders of shares of Common Stock shall vote together as one class on all matters submitted to a vote of shareholders of the Corporation. (C) (i) If at any time dividends on any Units of Series A Junior Preferred Stock shall be in arrears in an amount equal to six quarterly dividends thereon, then during the period (a ''default period'') from the occurrence of such event until such time as all accrued and unpaid dividends for all previous quarterly dividend periods and for the current quarterly dividend period on all Units of Series A Junior Preferred Stock then outstanding shall have been declared and paid or set apart for payment, all holders of Units of Series A Junior Preferred Stock, voting separately as a class, shall have the right to elect two Directors. (ii) During any default period, such voting rights of the holders of Units of Series A Junior Preferred Stock may be exercised initially at a special meeting called pursuant to subparagraph (iii) of this Section 3(C) or at any annual meeting of shareholders, and thereafter at annual meetings of shareholders, provided that neither such voting rights nor any right of the holders of Units of Series A Junior Preferred Stock to increase, in certain cases, the authorized number of Directors may be exercised at any meeting unless one-third of the outstanding Units of Series A Junior Preferred Stock shall be present at such meeting in person or by proxy. The absence of a quorum of the holders of Common Stock shall not affect the exercise by the holders of Units of Series A Junior Preferred Stock of such rights. At any meeting at which the holders of Units of Series A Junior Preferred Stock shall exercise such voting right initially during an existing default period, they shall have the right, voting separately as a class, to elect Directors to fill up to two vacancies in the Board of Directors, if any such vacancies may then exist, or, if such right is exercised at an annual meeting, to elect two Directors. If the number which may be so elected at any special meeting does not amount to the required number, the holders of the Series A Junior Preferred Stock shall have the right to make such increase in the number of Directors as shall be necessary to permit the election by them of the required number. After the holders of Units of Series A Junior Preferred Stock shall have exercised their right to elect Directors during any default period, the number of Directors shall not be increased or decreased except as approved by a vote of the holders of Units of Series A Junior Preferred Stock as herein provided or pursuant to the rights of any equity securities ranking senior to the Series A Junior Preferred Stock. (iii) Unless the holders of Series A Junior Preferred Stock shall, during an existing default period, have previously exercised their right to elect Directors, the Board of Directors may order, or any shareholder or shareholders owning in the aggregate not less than 25% of the total number of Units of Series A Junior Preferred Stock outstanding may request in writing, the calling of a special meeting of the holders of Units of Series A Junior Preferred Stock, which meeting shall thereupon be called by the Secretary of the Corporation. Notice of such meeting and of any annual meeting at which holders of Units of Series A Junior Preferred Stock are entitled to vote pursuant to this paragraph (C)(iii) shall be given to each holder of record of Units of Series A Junior Preferred Stock by mailing a copy of such notice to him at his last address as the same appears on the books of the Corporation. Such meeting shall be called for a time not earlier than 10 days and not later than 60 days after such order or request or in default of the calling of such meeting within 60 days after such order or request, such meeting may be called on similar notice by any shareholder or shareholders owning in the aggregate not less than 25% of the total number of outstanding Units of Series A Junior Preferred Stock. (iv) During any default period, the holders of shares of Common Stock and Units of Series A Junior Preferred Stock, and other classes or series of stock of the Corporation, if applicable, shall continue to be entitled to elect all the Directors until the holders of Units of Series A Junior Preferred Stock shall have exercised their right to elect two Directors voting as a separate class, after the exercise of which right (x) the Directors so elected by the holders of Units of Series A Junior Preferred Stock shall continue in office until their successors shall have been elected by such holders or until the expiration of the default period, and (y) any vacancy in the Board of Directors may (except as provided in paragraph (C)(ii) of this Section 3) be filled by a vote of a majority of the remaining Directors theretofore elected by the holders of the class of capital stock which elected the Director whose office shall have become vacant. References in this paragraph (C) to Directors elected by the holders of a particular class of capital stock shall include Directors elected by such Directors to fill vacancies as provided in clause (y) of the foregoing sentence. (v) Immediately upon the expiration of a default period, (x) the right of the holders of Units of Series A Junior Preferred Stock as a separate class to elect Directors shall cease, (y) the term of any Directors elected by the holders of Units of Series A Junior Preferred Stock as a separate class shall terminate, and (z) the number of Directors shall be such number as may be provided for in the Articles or by-laws irrespective of any increase made pursuant to the provisions of paragraph (C)(ii) of this Section 3 (such number being subject, however, to change thereafter in any manner provided by law or in the Articles or by-laws). Any vacancies in the Board of Directors effected by the provisions of clauses (y) and (z) in the preceding sentence may be filled by a majority of the remaining Directors. (vi) The provisions of this paragraph (C) shall govern the election of Directors by holders of Units of Series A Junior Preferred Stock during any default period notwithstanding any provisions of the Articles to the contrary. (D) Except as set forth herein, holders of Units of Series A Junior Preferred Stock shall have no special voting rights and their consent shall not be required (except to the extent they are entitled to vote with holders of Shares of Common Stock as set forth herein) for taking any corporate action. Section 4. Certain Restrictions. (A) Whenever quarterly dividends or other dividends or distributions payable on Units of Series A Junior Preferred Stock as provided in Section 2 are in arrears, thereafter and until all accrued and unpaid dividends and distributions, whether or not declared, on outstanding Units of Series A Junior Preferred Stock shall have been paid in full, the Corporation shall not (i) declare or pay dividends on, make any other distributions on, or redeem or purchase or otherwise acquire for consideration any shares of junior stock; (ii) declare or pay dividends on or make any other distributions on any shares of parity stock, except dividends paid ratably on Units of Series A Junior Preferred Stock and shares of all such parity stock on which dividends are payable or in arrears in proportion to the total amounts to which the holders of such Units and all such shares are then entitled; (iii) redeem or purchase or otherwise acquire for consideration shares of any parity stock, provided, however, that the Corporation may at any time redeem, purchase or otherwise acquire shares of any such parity stock in exchange for shares of any junior stock; or (iv) purchase or otherwise acquire for consideration any Units of Series A Junior Preferred Stock, except in accordance with a purchase offer made in writing or by publication (as determined by the Board of Directors) to all holders of such Units. (B) The Corporation shall not permit any subsidiary of the Corporation to purchase or otherwise acquire for consideration any shares of stock of the Corporation unless the Corporation could, under paragraph (A) of this Section 4, purchase or otherwise acquire such shares at such time and in such manner. Section 5. Reacquired Shares. Any Units of Series A Junior Preferred Stock purchased or otherwise acquired by the Corporation in any manner whatsoever shall be retired and cancelled automatically upon the acquisition thereof. All such Units shall, upon their cancellation, become authorized but unissued Units of Junior Preferred Stock and may be reissued as part of a new series of Junior Preferred Stock to be created by resolution or resolutions of the Board of Directors, subject to the conditions and restrictions on issuance set forth herein. Section 6. Liquidation, Dissolution or Winding Up. (A) Upon any voluntary or involuntary liquidation, dissolution or winding up of the Corporation, no distribution shall be made (i) to the holders of shares of junior stock unless the holders of Units of Series A Junior Preferred Stock shall have received, subject to adjustment as hereinafter provided in paragraph (B), the greater of either (a) $.01 per Unit plus an amount equal to accrued and unpaid dividends and distributions thereon, whether or not earned or declared, to the date of such payment, or (b) the amount per Unit equal to the aggregate per share amount to be distributed to holders of shares of Common Stock, or (ii) to the holders of shares of parity stock, unless simultaneously therewith distributions are made ratably on Units of Series A Junior Preferred Stock and all other shares of such parity stock in proportion to the total amounts to which the holders of Units of Series A Junior Preferred Stock are entitled under clause (i)(a) of this sentence and to which the holders of shares of such parity stock are entitled, in each case upon such liquidation, dissolution or winding up. (B) In the event the Corporation shall at any time after the Rights Declaration Date (i) declare any dividend on outstanding shares of Common Stock payable in shares of Common Stock, (ii) subdivide outstanding shares of Common Stock, or (iii) combine outstanding shares of Common Stock into a smaller number of shares, then in each such case the aggregate amount to which holders of Units of Series A Junior Preferred Stock were entitled immediately prior to such event pursuant to clause (i)(b) of paragraph (A) of this Section 6 shall be adjusted by multiplying such amount by a fraction the numerator of which shall be the number of shares of Common Stock that are outstanding immediately after such event and the denominator of which shall be the number of shares of Common Stock that were outstanding immediately prior to such event. Section 7. Consolidation, Merger, etc. In case the Corporation shall enter into any consolidation, merger, combination or other transaction in which the shares of Common Stock are exchanged for or converted into other stock or securities, cash and/or any other property, then in any such case Units of Series A Junior Preferred Stock shall at the same time be similarly exchanged for or converted into an amount per Unit (subject to the provision for adjustment hereinafter set forth) equal to the aggregate amount of stock, securities, cash and/or any other property (payable in kind), as the case may be, into which or for which each share of Common Stock is converted or exchanged. In the event the Corporation shall at any time after the Rights Declaration Date (i) declare any dividend on outstanding shares of Common Stock payable in shares of Common Stock, (ii) subdivide outstanding shares of Common Stock, or (iii) combine outstanding Common Stock into a smaller number of shares, then in each such case the amount set forth in the immediately preceding sentence with respect to the exchange or conversion of Units of Series A Junior Preferred Stock shall be adjusted by multiplying such amount by a fraction the numerator of which shall be the number of shares of Common Stock that are outstanding immediately after such event and the denominator of which shall be the number of shares of Common Stock that were outstanding immediately prior to such event. Section 8. Redemption. The Units of Series A Junior Preferred Stock shall not be redeemable. Section 9. Ranking. The Units of Series A Junior Preferred Stock shall rank junior to all other series of the Junior Preferred Stock and to any other class of preferred stock that hereafter may be issued by the Corporation as to the payment of dividends and the distribution of assets, unless the terms of any such series or class shall provide otherwise. Section 10. Amendment. The Articles, including, without limitation, this resolution, shall not hereafter be amended, either directly or indirectly, or through merger or consolidation with another corporation, in any manner that would alter or change the powers, preferences or special rights of the Series A Junior Preferred Stock so as to affect them adversely without the affirmative vote of the holders of a majority or more of the outstanding Units of Series A Junior Preferred Stock, voting separately as a class. Section 11. Fractional Shares. The Series A Junior Preferred Stock may be issued in Units or other fractions of a share, which Units or fractions shall entitle the holder, in proportion to such holder's fractional shares, to exercise voting rights, receive dividends, participate in distributions and to have the benefit of all other rights of holders of Series A Junior Preferred Stock. Section 12. Certain Definitions. As used herein with respect to the Series A Junior Preferred Stock, the following terms shall have the following meanings: (A) The term "Common Stock" shall mean the class of stock designated as the common stock, par value $.80 per share, of the Corporation at the date hereof or any other class of stock resulting from successive changes or reclassification of the common stock. (B) The term "junior stock" (i) as used in Section 4, shall mean the Common Stock and any other class or series of capital stock of the Corporation hereafter authorized or issued over which the Series A Junior Preferred Stock has preference or priority as to the payment of dividends and (ii) as used in Section 6, shall mean the Common Stock and any other class or series of capital stock of the Corporation over which the Series A Junior Preferred Stock has preference or priority in the distribution of assets on any liquidation, dissolution or winding up of the Corporation. (C) The term "parity stock" (i) as used in Section 4, shall mean any class or series of stock of the Corporation hereafter authorized or issued ranking pari passu with the Series A Junior Preferred Stock as to dividends and (ii) as used in Section 6, shall mean any class or series of capital stock ranking pari passu with the Series A Junior Preferred Stock in the distribution of assets on any liquidation, dissolution or winding up. The following are the voting powers, designation, preferences and relative, participating, optional and other special rights, and qualifications, limitations and restrictions, in addition to those previously set forth in this Article IV, of ''Series B Junior Preferred Stock'': Section 1. Designation and Amount. The shares of such series shall be designated as "Series B Junior Preferred Stock" and the number of shares constituting such series shall be 5,000,000. Section 2. Dividends and Distributions. (A) Subject to the prior and superior rights of the holders of any shares of any other series of Preferred Stock or Junior Preferred Stock or any other shares of capital stock of the Corporation ranking prior and superior to the shares of Series B Junior Preferred Stock with respect to dividends, each holder of one one-hundredth (1/100) of a share (a "Unit") of Series B Junior Preferred Stock shall be entitled to receive, when, as and if declared by the Board of Directors out of funds legally available for that purpose, (i) quarterly dividends payable in cash on the first day of January, April, July and October in each year (each such date being a "Quarterly Dividend Payment Date"), commencing on the first Quarterly Dividend Payment Date after the first issuance of such Unit of Series B Junior Preferred Stock, in an amount per Unit (rounded to the nearest cent) equal to the greater of (a) $0.35 or (b) subject to the provision for adjustment hereinafter set forth, the aggregate per share amount of all cash dividends declared on shares of the Georgia-Pacific Group Stock since the immediately preceding Quarterly Dividend Payment Date or, with respect to the first Quarterly Dividend Payment Date, since the first issuance of a Unit of Series B Junior Preferred Stock, and (ii) subject to the provision for adjustment hereinafter set forth, quarterly distributions (payable in kind) on each Quarterly Dividend Payment Date in an amount per Unit equal to the aggregate per share amount of all non-cash dividends or other distributions (other than a dividend payable in shares of Georgia- Pacific Group Stock or a subdivision of the outstanding shares of Georgia- Pacific Group Stock, by reclassification or otherwise) declared on shares of Georgia-Pacific Group Stock since the immediately preceding Quarterly Dividend Payment Date, or with respect to the first Quarterly Dividend Payment Date, since the first issuance of a Unit of Series B Junior Preferred Stock. In the event that the Corporation shall at any time after the initial issuance of Georgia-Pacific Group Stock and Timber Stock (i) declare any dividend on outstanding shares of Georgia-Pacific Group Stock payable in shares of Georgia-Pacific Group Stock, (ii) subdivide outstanding shares of Georgia-Pacific Group Stock into a greater number of shares or (iii) combine outstanding shares of Georgia-Pacific Group Stock into a smaller number of shares, then in each such case the amount to which the holder of a Unit of Series B Junior Preferred Stock was entitled immediately prior to such event pursuant to the preceding sentence shall be adjusted by multiplying such amount by a fraction the numerator of which shall be the number of shares of Georgia-Pacific Group Stock that are outstanding immediately after such event and the denominator of which shall be the number of shares of Georgia-Pacific Group Stock that were outstanding immediately prior to such event. (B) The Corporation shall declare a dividend or distribution on Units of Series B Junior Preferred Stock as provided in paragraph (A) above immediately after it declares a dividend or distribution on the shares of Georgia-Pacific Group Stock (other than a dividend payable in shares of Georgia-Pacific Group Stock); provided, however, that, in the event no dividend or distribution shall have been declared on the Georgia-Pacific Group Stock during the period between any Quarterly Dividend Payment Date and the next subsequent Quarterly Dividend Payment Date, a dividend of $0.35 per Unit on the Series B Junior Preferred Stock shall nevertheless be payable on such subsequent Quarterly Dividend Payment Date. (C) Dividends shall begin to accrue and shall be cumulative on each outstanding Unit of Series B Junior Preferred Stock from the Quarterly Dividend Payment Date next preceding the date of issuance of such Unit of Series B Junior Preferred Stock, unless the date of issuance of such Unit is prior to the record date for the first Quarterly Dividend Payment Date, in which case, dividends on such Unit shall begin to accrue from the date of issuance of such Unit, or unless the date of issuance is a Quarterly Dividend Payment Date or is a date after the record date for the determination of holders of Units of Series B Junior Preferred Stock entitled to receive a quarterly dividend and before such Quarterly Dividend Payment Date, in either of which events such dividends shall begin to accrue and be cumulative from such Quarterly Dividend Payment Date. Accrued but unpaid dividends shall not bear interest. Dividends paid on Units of Series B Junior Preferred Stock in an amount less than the aggregate amount of all such dividends at the time accrued and payable on such Units shall be allocated pro rata on a unit-by- unit basis among all Units of Series B Junior Preferred Stock at the time outstanding. The Board of Directors may fix a record date for the determination of holders of Units of Series B Junior Preferred Stock entitled to receive payment of a dividend or distribution declared thereon, which record date shall be no more than 30 days prior to the date fixed for the payment thereof. Section 3. Voting Rights. The holders of Units of Series B Junior Preferred Stock shall have the following voting rights: (A) Subject to the provision for adjustment hereinafter set forth, each Unit of Series B Junior Preferred Stock shall entitle the holder thereof to one vote on all matters submitted to a vote of the shareholders of the Corporation. In the event the Corporation shall at any time after the initial issuance of Georgia-Pacific Group Stock and Timber Stock (i) declare any dividend on outstanding shares of Georgia-Pacific Group Stock payable in shares of Georgia-Pacific Group Stock, (ii) subdivide outstanding shares of Georgia-Pacific Group Stock into a greater number of shares or (iii) combine the outstanding shares of Georgia-Pacific Group Stock into a smaller number of shares, then in each such case the number of votes per Unit to which holders of Units of Series B Junior Preferred Stock were entitled immediately prior to such event shall be adjusted by multiplying such number by a fraction the numerator of which shall be the number of shares of Georgia-Pacific Group Stock outstanding immediately after such event and the denominator of which shall be the number of shares of Georgia-Pacific Group Stock that were outstanding immediately prior to such event. (B) Except as otherwise provided herein or by law, the holders of Units of Series A Junior Preferred Stock, Series B Junior Preferred Stock and Series C Junior Preferred Stock and the holders of shares of Georgia- Pacific Group Stock and Timber Stock shall vote together as one voting group on all matters submitted to a vote of shareholders of the Corporation. (C)(i) If at any time dividends on any Units of Series B Junior Preferred Stock shall be in arrears in an amount equal to six quarterly dividends thereon, then during the period (a ''default period'') from the occurrence of such event until such time as all accrued and unpaid dividends for all previous quarterly dividend periods and for the current quarterly dividend period on all Units of Series B Junior Preferred Stock then outstanding shall have been declared and paid or set apart for payment, all holders of Units of Series B Junior Preferred Stock, voting separately as a voting group, shall have the right to elect two Directors. (ii) During any default period, such voting rights of the holders of Units of Series B Junior Preferred Stock may be exercised initially at a special meeting called pursuant to subparagraph (iii) of this Section 3(C) or at any annual meeting of shareholders, and thereafter at annual meetings of shareholders, provided that neither such voting rights nor any right of the holders of Units of Series B Junior Preferred Stock to increase, in certain cases, the authorized number of Directors may be exercised at any meeting unless one-third of the outstanding Units of Series B Junior Preferred Stock shall be present at such meeting in person or by proxy. The absence of a quorum of the holders of Common Stock shall not affect the exercise by the holders of Units of Series B Junior Preferred Stock of such rights. At any meeting at which the holders of Units of Series B Junior Preferred Stock shall exercise such voting rights initially during an existing default period, they shall have the right, voting separately as a voting group, to elect Directors to fill up to two vacancies in the Board of Directors, if any such vacancies may then exist, or, if such right is exercised at an annual meeting, to elect two Directors. If the number which may be so elected at any special meeting does not amount to the required number, the holders of the Series B Junior Preferred Stock shall have the right to make such increase in the number of Directors as shall be necessary to permit the election by them of the required number. After the holders of Units of Series B Junior Preferred Stock shall have exercised their right to elect Directors during any default period, the number of Directors shall not be increased or decreased except as approved by a vote of the holders of Units of Series B Junior Preferred Stock as herein provided or pursuant to the rights of the Series A Junior Preferred Stock or Series C Junior Preferred Stock or pursuant to the rights of any equity securities ranking senior to the Series B Junior Preferred Stock. (iii) Unless the holders of Series B Junior Preferred Stock shall, during an existing default period, have previously exercised their right to elect Directors, the Board of Directors may order, or any shareholder or shareholders owning in the aggregate not less than 25% of the total number of Units of Series B Junior Preferred Stock outstanding may request in writing, the calling of a special meeting of the holders of Units of Series B Junior Preferred Stock, which meeting shall thereupon be called by the Secretary of the Corporation. Notice of such meeting and of any annual meeting at which holders of Units of Series B Junior Preferred Stock are entitled to vote pursuant to this paragraph (C)(iii) shall be given to each holder of record of Units of Series B Junior Preferred Stock by mailing a copy of such notice to him at his last address as the same appears on the books of the Corporation. Such meeting shall be called for a time not earlier than 10 days and not later than 60 days after such order or request or in default of the calling of such meeting within 60 days after such order or request, such meeting may be called on similar notice by any shareholder or shareholders owning in the aggregate not less than 25% of the total number of outstanding Units of Series B Junior Preferred Stock. (iv) During any default period, the holders of shares of Georgia- Pacific Group Stock, Timber Stock and Units of Series B Junior Preferred Stock, and other classes or series of stock of the Corporation, if applicable, shall continue to be entitled to elect all the Directors until the holders of Units of Series B Junior Preferred Stock shall have exercised their right to elect two Directors voting as a separate voting group, after the exercise of which right (x) the Directors so elected by the holders of Units of Series B Junior Preferred Stock shall continue in office until their successors shall have been elected by such holders or until the expiration of the default period, and (y) any vacancy in the Board of Directors may (except as provided in paragraph (C)(ii) of this Section 3) be filled by a vote of a majority of the remaining Directors theretofore elected by the holders of the class or series of capital stock which elected the Director whose office shall have become vacant. References in this paragraph (C) to Directors elected by the holders of a particular class or series of capital stock shall include Directors elected by such Directors to fill vacancies as provided in clause (y) of the foregoing sentence. (v) Immediately upon the expiration of a default period, (x) the right of the holders of Units of Series B Junior Preferred Stock as a separate voting group to elect Directors shall cease, (y) the term of any Directors elected by the holders of Units of Series B Junior Preferred Stock as a separate voting group shall terminate, and (z) the number of Directors shall be such number as may be provided for in the Articles or By-laws irrespective of any increase made pursuant to the provisions of paragraph (C)(ii) of this Section 3 (such number being subject, however, to change thereafter in any manner provided by law or in the Articles or By-laws). Any vacancies in the Board of Directors effected by the provisions of clauses (y) and (z) in the preceding sentence may be filled by a majority of the remaining Directors. (vi) The provisions of this paragraph (C) shall govern the election of Directors by holders of Units of Series B Junior Preferred Stock during any default period notwithstanding any provisions of the Articles to the contrary. (D) Except as set forth herein, holders of Units of Series B Junior Preferred Stock shall have no special voting rights and their consent shall not be required (except to the extent they are entitled to vote with holders of shares of Georgia-Pacific Group Stock or Timber Stock or any other class or series of capital stock of the Corporation, as applicable) for taking any corporate action. Section 4. Certain Restrictions. (A) Whenever quarterly dividends or other dividends or distributions payable on Units of Series B Junior Preferred Stock as provided in Section 2 are in arrears, thereafter and until all accrued and unpaid dividends and distributions, whether or not declared, on outstanding Units of Series B Junior Preferred Stock shall have been paid in full, the Corporation shall not (i) declare or pay dividends on, make any other distributions on, or redeem or purchase or otherwise acquire for consideration any shares of junior stock; (ii) declare or pay dividends on or make any other distributions on any shares of parity stock, except dividends paid ratably on Units of Series B Junior Preferred Stock and shares of all such parity stock on which dividends are payable or in arrears in proportion to the total amounts to which the holders of such Units and all such shares are then entitled; (iii) redeem or purchase or otherwise acquire for consideration shares of any parity stock, provided, however, that the Corporation may at any time redeem, purchase or otherwise acquire shares of any such parity stock in exchange for shares of any junior stock; or (iv) purchase or otherwise acquire for consideration any Units of Series B Junior Preferred Stock, except in accordance with a purchase offer made in writing or by publication (as determined by the Board of Directors) to all holders of such Units. (B) The Corporation shall not permit any subsidiary of the Corporation to purchase or otherwise acquire for consideration any shares of stock of the Corporation unless the Corporation could, under paragraph (A) of this Section 4, purchase or otherwise acquire such shares at such time and in such manner. Section 5. Reacquired Shares. Any Units of Series B Junior Preferred Stock purchased or otherwise acquired by the Corporation in any manner whatsoever shall be retired and cancelled automatically upon the acquisition thereof. All such Units shall, upon their cancellation, become authorized but unissued Units of Junior Preferred Stock and may be reissued as part of a new series of Junior Preferred Stock to be created by resolution or resolutions of the Board of Directors, subject to the conditions and restrictions on issuance set forth herein. Section 6. Liquidation, Dissolution or Winding Up. (A) Upon any voluntary or involuntary liquidation, dissolution or winding up of the Corporation, no distribution shall be made (i) to the holders of shares of junior stock unless the holders of Units of Series B Junior Preferred Stock shall have received, subject to adjustment as hereinafter provided in paragraph (B), the greater of either (a) $.01 per Unit plus an amount equal to accrued and unpaid dividends and distributions thereon, whether or not earned or declared, to the date of such payment, or (b) the amount per Unit equal to the aggregate per share amount to be distributed to holders of shares of Georgia-Pacific Group Stock, or (ii) to the holders of shares of parity stock, unless simultaneously therewith distributions are made ratably on Units of Series B Junior Preferred Stock and all other shares of such parity stock in proportion to the total amounts to which the holders of Units of Series B Junior Preferred Stock are entitled under clause (i)(a) of this sentence and to which the holders of shares of such parity stock are entitled, in each case upon such liquidation, dissolution or winding up. (B) In the event the Corporation shall at any time after the initial issuance of Georgia-Pacific Group Stock and Timber Stock (i) declare any dividend on outstanding shares of Georgia-Pacific Group Stock payable in shares of Georgia-Pacific Group Stock, (ii) subdivide outstanding shares of Georgia-Pacific Group Stock into a greater number of shares, or (iii) combine outstanding shares of Georgia-Pacific Group Stock into a smaller number of shares, then in each such case the aggregate amount to which holders of Units of Series B Junior Preferred Stock were entitled immediately prior to such event pursuant to clause (i)(b) of paragraph (A) of this Section 6 shall be adjusted by multiplying such amount by a fraction the numerator of which shall be the number of shares of Georgia-Pacific Group Stock that are outstanding immediately after such event and the denominator of which shall be the number of shares of Georgia-Pacific Group Stock that were outstanding immediately prior to such event. Section 7. Consolidation, Merger, etc. In case the Corporation shall enter into any consolidation, merger, combination or other transaction in which the shares of Georgia-Pacific Group Stock are exchanged for or converted into other stock or securities, cash and/or any other property, then in any such case Units of Series B Junior Preferred Stock shall at the same time be similarly exchanged for or converted into an amount per Unit (subject to the provision for adjustment hereinafter set forth) equal to the aggregate amount of stock, securities, cash and/or any other property (payable in kind), as the case may be, into which or for which each share of Georgia-Pacific Group Stock is converted or exchanged. In the event the Corporation shall at any time after the initial issuance of Georgia-Pacific Group Stock and Timber Stock (i) declare any dividend on outstanding shares of Georgia-Pacific Group Stock payable in shares of Georgia-Pacific Group Stock, (ii) subdivide outstanding shares of Georgia-Pacific Group Stock into a greater number of shares, or (iii) combine outstanding Georgia-Pacific Group Stock into a smaller number of shares, then in each such case the amount set forth in the immediately preceding sentence with respect to the exchange or conversion of Units of Series B Junior Preferred Stock shall be adjusted by multiplying such amount by a fraction the numerator of which shall be the number of shares of Georgia-Pacific Group Stock that are outstanding immediately after such event and the denominator of which shall be the number of shares of Georgia-Pacific Group Stock that were outstanding immediately prior to such event. Section 8. Redemption. The Units of Series B Junior Preferred Stock shall not be redeemable. Notwithstanding the foregoing, the Corporation may acquire shares of Series B Junior Preferred Stock in any other manner permitted by applicable law or these Articles. Section 9. Ranking. The Units of Series B Junior Preferred Stock shall rank senior to the Georgia-Pacific Group Stock and the Timber Stock, on a parity with the Series A Junior Preferred Stock and Series C Junior Preferred Stock and junior to all other series of the Junior Preferred Stock and to any other series or class of Preferred Stock that hereafter may be issued by the Corporation as to the payment of distributions and dividends and the distribution of assets upon liquidation, unless the terms of any such series or class shall provide otherwise. Section 10. Amendment. The Articles shall not hereafter be amended, either directly or indirectly, or through merger or consolidation with another corporation, in any manner that would alter or change the powers, preferences or special rights of the Series B Junior Preferred Stock so as to affect them adversely without the affirmative vote of the holders of a majority or more of the outstanding Units of Series B Junior Preferred Stock, voting separately as a voting group. Section 11. Fractional Shares. The Series B Junior Preferred Stock may be issued in Units or other fractions of a share, which Units or fractions shall entitle the holder, in proportion to such holder's fractional shares, to exercise voting rights, receive dividends, participate in distributions and to have the benefit of all other rights of holders of Series B Junior Preferred Stock. Section 12. Certain Definitions. As used herein with respect to the Series B Junior Preferred Stock, the following terms shall have the following meanings: (A) The term "junior stock" (i) as used in Section 4, shall mean the Georgia-Pacific Group Stock and the Timber Stock and any other class or series of capital stock of the Corporation hereafter authorized or issued over which the Series B Junior Preferred Stock has preference or priority as to the payment of dividends and (ii) as used in Section 6, shall mean the Georgia-Pacific Group Stock and the Timber Stock and any other class or series of capital stock of the Corporation over which the Series B Junior Preferred Stock has preference or priority in the distribution of assets on any liquidation, dissolution or winding up of the Corporation. (B) The term "parity stock" (i) as used in Section 4, shall mean any class or series of stock of the Corporation hereafter authorized or issued ranking pari passu with the Series B Junior Preferred Stock as to dividends and (ii) as used in Section 6, shall mean any class or series of capital stock ranking pari passu with the Series B Junior Preferred Stock in the distribution of assets on any liquidation, dissolution or winding up. The following are the voting powers, designation, preferences and relative, participating, optional and other special rights, and qualifications, limitations and restrictions, in addition to those previously set forth in this Article IV, of "Series C Junior Preferred Stock": Section 1. Designation and Amount. The shares of such series shall be designated as "Series C Junior Preferred Stock" and the number of shares constituting such series shall be 5,000,000. Section 2. Dividends and Distributions. (A) Subject to the prior and superior rights of the holders of any shares of any other series of Preferred Stock or Junior Preferred Stock or any other shares of capital stock of the Corporation ranking prior and superior to the shares of Series C Junior Preferred Stock with respect to dividends, each holder of one one-hundredth (1/100th) of a share (a "Unit") of Series C Junior Preferred Stock shall be entitled to receive, when, as and if declared by the Board of Directors out of funds legally available for that purpose, (i) quarterly dividends payable in cash on the first day of January, April, July and October in each year (each such date being a "Quarterly Dividend Payment Date"), commencing on the first Quarterly Dividend Payment Date after the first issuance of such Unit of Series C Junior Preferred Stock, in an amount per Unit (rounded to the nearest cent) equal to the greater of (a) $0.35 or (b) subject to the provision for adjustment hereinafter set forth, the aggregate per share amount of all cash dividends declared on shares of the Timber Stock since the immediately preceding Quarterly Dividend Payment Date or, with respect to the first Quarterly Dividend Payment Date, since the first issuance of a Unit of Series C Junior Preferred Stock, and (ii) subject to the provision for adjustment hereinafter set forth, quarterly distributions (payable in kind) on each Quarterly Distribution Payment Date in an amount per Unit equal to the aggregate per share amount of all non-cash dividends or other distributions (other than a dividend payable in shares of Timber Stock or a subdivision of the outstanding shares of Timber Stock, by reclassification or otherwise) declared on shares of Timber Stock since the immediately preceding Quarterly Dividend Payment Date, or with respect to the first Quarterly Dividend Payment Date, since the first issuance of a Unit of Series C Junior Preferred Stock. In the event that the Corporation shall at any time after the initial issuance of Georgia-Pacific Group Stock and Timber Stock (i) declare any dividend on outstanding shares of Timber Stock payable in shares of Timber Stock, (ii) subdivide outstanding shares of Timber Stock into a greater number of shares or (iii) combine outstanding shares of Timber Stock into a smaller number of shares, then in each such case the amount to which the holder of a Unit of Series C Junior Preferred Stock was entitled immediately prior to such event pursuant to the preceding sentence shall be adjusted by multiplying such amount by a fraction the numerator of which shall be the number of shares of Timber Stock that are outstanding immediately after such event and the denominator of which shall be the number of shares of Timber Stock that were outstanding immediately prior to such event. (B) The Corporation shall declare a dividend or distribution on Units of Series C Junior Preferred Stock as provided in paragraph (A) above immediately after it declares a dividend or distribution on the shares of Timber Stock (other than a dividend payable in shares of Timber Stock); provided, however, that, in the event no dividend or distribution shall have been declared on the Timber Stock during the period between any Quarterly Dividend Payment Date and the next subsequent Quarterly Dividend Payment Date, a dividend of $0.35 per Unit on the Series C Junior Preferred Stock shall nevertheless be payable on such subsequent Quarterly Dividend Payment Date. (C) Dividends shall begin to accrue and shall be cumulative on each outstanding Unit of Series C Junior Preferred Stock from the Quarterly Dividend Payment Date next preceding the date of issuance of such Unit of Series C Junior Preferred Stock, unless the date of issuance of such Unit is prior to the record date for the first Quarterly Dividend Payment Date, in which case, dividends on such Unit shall begin to accrue from the date of issuance of such Unit, or unless the date of issuance is a Quarterly Dividend Payment Date or is a date after the record date for the determination of holders of Units of Series C Junior Preferred Stock entitled to receive a quarterly dividend and before such Quarterly Dividend Payment Date, in either of which events such dividends shall begin to accrue and be cumulative from such Quarterly Dividend Payment Date. Accrued but unpaid dividends shall not bear interest. Dividends paid on Units of Series C Junior Preferred Stock in an amount less than the aggregate amount of all such dividends at the time accrued and payable on such Units shall be allocated pro rata on a unit-by- unit basis among all Units of Series C Junior Preferred Stock at the time outstanding. The Board of Directors may fix a record date for the determination of holders of Units of Series C Junior Preferred Stock entitled to receive payment of a dividend or distribution declared thereon, which record date shall be no more than 30 days prior to the date fixed for the payment thereof. Section 3. Voting Rights. The holders of Units of Series C Junior Preferred Stock shall have the following voting rights: (A) Subject to the provision for adjustment hereinafter set forth, each Unit of Series C Junior Preferred Stock shall entitle the holder thereof to the number of votes per share which the holders of Timber Stock then have with respect to matters submitted to a vote of the shareholders of the Corporation. In the event the Corporation shall at any time after the initial issuance of Georgia-Pacific Group Stock and Timber Stock (i) declare any dividend on outstanding shares of Timber Stock payable in shares of Timber Stock, (ii) subdivide outstanding shares of Timber Stock into a greater number of shares or (iii) combine the outstanding shares of Timber Stock into a smaller number of shares, then in each such case the number of votes per Unit to which holders of Units of Series C Junior Preferred Stock were entitled immediately prior to such event shall be adjusted by multiplying such number by a fraction the numerator of which shall be the number of shares of Timber Stock outstanding immediately after such event and the denominator of which shall be the number of shares of Timber Stock that were outstanding immediately prior to such event. (B) Except as otherwise provided herein or by applicable law, the holders of Units of Series A Junior Preferred Stock, Series B Junior Preferred Stock and Series C Junior Preferred Stock and the holders of shares of Timber Stock and Georgia-Pacific Group Stock shall vote together as one voting group on all matters submitted to a vote of shareholders of the Corporation. (C)(i) If at any time dividends on any Units of Series C Junior Preferred Stock shall be in arrears in an amount equal to six quarterly dividends thereon, then during the period (a "default period") from the occurrence of such event until such time as all accrued and unpaid dividends for all previous quarterly dividend periods and for the current quarterly dividend period on all Units of Series C Junior Preferred Stock then outstanding shall have been declared and paid or set apart for payment, all holders of Units of Series C Junior Preferred Stock, voting separately as a class, shall have the right to elect two Directors. (ii) During any default period, such voting rights of the holders of Units of Series C Junior Preferred Stock may be exercised initially at a special meeting called pursuant to subparagraph (iii) of this Section 3(C) or at any annual meeting of shareholders, and thereafter at annual meetings of shareholders, provided that neither such voting rights nor any right of the holders of Units of Series C Junior Preferred Stock to increase, in certain cases, the authorized number of Directors may be exercised at any meeting unless one-third of the outstanding Units of Series C Junior Preferred Stock shall be present at such meeting in person or by proxy. The absence of a quorum of the holders of Common Stock shall not affect the exercise by the holders of Units of Series C Junior Preferred Stock of such rights. At any meeting at which the holders of Units of Series C Junior Preferred Stock shall exercise such voting rights initially during an existing default period, they shall have the right, voting separately as a voting group, to elect Directors to fill up to two vacancies in the Board of Directors, if any such vacancies may then exist, or, if such right is exercised at an annual meeting, to elect two Directors. If the number which may be so elected at any special meeting does not amount to the required number, the holders of the Series C Junior Preferred Stock shall have the right to make such increase in the number of Directors as shall be necessary to permit the election by them of the required number. After the holders of Units of Series C Junior Preferred Stock shall have exercised their right to elect Directors during any default period, the number of Directors shall not be increased or decreased except as approved by a vote of the holders of Units of Series C Junior Preferred Stock as herein provided or pursuant to the rights of the Series A Junior Preferred Stock or Series B Junior Preferred Stock or pursuant to the rights of any equity securities ranking senior to the Series C Junior Preferred Stock. (iii) Unless the holders of Series C Junior Preferred Stock shall, during an existing default period, have previously exercised their right to elect Directors, the Board of Directors may order, or any shareholder or shareholders owning in the aggregate not less than 25% of the total number of Units of Series C Junior Preferred Stock outstanding may request in writing, the calling of a special meeting of the holders of Units of Series C Junior Preferred Stock, which meeting shall thereupon be called by the Secretary of the Corporation. Notice of such meeting and of any annual meeting at which holders of Units of Series C Junior Preferred Stock are entitled to vote pursuant to this paragraph (C)(iii) shall be given to each holder of record of Units of Series C Junior Preferred Stock by mailing a copy of such notice to him at his last address as the same appears on the books of the Corporation. Such meeting shall be called for a time not earlier than 10 days and not later than 60 days after such order or request or in default of the calling of such meeting within 60 days after such order or request, such meeting may be called on similar notice by any shareholder or shareholders owning in the aggregate not less than 25% of the total number of outstanding Units of Series C Junior Preferred Stock. (iv) During any default period, the holders of shares of Georgia- Pacific Group Stock, Timber Stock and Units of Series C Junior Preferred Stock, and other classes or series of stock of the Corporation, if applicable, shall continue to be entitled to elect all the Directors until the holders of Units of Series C Junior Preferred Stock shall have exercised their right to elect two Directors voting as a separate voting group, after the exercise of which right (x) the Directors so elected by the holders of Units of Series C Junior Preferred Stock shall continue in office until their successors shall have been elected by such holders or until the expiration of the default period, and (y) any vacancy in the Board of Directors may (except as provided in paragraph (C)(ii) of this Section 3) be filled by a vote of a majority of the remaining Directors theretofore elected by the holders of the class or series of capital stock which elected the Director whose office shall have become vacant. References in this paragraph (C) to Directors elected by the holders of a particular class or series of capital stock shall include Directors elected by such Directors to fill vacancies as provided in clause (y) of the foregoing sentence. (v) Immediately upon the expiration of a default period, (x) the right of the holders of Units of Series C Junior Preferred Stock as a separate voting group to elect Directors shall cease, (y) the term of any Directors elected by the holders of Units of Series C Junior Preferred Stock as a separate voting group shall terminate, and (z) the number of Directors shall be such number as may be provided for in the Articles or By-laws irrespective of any increase made pursuant to the provisions of paragraph (C)(ii) of this Section 3 (such number being subject, however, to change thereafter in any manner provided by law or in the Articles or By-laws). Any vacancies in the Board of Directors effected by the provisions of clauses (y) and (z) in the preceding sentence may be filled by a majority of the remaining Directors. (vi) The provisions of this paragraph (C) shall govern the election of Directors by holders of Units of Series C Junior Preferred Stock during any default period notwithstanding any provisions of the Articles to the contrary. (D) Except as set forth herein, holders of Units of Series C Junior Preferred Stock shall have no special voting rights and their consent shall not be required (except to the extent they are entitled to vote with holders of shares of Georgia-Pacific Group Stock or Timber Stock or any other class or series of capital stock of the Corporation, as applicable) for taking any corporate action. Section 4. Certain Restrictions. (A) Whenever quarterly dividends or other dividends or distributions payable on Units of Series C Junior Preferred Stock as provided in Section 2 are in arrears, thereafter and until all accrued and unpaid dividends and distributions, whether or not declared, on outstanding Units of Series C Junior Preferred Stock shall have been paid in full, the Corporation shall not (i) declare or pay dividends on, make any other distributions on, or redeem or purchase or otherwise acquire for consideration any shares of junior stock; (ii) declare or pay dividends on or make any other distributions on any shares of parity stock, except dividends paid ratably on Units of Series C Junior Preferred Stock and shares of all such parity stock on which dividends are payable or in arrears in proportion to the total amounts to which the holders of such Units and all such shares are then entitled; (iii) redeem or purchase or otherwise acquire for consideration shares of any parity stock, provided, however, that the Corporation may at any time redeem, purchase or otherwise acquire shares of any such parity stock in exchange for shares of any junior stock; or (iv) purchase or otherwise acquire for consideration any Units of Series C Junior Preferred Stock, except in accordance with a purchase offer made in writing or by publication (as determined by the Board of Directors) to all holders of such Units. (B) The Corporation shall not permit any subsidiary of the Corporation to purchase or otherwise acquire for consideration any shares of stock of the Corporation unless the Corporation could, under paragraph (A) of this Section 4, purchase or otherwise acquire such shares at such time and in such manner. Section 5. Reacquired Shares. Any Units of Series C Junior Preferred Stock purchased or otherwise acquired by the Corporation in any manner whatsoever shall be retired and cancelled automatically upon the acquisition thereof. All such Units shall, upon their cancellation, become authorized but unissued Units of Junior Preferred Stock and may be reissued as part of a new series of Junior Preferred Stock to be created by resolution or resolutions of the Board of Directors, subject to the conditions and restrictions on issuance set forth herein. Section 6. Liquidation, Dissolution or Winding Up. (A) Upon any voluntary or involuntary liquidation, dissolution or winding up of the Corporation, no distribution shall be made (i) to the holders of shares of junior stock unless the holders of Units of Series C Junior Preferred Stock shall have received, subject to adjustment as hereinafter provided in paragraph (B), the greater of (a) $.01 per Unit plus an amount equal to accrued and unpaid dividends and distributions thereon, whether or not earned or declared, to the date of such payment, or (b) the amount per Unit equal to the aggregate per share amount to be distributed to holders of shares of Timber Stock, or (ii) to the holders of shares of parity stock, unless simultaneously therewith distributions are made ratably on Units of Series C Junior Preferred Stock and all other shares of such parity stock in proportion to the total amounts to which the holders of Units of Series C Junior Preferred Stock are entitled under clause (i)(a) of this sentence and to which the holders of shares of such parity stock are entitled, in each case upon such liquidation, dissolution or winding up. (B) In the event the Corporation shall at any time after the initial issuance of Georgia-Pacific Group Stock and Timber Stock (i) declare any dividend on outstanding shares of Timber Stock payable in shares of Timber Stock, (ii) subdivide outstanding shares of Timber Stock into a greater number of shares, or (iii) combine outstanding shares of Timber Stock into a smaller number of shares, then in each such case the aggregate amount to which holders of Units of Series C Junior Preferred Stock were entitled immediately prior to such event pursuant to clause (i)(b) of paragraph (A) of this Section 6 shall be adjusted by multiplying such amount by a fraction the numerator of which shall be the number of shares of Timber Stock that are outstanding immediately after such event and the denominator of which shall be the number of shares of Timber Stock that were outstanding immediately prior to such event. Section 7. Consolidation, Merger, etc. In case the Corporation shall enter into any consolidation, merger, combination or other transaction in which the shares of Timber Stock are exchanged for or converted into other stock or securities, cash and/or any other property, then in any such case Units of Series C Junior Preferred Stock shall at the same time be similarly exchanged for or converted into an amount per Unit (subject to the provision for adjustment hereinafter set forth) equal to the aggregate amount of stock, securities, cash and/or any other property (payable in kind), as the case may be, into which or for which each share of Timber Stock is converted or exchanged. In the event the Corporation shall at any time after the initial issuance of Georgia-Pacific Group Stock and Timber Stock (i) declare any dividend on outstanding shares of Timber Stock payable in shares of Timber Stock, (ii) subdivide outstanding shares of Timber Stock into a greater number of shares, or (iii) combine outstanding Timber Stock into a smaller number of shares, then in each such case the amount set forth in the immediately preceding sentence with respect to the exchange or conversion of Units of Series C Junior Preferred Stock shall be adjusted by multiplying such amount by a fraction the numerator of which shall be the number of shares of Timber Stock that are outstanding immediately after such event and the denominator of which shall be the number of shares of Timber Stock that were outstanding immediately prior to such event. Section 8. Redemption. The Units of Series C Junior Preferred Stock shall not be redeemable. Notwithstanding the foregoing, the Corporation may acquire shares of Series C Junior Preferred Stock in any other manner permitted by applicable law or the Articles. Section 9. Ranking. The Units of Series C Junior Preferred Stock shall rank senior to the Timber Stock and the Georgia-Pacific Group Stock, on a parity with the Series A Junior Preferred Stock and Series B Junior Preferred Stock and junior to all other series of the Junior Preferred Stock and to any other series or class of Preferred Stock that hereafter may be issued by the Corporation as to the payment of dividends and the distribution of assets, unless the terms of any such series or class shall provide otherwise. Section 10. Amendment. The Articles shall not hereafter be amended, either directly or indirectly, or through merger or consolidation with another corporation, in any manner that would alter or change the powers, preferences or special rights of the Series C Junior Preferred Stock so as to affect them adversely without the affirmative vote of the holders of a majority or more of the outstanding Units of Series C Junior Preferred Stock, voting separately as a voting group. Section 11. Fractional Shares. The Series C Junior Preferred Stock may be issued in Units or other fractions of a share, which Units or fractions shall entitle the holder, in proportion to such holder's fractional shares, to exercise voting rights, receive dividends, participate in distributions and to have the benefit of all other rights of holders of Series C Junior Preferred Stock. Section 12. Certain Definitions. As used herein with respect to the Series C Junior Preferred Stock, the following terms shall have the following meanings: (A) The term "junior stock" (i) as used in Section 4, shall mean the Georgia-Pacific Group Stock and the Timber Stock and any other class or series of capital stock of the Corporation hereafter authorized or issued over which the Series C Junior Preferred Stock has preference or priority as to the payment of dividends and (ii) as used in Section 6, shall mean the Georgia-Pacific Group Stock and the Timber Stock and any other class or series of capital stock of the Corporation over which the Series C Junior Preferred Stock has preference or priority in the distribution of assets on any liquidation, dissolution or winding up of the Corporation. (B) The term "parity stock" (i) as used in Section 4, shall mean any class or series of stock of the Corporation hereafter authorized or issued ranking pari passu with the Series C Junior Preferred Stock as to dividends and (ii) as used in Section 6, shall mean any class or series of capital stock ranking pari passu with the Series C Junior Preferred Stock in the distribution of assets on any liquidation, dissolution or winding up. ARTICLE V. The following is a description of the terms, provisions, preferences, rights, voting powers, restrictions and qualifications of the Common Stock. A. Distributions. Subject to any preferences, limitations and relative rights of any outstanding series of the Preferred Stock or the Junior Preferred Stock and any qualifications or restrictions on the Common Stock created thereby, distributions may be authorized and made upon the Georgia-Pacific Group Stock and the Timber Stock, upon the terms with respect to each such class, and subject to the limitations provided for below in this Section A, as the Board of Directors may determine. (a) Distributions on Georgia-Pacific Group Stock. Distributions on Georgia-Pacific Group Stock may be authorized and made only out of the lesser of (i) the assets of the Corporation legally available therefor and (ii) the Georgia-Pacific Group Available Distribution Amount. (b) Distributions on Timber Stock. Distributions on Timber Stock may be authorized and made only out of the lesser of (i) the assets of the Corporation legally available therefor and (ii) the Timber Group Available Distribution Amount. (c) Discrimination in Distributions Between Classes of Common Stock. The Board of Directors, subject to the provisions of paragraphs A.(a) and A.(b), may at any time authorize and make distributions exclusively on Georgia- Pacific Group Stock, exclusively on Timber Stock or on both such classes, in equal or unequal amounts, notwithstanding the amount of distributions previously authorized on each class, the respective voting or liquidation rights of each class or any other factor. (d) Share Dividends. Except as permitted by paragraph D.(a), the Board of Directors may declare and pay dividends of shares of the Common Stock (or Convertible Securities convertible into or exchangeable or exercisable for shares of the Common Stock) on shares of the Common Stock or shares of the Preferred Stock or the Junior Preferred Stock only as follows: (i) dividends of shares of Georgia-Pacific Group Stock (or Convertible Securities convertible into or exchangeable or exercisable for shares of Georgia-Pacific Group Stock) on shares of Georgia-Pacific Group Stock or shares of the Preferred Stock or the Junior Preferred Stock attributed to the Georgia-Pacific Group; and (ii) dividends of shares of Timber Stock (or Convertible Securities convertible into or exchangeable or exercisable for shares of Timber Stock) on shares of Timber Stock or shares of the Preferred Stock or the Junior Preferred Stock attributed to the Timber Group. For purposes of this paragraph A.(d), any outstanding Convertible Securities that are convertible into or exchangeable or exercisable for any other Convertible Securities which are themselves convertible into or exchangeable or exercisable for Georgia-Pacific Group Stock or Timber Stock (or other Convertible Securities that are so convertible, exchangeable or exercisable) shall be deemed to have been converted, exchanged or exercised in full for such Convertible Securities. B. Voting Rights. (a) General. Except as otherwise provided by law, by the terms of any outstanding series of Preferred Stock or Junior Preferred Stock or any provision of the Articles restricting the power to vote on a specified matter to other shareholders, the entire voting power of the shareholders of the Corporation shall be vested in the holders of the Common Stock, who shall be entitled to vote on any matter on which the holders of stock of the Corporation shall, by law or by the provisions of the Articles or the Bylaws of the Corporation, be entitled to vote, and both classes of Common Stock shall vote thereon together as a single voting group. (b) Number of Votes for Each Class of Common Stock. On each matter to be voted on by the holders of both classes of the Common Stock voting together as a single voting group, the number of votes per share of each class shall be as follows: (i) each outstanding share of Georgia-Pacific Group Stock shall have one vote; and (ii) each outstanding share of Timber Stock shall have a number of votes (including a fraction of one vote) equal to the number of votes determined by the ratio of the weighted average during the 20 Trading Days ending on the tenth Trading Day prior to the record date for determining the shareholders entitled to vote of the Market Value of a share of the Timber Stock to the weighted average over the same 20 Trading Days of the Market Value of the Georgia-Pacific Group Stock, expressed as a decimal fraction rounded to the nearest three decimal places, determined as follows: (A) the numerator of such fraction shall be the sum of (1) four times the average Market Value of one share of Timber Stock over the period of five Trading Days ending on such tenth Trading Day prior to such record date, (2) three times the average Market Value of one share of Timber Stock over the period of five Trading Days ending on the 15th Trading Day prior to such record date, (3) two times the average Market Value of one share of Timber Stock over the period of five Trading Days ending on the 20th Trading Day prior to such record date and (4) the average Market Value of one share of Timber Stock over the period of five Trading Days ending on the 25th Trading Day prior to such record date and (B) the denominator of such fraction shall be the sum of (1) four times the average Market Value of one share of Georgia-Pacific Group Stock over the period of five Trading Days ending on such tenth Trading Day prior to such record date, (2) three times the average Market Value of one share of Georgia-Pacific Group Stock over the period of five Trading Days ending on the 15th Trading Day prior to such record date, (3) two times the average Market Value of one share of Georgia-Pacific Group Stock over the period of five Trading Days ending on the 20th Trading Day prior to such record date and (4) the average Market Value of one share of Georgia-Pacific Group Stock over the period of five Trading Days ending on the 25th Trading Day prior to such record date. Notwithstanding the foregoing provisions of this paragraph B., if shares of only one class of the Common Stock are outstanding on the record date for determining the common shareholders entitled to vote on any matter, then each share of that class shall be entitled to one vote and, if either class of the Common Stock is entitled to vote as a separate voting group with respect to any matter, each share of that class shall, for purpose of such vote, be entitled to one vote on such matter. In addition to any provision of law or any provision of the Articles entitling the holders of outstanding shares of Georgia-Pacific Group Stock or Timber Stock to vote as a separate voting group, the Board of Directors may condition the approval of any matter submitted to shareholders on receipt of a separate vote of the holders of outstanding shares of Georgia-Pacific Group Stock or Timber Stock. C. Liquidation Rights. In the event of any voluntary or involuntary dissolution, liquidation or winding up of the Corporation, after payment or provision for payment of the debts and other liabilities of the Corporation and the full preferential amounts (including any accumulated and unpaid dividends) to which the holders of any outstanding shares of the Preferred Stock or the Junior Preferred Stock are entitled (regardless of the Group to which such shares of the Preferred Stock or the Junior Preferred Stock were attributed), the holders of the Georgia-Pacific Group Stock and Timber Stock shall be entitled to receive the assets, if any, of the Corporation remaining for distribution to holders of the Common Stock on a per share basis in proportion to the respective liquidation units per share of such class. Each share of Georgia-Pacific Group Stock shall have one liquidation unit and each share of Timber Stock shall have a number of liquidation units (including a fraction of one liquidation unit) equal to the number of liquidation units determined by the ratio of the weighted average during the 20 Trading Days ending on the 40th Trading Day immediately succeeding the date of the effectiveness of these Articles of Incorporation of the Market Value of a share of the Timber Stock to the weighted average over the same 20 Trading Days of the Market Value of the Georgia-Pacific Group Stock, expressed as a decimal fraction rounded to the nearest three decimal places, determined as follows: (A) the numerator of such fraction shall be the sum of (1) four times the average Market Value of one share of Timber Stock over the period of five Trading Days ending on such date, (2) three times the average Market Value of one share of Timber Stock over the period of five Trading Days ending on the 5th Trading Day prior to such date, (3) two times the average Market Value of one share of Timber Stock over the period of five Trading Days ending on the 10th Trading Day prior to such date and (4) the average Market Value of one share of Timber Stock over the period of five Trading Days ending on the 15th Trading Day prior to such date and (B) the denominator of such fraction shall be the sum of (1) four times the average Market Value of one share of Georgia-Pacific Group Stock over the period of five Trading Days ending on such date, (2) three times the average Market Value of one share of Georgia-Pacific Group Stock over the period of five Trading Days ending on the 5th Trading Day prior to such date, (3) two times the average Market Value of one share of Georgia-Pacific Group Stock over the period of five Trading Days ending on the 10th Trading Day prior to such date and (4) the average Market Value of one share of Georgia-Pacific Group Stock over the period of five Trading Days ending on the 15th Trading Day prior to such date. Neither a merger nor share exchange of the Corporation into or with any other company, nor a merger or share exchange of any other company into or with the Corporation, nor a sale, lease, exchange or other disposition of all or any part of the assets of the Corporation, shall, alone, be deemed a liquidation of the Corporation, or cause the dissolution of the Corporation, for purposes of this Section C. If the Corporation shall in any manner subdivide (by stock split, reclassification or otherwise) or combine (by reverse stock split, reclassification or otherwise) the outstanding shares of Georgia-Pacific Group Stock or Timber Stock, or declare a dividend in shares of either class to holders of such class, the per share liquidation units of either class of the Common Stock specified in the preceding paragraph of this paragraph C., as adjusted from time to time, shall be appropriately adjusted, as determined by the Board of Directors, so as to avoid dilution in the aggregate, relative liquidation rights of the shares of any class of the Common Stock. D. Conversion or Redemption of the Common Stock. The Georgia-Pacific Group Stock is subject to conversion or redemption and the Timber Stock is subject to conversion or redemption upon the terms provided below in this Section D.; provided, however, that neither class of the Common Stock may be converted or redeemed if the other class of Common Stock has been converted or redeemed in its entirety or notice thereof shall have been given as required by this Section D. (a) Mandatory and Optional Conversion and Redemption of Common Stock Other than for Subsidiary Stock. (i) In the event of the Disposition, in one transaction or a series of related transactions, by the Corporation and/or its subsidiaries of all or substantially all of the properties and assets attributed to either Group to one or more persons or entities (other than (w) the Disposition by the Corporation of all or substantially all its properties and assets in one transaction or a series of related transactions in connection with the dissolution, liquidation or winding up of the Corporation and the distribution of assets to shareholders as referred to in Section C., (x) the Disposition of the properties and assets attributed to either Group as contemplated by paragraph D.(b) or otherwise to all holders of shares of such Group divided among such holders on a pro rata basis in accordance with the number of shares of stock issued in respect of such Group outstanding, (y) to any person or entity controlled (as determined by the Board of Directors) by the Corporation or (z) in connection with a Related Business Transaction), the Corporation shall, on or prior to the 85th Trading Day after the date of consummation of such Disposition (the ''Disposition Date''), make a distribution on the class of the Common Stock relating to the Group subject to such Disposition or redeem some or all of such Common Stock or convert such Common Stock into Common Stock relating to the other Group (or another class or series of common stock of the Corporation), all as provided by the following paragraphs D.(a)(i)(1) and D.(a)(i)(2) and, to the extent applicable, by paragraph D.(c), as the Board of Directors shall have selected among such alternatives: (1) provided that there are assets of the Corporation legally available therefor: (A) make or pay to the holders of the shares of the class of the Common Stock relating to the Group subject to such disposition a distribution or dividend, as the Board of Directors shall have authorized and declared subject to compliance with Section A., in cash and/or in securities (other than a dividend of the Common Stock) or other property having a Fair Value as of the Disposition Date equal to the Fair Value as of the Disposition Date of the Net Proceeds of such Disposition; or (B)(I) subject to the last sentence of this paragraph D.(a)(i), if such Disposition involves all (not merely substantially all) of the properties and assets attributed to such Group, redeem as of the Redemption Date determined as provided by paragraph D.(d)(iii), all outstanding shares of the Common Stock relating to the Group subject to such Disposition in exchange for cash and/or securities (other than the Common Stock) or other property having a Fair Value as of the Disposition Date equal to the Fair Value as of the Disposition Date of the Net Proceeds of such Disposition; or (II) subject to the last sentence of this paragraph D.(a)(i), if such Disposition involves substantially all (but not all) of the properties and assets attributed to such Group, redeem as of the Redemption Date determined as provided by paragraph D.(d)(iv) such number of whole shares of the class of the Common Stock relating to the Group subject to such Disposition (which may be all, but not more than all, of such shares outstanding) as have in the aggregate an average Market Value during the period of ten consecutive Trading Days beginning on the 16th Trading Day immediately succeeding the Disposition Date closest to the Fair Value as of the Disposition Date of the Net Proceeds of such Disposition in exchange for cash and/or securities (other than the Common Stock) or other property having a Fair Value as of the Disposition Date in the aggregate equal to such Fair Value of the Net Proceeds; or (2) declare that each outstanding share of the class of the Common Stock relating to the Group subject to such Disposition shall be converted as of the Conversion Date determined as provided by paragraph D.(d)(v) into a number of fully paid and nonassessable shares of the class of the Common Stock relating to the other Group (or, if the class of the Common Stock relating to the other Group is not Publicly Traded at such time and shares of another class or series of the Common Stock of the Corporation (other than the class of the Common Stock relating to the Group subject to such Disposition) are then Publicly Traded, of such other class or series of the common stock as has the largest Market Capitalization as of the close of business on the Trading Day immediately preceding the date of the notice of such conversion required by paragraph D.(d)(v)) equal to 110% of the ratio, expressed as a decimal fraction rounded to the nearest five decimal places, of the average Market Value of one share of the Common Stock relating to the Group subject to such Disposition over the period of 10 consecutive Trading Days beginning on the 16th Trading Day immediately succeeding the Disposition Date to the average Market Value of one share of the Common Stock relating to the other Group (or such other class or series of common stock) over the same 10 Trading Day period. Notwithstanding the foregoing provisions of this paragraph D.(a)(i), the Corporation shall redeem shares of a class of the Common Stock as provided by paragraphs D.(a)(i)(1)(B)(I) or (II) only if the amount to be paid in redemption of such stock is less than or equal to the Available Distribution Amount with respect to the Group subject to such Disposition as of the Redemption Date. (ii) For purposes of this paragraph D.(a): (1) as of any date, "substantially all of the properties and assets" attributed to either Group shall mean a portion of such properties and assets (x) that represents at least 80% of the Fair Value of the properties and assets attributed to such Group as of such date or (y) from which were derived at least 80% of the aggregate revenues for the immediately preceding twelve fiscal quarterly periods of the Corporation (calculated on a pro forma basis to include revenues derived from any of such properties and assets acquired during such period) derived from the properties and assets of such Group as of such date; (2) in the case of a Disposition of the properties and assets attributed to either Group in a series of related transactions, such Disposition shall not be deemed to have been consummated until the consummation of the last of such transactions; and (3) the Board of Directors may make or pay any distribution or dividend or redemption price referred to in paragraph D.(a)(i) in cash, securities (other than the Common Stock) or other property, regardless of the form or nature of the proceeds of the Disposition. (iii) After the payment of the distribution or the redemption price with respect to the class of the Common Stock relating to the Group subject to a Disposition as provided for by paragraph D.(a)(i)(1), the Board of Directors may declare that each share of such class of the Common Stock remaining outstanding shall be converted, but only as of a Conversion Date (determined as provided by paragraph D.(d)(v)) prior to the first anniversary of the payment of such distribution or redemption price, into a number of fully paid and nonassessable shares of the class of the Common Stock relating to the other Group (or, if the class of the Common Stock relating to the other Group is not Publicly Traded at such time and shares of any other class or series of common stock of the Corporation (other than the class of the Common Stock relating to the Group subject to such Disposition) are then Publicly Traded, of such other class or series of common stock of the Corporation as has the largest Market Capitalization as of the close of business on the Trading Day immediately preceding the date of the notice of such conversion required by paragraph D.(d)(v)) equal to 110% of the Market Value Ratio of the Converted Stock to the Consideration Stock as of the fifth Trading Day prior to the date of the notice of such conversion required by paragraph D.(d)(v). (iv) The Board of Directors may at any time declare that each outstanding share of either Georgia-Pacific Group Stock or Timber Stock shall be converted, as of a Conversion Date determined as provided by paragraph D.(d)(v), into the number of fully paid and nonassessable shares of Timber Stock or Georgia-Pacific Group Stock, respectively (or, if such latter class of Common Stock of the Corporation is not Publicly Traded at such time and shares of any other class or series of common stock of the Corporation (other than the class of the Common Stock subject to such conversion) are then Publicly Traded, of such other class or series of common stock of the Corporation as has the largest Market Capitalization as of the close of business on the Trading Day immediately preceding the date of the notice of conversion required by paragraph D.(d)(v)) equal to 115% of the Market Value Ratio of the Converted Stock to the Consideration Stock as of the fifth Trading Day prior to the date of the notice of such conversion required by paragraph D.(d)(v). (b) Redemption of Common Stock for Subsidiary Stock. (i) At any time at which all of the assets and liabilities attributed to the Timber Group (and no other assets or liabilities of the Corporation or any subsidiary thereof) are held directly or indirectly by one or more wholly-owned subsidiaries of the Corporation (each, a ''Timber Group Subsidiary''), the Board of Directors may, provided that there are assets of the Corporation legally available therefor, redeem all of the outstanding shares of Timber Stock, on a Redemption Date of which notice is delivered in accordance with paragraph D.(d)(vi), in exchange for all of the shares of common stock of each Timber Group Subsidiary as will be outstanding immediately following such exchange of shares, such Timber Group Subsidiary shares to be delivered to the holders of shares of Timber Stock on the Redemption Date either directly or indirectly through another Timber Group Subsidiary (as a wholly-owned subsidiary thereof) and to be divided among the holders of Timber Stock pro rata in accordance with the number of shares of Timber Stock held by each on such Redemption Date, each of which shares of common stock of such Timber Group Subsidiary shall be, upon such delivery, fully paid and nonassessable. (ii) At any time at which all of the assets and liabilities attributed to the Georgia-Pacific Group (and no other assets or liabilities of the Corporation or any subsidiary thereof) are held directly or indirectly by one or more wholly-owned subsidiaries of the Corporation (each, a "Georgia-Pacific Group Subsidiary"), the Board of Directors may, provided that there are assets of the Corporation legally available therefor, redeem all of the outstanding shares of Georgia-Pacific Group Stock, on a Redemption Date of which notice is delivered in accordance with paragraph D.(d)(vi) of this Article, in exchange for all of the shares of common stock of each Georgia-Pacific Group Subsidiary as will be outstanding immediately following such exchange of shares, such shares of common stock of each Georgia-Pacific Group Subsidiary to be delivered to the holders of shares of Georgia-Pacific Group Stock on the Redemption Date either directly or indirectly through another Georgia-Pacific Group Subsidiary (as a wholly-owned subsidiary thereof) and to be divided among the holders of Georgia-Pacific Group Stock pro rata in accordance with the number of shares of Georgia-Pacific Group Stock held by each on such Redemption Date, each of which shares of common stock of such Georgia- Pacific Group Subsidiary shall be, upon such delivery, fully paid and nonassessable. (c) Treatment of Convertible Securities. After any Conversion Date or Redemption Date on which all outstanding shares of either class of the Common Stock are converted or redeemed, any share of such class of the Common Stock that is to be issued on conversion, exchange or exercise of any Convertible Securities shall, immediately upon such conversion, exchange or exercise and without any notice from or to, or any other action on the part of, the Corporation or its Board of Directors or the holder of such Convertible Security: (i) in the event the shares of such class of the Common Stock outstanding on such Conversion Date were converted into shares of the other class of the Common Stock (or another class or series of common stock of the Corporation) pursuant to paragraph D.(a)(i)(2) or paragraph D.(a)(iii), be converted into the amount of cash and/or the number of shares of the kind of capital stock and/or other securities or property of the Corporation that the number of shares of such class of the Common Stock that were to be issued upon such conversion, exchange or exercise would have received had such shares been outstanding on such Conversion Date; or (ii) in the event the shares of such class of the Common Stock outstanding on such Redemption Date were redeemed pursuant to paragraph D.(a)(i)(1)(B) or paragraph D.(b), be redeemed, to the extent of funds of the Corporation legally available therefor, for $.01 per share in cash for each share of such class of the Common Stock that otherwise would be issued upon such conversion, exchange or exercise. The provisions of the immediately preceding sentence shall not apply to the extent that other adjustments in respect of such conversion, exchange or redemption of a class of the Common Stock are otherwise made pursuant to the provisions of such Convertible Securities. (d) Notice and Other Provisions. (i) Not later than the tenth Trading Day following the consummation of a Disposition referred to in paragraph D.(a)(i), the Corporation shall announce publicly by press release (1) the estimated Net Proceeds of such Disposition, (2) the number of shares outstanding of the class of the Common Stock relating to the Group subject to such Disposition and (3) the number of shares of such class of Common Stock into or for which Convertible Securities are then convertible, exchangeable or exercisable and the conversion, exchange or exercise price thereof. Not earlier than the 26th Trading Day and not later than the 30th Trading Day following the consummation of such Disposition, the Corporation shall announce publicly by press release which of the actions specified in paragraph D.(a)(i), it has irrevocably determined to take in respect of such Disposition. (ii) If the Corporation determines to make or pay a distribution or dividend pursuant to paragraph D.(a)(i)(1)(A), the Corporation shall, not later than the 30th Trading Day following the consummation of the Disposition referred to in such paragraph, cause notice to be given to each holder of shares of the class of the Common Stock relating to the Group subject to such Disposition and to each holder of Convertible Securities that are convertible into or exchangeable or exercisable for shares of such class of Common Stock (unless alternate provision for such notice to the holders of such Convertible Securities is made pursuant to the terms of such Convertible Securities), setting forth (1) the record date for determining holders entitled to receive such distribution or dividend, which shall be not earlier than the 40th Trading Day and not later than the 50th Trading Day following the consummation of such Disposition, (2) the anticipated payment date of such distribution or dividend (which shall not be more than 85 Trading Days following the consummation of such Disposition), (3) the type of property to be paid as such distribution or dividend in respect of the outstanding shares of such class of Common Stock, (4) the Net Proceeds of such Disposition, (5) the number of outstanding shares of such class of Common Stock and the number of shares of such class of Common Stock into or for which outstanding Convertible Securities are then convertible, exchangeable or exercisable and the conversion, exchange or exercise price thereof and (6) in the case of notice to be given to holders of Convertible Securities, a statement to the effect that a holder of such Convertible Securities shall be entitled to receive such distribution or dividend only if such holder properly converts, exchanges or exercises such Convertible Securities on or prior to the record date referred to in clause (1) of this sentence. Such notice shall be sent by first-class mail, postage prepaid, to each such holder at such holder's address as the same appears on the transfer books of the Corporation. (iii) If the Corporation determines to undertake a redemption pursuant to paragraph D.(a)(i)(1)(B)(I), the Corporation shall, not less than 35 Trading Days and not more than 45 Trading Days prior to the Redemption Date, cause notice to be given to each holder of shares of the class of the Common Stock relating to the Group subject to the Disposition referred to in such paragraph and to each holder of Convertible Securities convertible into or exchangeable or exercisable for shares of such class of Common Stock (unless alternate provision for such notice to the holders of such Convertible Securities is made pursuant to the terms of such Convertible Securities), setting forth (1) a statement that all shares of such class of Common Stock outstanding on the Redemption Date shall be redeemed, (2) the Redemption Date (which shall not be more than 85 Trading Days following the consummation of such Disposition), (3) the type of property in which the redemption price for the shares of such class of Common Stock to be redeemed is to be paid, (4) the Net Proceeds of such Disposition, (5) the place or places where certificates for shares of such class of Common Stock, properly endorsed or assigned for transfer (unless the Corporation waives such requirement), are to be surrendered for delivery of cash and/or securities or other property, (6) the number of outstanding shares of such class of Common Stock and the number of shares of such class of the Common Stock into or for which such outstanding Convertible Securities are then convertible, exchangeable or exercisable and the conversion, exchange or exercise price thereof, (7) in the case of notice to be given to holders of Convertible Securities, a statement to the effect that a holder of such Convertible Securities shall be entitled to participate in such redemption only if such holder properly converts, exchanges or exercises such Convertible Securities on or prior to the Redemption Date referred to in clause (2) of this sentence and a statement as to what, if anything, such holder will be entitled to receive pursuant to the terms of such Convertible Securities or, if applicable, this Section D. if such holder thereafter converts, exchanges or exercises such Convertible Securities and (8) a statement to the effect that, except as otherwise provided by paragraph D.(d)(ix), distributions and dividends on such shares of the Common Stock shall cease to be paid as of such Redemption Date. Such notice shall be sent by first-class mail, postage prepaid, to each such holder at such holder's address as the same appears on the transfer books of the Corporation. (iv) If the Corporation determines to undertake a redemption pursuant to paragraph D.(a)(i)(1)(B)(II), the Corporation shall, not later than the 30th Trading Day following the consummation of the Disposition referred to in such paragraph, cause notice to be given to each holder of shares of the class of the Common Stock relating to the Group subject to such Disposition and to each holder of Convertible Securities that are convertible into or exchangeable or exercisable for shares of such class of Common Stock (unless alternate provision for such notice to the holders of such Convertible Securities is made pursuant to the terms of such Convertible Securities) setting forth (1) a date not earlier than the 40th Trading Day and not later than the 50th Trading Day following the consummation of the Disposition in respect of which such redemption is to be made on which shares of such class of the Common Stock shall be selected for redemption, (2) the anticipated Redemption Date (which shall not be more than 85 Trading Days following the consummation of such Disposition), (3) the type of property in which the redemption price for the shares to be redeemed is to be paid, (4) the Net Proceeds of such Disposition, (5) the number of shares of such class of Common Stock outstanding and the number of shares of such class of Common Stock into or for which outstanding Convertible Securities are then convertible, exchangeable or exercisable and the conversion, exchange or exercise price thereof, (6) in the case of notice to be given to holders of Convertible Securities, a statement to the effect that a holder of such Convertible Securities shall be eligible to participate in such selection for redemption only if such holder properly converts, exchanges or exercises such Convertible Securities on or prior to the record date referred to in clause (1) of this sentence, and a statement as to what, if anything, such holder will be entitled to receive pursuant to the terms of such Convertible Securities or, if applicable, this Section D. if such holder thereafter converts, exchanges or exercises such Convertible Securities and (7) a statement that the Corporation will not be required to register a transfer of any shares of such class of the Common Stock for a period of 15 Trading Days next preceding the date referred to in clause (1) of this sentence. Promptly following the date referred to in clause (1) of the preceding sentence, but not earlier than 40 Trading Days nor later than 50 Trading Days following the consummation of such Disposition, the Corporation shall cause a notice to be given to each holder of record of shares of such class of Common Stock to be redeemed setting forth (1) the number of shares of such class of Common Stock held by such holder to be redeemed, (2) a statement that such shares of such class of Common Stock shall be redeemed, (3) the Redemption Date, (4) the kind and per share amount of cash and/or securities or other property to be received by such holder with respect to each share of such class of Common Stock to be redeemed, including details as to the calculation thereof, (5) the place or places where certificates for shares of such class of Common Stock, properly endorsed or assigned for transfer (unless the Corporation shall waive such requirement), are to be surrendered for delivery of such cash and/or securities or other property, (6) if applicable, a statement to the effect that the shares being redeemed may no longer be transferred on the transfer books of the Corporation after the Redemption Date and (7) a statement to the effect that, subject to paragraph D.(d)(ix), distributions and dividends on such shares of such class of Common Stock shall cease to be paid as of the Redemption Date. Such notices shall be sent by first-class mail, postage prepaid, to each such holder at such holder's address as the same appears on the transfer books of the Corporation. (v) If the Corporation determines to convert either class of the Common Stock into the other class (or another class or series of common stock of the Corporation) pursuant to paragraph D.(a)(i)(2), D.(a)(iii) or D.(a)(iv), the Corporation shall, not less than 35 Trading Days and not more than 45 Trading Days prior to the Conversion Date, cause notice to be given to each holder of shares of the class of the Common Stock to be so converted and to each holder of Convertible Securities that are convertible into or exchangeable or exercisable for shares of such class of Common Stock (unless alternate provision for such notice to the holders of such Convertible Securities is made pursuant to the terms of such Convertible Securities) setting forth (1) a statement that all outstanding shares of such class of Common Stock shall be converted, (2) the Conversion Date (which, in the case of a conversion after a Disposition, shall not be more than 85 Trading Days following the consummation of such Disposition), (3) the per share number of shares of Common Stock (or another class or series of common stock of the Corporation), as the case may be, to be received with respect to each share of such class of Common Stock, including details as to the calculation thereof, (4) the place or places where certificates for shares of such class of Common Stock, properly endorsed or assigned for transfer (unless the Corporation shall waive such requirement), are to be surrendered for delivery of certificates for shares of such class of Common Stock, (5) the number of outstanding shares of such class of Common Stock and the number of shares of such class of Common Stock into or for which outstanding Convertible Securities are then convertible, exchangeable or exercisable and the conversion, exchange or exercise price thereof, (6) a statement to the effect that, subject to paragraph D.(d)(ix), distributions and dividends on such shares of Common Stock shall cease to be made as of such Conversion Date and (7) in the case of notice to holders of such Convertible Securities, a statement to the effect that a holder of such Convertible Securities shall be entitled to receive shares of such class of Common Stock upon such conversion only if such holder properly converts, exchanges or exercises such Convertible Securities on or prior to such Conversion Date and a statement as to what, if anything, such holder will be entitled to receive pursuant to the terms of such Convertible Securities or, if applicable, this Section D. if such holder thereafter converts, exchanges or exercises such Convertible Securities. Such notice shall be sent by first-class mail, postage prepaid, to each such holder at such holder's address as the same appears on the transfer books of the Corporation. (vi) If the Corporation determines to redeem shares of either class of the Common Stock pursuant to paragraph D.(b), the Corporation shall cause notice to be given to each holder of shares of such class of the Common Stock to be redeemed and to each holder of Convertible Securities that are convertible into or exchangeable or exercisable for shares of such class of the Common Stock (unless alternate provision for such notice to the holders of such Convertible Securities is made pursuant to the terms of such Convertible Securities), setting forth (1) a statement that all shares of such class of the Common Stock outstanding on the Redemption Date shall be redeemed in exchange for shares of common stock of each Timber Group Subsidiary (if such redemption is pursuant to paragraph D.(b)(i)) or shares of common stock of each Georgia-Pacific Group Subsidiary (if such redemption is pursuant to paragraph D.(b)(ii)), (2) the Redemption Date, (3) the place or places where certificates for shares of the class of the Common Stock to be redeemed, properly endorsed or assigned for transfer (unless the Corporation shall waive such requirement), are to be surrendered for delivery of certificates for shares of the common stock of each Timber Group Subsidiary or Georgia- Pacific Group Subsidiary, as applicable, (4) a statement to the effect that, subject to paragraph D.(d)(ix), distributions and dividends on such shares of the Common Stock shall cease to be paid as of such Redemption Date, (5) the number of shares of such class of the Common Stock outstanding and the number of shares of such class of Common Stock into or for which outstanding Convertible Securities are then convertible, exchangeable or exercisable and the conversion, exchange or exercise price thereof and (6) in the case of notice to holders of Convertible Securities, a statement to the effect that a holder of Convertible Securities shall be entitled to receive shares of common stock of each Timber Group Subsidiary or Georgia-Pacific Group Subsidiary, as applicable, upon redemption only if such holder properly converts, exchanges or exercises such Convertible Securities on or prior to the Redemption Date and a statement as to what, if anything, such holder will be entitled to receive pursuant to the terms of such Convertible Securities or, if applicable, this Section D., if such holder thereafter converts, exchanges or exercises such Convertible Securities. Such notice shall be sent by first-class mail, postage prepaid, not less than 30 Trading Days nor more than 45 Trading Days prior to the Redemption Date to each such holder at such holder's address as the same appears on the transfer books of the Corporation. (vii) If less than all of the outstanding shares of the Common Stock of a class are to be redeemed pursuant to paragraph D.(a)(i)(1)(B)(II), the shares to be redeemed by the Corporation shall be selected from among the holders of shares of such class of the Common Stock outstanding at the close of business on the record date for such redemption on a pro rata basis among all such holders or by lot or by such other method as may be determined by the Board of Directors of the Corporation to be equitable. (viii) The Corporation shall not be required to issue or deliver fractional shares of any capital stock or of any other securities to any holder of either class of the Common Stock upon any conversion, redemption, dividend or other distribution pursuant to this Section D. If more than one share of either class of the Common Stock shall be held at the same time by the same holder, the Corporation may aggregate the number of shares of any capital stock that shall be issuable or any other securities or property that shall be distributable to such holder upon any conversion, redemption, dividend or other distribution (including any fractional shares). If there are fractional shares of any capital stock or of any other securities remaining to be issued or distributed to the holders of either class of the Common Stock, the Corporation shall, if such fractional shares are not issued or distributed to the holder, pay cash in respect of such fractional shares in an amount equal to the Fair Value thereof on the fifth Trading Day prior to the date such payment is to be made (without interest). (ix) No adjustments in respect of distributions or dividends shall be made upon the conversion or redemption of any shares of either class of the Common Stock; provided, however, that if the Conversion Date or Redemption Date, as the case may be, with respect to any shares of either class of the Common Stock shall be subsequent to the record date for the payment of a distribution or dividend thereon or with respect thereto, the holders of such class of the Common Stock at the close of business on such record date shall be entitled to receive the distribution or dividend payable on or with respect to such shares on the date set for payment of such distribution or dividend, in each case without interest, notwithstanding the subsequent conversion or redemption of such shares. (x) Before any holder of shares of either class of the Common Stock shall be entitled to receive any cash payment and/or certificates or instruments representing shares of any capital stock and/or other securities or property to be distributed to such holder with respect to such class of the Common Stock pursuant to this Section D., such holder shall surrender at such place as the Corporation shall specify certificates for such shares of the Common Stock, properly endorsed or assigned for transfer (unless the Corporation shall waive such requirement). The Corporation shall as soon as practicable after receipt of certificates representing such shares of the Common Stock deliver to the person for whose account such shares of the Common Stock were so surrendered, or to such person's nominee or nominees, the cash and/or the certificates or instruments representing the number of whole shares of the kind of capital stock and/or other securities or property to which such person shall be entitled as aforesaid, together with any payment in respect of fractional shares contemplated by paragraph D.(d)(viii), in each case without interest. If less than all of the shares of either class of the Common Stock represented by any one certificate are to be redeemed, the Corporation shall issue and deliver a new certificate for the shares of such class of Common Stock not redeemed. (xi) From and after any applicable Conversion Date or Redemption Date, as the case may be, all rights of a holder of shares of either class of the Common Stock that were converted or redeemed shall cease except for the right, upon surrender of the certificates representing such shares of the Common Stock as required by paragraph D.(d)(x), to receive the cash and/or the certificates or instruments representing shares of the kind and amount of capital stock and/or other securities or property for which such shares were converted or redeemed, together with any payment in respect of fractional shares contemplated by paragraph D.(d)(viii) (which shall be held by the Corporation for the holder of shares of the Common Stock that were redeemed until the receipt of certificates representing such shares of the Common Stock as provided in paragraph D.(d)(x))and rights to distributions or dividends as provided in paragraph D.(d)(ix), in each case without interest. No holder of a certificate that immediately prior to the applicable Conversion Date or Redemption Date represented shares of a class of the Common Stock shall be entitled to receive any distribution or dividend or interest payment with respect to shares of any kind of capital stock or other security or instrument for which such class of the Common Stock was converted or redeemed until the surrender as required by this Section D. of such certificate in exchange for a certificate or certificates or instrument or instruments representing such capital stock or other security. Subject to applicable escheat and similar laws, upon such surrender, there shall be paid to the holder the amount of any distributions or dividends (without interest) which theretofore became payable on any class or series of capital stock of the Corporation as of a record date after the Conversion Date or Redemption Date, but that were not paid by reason of the foregoing, with respect to the number of whole shares of the kind of capital stock represented by the certificate or certificates issued upon such surrender. From and after a Conversion Date or Redemption Date, the Corporation shall, however, be entitled to treat the certificates for a class of the Common Stock that have not yet been surrendered for conversion or redemption as evidencing the ownership of the number of whole shares of the kind or kinds of capital stock of the Corporation for which the shares of such class of the Common Stock represented by such certificates shall have been converted or redeemed, notwithstanding the failure to surrender such certificates. (xii) The Corporation shall pay any and all documentary, stamp or similar issue or transfer taxes that may be payable in respect of the issuance or delivery of any shares of capital stock and/or other securities upon conversion or redemption of shares of either class of the Common Stock pursuant to this Section D. The Corporation shall not, however, be required to pay any tax that may be payable in respect of any transfer involved in the issuance or delivery of any shares of capital stock and/or other securities in a name other than that in which the shares of such class of the Common Stock so converted or redeemed were registered, and no such issuance or delivery shall be made unless and until the person requesting such issuance or delivery has paid to the Corporation the amount of any such tax or has established to the satisfaction of the Corporation that such tax has been paid. (xiii) Neither the failure to mail any notice required by this paragraph D.(d) to any particular holder of the Common Stock or of Convertible Securities nor any defect therein shall affect the sufficiency thereof with respect to any other holder of outstanding shares of the Common Stock or of Convertible Securities or the validity of any such conversion or redemption. (xiv) The Board of Directors may establish such rules and requirements to facilitate the effectuation of the transactions contemplated by this Section D. as the Board of Directors shall determine to be appropriate. E. Application of the Provisions of this Certificate of Designations. (a) Certain Determinations by the Board of Directors. The Board of Directors shall make such determinations with respect to the assets and liabilities to be attributed to the Groups, the application of the provisions of this Article VII to transactions to be engaged in by the Corporation and the preferences, limitations and relative rights of the holders of either class of the Common Stock, and the qualifications and restrictions thereon, provided by the Articles as may be or become necessary or appropriate to the exercise of such preferences, limitations and relative rights, including, without limiting the foregoing, the determinations referred to in the following paragraphs E.(a)(i), (ii) and (iii). A record of any such determination shall be filed with the records of the actions of the Board of Directors. (i) Upon any acquisition by the Corporation or its subsidiaries of any assets or business, or any assumption of liabilities, outside of the ordinary course of business of the Georgia-Pacific Group or the Timber Group, as the case may be, the Board of Directors shall determine whether such assets, business and liabilities (or an interest therein) shall be for the benefit of the Georgia-Pacific Group or the Timber Group or that an interest therein shall be partly for the benefit of the Georgia-Pacific Group and partly for the benefit of the Timber Group and, accordingly, shall be attributed to the Georgia-Pacific Group or the Timber Group, or partly to each, in accordance with paragraph F.(g) or (q), as the case may be. (ii) Upon any issuance of any shares of the Preferred Stock or the Junior Preferred Stock of any series, the Board of Directors shall attribute, based on the use of proceeds of such issuance of shares of the Preferred Stock or the Junior Preferred Stock in the business of the Georgia-Pacific Group or the Timber Group and any other relevant factors, the shares so issued entirely to the Georgia-Pacific Group or entirely to the Timber Group or partly to the Georgia-Pacific Group and partly to the Timber Group in such proportion as the Board of Directors shall determine. (iii) Upon any redemption or repurchase by the Corporation or any subsidiary thereof of shares of the Preferred Stock or the Junior Preferred Stock of any class or series or of other securities or debt obligations of the Corporation, the Board of Directors shall determine, based on the property used to redeem or purchase such shares, other securities or debt obligations, which, if any, of such shares, other securities or debt obligations redeemed or repurchased shall be attributed to the Georgia-Pacific Group and which, if any, of such shares, other securities or debt obligations shall be attributed to the Timber Group and, accordingly, how many of the shares of such series of the Preferred Stock or the Junior Preferred Stock or of such other securities, or how much of such debt obligations, that remain outstanding, if any, are thereafter attributed to the Georgia-Pacific Group or to the Timber Group. (b) Certain Determinations Not Required. Notwithstanding the foregoing provisions of this Section E., the provisions of paragraphs F.(g) or (q) or any other provision, at any time when there are not outstanding both (i) one or more shares of Georgia-Pacific Group Stock or Convertible Securities convertible into or exchangeable or exercisable for Georgia-Pacific Group Stock and (ii) one or more shares of Timber Stock or Convertible Securities convertible into or exchangeable or exercisable for Timber Stock, the Corporation need not (A) attribute any of the assets or liabilities of the Corporation or any of its subsidiaries to the Georgia-Pacific Group or the Timber Group or (B) make any determination required in connection therewith, nor shall the Board of Directors be required to make any of the determinations otherwise required by this Article, and in such circumstances the holders of the shares of Georgia-Pacific Group Stock or Timber Stock outstanding, as the case may be, shall (unless otherwise specifically provided by the Articles) be entitled to all the preferences or other relative rights of both classes of the Common Stock without differentiation between the Georgia-Pacific Group Stock and the Timber Stock. (c) Board Determinations Binding. Subject to applicable law, any determinations made in good faith by the Board of Directors of the Corporation under any provision of this Section E. or otherwise in furtherance of the application of this Article shall be final and binding on all shareholders. F. Certain Definitions. As used in this Article, the following terms shall have the following meanings (with terms defined in the singular having comparable meaning when used in the plural and vice versa), unless the context otherwise requires. As used in this Section F., a "contribution" or "transfer" of assets or properties from one Group to another shall refer to the reattribution of such assets or properties from the contributing or transferring Group to the other Group and correlative phrases shall have correlative meanings. (a) "Available Distribution Amount" shall mean, as the context requires, a reference to the Georgia-Pacific Group Available Distribution Amount or the Timber Group Available Distribution Amount. (b) "Common Stock" shall mean the collective reference to the Georgia- Pacific Group Stock and the Timber Stock, and either may sometimes be called a class of Common Stock. (c) "Conversion Date" shall mean the date fixed by the Board of Directors as the effective date for the conversion of shares of Georgia- Pacific Group Stock or Timber Stock, as the case may be, into shares of Timber Stock or Georgia-Pacific Group Stock, respectively (or another class or series of common stock of the Corporation, as the case may be) as shall be set forth in the notice to holders of shares of the class of Common Stock subject to such conversion and to holders of any Convertible Securities that are convertible into or exchangeable or exercisable for shares of the class of Common Stock subject to such conversion required pursuant to paragraph D.(d)(v). (d) "Convertible Securities" shall mean at any time any securities of the Corporation or of any subsidiary thereof (other than shares of the Common Stock), including warrants and options, outstanding at such time that by their terms are convertible into or exchangeable or exercisable for or evidence the right to acquire any shares of either class of the Common Stock, whether convertible, exchangeable or exercisable at such time or a later time or only upon the occurrence of certain events, but in respect of antidilution provisions of such securities only upon the effectiveness thereof. (e) "Disposition" shall mean a sale, transfer, assignment or other disposition (whether by merger, consolidation, sale or contribution of assets or stock or otherwise) of properties or assets (including stock, other securities and goodwill). (f) "Fair Value" shall mean, (i) in the case of equity securities or debt securities of a class or series that has previously been Publicly Traded for a period of at least 15 months, the Market Value thereof (if such Market Value, as so defined, can be determined); (ii) in the case of an equity security or debt security that has not been Publicly Traded for at least 15 months or the Market Value of which cannot be determined, the fair value per share of stock or per other unit of such security, on a fully distributed basis, as determined by an independent investment banking firm experienced in the valuation of securities selected in good faith by the Board of Directors, or, if no such investment banking firm is, as determined in the good faith judgment of the Board of Directors, available to make such determination, in good faith by the Board of Directors; (iii) in the case of cash denominated in U.S. dollars, the face amount thereof and in the case of cash denominated in other than U.S. dollars, the face amount thereof converted into U.S. dollars at the rate published in The Wall Street Journal on the date for the determination of Fair Value or, if not so published, at such rate as shall be determined in good faith by the Board of Directors based upon such information as the Board of Directors shall in good faith determine to be appropriate in accordance with good business practice; and (iv) in the case of property other than securities or cash, the ''Fair Value'' thereof shall be determined in good faith by the Board of Directors based upon such appraisals or valuation reports of such independent experts as the Board of Directors shall in good faith determine to be appropriate in accordance with good business practice. Any such determination of Fair Value shall be described in a statement filed with the records of the actions of the Board of Directors. (g) "Georgia-Pacific Group" shall mean, as of any date: (i) the interest of the Corporation or any of its subsidiaries on such date in all of the assets, liabilities and businesses of the Corporation or any of its subsidiaries (and any successor companies), other than any assets, liabilities and businesses attributed in accordance with this Article to the Timber Group; (ii) all properties and assets transferred to the Georgia-Pacific Group from the Timber Group pursuant to transactions in the ordinary course of business of both the Georgia-Pacific Group and the Timber Group or otherwise as the Board of Directors may have directed as permitted by this Article; and (iii) the interest of the Corporation or any of its subsidiaries in any business or asset acquired and any liabilities assumed by the Corporation or any of its subsidiaries outside the ordinary course of business and attributed to the Georgia-Pacific Group, as determined by the Board of Directors as contemplated by paragraph E.(a)(i); provided that from and after any transfer of any assets or properties from the Georgia-Pacific Group to the Timber Group, the Georgia-Pacific Group shall no longer include such assets or properties so contributed or transferred. (h) "Georgia-Pacific Group Available Distribution Amount," on any date, shall mean any amount in excess of the minimum amount necessary for the Georgia-Pacific Group to be able to pay its debts as they become due in the usual course of business. (i) "Group" shall mean, as of any date, the Georgia-Pacific Group or the Timber Group, as the case may be. (j) "Market Capitalization" of any class or series of common stock on any date shall mean the product of (i) the Market Value of one share of such class or series of capital stock on such date and (ii) the number of shares of such class or series of capital stock outstanding on such date. (k) "Market Value" of a share of any class or series of capital stock of the Corporation on any day shall mean the average of the high and low reported sales prices regular way of a share of such class or series on such Trading Day or, in case no such reported sale takes place on such Trading Day, the average of the reported closing bid and asked prices regular way of a share of such class or series on such Trading Day, in either case as reported on the New York Stock Exchange Composite Tape or, if the shares of such class or series are not listed or admitted to trading on such Exchange on such Trading Day, on the principal national securities exchange in the United States on which the shares of such class or series are listed or admitted to trading or, if not listed or admitted to trading on any national securities exchange on such Trading Day, on The Nasdaq National Market or, if the shares of such class or series are not listed or admitted to trading on any national securities exchange or quoted on The Nasdaq National Market on such Trading Day, the average of the closing bid and ask prices of a share of such class or series in the over-the-counter market on such Trading Day as furnished by any New York Stock Exchange member firm selected from time to time by the Corporation or, if such closing bid and asked prices are not made available by any such New York Stock Exchange member firm on such Trading Day, the Fair Value of a share of such class or series as set forth in clause (ii) of the definition of Fair Value; provided that, for purposes of determining the Market Value of a share of any class or series of capital stock for any period, (i) the ''Market Value'' of a share of capital stock on any day prior to any ''ex-dividend'' date or any similar date occurring during such period for any dividend or distribution (other than any dividend or distribution contemplated by clause (ii)(B) of this sentence) paid or to be paid with respect to such capital stock shall be reduced by the Fair Value of the per share amount of such dividend or distribution and (ii) the "Market Value" of any share of capital stock on any day prior to (A) the effective date of any subdivision (by stock split or otherwise) or combination (by reverse stock split or otherwise) of outstanding shares of such class or series of capital stock occurring during such period or (B) any "ex-dividend" date or any similar date occurring during such period for any dividend or distribution with respect to such capital stock to be made in shares of such class or series of capital stock or Convertible Securities that are convertible, exchangeable or exercisable for such class or series of capital stock shall be appropriately adjusted, as determined by the Board of Directors, to reflect such subdivision, combination, dividend or distribution. (l) "Market Value Ratio of the Converted Stock to the Consideration Stock" as of any date shall mean the fraction (which may be greater or less than 1/1), expressed as a decimal (rounded to the nearest five decimal places), of a share of a class of Common Stock (or another class or series of common stock of the Corporation, if so provided by paragraph D.(a) because such class of Common Stock is not then Publicly Traded) to be received by holders of shares of another class of Common Stock upon the conversion of all or a portion of such class of shares into such other class or series of shares (such class of Common Stock or another class or series of common stock to be received, the "Consideration Stock" and such class of Common Stock to be converted, the "Converted Stock") in accordance with paragraph D.(a), based on the ratio of the Market Value of a share of Converted Stock to the Market Value of a share of Consideration Stock as of such date, determined by the fraction the numerator of which shall be the sum of (A) four times the average Market Value of one share of Converted Stock over the period of five consecutive Trading Days ending on such date, (B) three times the average Market Value of one share of Converted Stock over the period of five consecutive Trading Days ending on the fifth Trading Day prior to such date, (C) two times the average Market Value of one share of Converted Stock over the period of five consecutive Trading Days ending on the 10th Trading Day prior to such date and (D) the average Market Value of one share of Converted Stock over the period of five consecutive Trading Days ending on the 15th Trading Day prior to such date, and the denominator of which shall be the sum of (A) four times the average Market Value of one share of Consideration Stock (or such other common stock) over the period of five consecutive Trading Days ending on such date, (B) three times the average Market Value of one share of Consideration Stock (or such other common stock) over the period of five consecutive Trading Days ending on the fifth Trading Day prior to such date, (C) two times the average Market Value of one share of Consideration Stock (or such other common stock) over the period of five consecutive Trading Days ending on the 10th Trading Day prior to such date and (D) the average Market Value of one share of Consideration Stock (or such other common stock) over the period of five consecutive Trading Days ending on the 15th Trading Day prior to such date. (m) "Net Proceeds" shall mean, as of any date with respect to any Disposition of any of the properties and assets attributed to the Georgia- Pacific Group or the Timber Group, as the case may be, an amount, if any, equal to what remains of the gross proceeds of such Disposition after payment of, or reasonable provision is made as determined by the Board of Directors for, (A) any taxes payable by the Corporation (or which would have been payable but for the utilization of tax benefits attributable to the other Group) in respect of such Disposition or in respect of any resulting dividend or redemption pursuant to paragraphs D.(a)(i)(1)(A) or (B), (B) any transaction costs, including, without limitation, any legal, investment banking and accounting fees and expenses and (C) any liabilities (contingent or otherwise) of or attributed to such Group, including, without limitation, any liabilities for deferred taxes or any indemnity or guarantee obligations of the Corporation incurred in connection with the Disposition or otherwise, and any liabilities for future purchase price adjustments and any preferential amounts plus any accumulated and unpaid distributions in respect of the Preferred Stock or the Junior Preferred Stock attributed to such Group. For purposes of this definition, any properties and assets attributed to the Group, the properties and assets of which are subject to such Disposition, remaining after such Disposition shall constitute "reasonable provision: for such amount of taxes, costs and liabilities (contingent or otherwise) as the Board of Directors determines can be expected to be supported by such properties and assets. (n) "Publicly Traded" with respect to any security shall mean that such security is (i) registered under Section 12 of the Securities Exchange Act of 1934, as amended (or any successor provision of law), and (ii) listed for trading on the New York Stock Exchange or the American Stock Exchange (or any national securities exchange registered under Section 7 of the Securities Exchange Act of 1934, as amended (or any successor provision of law), that is the successor to either such exchange) or listed on The Nasdaq Stock Market (or any successor market system). (o) "Redemption Date" shall mean the date fixed by the Board of Directors as the effective date for a redemption of shares of either class of the Common Stock, as set forth in a notice to holders thereof required pursuant to paragraphs D.(d)(iii), (iv) or (vi). (p) "Related Business Transaction" means any Disposition of all or substantially all the properties and assets attributed to the Georgia-Pacific Group or the Timber Group, as the case may be, in a transaction or series of related transactions that result in the Corporation receiving in consideration of such properties and assets primarily equity securities (including, without limitation, capital stock, debt securities convertible into or exchangeable for equity securities or interests in a general or limited partnership or limited liability company, without regard to the voting power or other management or governance rights associated therewith) of any entity which (i) acquires such properties or assets or succeeds (by merger, formation of a joint venture or otherwise) to the business conducted with such properties or assets or controls such acquiror or successor and (ii) is primarily engaged or proposes to engage primarily in one or more businesses similar or complementary to the businesses conducted by such Group prior to such Disposition, as determined by the Board of Directors. (q) "Timber Group" shall mean, as of any date: (i) all assets and liabilities of the Corporation and its subsidiaries attributed by the Board of Directors to the Timber Group; (ii) all properties and assets transferred to the Timber Group from the Georgia-Pacific Group pursuant to transactions in the ordinary course of business of the Georgia-Pacific Group and the Timber Group or otherwise as the Board of Directors may have directed as permitted by this Article; and (iii) the interest of the Corporation or any of its subsidiaries in any business or asset acquired and any liabilities assumed by the Corporation or any of its subsidiaries outside of the ordinary course of business and attributed to the Timber Group, as determined by the Board of Directors as contemplated by paragraph E.(a)(i); provided that from and after any transfer of any assets or properties from the Timber Group to the Georgia-Pacific Group, the Timber Group shall no longer include such assets or properties so contributed or transferred. (r) "Timber Group Available Distribution Amount," on any date, shall mean any amount in excess of the minimum amount necessary for the Timber Group to be able to pay its debts as they become due in the usual course of business. (s) "Trading Day" shall mean each weekday other than any day on which the relevant class of common stock of the Corporation is not traded on any national securities exchange or quoted on The Nasdaq National Market or in the over-the-counter market. G. Inconsistencies. In the event of an inconsistency between the provisions of this Article V and the provisions of Article IV relating to the Junior Preferred Stock, the provisions of Article IV shall control. ARTICLE VI. A. Notwithstanding any provision of the Bylaws of the Corporation (and notwithstanding that some lesser percentage may be permissible in law), the following provisions of the Bylaws of the Corporation, as in effect on March 3, 1984, shall not be amended, modified or repealed by the shareholders of the Corporation, nor shall any provision of the Bylaws of the Corporation inconsistent with such provisions be adopted by the shareholders of the Corporation, except pursuant to the affirmative vote of at least seventy-five percent (75%) of the voting power of the outstanding capital stock of the Corporation entitled to vote generally in the election of directors, voting as a class: Article I, Section 2; Article II, Section 1(A); Article II, Section 1(D); Article II, Section 8; and Article II, Section 9. B. Notwithstanding that some lesser percentage may be permissible in law, no provision of Article IV of these Articles of Incorporation regarding Junior Preferred Stock of the Corporation and no provision of this Article VI shall be amended, modified or repealed by the shareholders of the Corporation, nor shall any provision of these Articles of Incorporation inconsistent with any such provision be adopted by the shareholders of the Corporation, except pursuant to the affirmative vote of at least seventy-five percent (75%) of the voting power of the outstanding capital stock of the Corporation entitled to vote generally in the election of directors, voting as a class. ARTICLE VII. A. A director of the Corporation shall not be liable to the Corporation or its shareholders for monetary damages for any action taken, or any failure to take any action, as a director, except for liability (i) for any appropriation, in violation of his or her duties, of any business opportunity of the Corporation, (ii) for acts or omissions that involve intentional misconduct or a knowing violation of law, (iii) of the types set forth in Section 14-2-832 of the Georgia Business Corporation Code, or (iv) for any transaction from which the director received an improper personal benefit. B. Any repeal or modification of the provisions of this Article VII by the shareholders of the Corporation shall be prospective only, and shall not adversely affect any limitation on the liability of a director of the Corporation with respect to any act or omission occurring prior to the effective date of such repeal or modification. C. If the Georgia Business Corporation Code is hereafter amended to authorize the further elimination or limitation of 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 Georgia Business Corporation Code. D. In the event that any of the provisions of this Article VII (including any provision within a single sentence) is held by a court of competent jurisdiction to be invalid, void or otherwise unenforceable, the remaining provisions are severable and shall remain enforceable to the fullest extent permitted by law. ARTICLE VIII. In discharging the duties of their respective positions and in determining what is believed to be in the best interests of the Corporation, the Board of Directors, committees of the Board of Directors and individual directors, in addition to considering the effects of any action on the Corporation and its shareholders, may consider the interests of the employees, customers, suppliers and creditors of the Corporation and its subsidiaries, the communities in which offices or other establishments of the Corporation and its subsidiaries are located, and all other factors such directors consider pertinent; provided, however that no constituency shall be deemed to have been given any right to consideration hereby. IN WITNESS WHEREOF, GEORGIA-PACIFIC CORPORATION has caused these Restated Articles of Incorporation to be executed and its corporate seal to be affixed and has caused its seal and the execution hereof to be attested, all by its duly authorized officers, this 16th day of December, 1997. GEORGIA-PACIFIC CORPORATION By: /s/ James F. Kelley ------------------- James F. Kelley Senior Vice President-Law and General Counsel [CORPORATE SEAL] Attest: /s/ Kenneth F. Khoury Kenneth F. Khoury Vice President and Secretary EX-99.5 6 1993 ESOP (G-P GROUP OPTION) 1993 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 January 27, 1993, the Optionee was granted pursuant to the Georgia-Pacific Corporation 1993 Employee Stock Option Plan the option to purchase from the Company up to, but not exceeding in the aggregate, ----- shares of the Company's then existing common stock ("G-P Common Stock") at a price of $59.00 per share (the "Original Option"), of which an option to purchase from the Company up to, but not exceeding in the aggregate, ----- 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 or surrender 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 January 27, 1998 the option to purchase from the Company, from time to time, as hereinafter more specifically stated, at a price of $41.99 per share, up to but not exceeding in the aggregate, shares of G-P Group ---------- Stock, which option may be exercised or surrendered, in whole or in part, from time to time, commencing on the date hereof, but no later than January 27, 1998. Such period may not be extended pursuant to the provisions of Section 5. 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 option price of such shares. 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. Within thirty 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. The Optionee may elect, in lieu of the exercise of the option, to surrender the option granted hereby, or any portion thereof, by delivery to the Treasurer of the Company or his delegate, from time to time, of written notice, signed by the Optionee, specifying the portion of the option the Optionee then desires to surrender. 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 surrender. Within thirty business days after any such surrender of the option, or any portion thereof, the Company shall deliver to the Optionee a certificate or certificates representing shares of G-P Group Stock whose aggregate fair market value equals the difference between the aggregate fair market value of the shares covered by the option, or portion thereof, surrendered and the aggregate option price of such shares. No fractional shares of G-P Group Stock shall be issued and in lieu thereof, if a fractional share of G-P Group Stock would otherwise be deliverable to the Optionee, the Optionee shall be paid in cash an amount equal to the same fraction of the fair market value of a share of G-P Group Stock. "Fair market value" as used in this Section 3 shall mean the mean between the high and low sales prices of G-P Group Stock on the day preceding the date of surrender as reported in the Record of Composite Transactions for New York Stock Exchange listed securities and printed in The Wall Street Journal or, if no sale of stock shall have been made on that date, on the next preceding day on which there was a sale of the stock. 4. (a) The Company shall pay a cash bonus as of each date or dates the option is exercised or surrendered, in whole or in part, in an amount determined as follows: (1) If the option is exercised, the market appreciation of the shares being exercised (defined as the market price of G-P Group Stock on the date of exercise, less the option price, adjusted pursuant to Section l0 hereof, multiplied by the number of shares being exercised on that date), multiplied by the Bonus Factor; and (2) If the option is surrendered, the aggregate market price on the day preceding the date of surrender of the shares received by the Optionee multiplied by the Bonus Factor. (3) 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 subsection (a)(2), 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 option is exercised or surrendered (taking into account any retroactive changes in the specified tax rates). "Market price" as used in this Section 4 shall be the mean between the high and low sales prices of G-P Group Stock on the specified date, as reported in the Record of Composite Transactions for New York Stock Exchange listed securities and printed in The Wall Street Journal, or if no sale of stock shall have been made on that date, on the next preceding day on which there was a sale of the stock. (b) Notwithstanding any other provision of this Agreement, in no event shall any bonus be paid pursuant to this Section 4 in excess of the market appreciation of the shares being exercised (as defined in Section 4(a)(1)) or the aggregate market value of the shares received by the Optionee upon surrender (as defined in Section 4(a)(2)). (c) If the Optionee is employed by a Subsidiary, the Subsidiary shall pay such cash bonus payable pursuant to this Section 4 or the Company shall pay such cash bonus as an agent for the Subsidiary, which shall reimburse the Company. (d) In all cases, the Company, or the Subsidiary, shall hold and deposit such cash bonus as withholding taxes. 5. 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 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, except in the case of his death or permanent disability while in the Company's employment or his retirement; provided, that during such ninety-day period, the Optionee shall have the right to exercise or surrender this option with respect to any or all shares which were available for purchase by him on the date of such termination of employment and, in the event of his 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 shall have the right, within such period, to exercise or surrender this option 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 after a period of continuous employment by the Company; provided, that during such 36-month period, the Optionee shall have the right to exercise or surrender this option with respect to any or all shares which were available for purchase by him on the date of such retirement and, in the event of his 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 shall have the right, within such period, to exercise or surrender this option 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; provided, that during such 36- month period, such deceased Optionee's estate, personal representative or beneficiary or such disabled Optionee shall have the right to exercise or surrender this option 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 or surrender 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. 6. 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. 7. This option is not transferable by the Optionee otherwise than by will or the laws of descent and distribution and, during the Optionee's lifetime, may be exercised or surrendered only by him or by his legal guardian or representative. No assignment or transfer of this option or the rights represented thereby, or of the right to cash bonuses hereunder, 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. 8. The Optionee shall not be deemed for any purpose to be a stockholder of the Company with respect to any shares optioned by this Agreement as to which the option hereby granted shall not have been exercised or surrendered 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 or transferred to Optionee. 9. 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 or 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. 10. The shares with respect to which this option is granted are shares of G-P Group Stock of the Company 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 option hereunder 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 option hereunder 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. 11. 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 or surrender 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 or surrendered, 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 of the Company equal to the number of shares as to which such option shall be so exercised or surrendered. The Plan Administrator shall determine, in its absolute and uncontrolled discretion, the adjustment to be made and the extent thereof. 12. 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 days prior to such merger or sale of assets, to exercise immediately on a fully-vested basis each outstanding option which was granted to him 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 the option would otherwise expire according to Section 5 of this Agreement, to exercise 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. 13. In the event that a Change in Control (as defined in Section 12 above) shall occur, the Optionee shall have the right to elect to receive from the Company an amount in cash, in a lump sum, for each share of G-P Group Stock covered by the Optionee's options granted hereunder, 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 outstanding options which were granted under this Agreement. Upon an election to receive such cash payment, the option to which such cash payment relates shall no longer be exercisable to the extent of the number of shares covered by the option for which such cash payment was received. In the event a Change in Control shall occur and this Section 13 shall become effective, (a) any election pursuant to Section 3 of this Agreement which the Optionee has to surrender his options issued hereunder and to receive shares of G-P Group Stock in lieu of the exercise of such options shall not be effective, and (b) the Optionee shall also have the right to receive the cash bonus otherwise payable upon surrender of his option pursuant to Section 4(a)(2) of this Agreement. 14. In the event that Sections 12 or 13 of this Agreement shall become applicable, Section 16 of this Agreement shall not be effective. 15. Anything in this Agreement to the contrary notwithstanding, if, at any time specified herein for the exercise of this option, the delivery of shares to the Optionee, or for the payment of cash bonuses 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 or the payment of such cash bonuses on such exercise shall be deferred until such action shall have been taken or such restriction on action shall have been removed. 16. Subject to Section 14 of this Agreement, as conditions precedent to the granting of the option, cash bonuses 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 Company's Board of Directors in the Plan Administrator's or the Board'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 Board of Directors of the Company shall be final, binding and conclusive on all persons affected thereby. 17. 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. 18. 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, l33 Peachtree Street, N.E., Atlanta, Georgia 30303, 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 hereunder set his hand and seal, as of this day and year first above written. GEORGIA-PACIFIC CORPORATION By: ----------------------- A. D. Correll Chairman, Chief Executive Officer and President ATTEST: W. Edwin Frazier, III, Assistant Secretary Optionee NOTE: PLEASE COMPLETE THE ATTACHED PERSONAL DATA SHEET. OPTIONEE'S PERSONAL DATA (Please Print) Full Name ADDRESS: SOCIAL SECURITY NUMBER: DATE OF BIRTH: Month, Day and Year DIVISION: LOCATION 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 OF A CHANGE IN WRITING. EX-99.6 7 1993 ESOP (TIMBER GROUP OPTION) 1993 GEORGIA-PACIFIC CORPORATION REPLACEMENT EMPLOYEE STOCK OPTION (Timber 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 January 27, 1993, the Optionee was granted pursuant to the Georgia-Pacific Corporation 1993 Employee Stock Option Plan the option to purchase from the Company up to, but not exceeding in the aggregate, ----- shares of the Company's then existing common stock ("G-P Common Stock") at a price of $59.00 per share (the "Original Option"), of which an option to purchase from the Company up to, but not exceeding in the aggregate, ----- 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 or surrender 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 January 27, 1998 the option to purchase from the Company, from time to time, as hereinafter more specifically stated, at a price of $17.01 per share, up to but not exceeding in the aggregate, shares of Timber ---------- Stock, which option may be exercised or surrendered, in whole or in part, from time to time, commencing on the date hereof, but no later than January 27, 1998. Such period may not be extended pursuant to the provisions of Section 5. 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 option price of such shares. 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. Within thirty 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. The Optionee may elect, in lieu of the exercise of the option, to surrender the option granted hereby, or any portion thereof, by delivery to the Treasurer of the Company or his delegate, from time to time, of written notice, signed by the Optionee, specifying the portion of the option the Optionee then desires to surrender. 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 surrender. Within thirty business days after any such surrender of the option, or any portion thereof, the Company shall deliver to the Optionee a certificate or certificates representing shares of Timber Stock whose aggregate fair market value equals the difference between the aggregate fair market value of the shares covered by the option, or portion thereof, surrendered and the aggregate option price of such shares. No fractional shares of Timber Stock shall be issued and in lieu thereof, if a fractional share of Timber Stock would otherwise be deliverable to the Optionee, the Optionee shall be paid in cash an amount equal to the same fraction of the fair market value of a share of Timber Stock. "Fair market value" as used in this Section 3 shall mean the mean between the high and low sales prices of Timber Stock on the day preceding the date of surrender as reported in the Record of Composite Transactions for New York Stock Exchange listed securities and printed in The Wall Street Journal or, if no sale of stock shall have been made on that date, on the next preceding day on which there was a sale of the stock. 4. (a) The Company shall pay a cash bonus as of each date or dates the option is exercised or surrendered, in whole or in part, in an amount determined as follows: (1) If the option is exercised, the market appreciation of the shares being exercised (defined as the market price of Timber Stock on the date of exercise, less the option price, adjusted pursuant to Section l0 hereof, multiplied by the number of shares being exercised on that date), multiplied by the Bonus Factor; and (2) If the option is surrendered, the aggregate market price on the day preceding the date of surrender of the shares received by the Optionee multiplied by the Bonus Factor. (3) 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 subsection (a)(2), 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 option is exercised or surrendered (taking into account any retroactive changes in the specified tax rates). "Market price" as used in this Section 4 shall be the mean between the high and low sales prices of Timber Stock on the specified date, as reported in the Record of Composite Transactions for New York Stock Exchange listed securities and printed in The Wall Street Journal, or if no sale of stock shall have been made on that date, on the next preceding day on which there was a sale of the stock. (b) Notwithstanding any other provision of this Agreement, in no event shall any bonus be paid pursuant to this Section 4 in excess of the market appreciation of the shares being exercised (as defined in Section 4(a)(1)) or the aggregate market value of the shares received by the Optionee upon surrender (as defined in Section 4(a)(2)). (c) If the Optionee is employed by a Subsidiary, the Subsidiary shall pay such cash bonus payable pursuant to this Section 4 or the Company shall pay such cash bonus as an agent for the Subsidiary, which shall reimburse the Company. (d) In all cases, the Company, or the Subsidiary, shall hold and deposit such cash bonus as withholding taxes. 5. 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 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, except in the case of his death or permanent disability while in the Company's employment or his retirement; provided, that during such ninety-day period, the Optionee shall have the right to exercise or surrender this option with respect to any or all shares which were available for purchase by him on the date of such termination of employment and, in the event of his 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 shall have the right, within such period, to exercise or surrender this option 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 after a period of continuous employment by the Company; provided, that during such 36-month period, the Optionee shall have the right to exercise or surrender this option with respect to any or all shares which were available for purchase by him on the date of such retirement and, in the event of his 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 shall have the right, within such period, to exercise or surrender this option 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; provided, that during such 36- month period, such deceased Optionee's estate, personal representative or beneficiary or such disabled Optionee shall have the right to exercise or surrender this option 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 or surrender 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. 6. 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. 7. This option is not transferable by the Optionee otherwise than by will or the laws of descent and distribution and, during the Optionee's lifetime, may be exercised or surrendered only by him or by his legal guardian or representative. No assignment or transfer of this option or the rights represented thereby, or of the right to cash bonuses hereunder, 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. 8. The Optionee shall not be deemed for any purpose to be a stockholder of the Company with respect to any shares optioned by this Agreement as to which the option hereby granted shall not have been exercised or surrendered 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 or transferred to Optionee. 9. 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 Timber Stock or 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. 10. The shares with respect to which this option is granted are shares of Timber Stock of the Company 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 Timber Stock with respect to which this option is granted, the Company shall effect a change in the par value of Timber Stock, or a change in the number of shares of Timber 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 Timber 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 Timber Stock then remaining subject to option hereunder 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 Timber Stock then remaining subject to option hereunder 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 Timber Stock or a change from par value to no par value, the shares resulting from any such change shall be deemed to be Timber Stock under this Agreement. 11. 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 or surrender 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 or surrendered, 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 Timber Stock of the Company equal to the number of shares as to which such option shall be so exercised or surrendered. The Plan Administrator shall determine, in its absolute and uncontrolled discretion, the adjustment to be made and the extent thereof. 12. 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 days prior to such merger or sale of assets, to exercise immediately on a fully-vested basis each outstanding option which was granted to him 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 the option would otherwise expire according to Section 5 of this Agreement, to exercise 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 Timber Stock not approved by the Board of Directors prior to such commencement. 13. In the event that a Change in Control (as defined in Section 12 above) shall occur, the Optionee shall have the right to elect to receive from the Company an amount in cash, in a lump sum, for each share of Timber Stock covered by the Optionee's options granted hereunder, 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 Timber Stock in connection with the Change in Control and (ii) the highest closing price per share paid for the purchase of Timber Stock on the principal exchange on which Timber Stock is listed, or, if Timber 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 outstanding options which were granted under this Agreement. Upon an election to receive such cash payment, the option to which such cash payment relates shall no longer be exercisable to the extent of the number of shares covered by the option for which such cash payment was received. In the event a Change in Control shall occur and this Section 13 shall become effective, (a) any election pursuant to Section 3 of this Agreement which the Optionee has to surrender his options issued hereunder and to receive shares of Timber Stock in lieu of the exercise of such options shall not be effective, and (b) the Optionee shall also have the right to receive the cash bonus otherwise payable upon surrender of his option pursuant to Section 4(a)(2) of this Agreement. 14. In the event that Sections 12 or 13 of this Agreement shall become applicable, Section 16 of this Agreement shall not be effective. 15. Anything in this Agreement to the contrary notwithstanding, if, at any time specified herein for the exercise of this option, the delivery of shares to the Optionee, or for the payment of cash bonuses 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 or the payment of such cash bonuses on such exercise shall be deferred until such action shall have been taken or such restriction on action shall have been removed. 16. Subject to Section 14 of this Agreement, as conditions precedent to the granting of the option, cash bonuses 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 Company's Board of Directors in the Plan Administrator's or the Board'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 Board of Directors of the Company shall be final, binding and conclusive on all persons affected thereby. 17. 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. 18. 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, l33 Peachtree Street, N.E., Atlanta, Georgia 30303, 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 hereunder set his hand and seal, as of this day and year first above written. GEORGIA-PACIFIC CORPORATION By: --------------------- A. D. Correll Chairman, Chief Executive Officer and President ATTEST: W. Edwin Frazier, III, Assistant Secretary Optionee NOTE: PLEASE COMPLETE THE ATTACHED PERSONAL DATA SHEET. OPTIONEE'S PERSONAL DATA (Please Print) Full Name ADDRESS: SOCIAL SECURITY NUMBER: DATE OF BIRTH: Month, Day and Year DIVISION: LOCATION EX-99.8 8 1994 ESOP (G-P GROUP OPTION) 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, ----- 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, ----- 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 -------- 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, l33 Peachtree Street, N.E., Atlanta, Georgia 30303, 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: --------------------- A. D. Correll Chairman, Chief Executive Officer and President ATTEST: W. Edwin Frazier, III, Assistant Secretary OPTIONEE NOTE: PLEASE COMPLETE THE ATTACHED PERSONAL DATA SHEET. OPTIONEE'S PERSONAL DATA (Please Print) Full Name ADDRESS: ========================================================== ---------------------------------------------------------- SOCIAL SECURITY NUMBER: --------------------------------------------- DATE OF BIRTH: --------------------------------------------------------- Month, Day and Year DIVISION: LOCATION: ------------------------- -------------------------- 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. EX-99.9 9 1994 ESOP (TIMBER GROUP OPTION) 1994 GEORGIA-PACIFIC CORPORATION REPLACEMENT EMPLOYEE STOCK OPTION (Timber 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, ----- 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, ----- 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 $21.65 per share, up to but not exceeding in the aggregate, shares of Timber -------- 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 Timber 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 Timber 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 Timber Stock with respect to which this option is granted, the Company shall effect a change in the par value of Timber Stock, or a change in the number of shares of Timber 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 Timber 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 Timber 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 Timber 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 Timber Stock or a change from par value to no par value, the shares resulting from any such change shall be deemed to be Timber 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 Timber 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 Timber 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 Timber 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 Timber Stock in connection with the Change in Control and (ii) the highest closing price per share paid for the purchase of Timber Stock on the principal exchange on which Timber Stock is listed, or, if Timber 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 Timber 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, l33 Peachtree Street, N.E., Atlanta, Georgia 30303, 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: --------------------- A. D. Correll Chairman, Chief Executive Officer and President ATTEST: W. Edwin Frazier, III, Assistant Secretary OPTIONEE NOTE: PLEASE COMPLETE THE ATTACHED PERSONAL DATA SHEET. OPTIONEE'S PERSONAL DATA (Please Print) Full Name ADDRESS: ========================================================== ---------------------------------------------------------- SOCIAL SECURITY NUMBER: --------------------------------------------- DATE OF BIRTH: --------------------------------------------------------- Month, Day and Year DIVISION: ------------------------- LOCATION: -------------------------- 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. EX-99.11 10 SVIP (G-P GROUP 1995 GRANT OPTION) 1995 GEORGIA-PACIFIC CORPORATION REPLACEMENT SHAREHOLDER VALUE INCENTIVE STOCK OPTION (G-P Group Stock) THIS AGREEMENT, dated December 17, 1997 by and between GEORGIA- PACIFIC CORPORATION, a Georgia corporation (hereinafter called the "Corporation"), and (hereinafter called "Optionee"); W I T N E S S E T H: WHEREAS, on April 1, 1995, the Optionee was granted pursuant to the Georgia-Pacific Corporation 1995 Shareholder Value Incentive Plan (as then in effect, the "Original Plan") the option to purchase from the Company up to, but not exceeding in the aggregate, shares of the Company's then existing ----- common stock ("G-P Common Stock") at a price of $80.50 per share (the "Original Option"); WHEREAS, the shareholders of the Corporation have approved, effective December 16, 1997, a recapitalization of the Corporation'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, in conjunction with the approval of the Letter Stock Transaction, the shareholders of the Corporation also approved, effective December 16, 1997, an amendment and restatement of the Original Plan (the "Plan"), which upon approval of the Letter Stock Transaction provides for the conversion 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; WHEREAS, in making the options conversion contemplated in the Letter Stock Transaction and in the Plan, 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 (the "Timber Stock Price"), and the exercise price for the Timber Stock option is equal to the exercise price under the Original Option Price multiplied by a fraction, the numerator of which is the Timber Stock Price and the denominator of which is the sum of the G-P Group Stock Price and the Timber Stock Price; 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. OPTION GRANT. Subject to the terms and conditions set forth herein, the Corporation hereby grants to the Optionee during the period commencing on the date hereof and ending on March 31, 2005, the option to purchase from the Corporation, from time to time, as hereinafter more specifically stated, at a price of $57.29 per share, up to but not exceeding in the aggregate, shares of the G-P Group Stock (or such portion of such -------- shares as may be vested and exercisable), which option may be exercised, in whole or in part, from time to time, commencing on the applicable Vesting Date as determined in accordance with Section 2 or 3 (but only as to the portion then becoming exercisable) and for the exercise period beginning on such Vesting Date and continuing to the end of the applicable exercise period specified in this Agreement. 2. NORMAL VESTING. This option grant (or any portion thereof) may in no event be exercised prior to its Vesting Date, but on and after its Vesting Date (to the extent of the number option shares then becoming exercisable), it may be exercised in accordance with - and to the extent permitted under - the terms of the Plan and this Agreement. This option grant will vest without regard to performance standards stated in this Section 2 on the 183rd day following the 9th anniversary of the Grant Date. This option grant is subject to accelerated performance-based vesting in accordance with any of the following rules: (a) This option grant will vest on the 3rd anniversary of the Grant Date if the Corporation's Total Shareholder Return for the immediately preceding 3 full fiscal years exceeds the Weighted Average Total Shareholder Return of all Peer Group Companies for the same period. (b) This option grant will vest on the 4th anniversary of the Grant Date if the Corporation's Total Shareholder Return for the immediately preceding 4 full fiscal years exceeds the Weighted Average Total Shareholder Return of all Peer Group Companies for the same period. (c) This option grant will vest on the 5th anniversary of the Grant Date if the Corporation's Total Shareholder Return for the immediately preceding 5 full fiscal years exceeds the Weighted Average Total Shareholder Return of all Peer Group Companies for the same period. Vesting under subsections (a), (b) and (c) shall be conditioned upon the Committee's written certification that the performance vesting standards of this Section 2 have been met. Vesting of this option grant under this Section 2 is subject in all cases to the restrictions/forfeiture rules in Sections 4 and 5. Subject to those rules, if this option grant vests pursuant to this Section 2, it may be exercised at any time on or after the Vesting Date and prior to the 10th anniversary of the Grant Date (not inclusive), provided that if the Optionee's employment with the Corporation and its Subsidiaries terminates for any reason other than retirement (as defined in Section 3(b)(i)), death or disability (as defined in Section 3(b)(iii)) after the Vesting Date of this option grant and before it has expired, the option grant may be exercised only during the 90-day period following the Optionee's date of termination or, if shorter, during the remaining period before this option grant expires in accordance with this Agreement. If a Participant's employment with the Corporation and its Subsidiaries terminates for any reason other than retirement (as defined in Section 3(b)(i)), death or disability (as defined in Section 3(b)(iii)) prior to the Vesting Date of this option grant, this option grant will terminate as of the Participant's termination date, and the Participant will have no further rights hereunder. 3. SPECIAL VESTING. This option grant (or the portion designated below in Section 3(c)) shall vest and become exercisable under the circumstances and subject to the terms and conditions specified in this Section 3 (subject to the provisions of Section 5): (a) Notwithstanding anything in Sections 2 or 4 to the contrary, the performance-based vesting provisions of subsections (a), (b) and (c) of Section 2 shall operate to vest this option grant to the extent that it remains outstanding when the Optionee retires (as defined in Section 3(b)(i)), dies or becomes disabled (as defined in Section 3(b)(iii)) prior to its Vesting Date even if such vesting occurs after the termination of the Optionee's employment with the Corporation and its Subsidiaries. (b) Notwithstanding anything in Sections 2 or 4 to the contrary, if this option grant is not vested pursuant to the performance- based vesting standards of subsections (a), (b) and (c) of Section 2 or another provision of this Agreement, it will vest in the circumstances and on the date specified in paragraphs (i) through (iii) below to the extent permitted by the schedule set forth in Section 3(c): (i) If the Optionee terminates employment with the Corporation and its Subsidiaries after attaining age 65 or age 55 and 10 years of service for vesting purposes under the Georgia-Pacific Corporation Savings and Capital Growth Plan (other than a termination for Cause), on the later of his/her retirement date or the 5th anniversary of the Grant Date; (ii) If the Optionee dies, on the later of his/her date of death or the 5th anniversary of the Grant Date; or (iii) If the Optionee becomes totally disabled as defined under the Georgia-Pacific Corporation Salaried Long-Term Disability Plan (whether or not the Optionee actually participates in that plan), as determined by the Plan Administrator in its sole discretion, on the later of his/her date of termination of employment with the Corporation and its Subsidiaries because of such disability or the 5th anniversary of the Grant Date. (c) If the Optionee becomes entitled to special vesting in accordance with Section 3(b) above, this option grant, if then still outstanding, will vest as of the applicable date specified in Section 3(b) to the extent indicated in paragraphs (i) through (iii) below: (i) If the special vesting event described in Section 3(b)(i) through (iii) occurs prior to the 5th anniversary of the Grant Date of this option grant (which has not otherwise vested), 50% of this option grant will vest and 50% will be forfeited. (ii) If special vesting described in Section 3(b)(i) through (iii) occurs on or after the 5th anniversary, but prior to the 6th anniversary, of the Grant Date of this option grant (which has not otherwise vested), 60% of this option grant will vest and 40% will be forfeited. (iii)If special vesting described in Section 3(b)(i) through (iii) occurs on or after the 6th anniversary, but prior to the 7th anniversary, of the Grant Date of this option grant (which has not otherwise vested), 70% of this option grant will vest and 30% will be forfeited. (iv) If special vesting described in Section 3(b)(i) through (iii) occurs on or after the 7th anniversary, but prior to the 8th anniversary, of the Grant Date of this option grant (which has not otherwise vested), 80% of this option grant will vest and 20% will be forfeited. (v) If special vesting described in Section 3(b)(i) through (iii) occurs on or after the 8th anniversary, but prior to the 9th anniversary, of the Grant Date of this option grant (which has not otherwise vested), 90% of this option grant will vest and 10% will be forfeited. (vi) If special vesting described in Section 3(b)(i) through (iii) occurs on or after the 9th anniversary of the Grant Date of this option grant (which has not otherwise vested), 100% of this option grant will vest. (d) The special vesting dates specified in this Section 3 shall be considered Vesting Dates for purposes of this Agreement. (e) If this option grant vests pursuant to Section 3(a), it may be exercised at any time on or after its Vesting Date and prior to the 10th anniversary of its Grant Date (not inclusive). If this option grant (or any portion thereof) vests pursuant to Section 3(b), it may be exercised (to the extent it has vested) at any time on or after its Vesting Date and prior to the 183rd day following its Vesting Date (not inclusive) or, if earlier, prior to the 10th anniversary of its Grant Date (not inclusive). 4. RESTRICTIONS/FORFEITURE RULES. This option grant will be subject to the following restrictions and forfeiture rules: (a) Subject to Section 3, if the Optionee's employment with the Corporation and its Subsidiaries is terminated for any reason prior to the Vesting Date for this option grant (or any portion thereof), the Optionee shall forfeit all rights with respect to this option grant, and this Agreement shall be null, void and of no effect as of the date his/her employment terminates. (b) This option grant shall be nontransferable and may not be sold, hypothecated or otherwise assigned or conveyed by the Optionee to any party; provided that in the event of the incapacity (as determined by the Plan Administrator) or death of the Optionee, his/her attorney-in-fact pursuant to a valid power of attorney giving general or specific authority to make elections with respect to this option grant, his/her court-appointed guardian or the custodian of his/her affairs or the executor or administrator of his/her estate (as the case may be) may exercise any rights with respect to this option grant that the Participant could have exercised if he/she were still alive or not incapacitated. No assignment or transfer of this option or the rights represented thereby, whether voluntary, involuntary, or by operation of law or otherwise, except by will or the laws of descent and distribution, shall vest in the assignee or transferee any interest or right herein whatsoever, and immediately upon any attempt to assign or transfer this option, this option shall terminate and be of no force or effect. Notwithstanding anything in this subsection (b) to the contrary, an Optionee may designate a person or persons to receive, in the event of his death, any rights to which he would be entitled under this Option Agreement. Such a designation shall be made in writing, and filed with the Corporation's Treasurer's Department. A beneficiary designation may be changed or revoked by an Optionee at any time by filing a written statement of such change or revocation with the Corporation's Treasurer's Department. No beneficiary designation or change of beneficiary designation will be effective until actually received by the Corporation's Treasurer's Department. If an Optionee fails to designate a beneficiary (or the beneficiary predeceases the Optionee), this subsection (b) will apply without regard to the provisions relating to the designation of a beneficiary. (c) The Optionee shall not be deemed to be a shareholder of the Corporation - and shall have no rights as a stockholder - with respect to the shares covered by this option grant until the date (i) such shares have been issued or transferred to him/her and (ii) payment in full for such shares has been received by the Corporation as provided in this Agreement. No adjustment shall be made for dividends or other rights for which the record date is prior to the date of such issuance or transfer. (d) To the extent that this option grant is vested, but not exercised during the period provided for its exercise under this Agreement, the Participant shall forfeit all rights with respect to this option grant and this Agreement shall expire as of the close of the last day of the prescribed exercise period. 5. TERMINATION FOR CAUSE. Notwithstanding anything in this Option Agreement to the contrary, if the Optionee is terminated for Cause, this option grant shall terminate as of such date of termination regardless whether a Vesting Date has occurred on or prior to his/her date of termination unless and to the extent that the Committee determines (after taking into account the provisions of Section 16) that such forfeiture in a given case would violate applicable law. 6. EXERCISE OF OPTION. The option hereby granted shall be exercised by the delivery to the Treasurer of the Corporation or his delegate, from time to time, of written notice, signed by the Optionee, specifying the number of shares the Optionee then desires to purchase, together with cash, certified check, bank draft or postal or express money order to the order of the Corporation for an amount in United States dollars equal to the sum of: (a) the option price of such shares and (b) an amount sufficient to pay all state and federal withholding taxes (including, without limitation, FICA) with respect to the exercise (the total of (a) and (b) shall be referred to as the `Exercise Amount'). In the alternative, the Optionee may tender payment for the option shares in the form of shares of G-P Group Stock having a Fair Market Value on the date of exercise equal to the Exercise Amount or a combination of (i) shares of G-P Group Stock and (ii) cash, certified check, bank draft or postal or express money order to the order of the Corporation in an amount in United States dollars equal to the difference between the Exercise Amount and the Fair Market Value of the tendered shares of G-P Group Stock on the date of exercise. If the written notice of exercise is mailed, the date of its receipt by the Treasurer of the Corporation or his delegate shall be considered the date of exercise of the option by the Optionee. An exercise of stock options granted under this Agreement will generate compensation subject to federal and state tax withholding (including, without limitation, FICA withholding) in the calendar year of each exercise, and all such withholding taxes shall be the responsibility of the Optionee. The Committee may also authorize alternative procedures for exercising options under this Agreement. Within thirty (30) business days after any such exercise of the option in whole or in part by the Optionee, the Corporation shall deliver to the Optionee a certificate or certificates representing the aggregate number of shares with respect to which such option shall be so exercised, registered in the Optionee's name. The Optionee shall not have the right, in lieu of the exercise of the option, to surrender the option granted hereby, or any portion thereof, in order to receive shares covered by this option grant. 7. DATE OF TERMINATION. Except to the extent otherwise provided in subsections (a) through (c) of this Section 7, for purposes of this Agreement, the Optionee's date of termination shall be deemed to be his/her last day worked: (a) The Optionee's employment by the Corporation shall be deemed to continue during such periods as he/she is employed by a Subsidiary. If the Optionee shall be transferred from the Corporation to a Subsidiary or from a Subsidiary to the Corporation or from a Subsidiary to another Subsidiary, his/her employment shall not be deemed to be terminated by reason of such transfer. If, while the Optionee is employed by a Subsidiary, such Subsidiary shall cease to be a Subsidiary and the Optionee is not thereupon transferred to and employed by the Corporation or another Subsidiary, the date that the Optionee's employer ceases to be a Subsidiary shall be deemed to be a termination of employment. (b) The Optionee's date of termination on account of total disability shall be the last day of his/her salary continuation period under the Corporation's policy providing for salary continuation for salaried employees who are medically unable to work because of illness or injury or, if later, the date any personal leave of absence he/she may be granted under the policies of the Corporation immediately following such period of salary continuation terminates in accordance with such policies. (c) The Plan Administrator (as hereinafter defined) shall have absolute and uncontrolled discretion to determine whether any authorized leave of absence or absence on military or government service taken by the Optionee shall constitute a termination of employment for the purposes of this Agreement. 8. NO BAR TO CORPORATE RESTRUCTURING. The existence of this option shall not affect in any way the right or power of the Corporation or its stockholders to make or authorize any and all adjustments, recapitalizations, reorganizations or other changes in the Corporation's capital structure or its business, or any merger or consolidation of the Corporation, or any issue of bonds, debentures, preferred or preference stocks ahead of or affecting G-P Group Stock or the rights thereof, or the dissolution or liquidation of the Corporation, or any sale or transfer of all or part of its assets or business, or any other corporate act or proceeding, whether of a similar character or otherwise. 9. CAPITAL READJUSTMENTS/STOCK OPTION MODIFICATIONS. The option grant under this Plan will be made in G-P Group Stock as constituted on the Grant Date for this option grant. In the event of any merger, reorganization, consolidation, recapitalization, stock dividend, stock split, or extraordinary distribution with respect to G-P Group Stock or other change in corporate structure affecting G-P Group Stock, the Plan Administrator shall have the authority to make such substitution or adjustments in the number, kind and option price of shares subject to this option grant and/or such other equitable substitution or adjustments as it may determine in its sole discretion to be appropriate to ensure that all similarly situated optionees under the Plan are treated equitably as a result of any such event; provided, however, that the number of shares subject to any option grant shall always be a whole number. In the event any adjustment to this option grant pursuant to this Agreement would otherwise result in the creation of a fractional share interest, the number of shares under this option grant shall be rounded to the nearest whole share (with 0.5 share rounded to the next higher whole number). 10. CHANGE OF CONTROL. Notwithstanding any other provision of this Agreement to the contrary, in the event of a Change of Control of the Corporation (as defined in this Section 10), this option grant, if then outstanding and not yet vested, shall vest as of the effective date of such Change of Control if the Total Shareholder Return of the Corporation for at least one of the 3-year, 4-year or 5-year periods ending on the effective date of the Change of Control exceeds the Weighted Average Total Shareholder Return of all Peer Group Companies for the same period. If this option grant vests pursuant to this Section 10, it may be exercised at any time from and after the effective date of the Change of Control (which shall be considered the applicable Vesting Date) and prior to the 10th anniversary of its Grant Date. For the purposes of this Agreement, a `Change of Control'' shall mean: (a) The acquisition by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the `Exchange Act'')) (a `Person'') of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 20% or more of the combined voting power of the then outstanding voting securities of the Corporation entitled to vote generally in the election of directors (the `Outstanding Voting Securities''); provided, however, that for purposes of this subsection (a), the following acquisitions shall not constitute a Change of Control: (i) any acquisition by a Person who on the effective date of the Original Plan was the beneficial owner of 20% or more of the Outstanding Voting Securities; (ii) any acquisition directly from the Corporation, including without limitation a public offering of securities; (iii) any acquisition by the Corporation, (iv) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Corporation or any of its Subsidiaries or (v) any acquisition by any corporation pursuant to a transaction which complies with clauses (i), (ii), and (iii) of subsection (c) of this Section 10; or (b) Individuals who, as of the effective date of the Original Plan, constitute the Board (the `Incumbent Board'') cease for any reason to constitute at least a majority of the Board; provided, however, that any individual becoming a director subsequent to the effective date of the Original Plan whose election, or nomination for election by the Corporation's shareholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board or actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board; or (c) Consummation of a reorganization, merger or consolidation to which the Corporation is a party or sale or other disposition of all or substantially all of the assets of the Corporation (a "Business Combination"), in each case, unless, following such Business Combination, (i) all or substantially all of the individuals and entities who were the beneficial owners, respectively, of the Outstanding Stock and Outstanding Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly, more than 50% of the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors, as the case may be, of the corporation resulting - 13 - from such Business Combination (including, without limitation, a corporation which as a result of such transaction owns the Corporation or all or substantially all of the Corporation's assets either directly or through one or more subsidiaries) (the `Successor Entity'') in substantially the same proportions as their ownership, immediately prior to such Business Combination, of Outstanding Voting Securities and (ii) no Person (excluding any Successor Entity or any employee benefit plan, or related trust, of the Corporation or such Successor Entity) beneficially owns, directly or indirectly, 20% or more of, respectively, the combined voting power of the then outstanding voting securities of the Successor Entity, except to the extent that such ownership existed prior to the Business Combination and (iii) at least a majority of the members of the board of directors of the Successor Entity were members of the Incumbent Board (including persons deemed to be members of the Incumbent Board by reason of the proviso to subsection (c) of this Section 10) at the time of the execution of the initial agreement, or of the action of the Board, providing for such Business Combination; or (d) Approval by the shareholders of the Corporation of a complete liquidation or dissolution of the Corporation. 11. LEGAL IMPEDIMENTS TO EXERCISE. Anything in this Agreement to the contrary notwithstanding, if, at any time specified herein for the exercise of this option or the delivery of shares to the Optionee, any law or regulations of any governmental authority having jurisdiction in the matter shall require either the Corporation or the Optionee to take any action or refrain from action in connection therewith or to delay such exercise, then the delivery of such shares on such exercise shall be deferred until such action shall have been taken or such restriction on action shall have been removed. 12. AUTHORITY OF PLAN ADMINISTRATOR. As conditions precedent to the granting of the option and all other rights provided hereunder, the Optionee and any other person who acquires any rights hereunder agrees that any dispute or disagreement which shall arise under, or as a result of, or pursuant to, this Agreement may be determined by the Plan Administrator constituted under the Plan (the "Plan Administrator") in the Plan Administrator's absolute and uncontrolled discretion; and that any such determination or interpretation of the terms of this Agreement or the Plan or any other determination by either such Plan Administrator shall be final, binding and conclusive on all persons affected thereby. The Plan Administrator shall have the authority to administer the Plan, make all determinations with respect to the construction and application of the Plan, the Board resolutions establishing the Plan and this Agreement, adopt and revise rules and regulations relating to the Plan and make any other determinations which it believes necessary or advisable for the administration of the Plan (subject to the provisions of the Plan regarding Plan administration). Questions regarding the options granted under this Agreement and the administration of the Plan may be addressed to the Treasurer's Department of the Corporation. 13. NOT INCENTIVE STOCK OPTIONS. Anything in this Agreement to the contrary notwithstanding, the Corporation and Optionee acknowledge and agree that the Plan was not intended to provide for the issuance of "incentive stock options" as defined in Section 422 of the Internal Revenue Code of 1986, as amended, and that the options granted pursuant to this Agreement are not "incentive stock options" as so defined. 14. CONTINUED EMPLOYMENT. This Agreement shall not be deemed to limit or restrict the right of the Corporation or any Subsidiary to terminate the Optionee's employment at any time, for any reason, with or without cause, or to limit or restrict the right of the Optionee to terminate his employment with the Corporation or any Subsidiary at any time. In the event of termination of the Optionee's employment with the Corporation and all Subsidiaries, such employee shall be eligible to exercise only options on the number of shares that then or thereafter become available for purchase pursuant to Section 3 hereof (but subject to Section 5). Optionee's services shall be subject to the direction of the Board of Directors of the Corporation or such Subsidiary or such officer or officers as the respective Boards may designate from time to time and shall be rendered at such locations as the respective Boards or any such officer may determine. 15. AMENDMENT OR TERMINATION. This Agreement may be amended or terminated prior to the expiration dates set forth herein only with the mutual agreement and consent of the Optionee and the Corporation, and then only to the extent permitted under the Plan. 16. GOVERNING LAW. This Agreement shall be construed and its provisions enforced and administered in accordance with the laws of the State of Georgia and, where applicable, federal law. 17. INTERPRETATION. This Agreement shall at all times be interpreted so as to be consistent with the intent, purposes and specific language of the Plan. 18. SEVERABILITY. If any provision of this Agreement should be held illegal or invalid for any reason, such determination shall not affect the other provisions of this Agreement, but instead the Agreement shall be construed as if such provisions had never been included herein. 19. HEADINGS/GENDER. Headings contained in this Agreement are for convenience only and shall in no event be construed as part of this Agreement. Any reference to the masculine, feminine or neuter gender shall be a reference to other genders as appropriate. 20. NOTICES. Any notice which either party hereto may be required or permitted to give to the other shall be in writing, and may be delivered personally or by mail, postage prepaid, addressed as follows: (i) to the Corporation, Georgia-Pacific Corporation, l33 Peachtree Street, N.E., Atlanta, Georgia 30303, Attention: Vice President and Treasurer, or at such other address as the Corporation, by notice to the Optionee, may designate in writing from time to time; (ii) to the Optionee at the address indicated in the Optionee's then current personnel records, or at such other address as the Optionee, by notice to the Treasurer of the Corporation at the above address, may designate in writing from time to time. Such notices shall be deemed given upon receipt. 21. DEFINITIONS. For purposes of this Agreement, the following terms shall be defined as follows (certain other definitions are found in the premises to this Option Agreement): (a) "Cause" for the purposes of this Agreement shall mean any of the following: (i) the willful failure of the Optionee to perform satisfactorily the duties consistent with his title and position reasonably required of him by the Board or supervising management (other than by reason of incapacity due to physical or mental illness); (ii) the commission by the Optionee of a felony, or the perpetration by the Optionee of a dishonest act or common law fraud against the Corporation or any of its Subsidiaries; or (iii) any other willful act or omission (including without limitation the violation of any corporate policy or regulation) which could reasonably be expected to expose the Corporation to civil liability under the law of the applicable jurisdiction or causes or may reasonably be expected to cause significant injury to the financial condition or business reputation of the Corporation or any of its Subsidiaries. (b) "Corporation" shall mean Georgia-Pacific Corporation, a Georgia corporation, its successors and assigns. (c) "Committee" shall mean the Compensation Committee of the Board of Directors of the Corporation, as constituted from time to time, or such subcommittee of that body as the Compensation Committee shall specify to act for the Compensation Committee with respect to the options granted under the Plan, provided however that any such subcommittee shall have at least two members and shall consist entirely of `outside directors'' as that term is defined pursuant to Section 162(m) of the Internal Revenue Code of 1986, as amended from time to time, or any statute which is a successor or replacement for such statute (and applicable regulations promulgated thereunder). (d) "Fair Market Value of the Stock" shall mean, on any date, the mean between the high and low sales prices of a share of G-P Group Stock on that date as reported in The Wall Street Journal, New York Stock Exchange - Composite Transactions, or as reported in any successor quotation system adopted prospectively for this purpose by the Committee, in its discretion. The Fair Market Value of the Stock shall be rounded to the nearest whole cent (with 0.5 cent being rounded to the next higher whole cent). (e) "Grant Date" shall mean the date upon which the Original Option was granted under the Original Plan. (f) "Original Plan" shall mean the Georgia-Pacific Corporation 1995 Shareholder Value Incentive Plan as adopted by the Corporation's Board of Directors effective April 1, 1995 and approved by its shareholders on May 2, 1995 (as in effect at the time the Original Option was granted). (g) "Plan" shall mean the amendment and restatement of the Original Plan as adopted by the Corporation's Board of Directors on September 17, 1997, and approved by its shareholders on December 16, 1997 (as amended from time to time thereafter) (g) "Plan Administrator" shall mean the person or entity having administrative authority under the Plan, as specified in Article IV of the Plan. (h) "Peer Group Companies" shall mean the companies included in the Standard & Poors Paper and Forest Products Industry Index from time to time (but excluding the Corporation). (j) "Subsidiary" shall mean any corporation (other than the Corporation) in any unbroken chain of corporations beginning with the Corporation if, at the time of reference, each of the corporations other than the last corporation in the unbroken chain owns stock possessing fifty percent (50%) or more of the total combined voting power of all classes of stock in one of the other corporations in such chain. (k) "Total Shareholder Return" shall mean, for a given period and a given common stock, the number determined by the formula [(SB+SD)PE - 100] , 100, where (i) "SB" is the number of shares of the common stock (including fractional shares) that could be bought with an initial $100 investment at PB, or $100 , PB; (ii) "SD" is the total number of shares of the common stock (including fractional shares) which could be purchased with the dividends (or allocated portion of a per share dividend) paid on SB shares of the common stock during the measurement period (and any additional shares or fractional shares allocated in accordance with this subsection (ii) with respect to dividends paid during the measurement period but prior to the dividend in question), determined in the case of each such dividend paid using the closing price of the common stock on the trading date coincident with or next preceding the date of payment of the dividend; (iii) "PB" is the closing price of the common stock on the last trading day before the first day of the measurement period; and (iv) "PE" is the closing price of the common stock on the last trading day of the measurement period; provided, however, that in determining Total Shareholder Return of G-P Common Stock for any period ending after December 16, 1997, the following adjustments shall be made: (i) the sum of SB and SD shall be calculated through the December 16, 1997 using G-P Common Stock; (ii) effective December 17, 1997, each share of G-P Common Stock determined in (i) above shall automatically be converted to one share of G-P Group Stock and one share of Timber Stock; (iii) from and after the December 17, 1997, the sum of SB and SD will be calculated separately with respect to each class of the Corporation's common stock, and additions to SD for each such class of common stock will be based on the dividends declared on that class of common stock and the stock price for that class of common stock on the appropriate date; (iv) at the end of a measurement period, the Total Shareholder Return for the Corporation's common stock used for purposes of comparison with Total Shareholder Return of the common stock of Peer Group Companies will be based on the sum of (A) the product of the number of shares of G-P Group Stock (SB + SD) accrued through the close of the measurement period in accordance with (ii) and (iii) above and PE determined for this class of common stock and (B) a corresponding product with respect to the number of shares of Timber Stock. In calculating the Total Shareholder Return for a given common stock, the Plan Administrator will apply the principles of Section 9 (except for the last sentence of that section) as if that section applied to the common stock. (l) "Vesting Date" shall mean the date upon which options granted under this Agreement first become exercisable in accordance with the provisions of Sections 2, 3 or 10. (m) "Weighted Average Total Shareholder Return" shall mean, for any given measurement period, the average of the Total Shareholder Returns for a named group of corporations with the return of each such corporation weighted on the basis of its market capitalization at the beginning of the measurement period. IN WITNESS WHEREOF, the Corporation has caused this Agreement to be executed by its duly authorized officers, under its corporate seal, and the Optionee has executed this Agreement, as of this day and year first above written. GEORGIA-PACIFIC CORPORATION By: ---------------------------- A. D. Correll Chairman, Chief Executive Officer, and President ATTEST: W. Edwin Frazier, III, Assistant Secretary OPTIONEE NOTE: PLEASE COMPLETE THE ATTACHED PERSONAL DATA SHEET. - 21 - OPTIONEE'S PERSONAL DATA (Please Print) Full Name ADDRESS: ========================================================== ---------------------------------------------------------- SOCIAL SECURITY NUMBER: --------------------------------------------- DATE OF BIRTH: --------------------------------------------------------- Month, Day and Year DIVISION: LOCATION: ------------------------- -------------------------- 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. EX-99.12 11 SVIP (TIMBER GROUP 1995 GRANT OPTION) 1995 GEORGIA-PACIFIC CORPORATION REPLACEMENT SHAREHOLDER VALUE INCENTIVE STOCK OPTION (Timber Stock) THIS AGREEMENT, dated December 17, 1997 by and between GEORGIA- PACIFIC CORPORATION, a Georgia corporation (hereinafter called the "Corporation"), and (hereinafter called "Optionee"); W I T N E S S E T H: WHEREAS, on April 1, 1995, the Optionee was granted pursuant to the Georgia-Pacific Corporation 1995 Shareholder Value Incentive Plan (as then in effect, the "Original Plan") the option to purchase from the Company up to, but not exceeding in the aggregate, shares of the Company's then existing ----- common stock ("G-P Common Stock") at a price of $80.50 per share (the "Original Option"); WHEREAS, the shareholders of the Corporation have approved, effective December 16, 1997, a recapitalization of the Corporation'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, in conjunction with the approval of the Letter Stock Transaction, the shareholders of the Corporation also approved, effective December 16, 1997, an amendment and restatement of the Original Plan (the "Plan"), which upon approval of the Letter Stock Transaction provides for the conversion 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; WHEREAS, in making the options conversion contemplated in the Letter Stock Transaction and in the Plan, 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 (the "Timber Stock Price"), and the exercise price for the Timber Stock option is equal to the exercise price under the Original Option Price multiplied by a fraction, the numerator of which is the Timber Stock Price and the denominator of which is the sum of the G-P Group Stock Price and the Timber Stock Price; 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. OPTION GRANT. Subject to the terms and conditions set forth herein, the Corporation hereby grants to the Optionee during the period commencing on the date hereof and ending on March 31, 2005, the option to purchase from the Corporation, from time to time, as hereinafter more specifically stated, at a price of $23.21 per share, up to but not exceeding in the aggregate, shares of the Timber Stock (or such portion of such -------- shares as may be vested and exercisable), which option may be exercised, in whole or in part, from time to time, commencing on the applicable Vesting Date as determined in accordance with Section 2 or 3 (but only as to the portion then becoming exercisable) and for the exercise period beginning on such Vesting Date and continuing to the end of the applicable exercise period specified in this Agreement.. 2. NORMAL VESTING. This option grant (or any portion thereof) may in no event be exercised prior to its Vesting Date, but on and after its Vesting Date (to the extent of the number option shares then becoming exercisable), it may be exercised in accordance with - and to the extent permitted under - the terms of the Plan and this Agreement. This option grant will vest without regard to performance standards stated in this Section 2 on the 183rd day following the 9th anniversary of the Grant Date. This option grant is subject to accelerated performance-based vesting in accordance with any of the following rules: (a) This option grant will vest on the 3rd anniversary of the Grant Date if the Corporation's Total Shareholder Return for the immediately preceding 3 full fiscal years exceeds the Weighted Average Total Shareholder Return of all Peer Group Companies for the same period. (b) This option grant will vest on the 4th anniversary of the Grant Date if the Corporation's Total Shareholder Return for the immediately preceding 4 full fiscal years exceeds the Weighted Average Total Shareholder Return of all Peer Group Companies for the same period. (c) This option grant will vest on the 5th anniversary of the Grant Date if the Corporation's Total Shareholder Return for the immediately preceding 5 full fiscal years exceeds the Weighted Average Total Shareholder Return of all Peer Group Companies for the same period. Vesting under subsections (a), (b) and (c) shall be conditioned upon the Committee's written certification that the performance vesting standards of this Section 2 have been met. Vesting of this option grant under this Section 2 is subject in all cases to the restrictions/forfeiture rules in Sections 4 and 5. Subject to those rules, if this option grant vests pursuant to this Section 2, it may be exercised at any time on or after the Vesting Date and prior to the 10th anniversary of the Grant Date (not inclusive), provided that if the Optionee's employment with the Corporation and its Subsidiaries terminates for any reason other than retirement (as defined in Section 3(b)(i)), death or disability (as defined in Section 3(b)(iii)) after the Vesting Date of this option grant and before it has expired, the option grant may be exercised only during the 90-day period following the Optionee's date of termination or, if shorter, during the remaining period before this option grant expires in accordance with this Agreement. If a Participant's employment with the Corporation and its Subsidiaries terminates for any reason other than retirement (as defined in Section 3(b)(i)), death or disability (as defined in Section 3(b)(iii)) prior to the Vesting Date of this option grant, this option grant will terminate as of the Participant's termination date, and the Participant will have no further rights hereunder. 3. SPECIAL VESTING. This option grant (or the portion designated below in Section 3(c)) shall vest and become exercisable under the circumstances and subject to the terms and conditions specified in this Section 3 (subject to the provisions of Section 5): (a) Notwithstanding anything in Sections 2 or 4 to the contrary, the performance-based vesting provisions of subsections (a), (b) and (c) of Section 2 shall operate to vest this option grant to the extent that it remains outstanding when the Optionee retires (as defined in Section 3(b)(i)), dies or becomes disabled (as defined in Section 3(b)(iii)) prior to its Vesting Date even if such vesting occurs after the termination of the Optionee's employment with the Corporation and its Subsidiaries. (b) Notwithstanding anything in Sections 2 or 4 to the contrary, if this option grant is not vested pursuant to the performance- based vesting standards of subsections (a), (b) and (c) of Section 2 or another provision of this Agreement, it will vest in the circumstances and on the date specified in paragraphs (i) through (iii) below to the extent permitted by the schedule set forth in Section 3(c): (i) If the Optionee terminates employment with the Corporation and its Subsidiaries after attaining age 65 or age 55 and 10 years of service for vesting purposes under the Georgia-Pacific Corporation Savings and Capital Growth Plan (other than a termination for Cause), on the later of his/her retirement date or the 5th anniversary of the Grant Date; (ii) If the Optionee dies, on the later of his/her date of death or the 5th anniversary of the Grant Date; or (iii) If the Optionee becomes totally disabled as defined under the Georgia-Pacific Corporation Salaried Long-Term Disability Plan (whether or not the Optionee actually participates in that plan), as determined by the Plan Administrator in its sole discretion, on the later of his/her date of termination of employment with the Corporation and its Subsidiaries because of such disability or the 5th anniversary of the Grant Date. (c) If the Optionee becomes entitled to special vesting in accordance with Section 3(b) above, this option grant, if then still outstanding, will vest as of the applicable date specified in Section 3(b) to the extent indicated in paragraphs (i) through (iii) below: (i) If the special vesting event described in Section 3(b)(i) through (iii) occurs prior to the 5th anniversary of the Grant Date of this option grant (which has not otherwise vested), 50% of this option grant will vest and 50% will be forfeited. (ii) If special vesting described in Section 3(b)(i) through (iii) occurs on or after the 5th anniversary, but prior to the 6th anniversary, of the Grant Date of this option grant (which has not otherwise vested), 60% of this option grant will vest and 40% will be forfeited. (iii)If special vesting described in Section 3(b)(i) through (iii) occurs on or after the 6th anniversary, but prior to the 7th anniversary, of the Grant Date of this option grant (which has not otherwise vested), 70% of this option grant will vest and 30% will be forfeited. (iv) If special vesting described in Section 3(b)(i) through (iii) occurs on or after the 7th anniversary, but prior to the 8th anniversary, of the Grant Date of this option grant (which has not otherwise vested), 80% of this option grant will vest and 20% will be forfeited. (v) If special vesting described in Section 3(b)(i) through (iii) occurs on or after the 8th anniversary, but prior to the 9th anniversary, of the Grant Date of this option grant (which has not otherwise vested), 90% of this option grant will vest and 10% will be forfeited. (vi) If special vesting described in Section 3(b)(i) through (iii) occurs on or after the 9th anniversary of the Grant Date of this option grant (which has not otherwise vested), 100% of this option grant will vest. (d) The special vesting dates specified in this Section 3 shall be considered Vesting Dates for purposes of this Agreement. (e) If this option grant vests pursuant to Section 3(a), it may be exercised at any time on or after its Vesting Date and prior to the 10th anniversary of its Grant Date (not inclusive). If this option grant (or any portion thereof) vests pursuant to Section 3(b), it may be exercised (to the extent it has vested) at any time on or after its Vesting Date and prior to the 183rd day following its Vesting Date (not inclusive) or, if earlier, prior to the 10th anniversary of its Grant Date (not inclusive). 4. RESTRICTIONS/FORFEITURE RULES. This option grant will be subject to the following restrictions and forfeiture rules: (a) Subject to Section 3, if the Optionee's employment with the Corporation and its Subsidiaries is terminated for any reason prior to the Vesting Date for this option grant (or any portion thereof), the Optionee shall forfeit all rights with respect to this option grant, and this Agreement shall be null, void and of no effect as of the date his/her employment terminates. (b) This option grant shall be nontransferable and may not be sold, hypothecated or otherwise assigned or conveyed by the Optionee to any party; provided that in the event of the incapacity (as determined by the Plan Administrator) or death of the Optionee, his/her attorney-in-fact pursuant to a valid power of attorney giving general or specific authority to make elections with respect to this option grant, his/her court-appointed guardian or the custodian of his/her affairs or the executor or administrator of his/her estate (as the case may be) may exercise any rights with respect to this option grant that the Participant could have exercised if he/she were still alive or not incapacitated. No assignment or transfer of this option or the rights represented thereby, whether voluntary, involuntary, or by operation of law or otherwise, except by will or the laws of descent and distribution, shall vest in the assignee or transferee any interest or right herein whatsoever, and immediately upon any attempt to assign or transfer this option, this option shall terminate and be of no force or effect. Notwithstanding anything in this subsection (b) to the contrary, an Optionee may designate a person or persons to receive, in the event of his death, any rights to which he would be entitled under this Option Agreement. Such a designation shall be made in writing, and filed with the Corporation's Treasurer's Department. A beneficiary designation may be changed or revoked by an Optionee at any time by filing a written statement of such change or revocation with the Corporation's Treasurer's Department. No beneficiary designation or change of beneficiary designation will be effective until actually received by the Corporation's Treasurer's Department. If an Optionee fails to designate a beneficiary (or the beneficiary predeceases the Optionee), this subsection (b) will apply without regard to the provisions relating to the designation of a beneficiary. (c) The Optionee shall not be deemed to be a shareholder of the Corporation - and shall have no rights as a stockholder - with respect to the shares covered by this option grant until the date (i) such shares have been issued or transferred to him/her and (ii) payment in full for such shares has been received by the Corporation as provided in this Agreement. No adjustment shall be made for dividends or other rights for which the record date is prior to the date of such issuance or transfer. (d) To the extent that this option grant is vested, but not exercised during the period provided for its exercise under this Agreement, the Participant shall forfeit all rights with respect to this option grant and this Agreement shall expire as of the close of the last day of the prescribed exercise period. 5. TERMINATION FOR CAUSE. Notwithstanding anything in this Option Agreement to the contrary, if the Optionee is terminated for Cause, this option grant shall terminate as of such date of termination regardless whether a Vesting Date has occurred on or prior to his/her date of termination unless and to the extent that the Committee determines (after taking into account the provisions of Section 16) that such forfeiture in a given case would violate applicable law. 6. EXERCISE OF OPTION. The option hereby granted shall be exercised by the delivery to the Treasurer of the Corporation or his delegate, from time to time, of written notice, signed by the Optionee, specifying the number of shares the Optionee then desires to purchase, together with cash, certified check, bank draft or postal or express money order to the order of the Corporation for an amount in United States dollars equal to the sum of: (a) the option price of such shares and (b) an amount sufficient to pay all state and federal withholding taxes (including, without limitation, FICA) with respect to the exercise (the total of (a) and (b) shall be referred to as the "Exercise Amount"). In the alternative, the Optionee may tender payment for the option shares in the form of shares of Timber Stock having a Fair Market Value on the date of exercise equal to the Exercise Amount or a combination of (i) shares of Timber Stock and (ii) cash, certified check, bank draft or postal or express money order to the order of the Corporation in an amount in United States dollars equal to the difference between the Exercise Amount and the Fair Market Value of the tendered shares of Timber Stock on the date of exercise. If the written notice of exercise is mailed, the date of its receipt by the Treasurer of the Corporation or his delegate shall be considered the date of exercise of the option by the Optionee. An exercise of stock options granted under this Agreement will generate compensation subject to federal and state tax withholding (including, without limitation, FICA withholding) in the calendar year of each exercise, and all such withholding taxes shall be the responsibility of the Optionee. The Committee may also authorize alternative procedures for exercising options under this Agreement. Within thirty (30) business days after any such exercise of the option in whole or in part by the Optionee, the Corporation shall deliver to the Optionee a certificate or certificates representing the aggregate number of shares with respect to which such option shall be so exercised, registered in the Optionee's name. The Optionee shall not have the right, in lieu of the exercise of the option, to surrender the option granted hereby, or any portion thereof, in order to receive shares covered by this option grant. 7. DATE OF TERMINATION. Except to the extent otherwise provided in subsections (a) through (c) of this Section 7, for purposes of this Agreement, the Optionee's date of termination shall be deemed to be his/her last day worked: (a) The Optionee's employment by the Corporation shall be deemed to continue during such periods as he/she is employed by a Subsidiary. If the Optionee shall be transferred from the Corporation to a Subsidiary or from a Subsidiary to the Corporation or from a Subsidiary to another Subsidiary, his/her employment shall not be deemed to be terminated by reason of such transfer. If, while the Optionee is employed by a Subsidiary, such Subsidiary shall cease to be a Subsidiary and the Optionee is not thereupon transferred to and employed by the Corporation or another Subsidiary, the date that the Optionee's employer ceases to be a Subsidiary shall be deemed to be a termination of employment. (b) The Optionee's date of termination on account of total disability shall be the last day of his/her salary continuation period under the Corporation's policy providing for salary continuation for salaried employees who are medically unable to work because of illness or injury or, if later, the date any personal leave of absence he/she may be granted under the policies of the Corporation immediately following such period of salary continuation terminates in accordance with such policies. (c) The Plan Administrator (as hereinafter defined) shall have absolute and uncontrolled discretion to determine whether any authorized leave of absence or absence on military or government service taken by the Optionee shall constitute a termination of employment for the purposes of this Agreement. 8. NO BAR TO CORPORATE RESTRUCTURING. The existence of this option shall not affect in any way the right or power of the Corporation or its stockholders to make or authorize any and all adjustments, recapitalizations, reorganizations or other changes in the Corporation's capital structure or its business, or any merger or consolidation of the Corporation, or any issue of bonds, debentures, preferred or preference stocks ahead of or affecting Timber Stock or the rights thereof, or the dissolution or liquidation of the Corporation, or any sale or transfer of all or part of its assets or business, or any other corporate act or proceeding, whether of a similar character or otherwise. 9. CAPITAL READJUSTMENTS/STOCK OPTION MODIFICATIONS. The option grant under this Plan will be made in Timber Stock as constituted on the Grant Date for this option grant. In the event of any merger, reorganization, consolidation, recapitalization, stock dividend, stock split, or extraordinary distribution with respect to Timber Stock or other change in corporate structure affecting Timber Stock, the Plan Administrator shall have the authority to make such substitution or adjustments in the number, kind and option price of shares subject to this option grant and/or such other equitable substitution or adjustments as it may determine in its sole discretion to be appropriate to ensure that all similarly situated optionees under the Plan are treated equitably as a result of any such event; provided, however, that the number of shares subject to any option grant shall always be a whole number. In the event any adjustment to this option grant pursuant to this Agreement would otherwise result in the creation of a fractional share interest, the number of shares under this option grant shall be rounded to the nearest whole share (with 0.5 share rounded to the next higher whole number). 10. CHANGE OF CONTROL. Notwithstanding any other provision of this Agreement to the contrary, in the event of a Change of Control of the Corporation (as defined in this Section 10), this option grant, if then outstanding and not yet vested, shall vest as of the effective date of such Change of Control if the Total Shareholder Return of the Corporation for at least one of the 3-year, 4-year or 5-year periods ending on the effective date of the Change of Control exceeds the Weighted Average Total Shareholder Return of all Peer Group Companies for the same period. If this option grant vests pursuant to this Section 10, it may be exercised at any time from and after the effective date of the Change of Control (which shall be considered the applicable Vesting Date) and prior to the 10th anniversary of its Grant Date. For the purposes of this Agreement, a "Change of Control" shall mean: (a) The acquisition by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the "Exchange Act")) (a `Person'') of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 20% or more of the combined voting power of the then outstanding voting securities of the Corporation entitled to vote generally in the election of directors (the "Outstanding Voting Securities"); provided, however, that for purposes of this subsection (a), the following acquisitions shall not constitute a Change of Control: (i) any acquisition by a Person who on the effective date of the Original Plan was the beneficial owner of 20% or more of the Outstanding Voting Securities; (ii) any acquisition directly from the Corporation, including without limitation a public offering of securities; (iii) any acquisition by the Corporation, (iv) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Corporation or any of its Subsidiaries or (v) any acquisition by any corporation pursuant to a transaction which complies with clauses (i), (ii), and (iii) of subsection (c) of this Section 10; or (b) Individuals who, as of the effective date of the Original Plan, constitute the Board (the "Incumbent Board") cease for any reason to constitute at least a majority of the Board; provided, however, that any individual becoming a director subsequent to the effective date of the Original Plan whose election, or nomination for election by the Corporation's shareholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board or actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board; or (c) Consummation of a reorganization, merger or consolidation to which the Corporation is a party or sale or other disposition of all or substantially all of the assets of the Corporation (a "Business Combination"), in each case, unless, following such Business Combination, (i) all or substantially all of the individuals and entities who were the beneficial owners, respectively, of the Outstanding Stock and Outstanding Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly, more than 50% of the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors, as the case may be, of the corporation resulting from such Business Combination (including, without limitation, a corporation which as a result of such transaction owns the Corporation or all or substantially all of the Corporation's assets either directly or through one or more subsidiaries) (the "Successor Entity") in substantially the same proportions as their ownership, immediately prior to such Business Combination, of Outstanding Voting Securities and (ii) no Person (excluding any Successor Entity or any employee benefit plan, or related trust, of the Corporation or such Successor Entity) beneficially owns, directly or indirectly, 20% or more of, respectively, the combined voting power of the then outstanding voting securities of the Successor Entity, except to the extent that such ownership existed prior to the Business Combination and (iii) at least a majority of the members of the board of directors of the Successor Entity were members of the Incumbent Board (including persons deemed to be members of the Incumbent Board by reason of the proviso to subsection (c) of this Section 10) at the time of the execution of the initial agreement, or of the action of the Board, providing for such Business Combination; or (d) Approval by the shareholders of the Corporation of a complete liquidation or dissolution of the Corporation. 11. LEGAL IMPEDIMENTS TO EXERCISE. Anything in this Agreement to the contrary notwithstanding, if, at any time specified herein for the exercise of this option or the delivery of shares to the Optionee, any law or regulations of any governmental authority having jurisdiction in the matter shall require either the Corporation or the Optionee to take any action or refrain from action in connection therewith or to delay such exercise, then the delivery of such shares on such exercise shall be deferred until such action shall have been taken or such restriction on action shall have been removed. 12. AUTHORITY OF PLAN ADMINISTRATOR. As conditions precedent to the granting of the option and all other rights provided hereunder, the Optionee and any other person who acquires any rights hereunder agrees that any dispute or disagreement which shall arise under, or as a result of, or pursuant to, this Agreement may be determined by the Plan Administrator constituted under the Plan (the "Plan Administrator") in the Plan Administrator's absolute and uncontrolled discretion; and that any such determination or interpretation of the terms of this Agreement or the Plan or any other determination by either such Plan Administrator shall be final, binding and conclusive on all persons affected thereby. The Plan Administrator shall have the authority to administer the Plan, make all determinations with respect to the construction and application of the Plan, the Board resolutions establishing the Plan and this Agreement, adopt and revise rules and regulations relating to the Plan and make any other determinations which it believes necessary or advisable for the administration of the Plan (subject to the provisions of the Plan regarding Plan administration). Questions regarding the options granted under this Agreement and the administration of the Plan may be addressed to the Treasurer's Department of the Corporation. 13. NOT INCENTIVE STOCK OPTIONS. Anything in this Agreement to the contrary notwithstanding, the Corporation and Optionee acknowledge and agree that the Plan was not intended to provide for the issuance of "incentive stock options" as defined in Section 422 of the Internal Revenue Code of 1986, as amended, and that the options granted pursuant to this Agreement are not "incentive stock options" as so defined. 14. CONTINUED EMPLOYMENT. This Agreement shall not be deemed to limit or restrict the right of the Corporation or any Subsidiary to terminate the Optionee's employment at any time, for any reason, with or without cause, or to limit or restrict the right of the Optionee to terminate his employment with the Corporation or any Subsidiary at any time. In the event of termination of the Optionee's employment with the Corporation and all Subsidiaries, such employee shall be eligible to exercise only options on the number of shares that then or thereafter become available for purchase pursuant to Section 3 hereof (but subject to Section 5). Optionee's services shall be subject to the direction of the Board of Directors of the Corporation or such Subsidiary or such officer or officers as the respective Boards may designate from time to time and shall be rendered at such locations as the respective Boards or any such officer may determine. 15. AMENDMENT OR TERMINATION. This Agreement may be amended or terminated prior to the expiration dates set forth herein only with the mutual agreement and consent of the Optionee and the Corporation, and then only to the extent permitted under the Plan. 16. GOVERNING LAW. This Agreement shall be construed and its provisions enforced and administered in accordance with the laws of the State of Georgia and, where applicable, federal law. 17. INTERPRETATION. This Agreement shall at all times be interpreted so as to be consistent with the intent, purposes and specific language of the Plan. 18. SEVERABILITY. If any provision of this Agreement should be held illegal or invalid for any reason, such determination shall not affect the other provisions of this Agreement, but instead the Agreement shall be construed as if such provisions had never been included herein. 19. HEADINGS/GENDER. Headings contained in this Agreement are for convenience only and shall in no event be construed as part of this Agreement. Any reference to the masculine, feminine or neuter gender shall be a reference to other genders as appropriate. 20. NOTICES. Any notice which either party hereto may be required or permitted to give to the other shall be in writing, and may be delivered personally or by mail, postage prepaid, addressed as follows: (i) to the Corporation, Georgia-Pacific Corporation, l33 Peachtree Street, N.E., Atlanta, Georgia 30303, Attention: Vice President and Treasurer, or at such other address as the Corporation, by notice to the Optionee, may designate in writing from time to time; (ii) to the Optionee at the address indicated in the Optionee's then current personnel records, or at such other address as the Optionee, by notice to the Treasurer of the Corporation at the above address, may designate in writing from time to time. Such notices shall be deemed given upon receipt. 21. DEFINITIONS. For purposes of this Agreement, the following terms shall be defined as follows (certain other definitions are found in the premises to this Option Agreement): (a) "Cause" for the purposes of this Agreement shall mean any of the following: (i) the willful failure of the Optionee to perform satisfactorily the duties consistent with his title and position reasonably required of him by the Board or supervising management (other than by reason of incapacity due to physical or mental illness); (ii) the commission by the Optionee of a felony, or the perpetration by the Optionee of a dishonest act or common law fraud against the Corporation or any of its Subsidiaries; or (iii) any other willful act or omission (including without limitation the violation of any corporate policy or regulation) which could reasonably be expected to expose the Corporation to civil liability under the law of the applicable jurisdiction or causes or may reasonably be expected to cause significant injury to the financial condition or business reputation of the Corporation or any of its Subsidiaries. (b) "Corporation" shall mean Georgia-Pacific Corporation, a Georgia corporation, its successors and assigns. (c) "Committee" shall mean the Compensation Committee of the Board of Directors of the Corporation, as constituted from time to time, or such subcommittee of that body as the Compensation Committee shall specify to act for the Compensation Committee with respect to the options granted under the Plan, provided however that any such subcommittee shall have at least two members and shall consist entirely of `outside directors'' as that term is defined pursuant to Section 162(m) of the Internal Revenue Code of 1986, as amended from time to time, or any statute which is a successor or replacement for such statute (and applicable regulations promulgated thereunder). (d) "Fair Market Value of the Stock" shall mean, on any date, the mean between the high and low sales prices of a share of Timber Stock on that date as reported in The Wall Street Journal, New York Stock Exchange - Composite Transactions, or as reported in any successor quotation system adopted prospectively for this purpose by the Committee, in its discretion. The Fair Market Value of the Stock shall be rounded to the nearest whole cent (with 0.5 cent being rounded to the next higher whole cent). (e) "Grant Date" shall mean the date upon which the Original Option was granted under the Original Plan. (f) "Original Plan" shall mean the Georgia-Pacific Corporation 1995 Shareholder Value Incentive Plan as adopted by the Corporation's Board of Directors effective April 1, 1995 and approved by its shareholders on May 2, 1995 (as in effect at the time the Original Option was granted). (g) "Plan" shall mean the amendment and restatement of the Original Plan as adopted by the Corporation's Board of Directors on September 17, 1997, and approved by its shareholders on December 16, 1997 (as amended from time to time thereafter) (g) "Plan Administrator" shall mean the person or entity having administrative authority under the Plan, as specified in Article IV of the Plan. (h) "Peer Group Companies" shall mean the companies included in the Standard & Poors Paper and Forest Products Industry Index from time to time (but excluding the Corporation). (j) "Subsidiary" shall mean any corporation (other than the Corporation) in any unbroken chain of corporations beginning with the Corporation if, at the time of reference, each of the corporations other than the last corporation in the unbroken chain owns stock possessing fifty percent (50%) or more of the total combined voting power of all classes of stock in one of the other corporations in such chain. (k) "Total Shareholder Return" shall mean, for a given period and a given common stock, the number determined by the formula [(SB+SD)PE - 100] , 100, where (i) `SB'' is the number of shares of the common stock (including fractional shares) that could be bought with an initial $100 investment at PB, or $100 , PB; (ii) `SD'' is the total number of shares of the common stock (including fractional shares) which could be purchased with the dividends (or allocated portion of a per share dividend) paid on SB shares of the common stock during the measurement period (and any additional shares or fractional shares allocated in accordance with this subsection (ii) with respect to dividends paid during the measurement period but prior to the dividend in question), determined in the case of each such dividend paid using the closing price of the common stock on the trading date coincident with or next preceding the date of payment of the dividend; (iii) `PB'' is the closing price of the common stock on the last trading day before the first day of the measurement period; and (iv) `PE'' is the closing price of the common stock on the last trading day of the measurement period; provided, however, that in determining Total Shareholder Return of G-P Common Stock for any period ending after December 16, 1997, the following adjustments shall be made: (i) the sum of SB and SD shall be calculated through the December 16, 1997 using G-P Common Stock; (ii) effective December 17, 1997, each share of G-P Common Stock determined in (i) above shall automatically be converted to one share of G-P Group Stock and one share of Timber Stock; (iii) from and after the December 17, 1997, the sum of SB and SD will be calculated separately with respect to each class of the Corporation's common stock, and additions to SD for each such class of common stock will be based on the dividends declared on that class of common stock and the stock price for that class of common stock on the appropriate date; (iv) at the end of a measurement period, the Total Shareholder Return for the Corporation's common stock used for purposes of comparison with Total Shareholder Return of the common stock of Peer Group Companies will be based on the sum of (A) the product of the number of shares of G-P Group Stock (SB + SD) accrued through the close of the measurement period in accordance with (ii) and (iii) above and PE determined for this class of common stock and (B) a corresponding product with respect to the number of shares of Timber Stock. In calculating the Total Shareholder Return for a given common stock, the Plan Administrator will apply the principles of Section 9 (except for the last sentence of that section) as if that section applied to the common stock. (l) "Vesting Date" shall mean the date upon which options granted under this Agreement first become exercisable in accordance with the provisions of Sections 2, 3 or 10. (m) "Weighted Average Total Shareholder Return" shall mean, for any given measurement period, the average of the Total Shareholder Returns for a named group of corporations with the return of each such corporation weighted on the basis of its market capitalization at the beginning of the measurement period. IN WITNESS WHEREOF, the Corporation has caused this Agreement to be executed by its duly authorized officers, under its corporate seal, and the Optionee has executed this Agreement, as of this day and year first above written. GEORGIA-PACIFIC CORPORATION By: ---------------------- A. D. Correll Chairman, Chief Executive Officer, and President ATTEST: W. Edwin Frazier, III, Assistant Secretary OPTIONEE NOTE: PLEASE COMPLETE THE ATTACHED PERSONAL DATA SHEET. OPTIONEE'S PERSONAL DATA (Please Print) Full Name ADDRESS: ========================================================== ---------------------------------------------------------- SOCIAL SECURITY NUMBER: --------------------------------------------- DATE OF BIRTH: --------------------------------------------------------- Month, Day and Year DIVISION: ------------------------- LOCATION: -------------------------- 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 TREASURERS DEPARTMENT. EX-99.13 12 SVIP (G-P GROUP 1996 GRANT OPTION) 1996 GEORGIA-PACIFIC CORPORATION REPLACEMENT SHAREHOLDER VALUE INCENTIVE STOCK OPTION (G-P Group Stock) THIS AGREEMENT, dated December 17, 1997 by and between GEORGIA- PACIFIC CORPORATION, a Georgia corporation (hereinafter called the "Corporation"), and (hereinafter called "Optionee"); W I T N E S S E T H: WHEREAS, on February 1, 1996, the Optionee was granted pursuant to the Georgia-Pacific Corporation 1995 Shareholder Value Incentive Plan (as then in effect; the "Original Plan") the option to purchase from the Company up to, but not exceeding in the aggregate, shares of the Company's then existing ----- common stock ("G-P Common Stock") at a price of $72.63 per share (the "Original Option"); WHEREAS, the shareholders of the Corporation have approved, effective December 16, 1997, a recapitalization of the Corporation'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, in conjunction with the approval of the Letter Stock Transaction, the shareholders of the Corporation also approved, effective December 16, 1997, an amendment and restatement of the Original Plan (the "Plan"), which upon approval of the Letter Stock Transaction provides for the conversion 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; WHEREAS, in making the options conversion contemplated in the Letter Stock Transaction and in the Plan, 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 (the "Timber Stock Price"), and the exercise price for the Timber Stock option is equal to the exercise price under the Original Option Price multiplied by a fraction, the numerator of which is the Timber Stock Price and the denominator of which is the sum of the G-P Group Stock Price and the Timber Stock Price; 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. OPTION GRANT. Subject to the terms and conditions set forth herein, the Corporation hereby grants to the Optionee during the period commencing on the date hereof and ending on January 31, 2006, the option to purchase from the Corporation, from time to time, as hereinafter more specifically stated, at a price of $51.68 per share, up to but not exceeding in the aggregate, shares of the G-P Group Stock (or such portion of such -------- shares as may be vested and exercisable), which option may be exercised, in whole or in part, from time to time, commencing on the applicable Vesting Date as determined in accordance with Section 2 or 3 (but only as to the portion then becoming exercisable) and for the exercise period beginning on such Vesting Date and continuing to the end of the applicable exercise period specified in this Agreement.. 2. NORMAL VESTING. This option grant (or any portion thereof) may in no event be exercised prior to its Vesting Date, but on and after its Vesting Date (to the extent of the number option shares then becoming exercisable), it may be exercised in accordance with - and to the extent permitted under - the terms of the Plan and this Agreement. This option grant will vest without regard to performance standards stated in this Section 2 on the 183rd day following the 9th anniversary of the Grant Date. This option grant is subject to accelerated performance-based vesting in accordance with any of the following rules: (a) This option grant will vest on the 3rd anniversary of the Grant Date if the Corporation's Total Shareholder Return for the immediately preceding 3 full fiscal years exceeds the Weighted Average Total Shareholder Return of all Peer Group Companies for the same period. (b) This option grant will vest on the 4th anniversary of the Grant Date if the Corporation's Total Shareholder Return for the immediately preceding 4 full fiscal years exceeds the Weighted Average Total Shareholder Return of all Peer Group Companies for the same period. (c) This option grant will vest on the 5th anniversary of the Grant Date if the Corporation's Total Shareholder Return for the immediately preceding 5 full fiscal years exceeds the Weighted Average Total Shareholder Return of all Peer Group Companies for the same period. Vesting under subsections (a), (b) and (c) shall be conditioned upon the Committee's written certification that the performance vesting standards of this Section 2 have been met. Vesting of this option grant under this Section 2 is subject in all cases to the restrictions/forfeiture rules in Sections 4 and 5. Subject to those rules, if this option grant vests pursuant to this Section 2, it may be exercised at any time on or after the Vesting Date and prior to the 10th anniversary of the Grant Date (not inclusive), provided that if the Optionee's employment with the Corporation and its Subsidiaries terminates for any reason other than retirement (as defined in Section 3(b)(i)), death or disability (as defined in Section 3(b)(iii)) after the Vesting Date of this option grant and before it has expired, the option grant may be exercised only during the 90-day period following the Optionee's date of termination or, if shorter, during the remaining period before this option grant expires in accordance with this Agreement. If a Participant's employment with the Corporation and its Subsidiaries terminates for any reason other than retirement (as defined in Section 3(b)(i)), death or disability (as defined in Section 3(b)(iii)) prior to the Vesting Date of this option grant, this option grant will terminate as of the Participant's termination date, and the Participant will have no further rights hereunder. 3. SPECIAL VESTING. This option grant (or the portion designated below in Section 3(c)) shall vest and become exercisable under the circumstances and subject to the terms and conditions specified in this Section 3 (subject to the provisions of Section 5): (a) Notwithstanding anything in Sections 2 or 4 to the contrary, the performance-based vesting provisions of subsections (a), (b) and (c) of Section 2 shall operate to vest this option grant to the extent that it remains outstanding when the Optionee retires (as defined in Section 3(b)(i)), dies or becomes disabled (as defined in Section 3(b)(iii)) prior to its Vesting Date even if such vesting occurs after the termination of the Optionee's employment with the Corporation and its Subsidiaries. (b) Notwithstanding anything in Sections 2 or 4 to the contrary, if this option grant is not vested pursuant to the performance- based vesting standards of subsections (a), (b) and (c) of Section 2 or another provision of this Agreement, it will vest in the circumstances and on the date specified in paragraphs (i) through (iii) below to the extent permitted by the schedule set forth in Section 3(c): (i) If the Optionee terminates employment with the Corporation and its Subsidiaries after attaining age 65 or age 55 and 10 years of service for vesting purposes under the Georgia-Pacific Corporation Savings and Capital Growth Plan (other than a termination for Cause), on the later of his/her retirement date or the 5th anniversary of the Grant Date; (ii) If the Optionee dies, on the later of his/her date of death or the 5th anniversary of the Grant Date; or (iii) If the Optionee becomes totally disabled as defined under the Georgia-Pacific Corporation Salaried Long-Term Disability Plan (whether or not the Optionee actually participates in that plan), as determined by the Plan Administrator in its sole discretion, on the later of his/her date of termination of employment with the Corporation and its Subsidiaries because of such disability or the 5th anniversary of the Grant Date. (c) If the Optionee becomes entitled to special vesting in accordance with Section 3(b) above, this option grant, if then still outstanding, will vest as of the applicable date specified in Section 3(b) to the extent indicated in paragraphs (i) through (iii) below: (i) If the special vesting event described in Section 3(b)(i) through (iii) occurs prior to the 5th anniversary of the Grant Date of this option grant (which has not otherwise vested), 50% of this option grant will vest and 50% will be forfeited. (ii) If special vesting described in Section 3(b)(i) through (iii) occurs on or after the 5th anniversary, but prior to the 6th anniversary, of the Grant Date of this option grant (which has not otherwise vested), 60% of this option grant will vest and 40% will be forfeited. (iii) If special vesting described in Section 3(b)(i) through (iii) occurs on or after the 6th anniversary, but prior to the 7th anniversary, of the Grant Date of this option grant (which has not otherwise vested), 70% of this option grant will vest and 30% will be forfeited. (iv) If special vesting described in Section 3(b)(i) through (iii) occurs on or after the 7th anniversary, but prior to the 8th anniversary, of the Grant Date of this option grant (which has not otherwise vested), 80% of this option grant will vest and 20% will be forfeited. (v) If special vesting described in Section 3(b)(i) through (iii) occurs on or after the 8th anniversary, but prior to the 9th anniversary, of the Grant Date of this option grant (which has not otherwise vested), 90% of this option grant will vest and 10% will be forfeited. (vi) If special vesting described in Section 3(b)(i) through (iii) occurs on or after the 9th anniversary of the Grant Date of this option grant (which has not otherwise vested), 100% of this option grant will vest. (d) The special vesting dates specified in this Section 3 shall be considered Vesting Dates for purposes of this Agreement. (e) If this option grant vests pursuant to Section 3(a), it may be exercised at any time on or after its Vesting Date and prior to the 10th anniversary of its Grant Date (not inclusive). If this option grant (or any portion thereof) vests pursuant to Section 3(b), it may be exercised (to the extent it has vested) at any time on or after its Vesting Date and prior to the 183rd day following its Vesting Date (not inclusive) or, if earlier, prior to the 10th anniversary of its Grant Date (not inclusive). 4. RESTRICTIONS/FORFEITURE RULES. This option grant will be subject to the following restrictions and forfeiture rules: (a) Subject to Section 3, if the Optionee's employment with the Corporation and its Subsidiaries is terminated for any reason prior to the Vesting Date for this option grant (or any portion thereof), the Optionee shall forfeit all rights with respect to this option grant, and this Agreement shall be null, void and of no effect as of the date his/her employment terminates. (b) This option grant shall be nontransferable and may not be sold, hypothecated or otherwise assigned or conveyed by the Optionee to any party; provided that in the event of the incapacity (as determined by the Plan Administrator) or death of the Optionee, his/her attorney-in-fact pursuant to a valid power of attorney giving general or specific authority to make elections with respect to this option grant, his/her court-appointed guardian or the custodian of his/her affairs or the executor or administrator of his/her estate (as the case may be) may exercise any rights with respect to this option grant that the Participant could have exercised if he/she were still alive or not incapacitated. No assignment or transfer of this option or the rights represented thereby, whether voluntary, involuntary, or by operation of law or otherwise, except by will or the laws of descent and distribution, shall vest in the assignee or transferee any interest or right herein whatsoever, and immediately upon any attempt to assign or transfer this option, this option shall terminate and be of no force or effect. Notwithstanding anything in this subsection (b) to the contrary, an Optionee may designate a person or persons to receive, in the event of his death, any rights to which he would be entitled under this Option Agreement. Such a designation shall be made in writing, and filed with the Corporation's Treasurer's Department. A beneficiary designation may be changed or revoked by an Optionee at any time by filing a written statement of such change or revocation with the Corporation's Treasurer's Department. No beneficiary designation or change of beneficiary designation will be effective until actually received by the Corporation's Treasurer's Department. If an Optionee fails to designate a beneficiary (or the beneficiary predeceases the Optionee), this subsection (b) will apply without regard to the provisions relating to the designation of a beneficiary. (c) The Optionee shall not be deemed to be a shareholder of the Corporation - and shall have no rights as a stockholder - with respect to the shares covered by this option grant until the date (i) such shares have been issued or transferred to him/her and (ii) payment in full for such shares has been received by the Corporation as provided in this Agreement. No adjustment shall be made for dividends or other rights for which the record date is prior to the date of such issuance or transfer. (d) To the extent that this option grant is vested, but not exercised during the period provided for its exercise under this Agreement, the Participant shall forfeit all rights with respect to this option grant and this Agreement shall expire as of the close of the last day of the prescribed exercise period. 5. TERMINATION FOR CAUSE. Notwithstanding anything in this Option Agreement to the contrary, if the Optionee is terminated for Cause, this option grant shall terminate as of such date of termination regardless whether a Vesting Date has occurred on or prior to his/her date of termination unless and to the extent that the Committee determines (after taking into account the provisions of Section 16) that such forfeiture in a given case would violate applicable law. 6. EXERCISE OF OPTION. The option hereby granted shall be exercised by the delivery to the Treasurer of the Corporation or his delegate, from time to time, of written notice, signed by the Optionee, specifying the number of shares the Optionee then desires to purchase, together with cash, certified check, bank draft or postal or express money order to the order of the Corporation for an amount in United States dollars equal to the sum of: (a) the option price of such shares and (b) an amount sufficient to pay all state and federal withholding taxes (including, without limitation, FICA) with respect to the exercise (the total of (a) and (b) shall be referred to as the "Exercise Amount"). In the alternative, the Optionee may tender payment for the option shares in the form of shares of G-P Group Stock having a Fair Market Value on the date of exercise equal to the Exercise Amount or a combination of (i) shares of G-P Group Stock and (ii) cash, certified check, bank draft or postal or express money order to the order of the Corporation in an amount in United States dollars equal to the difference between the Exercise Amount and the Fair Market Value of the tendered shares of G-P Group Stock on the date of exercise. If the written notice of exercise is mailed, the date of its receipt by the Treasurer of the Corporation or his delegate shall be considered the date of exercise of the option by the Optionee. An exercise of stock options granted under this Agreement will generate compensation subject to federal and state tax withholding (including, without limitation, FICA withholding) in the calendar year of each exercise, and all such withholding taxes shall be the responsibility of the Optionee. The Committee may also authorize alternative procedures for exercising options under this Agreement. Within thirty (30) business days after any such exercise of the option in whole or in part by the Optionee, the Corporation shall deliver to the Optionee a certificate or certificates representing the aggregate number of shares with respect to which such option shall be so exercised, registered in the Optionee's name. The Optionee shall not have the right, in lieu of the exercise of the option, to surrender the option granted hereby, or any portion thereof, in order to receive shares covered by this option grant. 7. DATE OF TERMINATION. Except to the extent otherwise provided in subsections (a) through (c) of this Section 7, for purposes of this Agreement, the Optionee's date of termination shall be deemed to be his/her last day worked: (a) The Optionee's employment by the Corporation shall be deemed to continue during such periods as he/she is employed by a Subsidiary. If the Optionee shall be transferred from the Corporation to a Subsidiary or from a Subsidiary to the Corporation or from a Subsidiary to another Subsidiary, his/her employment shall not be deemed to be terminated by reason of such transfer. If, while the Optionee is employed by a Subsidiary, such Subsidiary shall cease to be a Subsidiary and the Optionee is not thereupon transferred to and employed by the Corporation or another Subsidiary, the date that the Optionee's employer ceases to be a Subsidiary shall be deemed to be a termination of employment. (b) The Optionee's date of termination on account of total disability shall be the last day of his/her salary continuation period under the Corporation's policy providing for salary continuation for salaried employees who are medically unable to work because of illness or injury or, if later, the date any personal leave of absence he/she may be granted under the policies of the Corporation immediately following such period of salary continuation terminates in accordance with such policies. (c) The Plan Administrator (as hereinafter defined) shall have absolute and uncontrolled discretion to determine whether any authorized leave of absence or absence on military or government service taken by the Optionee shall constitute a termination of employment for the purposes of this Agreement. 8. NO BAR TO CORPORATE RESTRUCTURING. The existence of this option shall not affect in any way the right or power of the Corporation or its stockholders to make or authorize any and all adjustments, recapitalizations, reorganizations or other changes in the Corporation's capital structure or its business, or any merger or consolidation of the Corporation, or any issue of bonds, debentures, preferred or preference stocks ahead of or affecting G-P Group Stock or the rights thereof, or the dissolution or liquidation of the Corporation, or any sale or transfer of all or part of its assets or business, or any other corporate act or proceeding, whether of a similar character or otherwise. 9. CAPITAL READJUSTMENTS/STOCK OPTION MODIFICATIONS. The option grant under this Plan will be made in G-P Group Stock as constituted on the Grant Date for this option grant. In the event of any merger, reorganization, consolidation, recapitalization, stock dividend, stock split, or extraordinary distribution with respect to G-P Group Stock or other change in corporate structure affecting G-P Group Stock, the Plan Administrator shall have the authority to make such substitution or adjustments in the number, kind and option price of shares subject to this option grant and/or such other equitable substitution or adjustments as it may determine in its sole discretion to be appropriate to ensure that all similarly situated optionees under the Plan are treated equitably as a result of any such event; provided, however, that the number of shares subject to any option grant shall always be a whole number. In the event any adjustment to this option grant pursuant to this Agreement would otherwise result in the creation of a fractional share interest, the number of shares under this option grant shall be rounded to the nearest whole share (with 0.5 share rounded to the next higher whole number). 10. CHANGE OF CONTROL. Notwithstanding any other provision of this Agreement to the contrary, in the event of a Change of Control of the Corporation (as defined in this Section 10), this option grant, if then outstanding and not yet vested, shall vest as of the effective date of such Change of Control if the Total Shareholder Return of the Corporation for at least one of the 3-year, 4-year or 5-year periods ending on the effective date of the Change of Control exceeds the Weighted Average Total Shareholder Return of all Peer Group Companies for the same period. If this option grant vests pursuant to this Section 10, it may be exercised at any time from and after the effective date of the Change of Control (which shall be considered the applicable Vesting Date) and prior to the 10th anniversary of its Grant Date. For the purposes of this Agreement, a "Change of Control" shall mean: (a) The acquisition by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the "Exchange Act")) (a `Person'') of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 20% or more of the combined voting power of the then outstanding voting securities of the Corporation entitled to vote generally in the election of directors (the "Outstanding Voting Securities"); provided, however, that for purposes of this subsection (a), the following acquisitions shall not constitute a Change of Control: (i) any acquisition by a Person who on the effective date of the Original Plan was the beneficial owner of 20% or more of the Outstanding Voting Securities; (ii) any acquisition directly from the Corporation, including without limitation a public offering of securities; (iii) any acquisition by the Corporation, (iv) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Corporation or any of its Subsidiaries or (v) any acquisition by any corporation pursuant to a transaction which complies with clauses (i), (ii), and (iii) of subsection (c) of this Section 10; or (b) Individuals who, as of the effective date of the Original Plan, constitute the Board (the "Incumbent Board") cease for any reason to constitute at least a majority of the Board; provided, however, that any individual becoming a director subsequent to the effective date of the Original Plan whose election, or nomination for election by the Corporation's shareholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board or actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board; or (c) Consummation of a reorganization, merger or consolidation to which the Corporation is a party or sale or other disposition of all or substantially all of the assets of the Corporation (a `Business Combination''), in each case, unless, following such Business Combination, (i) all or substantially all of the individuals and entities who were the beneficial owners, respectively, of the Outstanding Stock and Outstanding Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly, more than 50% of the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors, as the case may be, of the corporation resulting from such Business Combination (including, without limitation, a corporation which as a result of such transaction owns the Corporation or all or substantially all of the Corporation's assets either directly or through one or more subsidiaries) (the "Successor Entity") in substantially the same proportions as their ownership, immediately prior to such Business Combination, of Outstanding Voting Securities and (ii) no Person (excluding any Successor Entity or any employee benefit plan, or related trust, of the Corporation or such Successor Entity) beneficially owns, directly or indirectly, 20% or more of, respectively, the combined voting power of the then outstanding voting securities of the Successor Entity, except to the extent that such ownership existed prior to the Business Combination and (iii) at least a majority of the members of the board of directors of the Successor Entity were members of the Incumbent Board (including persons deemed to be members of the Incumbent Board by reason of the proviso to subsection (c) of this Section 10) at the time of the execution of the initial agreement, or of the action of the Board, providing for such Business Combination; or (d) Approval by the shareholders of the Corporation of a complete liquidation or dissolution of the Corporation. 11. LEGAL IMPEDIMENTS TO EXERCISE. Anything in this Agreement to the contrary notwithstanding, if, at any time specified herein for the exercise of this option or the delivery of shares to the Optionee, any law or regulations of any governmental authority having jurisdiction in the matter shall require either the Corporation or the Optionee to take any action or refrain from action in connection therewith or to delay such exercise, then the delivery of such shares on such exercise shall be deferred until such action shall have been taken or such restriction on action shall have been removed. 12. AUTHORITY OF PLAN ADMINISTRATOR. As conditions precedent to the granting of the option and all other rights provided hereunder, the Optionee and any other person who acquires any rights hereunder agrees that any dispute or disagreement which shall arise under, or as a result of, or pursuant to, this Agreement may be determined by the Plan Administrator constituted under the Plan (the "Plan Administrator") in the Plan Administrator's absolute and uncontrolled discretion; and that any such determination or interpretation of the terms of this Agreement or the Plan or any other determination by either such Plan Administrator shall be final, binding and conclusive on all persons affected thereby. The Plan Administrator shall have the authority to administer the Plan, make all determinations with respect to the construction and application of the Plan, the Board resolutions establishing the Plan and this Agreement, adopt and revise rules and regulations relating to the Plan and make any other determinations which it believes necessary or advisable for the administration of the Plan (subject to the provisions of the Plan regarding Plan administration). Questions regarding the options granted under this Agreement and the administration of the Plan may be addressed to the Treasurer's Department of the Corporation. 13. NOT INCENTIVE STOCK OPTIONS. Anything in this Agreement to the contrary notwithstanding, the Corporation and Optionee acknowledge and agree that the Plan was not intended to provide for the issuance of "incentive stock options" as defined in Section 422 of the Internal Revenue Code of 1986, as amended, and that the options granted pursuant to this Agreement are not "incentive stock options" as so defined. 14. CONTINUED EMPLOYMENT. This Agreement shall not be deemed to limit or restrict the right of the Corporation or any Subsidiary to terminate the Optionee's employment at any time, for any reason, with or without cause, or to limit or restrict the right of the Optionee to terminate his employment with the Corporation or any Subsidiary at any time. In the event of termination of the Optionee's employment with the Corporation and all Subsidiaries, such employee shall be eligible to exercise only options on the number of shares that then or thereafter become available for purchase pursuant to Section 3 hereof (but subject to Section 5). Optionee's services shall be subject to the direction of the Board of Directors of the Corporation or such Subsidiary or such officer or officers as the respective Boards may designate from time to time and shall be rendered at such locations as the respective Boards or any such officer may determine. 15. AMENDMENT OR TERMINATION. This Agreement may be amended or terminated prior to the expiration dates set forth herein only with the mutual agreement and consent of the Optionee and the Corporation, and then only to the extent permitted under the Plan. 16. GOVERNING LAW. This Agreement shall be construed and its provisions enforced and administered in accordance with the laws of the State of Georgia and, where applicable, federal law. 17. INTERPRETATION. This Agreement shall at all times be interpreted so as to be consistent with the intent, purposes and specific language of the Plan. 18. SEVERABILITY. If any provision of this Agreement should be held illegal or invalid for any reason, such determination shall not affect the other provisions of this Agreement, but instead the Agreement shall be construed as if such provisions had never been included herein. 19. HEADINGS/GENDER. Headings contained in this Agreement are for convenience only and shall in no event be construed as part of this Agreement. Any reference to the masculine, feminine or neuter gender shall be a reference to other genders as appropriate. 20. NOTICES. Any notice which either party hereto may be required or permitted to give to the other shall be in writing, and may be delivered personally or by mail, postage prepaid, addressed as follows: (i) to the Corporation, Georgia-Pacific Corporation, l33 Peachtree Street, N.E., Atlanta, Georgia 30303, Attention: Vice President and Treasurer, or at such other address as the Corporation, by notice to the Optionee, may designate in writing from time to time; (ii) to the Optionee at the address indicated in the Optionee's then current personnel records, or at such other address as the Optionee, by notice to the Treasurer of the Corporation at the above address, may designate in writing from time to time. Such notices shall be deemed given upon receipt. 21. DEFINITIONS. For purposes of this Agreement, the following terms shall be defined as follows (certain other definitions are found in the premises to this Option Agreement): (a) "Cause" for the purposes of this Agreement shall mean any of the following: (i) the willful failure of the Optionee to perform satisfactorily the duties consistent with his title and position reasonably required of him by the Board or supervising management (other than by reason of incapacity due to physical or mental illness); (ii) the commission by the Optionee of a felony, or the perpetration by the Optionee of a dishonest act or common law fraud against the Corporation or any of its Subsidiaries; or (iii) any other willful act or omission (including without limitation the violation of any corporate policy or regulation) which could reasonably be expected to expose the Corporation to civil liability under the law of the applicable jurisdiction or causes or may reasonably be expected to cause significant injury to the financial condition or business reputation of the Corporation or any of its Subsidiaries. (b) "Corporation" shall mean Georgia-Pacific Corporation, a Georgia corporation, its successors and assigns. (c) "Committee" shall mean the Compensation Committee of the Board of Directors of the Corporation, as constituted from time to time, or such subcommittee of that body as the Compensation Committee shall specify to act for the Compensation Committee with respect to the options granted under the Plan, provided however that any such subcommittee shall have at least two members and shall consist entirely of `outside directors'' as that term is defined pursuant to Section 162(m) of the Internal Revenue Code of 1986, as amended from time to time, or any statute which is a successor or replacement for such statute (and applicable regulations promulgated thereunder). (d) "Fair Market Value of the Stock" shall mean, on any date, the mean between the high and low sales prices of a share of G-P Group Stock on that date as reported in The Wall Street Journal, New York Stock Exchange - Composite Transactions, or as reported in any successor quotation system adopted prospectively for this purpose by the Committee, in its discretion. The Fair Market Value of the Stock shall be rounded to the nearest whole cent (with 0.5 cent being rounded to the next higher whole cent). (e) "Grant Date" shall mean the date upon which the Original Option was granted under the Original Plan. (f) "Original Plan" shall mean the Georgia-Pacific Corporation 1995 Shareholder Value Incentive Plan as adopted by the Corporation's Board of Directors effective April 1, 1995 and approved by its shareholders on May 2, 1995 (as in effect at the time the Original Option was granted). (g) "Plan" shall mean the amendment and restatement of the Original Plan as adopted by the Corporation's Board of Directors on September 17, 1997, and approved by its shareholders on December 16, 1997 (as amended from time to time thereafter). (g) "Plan Administrator" shall mean the person or entity having administrative authority under the Plan, as specified in Article IV of the Plan. (h) "Peer Group Companies" shall mean the companies included in the Standard & Poors Paper and Forest Products Industry Index from time to time (but excluding the Corporation). (j) "Subsidiary" shall mean any corporation (other than the Corporation) in any unbroken chain of corporations beginning with the Corporation if, at the time of reference, each of the corporations other than the last corporation in the unbroken chain owns stock possessing fifty percent (50%) or more of the total combined voting power of all classes of stock in one of the other corporations in such chain. (k) "Total Shareholder Return" shall mean, for a given period and a given common stock, the number determined by the formula [(SB+SD)PE - 100] , 100, where (i) `SB'' is the number of shares of the common stock (including fractional shares) that could be bought with an initial $100 investment at PB, or $100 , PB; (ii) `SD'' is the total number of shares of the common stock (including fractional shares) which could be purchased with the dividends (or allocated portion of a per share dividend) paid on SB shares of the common stock during the measurement period (and any additional shares or fractional shares allocated in accordance with this subsection (ii) with respect to dividends paid during the measurement period but prior to the dividend in question), determined in the case of each such dividend paid using the closing price of the common stock on the trading date coincident with or next preceding the date of payment of the dividend; (iii) `PB'' is the closing price of the common stock on the last trading day before the first day of the measurement period; and (iv) `PE'' is the closing price of the common stock on the last trading day of the measurement period; provided, however, that in determining Total Shareholder Return of G-P Common Stock for any period ending after December 16, 1997, the following adjustments shall be made: (i) the sum of SB and SD shall be calculated through the December 16, 1997 using G-P Common Stock; (ii) effective December 17, 1997, each share of G-P Common Stock determined in (i) above shall automatically be converted to one share of G-P Group Stock and one share of Timber Stock; (iii) from and after the December 17, 1997, the sum of SB and SD will be calculated separately with respect to each class of the Corporation's common stock, and additions to SD for each such class of common stock will be based on the dividends declared on that class of common stock and the stock price for that class of common stock on the appropriate date; (iv) at the end of a measurement period, the Total Shareholder Return for the Corporation's common stock used for purposes of comparison with Total Shareholder Return of the common stock of Peer Group Companies will be based on the sum of (A) the product of the number of shares of G-P Group Stock (SB + SD) accrued through the close of the measurement period in accordance with (ii) and (iii) above and PE determined for this class of common stock and (B) a corresponding product with respect to the number of shares of Timber Stock. In calculating the Total Shareholder Return for a given common stock, the Plan Administrator will apply the principles of Section 9 (except for the last sentence of that section) as if that section applied to the common stock. (l) "Vesting Date" shall mean the date upon which options granted under this Agreement first become exercisable in accordance with the provisions of Sections 2, 3 or 10. (m) "Weighted Average Total Shareholder Return" shall mean, for any given measurement period, the average of the Total Shareholder Returns for a named group of corporations with the return of each such corporation weighted on the basis of its market capitalization at the beginning of the measurement period. IN WITNESS WHEREOF, the Corporation has caused this Agreement to be executed by its duly authorized officers, under its corporate seal, and the Optionee has executed this Agreement, as of this day and year first above written. GEORGIA-PACIFIC CORPORATION By: --------------------- A. D. Correll Chairman, Chief Executive Officer, and President ATTEST: W. Edwin Frazier, III, Assistant Secretary OPTIONEE NOTE: PLEASE COMPLETE THE ATTACHED PERSONAL DATA SHEET. OPTIONEE'S PERSONAL DATA (Please Print) Full Name ADDRESS: ========================================================== ---------------------------------------------------------- SOCIAL SECURITY NUMBER: --------------------------------------------- DATE OF BIRTH: --------------------------------------------------------- Month, Day and Year DIVISION: LOCATION: ------------------------- -------------------------- 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 TREASURERS DEPARTMENT. EX-99.14 13 SVIP (TIMBER GROUP 1996 GRANT OPTION 1996 GEORGIA-PACIFIC CORPORATION REPLACEMENT SHAREHOLDER VALUE INCENTIVE STOCK OPTION (Timber Stock) THIS AGREEMENT, dated December 17, 1997 by and between GEORGIA- PACIFIC CORPORATION, a Georgia corporation (hereinafter called the "Corporation"), and (hereinafter called "Optionee"); W I T N E S S E T H: WHEREAS, on February 1. 1996, the Optionee was granted pursuant to the Georgia-Pacific Corporation 1995 Shareholder Value Incentive Plan (as then in effect, the "Original Plan") the option to purchase from the Company up to, but not exceeding in the aggregate, shares of the Company's then existing ----- common stock ("G-P Common Stock") at a price of $72.63 per share (the "Original Option"); WHEREAS, the shareholders of the Corporation have approved, effective December 16, 1997, a recapitalization of the Corporation'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, in conjunction with the approval of the Letter Stock Transaction, the shareholders of the Corporation also approved, effective December 16, 1997, an amendment and restatement of the Original Plan (the "Plan"), which upon approval of the Letter Stock Transaction provides for the conversion 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; WHEREAS, in making the options conversion contemplated in the Letter Stock Transaction and in the Plan, 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 (the "Timber Stock Price"), and the exercise price for the Timber Stock option is equal to the exercise price under the Original Option Price multiplied by a fraction, the numerator of which is the Timber Stock Price and the denominator of which is the sum of the G-P Group Stock Price and the Timber Stock Price; 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. OPTION GRANT. Subject to the terms and conditions set forth herein, the Corporation hereby grants to the Optionee during the period commencing on the date hereof and ending on January 31, 2006, the option to purchase from the Corporation, from time to time, as hereinafter more specifically stated, at a price of $20.95 per share, up to but not exceeding in the aggregate, shares of the Timber Stock (or such portion of such -------- shares as may be vested and exercisable), which option may be exercised, in whole or in part, from time to time, commencing on the applicable Vesting Date as determined in accordance with Section 2 or 3 (but only as to the portion then becoming exercisable) and for the exercise period beginning on such Vesting Date and continuing to the end of the applicable exercise period specified in this Agreement.. 2. NORMAL VESTING. This option grant (or any portion thereof) may in no event be exercised prior to its Vesting Date, but on and after its Vesting Date (to the extent of the number option shares then becoming exercisable), it may be exercised in accordance with - and to the extent permitted under - the terms of the Plan and this Agreement. This option grant will vest without regard to performance standards stated in this Section 2 on the 183rd day following the 9th anniversary of the Grant Date. This option grant is subject to accelerated performance-based vesting in accordance with any of the following rules: (a) This option grant will vest on the 3rd anniversary of the Grant Date if the Corporation's Total Shareholder Return for the immediately preceding 3 full fiscal years exceeds the Weighted Average Total Shareholder Return of all Peer Group Companies for the same period. (b) This option grant will vest on the 4th anniversary of the Grant Date if the Corporation's Total Shareholder Return for the immediately preceding 4 full fiscal years exceeds the Weighted Average Total Shareholder Return of all Peer Group Companies for the same period. (c) This option grant will vest on the 5th anniversary of the Grant Date if the Corporation's Total Shareholder Return for the immediately preceding 5 full fiscal years exceeds the Weighted Average Total Shareholder Return of all Peer Group Companies for the same period. Vesting under subsections (a), (b) and (c) shall be conditioned upon the Committee's written certification that the performance vesting standards of this Section 2 have been met. Vesting of this option grant under this Section 2 is subject in all cases to the restrictions/forfeiture rules in Sections 4 and 5. Subject to those rules, if this option grant vests pursuant to this Section 2, it may be exercised at any time on or after the Vesting Date and prior to the 10th anniversary of the Grant Date (not inclusive), provided that if the Optionee's employment with the Corporation and its Subsidiaries terminates for any reason other than retirement (as defined in Section 3(b)(i)), death or disability (as defined in Section 3(b)(iii)) after the Vesting Date of this option grant and before it has expired, the option grant may be exercised only during the 90-day period following the Optionee's date of termination or, if shorter, during the remaining period before this option grant expires in accordance with this Agreement. If a Participant's employment with the Corporation and its Subsidiaries terminates for any reason other than retirement (as defined in Section 3(b)(i)), death or disability (as defined in Section 3(b)(iii)) prior to the Vesting Date of this option grant, this option grant will terminate as of the Participant's termination date, and the Participant will have no further rights hereunder. 3. SPECIAL VESTING. This option grant (or the portion designated below in Section 3(c)) shall vest and become exercisable under the circumstances and subject to the terms and conditions specified in this Section 3 (subject to the provisions of Section 5): (a) Notwithstanding anything in Sections 2 or 4 to the contrary, the performance-based vesting provisions of subsections (a), (b) and (c) of Section 2 shall operate to vest this option grant to the extent that it remains outstanding when the Optionee retires (as defined in Section 3(b)(i)), dies or becomes disabled (as defined in Section 3(b)(iii)) prior to its Vesting Date even if such vesting occurs after the termination of the Optionee's employment with the Corporation and its Subsidiaries. (b) Notwithstanding anything in Sections 2 or 4 to the contrary, if this option grant is not vested pursuant to the performance- based vesting standards of subsections (a), (b) and (c) of Section 2 or another provision of this Agreement, it will vest in the circumstances and on the date specified in paragraphs (i) through (iii) below to the extent permitted by the schedule set forth in Section 3(c): (i) If the Optionee terminates employment with the Corporation and its Subsidiaries after attaining age 65 or age 55 and 10 years of service for vesting purposes under the Georgia-Pacific Corporation Savings and Capital Growth Plan (other than a termination for Cause), on the later of his/her retirement date or the 5th anniversary of the Grant Date; (ii) If the Optionee dies, on the later of his/her date of death or the 5th anniversary of the Grant Date; or (iii) If the Optionee becomes totally disabled as defined under the Georgia-Pacific Corporation Salaried Long-Term Disability Plan (whether or not the Optionee actually participates in that plan), as determined by the Plan Administrator in its sole discretion, on the later of his/her date of termination of employment with the Corporation and its Subsidiaries because of such disability or the 5th anniversary of the Grant Date. (c) If the Optionee becomes entitled to special vesting in accordance with Section 3(b) above, this option grant, if then still outstanding, will vest as of the applicable date specified in Section 3(b) to the extent indicated in paragraphs (i) through (iii) below: (i) If the special vesting event described in Section 3(b)(i) through (iii) occurs prior to the 5th anniversary of the Grant Date of this option grant (which has not otherwise vested), 50% of this option grant will vest and 50% will be forfeited. (ii) If special vesting described in Section 3(b)(i) through (iii) occurs on or after the 5th anniversary, but prior to the 6th anniversary, of the Grant Date of this option grant (which has not otherwise vested), 60% of this option grant will vest and 40% will be forfeited. (iii) If special vesting described in Section 3(b)(i) through (iii) occurs on or after the 6th anniversary, but prior to the 7th anniversary, of the Grant Date of this option grant (which has not otherwise vested), 70% of this option grant will vest and 30% will be forfeited. (iv) If special vesting described in Section 3(b)(i) through (iii) occurs on or after the 7th anniversary, but prior to the 8th anniversary, of the Grant Date of this option grant (which has not otherwise vested), 80% of this option grant will vest and 20% will be forfeited. (v) If special vesting described in Section 3(b)(i) through (iii) occurs on or after the 8th anniversary, but prior to the 9th anniversary, of the Grant Date of this option grant (which has not otherwise vested), 90% of this option grant will vest and 10% will be forfeited. (vi) If special vesting described in Section 3(b)(i) through (iii) occurs on or after the 9th anniversary of the Grant Date of this option grant (which has not otherwise vested), 100% of this option grant will vest. (d) The special vesting dates specified in this Section 3 shall be considered Vesting Dates for purposes of this Agreement. (e) If this option grant vests pursuant to Section 3(a), it may be exercised at any time on or after its Vesting Date and prior to the 10th anniversary of its Grant Date (not inclusive). If this option grant (or any portion thereof) vests pursuant to Section 3(b), it may be exercised (to the extent it has vested) at any time on or after its Vesting Date and prior to the 183rd day following its Vesting Date (not inclusive) or, if earlier, prior to the 10th anniversary of its Grant Date (not inclusive). 4. RESTRICTIONS/FORFEITURE RULES. This option grant will be subject to the following restrictions and forfeiture rules: (a) Subject to Section 3, if the Optionee's employment with the Corporation and its Subsidiaries is terminated for any reason prior to the Vesting Date for this option grant (or any portion thereof), the Optionee shall forfeit all rights with respect to this option grant, and this Agreement shall be null, void and of no effect as of the date his/her employment terminates. (b) This option grant shall be nontransferable and may not be sold, hypothecated or otherwise assigned or conveyed by the Optionee to any party; provided that in the event of the incapacity (as determined by the Plan Administrator) or death of the Optionee, his/her attorney-in-fact pursuant to a valid power of attorney giving general or specific authority to make elections with respect to this option grant, his/her court-appointed guardian or the custodian of his/her affairs or the executor or administrator of his/her estate (as the case may be) may exercise any rights with respect to this option grant that the Participant could have exercised if he/she were still alive or not incapacitated. No assignment or transfer of this option or the rights represented thereby, whether voluntary, involuntary, or by operation of law or otherwise, except by will or the laws of descent and distribution, shall vest in the assignee or transferee any interest or right herein whatsoever, and immediately upon any attempt to assign or transfer this option, this option shall terminate and be of no force or effect. Notwithstanding anything in this subsection (b) to the contrary, an Optionee may designate a person or persons to receive, in the event of his death, any rights to which he would be entitled under this Option Agreement. Such a designation shall be made in writing, and filed with the Corporation's Treasurer's Department. A beneficiary designation may be changed or revoked by an Optionee at any time by filing a written statement of such change or revocation with the Corporation's Treasurer's Department. No beneficiary designation or change of beneficiary designation will be effective until actually received by the Corporation's Treasurer's Department. If an Optionee fails to designate a beneficiary (or the beneficiary predeceases the Optionee), this subsection (b) will apply without regard to the provisions relating to the designation of a beneficiary. (c) The Optionee shall not be deemed to be a shareholder of the Corporation - and shall have no rights as a stockholder - with respect to the shares covered by this option grant until the date (i) such shares have been issued or transferred to him/her and (ii) payment in full for such shares has been received by the Corporation as provided in this Agreement. No adjustment shall be made for dividends or other rights for which the record date is prior to the date of such issuance or transfer. (d) To the extent that this option grant is vested, but not exercised during the period provided for its exercise under this Agreement, the Participant shall forfeit all rights with respect to this option grant and this Agreement shall expire as of the close of the last day of the prescribed exercise period. 5. TERMINATION FOR CAUSE. Notwithstanding anything in this Option Agreement to the contrary, if the Optionee is terminated for Cause, this option grant shall terminate as of such date of termination regardless whether a Vesting Date has occurred on or prior to his/her date of termination unless and to the extent that the Committee determines (after taking into account the provisions of Section 16) that such forfeiture in a given case would violate applicable law. 6. EXERCISE OF OPTION. The option hereby granted shall be exercised by the delivery to the Treasurer of the Corporation or his delegate, from time to time, of written notice, signed by the Optionee, specifying the number of shares the Optionee then desires to purchase, together with cash, certified check, bank draft or postal or express money order to the order of the Corporation for an amount in United States dollars equal to the sum of: (a) the option price of such shares and (b) an amount sufficient to pay all state and federal withholding taxes (including, without limitation, FICA) with respect to the exercise (the total of (a) and (b) shall be referred to as the "Exercise Amount"). In the alternative, the Optionee may tender payment for the option shares in the form of shares of Timber Stock having a Fair Market Value on the date of exercise equal to the Exercise Amount or a combination of (i) shares of Timber Stock and (ii) cash, certified check, bank draft or postal or express money order to the order of the Corporation in an amount in United States dollars equal to the difference between the Exercise Amount and the Fair Market Value of the tendered shares of Timber Stock on the date of exercise. If the written notice of exercise is mailed, the date of its receipt by the Treasurer of the Corporation or his delegate shall be considered the date of exercise of the option by the Optionee. An exercise of stock options granted under this Agreement will generate compensation subject to federal and state tax withholding (including, without limitation, FICA withholding) in the calendar year of each exercise, and all such withholding taxes shall be the responsibility of the Optionee. The Committee may also authorize alternative procedures for exercising options under this Agreement. Within thirty (30) business days after any such exercise of the option in whole or in part by the Optionee, the Corporation shall deliver to the Optionee a certificate or certificates representing the aggregate number of shares with respect to which such option shall be so exercised, registered in the Optionee's name. The Optionee shall not have the right, in lieu of the exercise of the option, to surrender the option granted hereby, or any portion thereof, in order to receive shares covered by this option grant. 7. DATE OF TERMINATION. Except to the extent otherwise provided in subsections (a) through (c) of this Section 7, for purposes of this Agreement, the Optionee's date of termination shall be deemed to be his/her last day worked: (a) The Optionee's employment by the Corporation shall be deemed to continue during such periods as he/she is employed by a Subsidiary. If the Optionee shall be transferred from the Corporation to a Subsidiary or from a Subsidiary to the Corporation or from a Subsidiary to another Subsidiary, his/her employment shall not be deemed to be terminated by reason of such transfer. If, while the Optionee is employed by a Subsidiary, such Subsidiary shall cease to be a Subsidiary and the Optionee is not thereupon transferred to and employed by the Corporation or another Subsidiary, the date that the Optionee's employer ceases to be a Subsidiary shall be deemed to be a termination of employment. (b) The Optionee's date of termination on account of total disability shall be the last day of his/her salary continuation period under the Corporation's policy providing for salary continuation for salaried employees who are medically unable to work because of illness or injury or, if later, the date any personal leave of absence he/she may be granted under the policies of the Corporation immediately following such period of salary continuation terminates in accordance with such policies. (c) The Plan Administrator (as hereinafter defined) shall have absolute and uncontrolled discretion to determine whether any authorized leave of absence or absence on military or government service taken by the Optionee shall constitute a termination of employment for the purposes of this Agreement. 8. NO BAR TO CORPORATE RESTRUCTURING. The existence of this option shall not affect in any way the right or power of the Corporation or its stockholders to make or authorize any and all adjustments, recapitalizations, reorganizations or other changes in the Corporation's capital structure or its business, or any merger or consolidation of the Corporation, or any issue of bonds, debentures, preferred or preference stocks ahead of or affecting Timber Stock or the rights thereof, or the dissolution or liquidation of the Corporation, or any sale or transfer of all or part of its assets or business, or any other corporate act or proceeding, whether of a similar character or otherwise. 9. CAPITAL READJUSTMENTS/STOCK OPTION MODIFICATIONS. The option grant under this Plan will be made in Timber Stock as constituted on the Grant Date for this option grant. In the event of any merger, reorganization, consolidation, recapitalization, stock dividend, stock split, or extraordinary distribution with respect to Timber Stock or other change in corporate structure affecting Timber Stock, the Plan Administrator shall have the authority to make such substitution or adjustments in the number, kind and option price of shares subject to this option grant and/or such other equitable substitution or adjustments as it may determine in its sole discretion to be appropriate to ensure that all similarly situated optionees under the Plan are treated equitably as a result of any such event; provided, however, that the number of shares subject to any option grant shall always be a whole number. In the event any adjustment to this option grant pursuant to this Agreement would otherwise result in the creation of a fractional share interest, the number of shares under this option grant shall be rounded to the nearest whole share (with 0.5 share rounded to the next higher whole number). 10. CHANGE OF CONTROL. Notwithstanding any other provision of this Agreement to the contrary, in the event of a Change of Control of the Corporation (as defined in this Section 10), this option grant, if then outstanding and not yet vested, shall vest as of the effective date of such Change of Control if the Total Shareholder Return of the Corporation for at least one of the 3-year, 4-year or 5-year periods ending on the effective date of the Change of Control exceeds the Weighted Average Total Shareholder Return of all Peer Group Companies for the same period. If this option grant vests pursuant to this Section 10, it may be exercised at any time from and after the effective date of the Change of Control (which shall be considered the applicable Vesting Date) and prior to the 10th anniversary of its Grant Date. For the purposes of this Agreement, a `Change of Control'' shall mean: (a) The acquisition by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the `Exchange Act'')) (a `Person'') of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 20% or more of the combined voting power of the then outstanding voting securities of the Corporation entitled to vote generally in the election of directors (the "Outstanding Voting Securities"); provided, however, that for purposes of this subsection (a), the following acquisitions shall not constitute a Change of Control: (i) any acquisition by a Person who on the effective date of the Original Plan was the beneficial owner of 20% or more of the Outstanding Voting Securities; (ii) any acquisition directly from the Corporation, including without limitation a public offering of securities; (iii) any acquisition by the Corporation, (iv) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Corporation or any of its Subsidiaries or (v) any acquisition by any corporation pursuant to a transaction which complies with clauses (i), (ii), and (iii) of subsection (c) of this Section 10; or (b) Individuals who, as of the effective date of the Original Plan, constitute the Board (the `Incumbent Board'') cease for any reason to constitute at least a majority of the Board; provided, however, that any individual becoming a director subsequent to the effective date of the Original Plan whose election, or nomination for election by the Corporation's shareholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board or actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board; or (c) Consummation of a reorganization, merger or consolidation to which the Corporation is a party or sale or other disposition of all or substantially all of the assets of the Corporation (a "Business Combination"), in each case, unless, following such Business Combination, (i) all or substantially all of the individuals and entities who were the beneficial owners, respectively, of the Outstanding Stock and Outstanding Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly, more than 50% of the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors, as the case may be, of the corporation resulting from such Business Combination (including, without limitation, a corporation which as a result of such transaction owns the Corporation or all or substantially all of the Corporation's assets either directly or through one or more subsidiaries) (the "Successor Entity") in substantially the same proportions as their ownership, immediately prior to such Business Combination, of Outstanding Voting Securities and (ii) no Person (excluding any Successor Entity or any employee benefit plan, or related trust, of the Corporation or such Successor Entity) beneficially owns, directly or indirectly, 20% or more of, respectively, the combined voting power of the then outstanding voting securities of the Successor Entity, except to the extent that such ownership existed prior to the Business Combination and (iii) at least a majority of the members of the board of directors of the Successor Entity were members of the Incumbent Board (including persons deemed to be members of the Incumbent Board by reason of the proviso to subsection (c) of this Section 10) at the time of the execution of the initial agreement, or of the action of the Board, providing for such Business Combination; or (d) Approval by the shareholders of the Corporation of a complete liquidation or dissolution of the Corporation. 11. LEGAL IMPEDIMENTS TO EXERCISE. Anything in this Agreement to the contrary notwithstanding, if, at any time specified herein for the exercise of this option or the delivery of shares to the Optionee, any law or regulations of any governmental authority having jurisdiction in the matter shall require either the Corporation or the Optionee to take any action or refrain from action in connection therewith or to delay such exercise, then the delivery of such shares on such exercise shall be deferred until such action shall have been taken or such restriction on action shall have been removed. 12. AUTHORITY OF PLAN ADMINISTRATOR. As conditions precedent to the granting of the option and all other rights provided hereunder, the Optionee and any other person who acquires any rights hereunder agrees that any dispute or disagreement which shall arise under, or as a result of, or pursuant to, this Agreement may be determined by the Plan Administrator constituted under the Plan (the "Plan Administrator") in the Plan Administrator's absolute and uncontrolled discretion; and that any such determination or interpretation of the terms of this Agreement or the Plan or any other determination by either such Plan Administrator shall be final, binding and conclusive on all persons affected thereby. The Plan Administrator shall have the authority to administer the Plan, make all determinations with respect to the construction and application of the Plan, the Board resolutions establishing the Plan and this Agreement, adopt and revise rules and regulations relating to the Plan and make any other determinations which it believes necessary or advisable for the administration of the Plan (subject to the provisions of the Plan regarding Plan administration). Questions regarding the options granted under this Agreement and the administration of the Plan may be addressed to the Treasurer's Department of the Corporation. 13. NOT INCENTIVE STOCK OPTIONS. Anything in this Agreement to the contrary notwithstanding, the Corporation and Optionee acknowledge and agree that the Plan was not intended to provide for the issuance of "incentive stock options" as defined in Section 422 of the Internal Revenue Code of 1986, as amended, and that the options granted pursuant to this Agreement are not "incentive stock options" as so defined. 14. CONTINUED EMPLOYMENT. This Agreement shall not be deemed to limit or restrict the right of the Corporation or any Subsidiary to terminate the Optionee's employment at any time, for any reason, with or without cause, or to limit or restrict the right of the Optionee to terminate his employment with the Corporation or any Subsidiary at any time. In the event of termination of the Optionee's employment with the Corporation and all Subsidiaries, such employee shall be eligible to exercise only options on the number of shares that then or thereafter become available for purchase pursuant to Section 3 hereof (but subject to Section 5). Optionee's services shall be subject to the direction of the Board of Directors of the Corporation or such Subsidiary or such officer or officers as the respective Boards may designate from time to time and shall be rendered at such locations as the respective Boards or any such officer may determine. 15. AMENDMENT OR TERMINATION. This Agreement may be amended or terminated prior to the expiration dates set forth herein only with the mutual agreement and consent of the Optionee and the Corporation, and then only to the extent permitted under the Plan. 16. GOVERNING LAW. This Agreement shall be construed and its provisions enforced and administered in accordance with the laws of the State of Georgia and, where applicable, federal law. 17. INTERPRETATION. This Agreement shall at all times be interpreted so as to be consistent with the intent, purposes and specific language of the Plan. 18. SEVERABILITY. If any provision of this Agreement should be held illegal or invalid for any reason, such determination shall not affect the other provisions of this Agreement, but instead the Agreement shall be construed as if such provisions had never been included herein. 19. HEADINGS/GENDER. Headings contained in this Agreement are for convenience only and shall in no event be construed as part of this Agreement. Any reference to the masculine, feminine or neuter gender shall be a reference to other genders as appropriate. 20. NOTICES. Any notice which either party hereto may be required or permitted to give to the other shall be in writing, and may be delivered personally or by mail, postage prepaid, addressed as follows: (i) to the Corporation, Georgia-Pacific Corporation, l33 Peachtree Street, N.E., Atlanta, Georgia 30303, Attention: Vice President and Treasurer, or at such other address as the Corporation, by notice to the Optionee, may designate in writing from time to time; (ii) to the Optionee at the address indicated in the Optionee's then current personnel records, or at such other address as the Optionee, by notice to the Treasurer of the Corporation at the above address, may designate in writing from time to time. Such notices shall be deemed given upon receipt. 21. DEFINITIONS. For purposes of this Agreement, the following terms shall be defined as follows (certain other definitions are found in the premises to this Option Agreement): (a) "Cause" for the purposes of this Agreement shall mean any of the following: (i) the willful failure of the Optionee to perform satisfactorily the duties consistent with his title and position reasonably required of him by the Board or supervising management (other than by reason of incapacity due to physical or mental illness); (ii) the commission by the Optionee of a felony, or the perpetration by the Optionee of a dishonest act or common law fraud against the Corporation or any of its Subsidiaries; or (iii) any other willful act or omission (including without limitation the violation of any corporate policy or regulation) which could reasonably be expected to expose the Corporation to civil liability under the law of the applicable jurisdiction or causes or may reasonably be expected to cause significant injury to the financial condition or business reputation of the Corporation or any of its Subsidiaries. (b) "Corporation" shall mean Georgia-Pacific Corporation, a Georgia corporation, its successors and assigns. (c) "Committee" shall mean the Compensation Committee of the Board of Directors of the Corporation, as constituted from time to time, or such subcommittee of that body as the Compensation Committee shall specify to act for the Compensation Committee with respect to the options granted under the Plan, provided however that any such subcommittee shall have at least two members and shall consist entirely of `outside directors'' as that term is defined pursuant to Section 162(m) of the Internal Revenue Code of 1986, as amended from time to time, or any statute which is a successor or replacement for such statute (and applicable regulations promulgated thereunder). (d) "Fair Market Value of the Stock" shall mean, on any date, the mean between the high and low sales prices of a share of Timber Stock on that date as reported in The Wall Street Journal, New York Stock Exchange - Composite Transactions, or as reported in any successor quotation system adopted prospectively for this purpose by the Committee, in its discretion. The Fair Market Value of the Stock shall be rounded to the nearest whole cent (with 0.5 cent being rounded to the next higher whole cent). (e) "Grant Date" shall mean the date upon which the Original Option was granted under the Original Plan. (f) "Original Plan" shall mean the Georgia-Pacific Corporation 1995 Shareholder Value Incentive Plan as adopted by the Corporation's Board of Directors effective April 1, 1995 and approved by its shareholders on May 2, 1995 (as in effect at the time the Original Option was granted). (g) "Plan" shall mean the amendment and restatement of the Original Plan as adopted by the Corporation's Board of Directors on September 17, 1997, and approved by its shareholders on December 16, 1997 (as amended from time to time thereafter) (g) "Plan Administrator" shall mean the person or entity having administrative authority under the Plan, as specified in Article IV of the Plan. (h) "Peer Group Companies" shall mean the companies included in the Standard & Poors Paper and Forest Products Industry Index from time to time (but excluding the Corporation). (j) "Subsidiary" shall mean any corporation (other than the Corporation) in any unbroken chain of corporations beginning with the Corporation if, at the time of reference, each of the corporations other than the last corporation in the unbroken chain owns stock possessing fifty percent (50%) or more of the total combined voting power of all classes of stock in one of the other corporations in such chain. (k) "Total Shareholder Return" shall mean, for a given period and a given common stock, the number determined by the formula [(SB+SD)PE - 100] , 100, where (i) `SB'' is the number of shares of the common stock (including fractional shares) that could be bought with an initial $100 investment at PB, or $100 , PB; (ii) `SD'' is the total number of shares of the common stock (including fractional shares) which could be purchased with the dividends (or allocated portion of a per share dividend) paid on SB shares of the common stock during the measurement period (and any additional shares or fractional shares allocated in accordance with this subsection (ii) with respect to dividends paid during the measurement period but prior to the dividend in question), determined in the case of each such dividend paid using the closing price of the common stock on the trading date coincident with or next preceding the date of payment of the dividend; (iii) `PB'' is the closing price of the common stock on the last trading day before the first day of the measurement period; and (iv) `PE'' is the closing price of the common stock on the last trading day of the measurement period; provided, however, that in determining Total Shareholder Return of G-P Common Stock for any period ending after December 16, 1997, the following adjustments shall be made: (i) the sum of SB and SD shall be calculated through the December 16, 1997 using G-P Common Stock; (ii) effective December 17, 1997, each share of G-P Common Stock determined in (i) above shall automatically be converted to one share of G-P Group Stock and one share of Timber Stock; (iii) from and after the December 17, 1997, the sum of SB and SD will be calculated separately with respect to each class of the Corporation's common stock, and additions to SD for each such class of common stock will be based on the dividends declared on that class of common stock and the stock price for that class of common stock on the appropriate date; (iv) at the end of a measurement period, the Total Shareholder Return for the Corporation's common stock used for purposes of comparison with Total Shareholder Return of the common stock of Peer Group Companies will be based on the sum of (A) the product of the number of shares of G-P Group Stock (SB + SD) accrued through the close of the measurement period in accordance with (ii) and (iii) above and PE determined for this class of common stock and (B) a corresponding product with respect to the number of shares of Timber Stock. In calculating the Total Shareholder Return for a given common stock, the Plan Administrator will apply the principles of Section 9 (except for the last sentence of that section) as if that section applied to the common stock. (l) "Vesting Date" shall mean the date upon which options granted under this Agreement first become exercisable in accordance with the provisions of Sections 2, 3 or 10. (m) "Weighted Average Total Shareholder Return" shall mean, for any given measurement period, the average of the Total Shareholder Returns for a named group of corporations with the return of each such corporation weighted on the basis of its market capitalization at the beginning of the measurement period. IN WITNESS WHEREOF, the Corporation has caused this Agreement to be executed by its duly authorized officers, under its corporate seal, and the Optionee has executed this Agreement, as of this day and year first above written. GEORGIA-PACIFIC CORPORATION By: --------------------- A. D. Correll Chairman, Chief Executive Officer, and President ATTEST: W. Edwin Frazier, III, Assistant Secretary OPTIONEE NOTE: PLEASE COMPLETE THE ATTACHED PERSONAL DATA SHEET. OPTIONEE'S PERSONAL DATA (Please Print) Full Name ADDRESS: ========================================================== ---------------------------------------------------------- SOCIAL SECURITY NUMBER: --------------------------------------------- DATE OF BIRTH: --------------------------------------------------------- Month, Day and Year DIVISION: LOCATION: ------------------------- -------------------------- 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 TREASURERS DEPARTMENT. EX-99.15 14 SVIP (G-P GROUP 1997 GRANT OPTION) 1997 GEORGIA-PACIFIC CORPORATION REPLACEMENT SHAREHOLDER VALUE SPECIAL INCENTIVE STOCK OPTION (G-P Group Stock) THIS AGREEMENT, dated December 17, 1997 by and between GEORGIA- PACIFIC CORPORATION, a Georgia corporation (hereinafter called the "Corporation"), and (hereinafter called "Optionee"); W I T N E S S E T H: WHEREAS, on February 3, 1997, the Optionee was granted pursuant to the Georgia-Pacific Corporation 1995 Shareholder Value Incentive Plan (as then in effect, the "Original Plan") the option to purchase from the Company up to, but not exceeding in the aggregate, shares of the Company's then existing ----- common stock ("G-P Common Stock") at a price of $74.25 per share (the "Original Option"); WHEREAS, the shareholders of the Corporation have approved, effective December 16, 1997, a recapitalization of the Corporation'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, in conjunction with the approval of the Letter Stock Transaction, the shareholders of the Corporation also approved, effective December 16, 1997, an amendment and restatement of the Original Plan (the "Plan"), which upon approval of the Letter Stock Transaction provides for the conversion 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; WHEREAS, in making the options conversion contemplated in the Letter Stock Transaction and in the Plan, 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 (the "Timber Stock Price"), and the exercise price for the Timber Stock option is equal to the exercise price under the Original Option Price multiplied by a fraction, the numerator of which is the Timber Stock Price and the denominator of which is the sum of the G-P Group Stock Price and the Timber Stock Price; 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. OPTION GRANT. Subject to the terms and conditions set forth herein, the Corporation hereby grants to the Optionee during the period commencing on the date hereof and ending on August 4, 2002, the option to purchase from the Corporation, from time to time, as hereinafter more specifically stated, at a price of $52.84 per share, up to but not exceeding in the aggregate, shares of the G-P Group Stock (or such portion of such -------- shares as may be vested and exercisable), which option may be exercised, in whole or in part, from time to time, commencing on the applicable Vesting Date as determined in accordance with Section 2 or 3 (but only as to the portion then becoming exercisable) and for the exercise period beginning on such Vesting Date and continuing to the end of the applicable exercise period specified in this Agreement. 2. NORMAL VESTING. This option grant (or any portion thereof) may in no event be exercised prior to its Vesting Date, but on and after its Vesting Date (to the extent of the number option shares then becoming exercisable), it may be exercised in accordance with - and to the extent permitted under - the terms of the Plan and this Agreement. This option grant is subject to accelerated performance-based vesting in accordance with any of the following rules: (a) This option grant will vest on the 3rd anniversary of the Grant Date if the Corporation's Total Shareholder Return for the immediately preceding 3 full fiscal years exceeds the Weighted Average Total Shareholder Return of all Peer Group Companies for the same period. (b) This option grant will vest on the 4th anniversary of the Grant Date if the Corporation's Total Shareholder Return for the immediately preceding 4 full fiscal years exceeds the Weighted Average Total Shareholder Return of all Peer Group Companies for the same period. (c) This option grant will vest on the 5th anniversary of the Grant Date if the Corporation's Total Shareholder Return for the immediately preceding 5 full fiscal years exceeds the Weighted Average Total Shareholder Return of all Peer Group Companies for the same period. Vesting under subsections (a), (b) and (c) shall be conditioned upon the Committee's written certification that the performance vesting standards of this Section 2 have been met. Vesting of this option grant under this Section 2 is subject in all cases to the restrictions/forfeiture rules in Sections 4 and 5. Subject to those rules, if this option grant vests pursuant to this Section 2, it may be exercised at any time on or after the Vesting Date and on or prior to August 4, 2002, provided that if the Optionee's employment with the Corporation and its Subsidiaries terminates for any reason other than Cause after the Vesting Date of this option grant and before it has expired, the option grant may be exercised only during the 90-day period following the Optionee's date of termination or, if shorter, during the remaining period before this option grant expires in accordance with this Agreement. If a Participant's employment with the Corporation and its Subsidiaries terminates for any reason prior to the Vesting Date of this option grant, this option grant will terminate as of the Participant's termination date, and the Participant will have no further rights hereunder. 3. DEFINITIONS OF RETIREMENT AND DISABILITY. For purposes of this Option Agreement: (a) "Retirement" means termination of employment with the Corporation and its Subsidiaries after attaining age 65 or age 55 and 10 years of service for vesting purposes under the Georgia-Pacific Corporation Savings and Capital Growth Plan (other than a termination for Cause); and (b) "Disability" means "total disability" as defined under the Georgia-Pacific Corporation Salaried Long-Term Disability Plan (whether or not the Optionee actually participates in that plan), as determined by the Plan Administrator in its sole discretion. 4. RESTRICTIONS/FORFEITURE RULES. This option grant will be subject to the following restrictions and forfeiture rules: (a) Subject to Section 3, if the Optionee's employment with the Corporation and its Subsidiaries is terminated for any reason prior to the Vesting Date for this option grant (or any portion thereof), the Optionee shall forfeit all rights with respect to this option grant, and this Agreement shall be null, void and of no effect as of the date his/her employment terminates. (b) This option grant shall be nontransferable and may not be sold, hypothecated or otherwise assigned or conveyed by the Optionee to any party; provided that in the event of the incapacity (as determined by the Plan Administrator) or death of the Optionee, his/her attorney-in-fact pursuant to a valid power of attorney giving general or specific authority to make elections with respect to this option grant, his/her court-appointed guardian or the custodian of his/her affairs or the executor or administrator of his/her estate (as the case may be) may exercise any rights with respect to this option grant that the Participant could have exercised if he/she were still alive or not incapacitated. No assignment or transfer of this option or the rights represented thereby, whether voluntary, involuntary, or by operation of law or otherwise, except by will or the laws of descent and distribution, shall vest in the assignee or transferee any interest or right herein whatsoever, and immediately upon any attempt to assign or transfer this option, this option shall terminate and be of no force or effect. Notwithstanding anything in this subsection (b) to the contrary, an Optionee may designate a person or persons to receive, in the event of his death, any rights to which he would be entitled under this Option Agreement. Such a designation shall be made in writing, and filed with the Corporation's Treasurer's Department. A beneficiary designation may be changed or revoked by an Optionee at any time by filing a written statement of such change or revocation with the Corporation's Treasurer's Department. No beneficiary designation or change of beneficiary designation will be effective until actually received by the Corporation's Treasurer's Department. If an Optionee fails to designate a beneficiary (or the beneficiary predeceases the Optionee), this subsection (b) will apply without regard to the provisions relating to the designation of a beneficiary. (c) The Optionee shall not be deemed to be a shareholder of the Corporation - and shall have no rights as a stockholder - with respect to the shares covered by this option grant until the date (i) such shares have been issued or transferred to him/her and (ii) payment in full for such shares has been received by the Corporation as provided in this Agreement. No adjustment shall be made for dividends or other rights for which the record date is prior to the date of such issuance or transfer. (d) To the extent that this option grant is vested, but not exercised during the period provided for its exercise under this Agreement, the Participant shall forfeit all rights with respect to this option grant and this Agreement shall expire as of the close of the last day of the prescribed exercise period. 5. TERMINATION FOR CAUSE. Notwithstanding anything in this Option Agreement to the contrary, if the Optionee is terminated for Cause, this option grant shall terminate as of such date of termination regardless whether a Vesting Date has occurred on or prior to his/her date of termination unless and to the extent that the Committee determines (after taking into account the provisions of Section 16) that such forfeiture in a given case would violate applicable law. 6. EXERCISE OF OPTION. The option hereby granted shall be exercised by the delivery to the Treasurer of the Corporation or his delegate, from time to time, of written notice, signed by the Optionee, specifying the number of shares the Optionee then desires to purchase, together with cash, certified check, bank draft or postal or express money order to the order of the Corporation for an amount in United States dollars equal to the sum of: (a) the option price of such shares and (b) an amount sufficient to pay all state and federal withholding taxes (including, without limitation, FICA) with respect to the exercise (the total of (a) and (b) shall be referred to as the `Exercise Amount'). In the alternative, the Optionee may tender payment for the option shares in the form of shares of G-P Group Stock having a Fair Market Value on the date of exercise equal to the Exercise Amount or a combination of (i) shares of G-P Group Stock and (ii) cash, certified check, bank draft or postal or express money order to the order of the Corporation in an amount in United States dollars equal to the difference between the Exercise Amount and the Fair Market Value of the tendered shares of G-P Group Stock on the date of exercise. If the written notice of exercise is mailed, the date of its receipt by the Treasurer of the Corporation or his delegate shall be considered the date of exercise of the option by the Optionee. An exercise of stock options granted under this Agreement will generate compensation subject to federal and state tax withholding (including, without limitation, FICA withholding) in the calendar year of each exercise, and all such withholding taxes shall be the responsibility of the Optionee. The Committee may also authorize alternative procedures for exercising options under this Agreement. Within thirty (30) business days after any such exercise of the option in whole or in part by the Optionee, the Corporation shall deliver to the Optionee a certificate or certificates representing the aggregate number of shares with respect to which such option shall be so exercised, registered in the Optionee's name. The Optionee shall not have the right, in lieu of the exercise of the option, to surrender the option granted hereby, or any portion thereof, in order to receive shares covered by this option grant. 7. DATE OF TERMINATION. Except to the extent otherwise provided in subsections (a) through (c) of this Section 7, for purposes of this Agreement, the Optionee's date of termination shall be deemed to be his/her last day worked: (a) The Optionee's employment by the Corporation shall be deemed to continue during such periods as he/she is employed by a Subsidiary. If the Optionee shall be transferred from the Corporation to a Subsidiary or from a Subsidiary to the Corporation or from a Subsidiary to another Subsidiary, his/her employment shall not be deemed to be terminated by reason of such transfer. If, while the Optionee is employed by a Subsidiary, such Subsidiary shall cease to be a Subsidiary and the Optionee is not thereupon transferred to and employed by the Corporation or another Subsidiary, the date that the Optionee's employer ceases to be a Subsidiary shall be deemed to be a termination of employment. (b) The Optionee's date of termination on account of total disability shall be the last day of his/her salary continuation period under the Corporation's policy providing for salary continuation for salaried employees who are medically unable to work because of illness or injury or, if later, the date any personal leave of absence he/she may be granted under the policies of the Corporation immediately following such period of salary continuation terminates in accordance with such policies. (c) The Plan Administrator (as hereinafter defined) shall have absolute and uncontrolled discretion to determine whether any authorized leave of absence or absence on military or government service taken by the Optionee shall constitute a termination of employment for the purposes of this Agreement. 8. NO BAR TO CORPORATE RESTRUCTURING. The existence of this option shall not affect in any way the right or power of the Corporation or its stockholders to make or authorize any and all adjustments, recapitalizations, reorganizations or other changes in the Corporation's capital structure or its business, or any merger or consolidation of the Corporation, or any issue of bonds, debentures, preferred or preference stocks ahead of or affecting G-P Group Stock or the rights thereof, or the dissolution or liquidation of the Corporation, or any sale or transfer of all or part of its assets or business, or any other corporate act or proceeding, whether of a similar character or otherwise. 9. CAPITAL READJUSTMENTS/STOCK OPTION MODIFICATIONS. The option grant under this Plan will be made in G-P Group Stock as constituted on the Grant Date for this option grant. In the event of any merger, reorganization, consolidation, recapitalization, stock dividend, stock split, or extraordinary distribution with respect to G-P Group Stock or other change in corporate structure affecting G-P Group Stock, the Plan Administrator shall have the authority to make such substitution or adjustments in the number, kind and option price of shares subject to this option grant and/or such other equitable substitution or adjustments as it may determine in its sole discretion to be appropriate to ensure that all similarly situated optionees under the Plan are treated equitably as a result of any such event; provided, however, that the number of shares subject to any option grant shall always be a whole number. In the event any adjustment to this option grant pursuant to this Agreement would otherwise result in the creation of a fractional share interest, the number of shares under this option grant shall be rounded to the nearest whole share (with 0.5 share rounded to the next higher whole number). 10. CHANGE OF CONTROL. Notwithstanding any other provision of this Agreement to the contrary, in the event of a Change of Control of the Corporation (as defined in this Section 10), this option grant, if then outstanding and not yet vested, shall vest as of the effective date of such Change of Control if the Total Shareholder Return of the Corporation for at least one of the 3-year, 4-year or 5-year periods ending on the effective date of the Change of Control exceeds the Weighted Average Total Shareholder Return of all Peer Group Companies for the same period. If this option grant vests pursuant to this Section 10, it may be exercised at any time from and after the effective date of the Change of Control (which shall be considered the applicable Vesting Date) and prior to the 10th anniversary of its Grant Date. For the purposes of this Agreement, a "Change of Control" shall mean: (a) The acquisition by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the "Exchange Act")) (a "Person") of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 20% or more of the combined voting power of the then outstanding voting securities of the Corporation entitled to vote generally in the election of directors (the "Outstanding Voting Securities"); provided, however, that for purposes of this subsection (a), the following acquisitions shall not constitute a Change of Control: (i) any acquisition by a Person who on the effective date of the Original Plan was the beneficial owner of 20% or more of the Outstanding Voting Securities; (ii) any acquisition directly from the Corporation, including without limitation a public offering of securities; (iii) any acquisition by the Corporation, (iv) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Corporation or any of its Subsidiaries or (v) any acquisition by any corporation pursuant to a transaction which complies with clauses (i), (ii), and (iii) of subsection (c) of this Section 10; or (b) Individuals who, as of the effective date of the Original Plan, constitute the Board (the "Incumbent Board") cease for any reason to constitute at least a majority of the Board; provided, however, that any individual becoming a director subsequent to the effective date of the Original Plan whose election, or nomination for election by the Corporation's shareholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board or actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board; or (c) Consummation of a reorganization, merger or consolidation to which the Corporation is a party or sale or other disposition of all or substantially all of the assets of the Corporation (a "Business Combination"), in each case, unless, following such Business Combination, (i) all or substantially all of the individuals and entities who were the beneficial owners, respectively, of the Outstanding Stock and Outstanding Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly, more than 50% of the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors, as the case may be, of the corporation resulting from such Business Combination (including, without limitation, a corporation which as a result of such transaction owns the Corporation or all or substantially all of the Corporation's assets either directly or through one or more subsidiaries) (the "Successor Entity") in substantially the same proportions as their ownership, immediately prior to such Business Combination, of Outstanding Voting Securities and (ii) no Person (excluding any Successor Entity or any employee benefit plan, or related trust, of the Corporation or such Successor Entity) beneficially owns, directly or indirectly, 20% or more of, respectively, the combined voting power of the then outstanding voting securities of the Successor Entity, except to the extent that such ownership existed prior to the Business Combination and (iii) at least a majority of the members of the board of directors of the Successor Entity were members of the Incumbent Board (including persons deemed to be members of the Incumbent Board by reason of the proviso to subsection (c) of this Section 10) at the time of the execution of the initial agreement, or of the action of the Board, providing for such Business Combination; or (d) Approval by the shareholders of the Corporation of a complete liquidation or dissolution of the Corporation. 11. LEGAL IMPEDIMENTS TO EXERCISE. Anything in this Agreement to the contrary notwithstanding, if, at any time specified herein for the exercise of this option or the delivery of shares to the Optionee, any law or regulations of any governmental authority having jurisdiction in the matter shall require either the Corporation or the Optionee to take any action or refrain from action in connection therewith or to delay such exercise, then the delivery of such shares on such exercise shall be deferred until such action shall have been taken or such restriction on action shall have been removed. 12. AUTHORITY OF PLAN ADMINISTRATOR. As conditions precedent to the granting of the option and all other rights provided hereunder, the Optionee and any other person who acquires any rights hereunder agrees that any dispute or disagreement which shall arise under, or as a result of, or pursuant to, this Agreement may be determined by the Plan Administrator constituted under the Plan (the "Plan Administrator") in the Plan Administrator's absolute and uncontrolled discretion; and that any such determination or interpretation of the terms of this Agreement or the Plan or any other determination by either such Plan Administrator shall be final, binding and conclusive on all persons affected thereby. The Plan Administrator shall have the authority to administer the Plan, make all determinations with respect to the construction and application of the Plan, the Board resolutions establishing the Plan and this Agreement, adopt and revise rules and regulations relating to the Plan and make any other determinations which it believes necessary or advisable for the administration of the Plan (subject to the provisions of the Plan regarding Plan administration). Questions regarding the options granted under this Agreement and the administration of the Plan may be addressed to the Treasurer's Department of the Corporation. 13. NOT INCENTIVE STOCK OPTIONS. Anything in this Agreement to the contrary notwithstanding, the Corporation and Optionee acknowledge and agree that the Plan was not intended to provide for the issuance of "incentive stock options" as defined in Section 422 of the Internal Revenue Code of 1986, as amended, and that the options granted pursuant to this Agreement are not "incentive stock options" as so defined. 14. CONTINUED EMPLOYMENT. This Agreement shall not be deemed to limit or restrict the right of the Corporation or any Subsidiary to terminate the Optionee's employment at any time, for any reason, with or without cause, or to limit or restrict the right of the Optionee to terminate his employment with the Corporation or any Subsidiary at any time. In the event of termination of the Optionee's employment with the Corporation and all Subsidiaries, such employee shall be eligible to exercise only options on the number of shares that then or thereafter become available for purchase pursuant to Section 3 hereof (but subject to Section 5). Optionee's services shall be subject to the direction of the Board of Directors of the Corporation or such Subsidiary or such officer or officers as the respective Boards may designate from time to time and shall be rendered at such locations as the respective Boards or any such officer may determine. 15. AMENDMENT OR TERMINATION. This Agreement may be amended or terminated prior to the expiration dates set forth herein only with the mutual agreement and consent of the Optionee and the Corporation, and then only to the extent permitted under the Plan. 16. GOVERNING LAW. This Agreement shall be construed and its provisions enforced and administered in accordance with the laws of the State of Georgia and, where applicable, federal law. 17. INTERPRETATION. This Agreement shall at all times be interpreted so as to be consistent with the intent, purposes and specific language of the Plan. 18. SEVERABILITY. If any provision of this Agreement should be held illegal or invalid for any reason, such determination shall not affect the other provisions of this Agreement, but instead the Agreement shall be construed as if such provisions had never been included herein. 19. HEADINGS/GENDER. Headings contained in this Agreement are for convenience only and shall in no event be construed as part of this Agreement. Any reference to the masculine, feminine or neuter gender shall be a reference to other genders as appropriate. 20. NOTICES. Any notice which either party hereto may be required or permitted to give to the other shall be in writing, and may be delivered personally or by mail, postage prepaid, addressed as follows: (i) to the Corporation, Georgia-Pacific Corporation, l33 Peachtree Street, N.E., Atlanta, Georgia 30303, Attention: Vice President and Treasurer, or at such other address as the Corporation, by notice to the Optionee, may designate in writing from time to time; (ii) to the Optionee at the address indicated in the Optionee's then current personnel records, or at such other address as the Optionee, by notice to the Treasurer of the Corporation at the above address, may designate in writing from time to time. Such notices shall be deemed given upon receipt. 21. DEFINITIONS. For purposes of this Agreement, the following terms shall be defined as follows (certain other definitions are found in the premises to this Option Agreement): (a) "Cause" for the purposes of this Agreement shall mean any of the following: (i) the willful failure of the Optionee to perform satisfactorily the duties consistent with his title and position reasonably required of him by the Board or supervising management (other than by reason of incapacity due to physical or mental illness); (ii) the commission by the Optionee of a felony, or the perpetration by the Optionee of a dishonest act or common law fraud against the Corporation or any of its Subsidiaries; or (iii) any other willful act or omission (including without limitation the violation of any corporate policy or regulation) which could reasonably be expected to expose the Corporation to civil liability under the law of the applicable jurisdiction or causes or may reasonably be expected to cause significant injury to the financial condition or business reputation of the Corporation or any of its Subsidiaries. (b) "Corporation" shall mean Georgia-Pacific Corporation, a Georgia corporation, its successors and assigns. (c) "Committee" shall mean the Compensation Committee of the Board of Directors of the Corporation, as constituted from time to time, or such subcommittee of that body as the Compensation Committee shall specify to act for the Compensation Committee with respect to the options granted under the Plan, provided however that any such subcommittee shall have at least two members and shall consist entirely of "outside directors" as that term is defined pursuant to Section 162(m) of the Internal Revenue Code of 1986, as amended from time to time, or any statute which is a successor or replacement for such statute (and applicable regulations promulgated thereunder). (d) "Fair Market Value of the Stock" shall mean, on any date, the mean between the high and low sales prices of a share of G-P Group Stock on that date as reported in The Wall Street Journal, New York Stock Exchange - Composite Transactions, or as reported in any successor quotation system adopted prospectively for this purpose by the Committee, in its discretion. The Fair Market Value of the Stock shall be rounded to the nearest whole cent (with 0.5 cent being rounded to the next higher whole cent). (e) "Grant Date" shall mean the date upon which the Original Option was granted under the Original Plan. (f) "Original Plan" shall mean the Georgia-Pacific Corporation 1995 Shareholder Value Incentive Plan as adopted by the Corporation's Board of Directors effective April 1, 1995 and approved by its shareholders on May 2, 1995 (as in effect at the time the Original Option was granted). (g) "Plan" shall mean the amendment and restatement of the Original Plan as adopted by the Corporation's Board of Directors on September 17, 1997, and approved by its shareholders on December 16, 1997 (as amended from time to time thereafter). (g) "Plan Administrator" shall mean the person or entity having administrative authority under the Plan, as specified in Article IV of the Plan. (h) "Peer Group Companies" shall mean the companies included in the Standard & Poors Paper and Forest Products Industry Index from time to time (but excluding the Corporation). (j) "Subsidiary" shall mean any corporation (other than the Corporation) in any unbroken chain of corporations beginning with the Corporation if, at the time of reference, each of the corporations other than the last corporation in the unbroken chain owns stock possessing fifty percent (50%) or more of the total combined voting power of all classes of stock in one of the other corporations in such chain. (k) "Total Shareholder Return" shall mean, for a given period and a given common stock, the number determined by the formula [(SB+SD)PE - 100] , 100, where (i) `SB'' is the number of shares of the common stock (including fractional shares) that could be bought with an initial $100 investment at PB, or $100 , PB; (ii) `SD'' is the total number of shares of the common stock (including fractional shares) which could be purchased with the dividends (or allocated portion of a per share dividend) paid on SB shares of the common stock during the measurement period (and any additional shares or fractional shares allocated in accordance with this subsection (ii) with respect to dividends paid during the measurement period but prior to the dividend in question), determined in the case of each such dividend paid using the closing price of the common stock on the trading date coincident with or next preceding the date of payment of the dividend; (iii) `PB'' is the closing price of the common stock on the last trading day before the first day of the measurement period; and (iv) `PE'' is the closing price of the common stock on the last trading day of the measurement period; provided, however, that in determining Total Shareholder Return of G-P Common Stock for any period ending after December 16, 1997, the following adjustments shall be made: (i) the sum of SB and SD shall be calculated through the December 16, 1997 using G-P Common Stock; (ii) effective December 17, 1997, each share of G-P Common Stock determined in (i) above shall automatically be converted to one share of G-P Group Stock and one share of Timber Stock; (iii) from and after the December 17, 1997, the sum of SB and SD will be calculated separately with respect to each class of the Corporation's common stock, and additions to SD for each such class of common stock will be based on the dividends declared on that class of common stock and the stock price for that class of common stock on the appropriate date; (iv) at the end of a measurement period, the Total Shareholder Return for the Corporation's common stock used for purposes of comparison with Total Shareholder Return of the common stock of Peer Group Companies will be based on the sum of (A) the product of the number of shares of G-P Group Stock (SB + SD) accrued through the close of the measurement period in accordance with (ii) and (iii) above and PE determined for this class of common stock and (B) a corresponding product with respect to the number of shares of Timber Stock. In calculating the Total Shareholder Return for a given common stock, the Plan Administrator will apply the principles of Section 9 (except for the last sentence of that section) as if that section applied to the common stock. (l) "Vesting Date" shall mean the date upon which options granted under this Agreement first become exercisable in accordance with the provisions of Sections 2, 3 or 10. (m) "Weighted Average Total Shareholder Return" shall mean, for any given measurement period, the average of the Total Shareholder Returns for a named group of corporations with the return of each such corporation weighted on the basis of its market capitalization at the beginning of the measurement period. IN WITNESS WHEREOF, the Corporation has caused this Agreement to be executed by its duly authorized officers, under its corporate seal, and the Optionee has executed this Agreement, as of this day and year first above written. GEORGIA-PACIFIC CORPORATION By: -------------------- A. D. Correll Chairman, Chief Executive Officer, and President ATTEST: W. Edwin Frazier, III, Assistant Secretary OPTIONEE NOTE: PLEASE COMPLETE THE ATTACHED PERSONAL DATA SHEET. OPTIONEE'S PERSONAL DATA (Please Print) Full Name ADDRESS: ========================================================== ---------------------------------------------------------- SOCIAL SECURITY NUMBER: --------------------------------------------- DATE OF BIRTH: --------------------------------------------------------- Month, Day and Year DIVISION: LOCATION: ------------------------- -------------------------- 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 TREASURERS DEPARTMENT. EX-99.16 15 SVIP (TIMBER 1997 GRANT OPTION 1997 GEORGIA-PACIFIC CORPORATION REPLACEMENT SHAREHOLDER VALUE INCENTIVE STOCK OPTION (Timber Stock) THIS AGREEMENT, dated December 17, 1997 by and between GEORGIA- PACIFIC CORPORATION, a Georgia corporation (hereinafter called the "Corporation"), and (hereinafter called "Optionee"); W I T N E S S E T H: WHEREAS, on February 3, 1997, the Optionee was granted pursuant to the Georgia-Pacific Corporation 1995 Shareholder Value Incentive Plan (as then in effect, the "Original Plan") the option to purchase from the Company up to, but not exceeding in the aggregate, shares of the Company's then existing ----- common stock ("G-P Common Stock") at a price of $74.25 per share (the "Original Option"); WHEREAS, the shareholders of the Corporation have approved, effective December 16, 1997, a recapitalization of the Corporation'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, in conjunction with the approval of the Letter Stock Transaction, the shareholders of the Corporation also approved, effective December 16, 1997, an amendment and restatement of the Original Plan (the "Plan"), which upon approval of the Letter Stock Transaction provides for the conversion 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; WHEREAS, in making the options conversion contemplated in the Letter Stock Transaction and in the Plan, 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 (the "Timber Stock Price"), and the exercise price for the Timber Stock option is equal to the exercise price under the Original Option Price multiplied by a fraction, the numerator of which is the Timber Stock Price and the denominator of which is the sum of the G-P Group Stock Price and the Timber Stock Price; 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. OPTION GRANT. Subject to the terms and conditions set forth herein, the Corporation hereby grants to the Optionee during the period commencing on the date hereof and ending on February 2, 2007, the option to purchase from the Corporation, from time to time, as hereinafter more specifically stated, at a price of $21.41 per share, up to but not exceeding in the aggregate, shares of the Timber Stock (or such portion of such -------- shares as may be vested and exercisable), which option may be exercised, in whole or in part, from time to time, commencing on the applicable Vesting Date as determined in accordance with Section 2 or 3 (but only as to the portion then becoming exercisable) and for the exercise period beginning on such Vesting Date and continuing to the end of the applicable exercise period specified in this Agreement. 2. NORMAL VESTING. This option grant (or any portion thereof) may in no event be exercised prior to its Vesting Date, but on and after its Vesting Date (to the extent of the number option shares then becoming exercisable), it may be exercised in accordance with - and to the extent permitted under - the terms of the Plan and this Agreement. This option grant will vest without regard to performance standards stated in this Section 2 on the 183rd day following the 9th anniversary of the Grant Date. This option grant is subject to accelerated performance-based vesting in accordance with any of the following rules: (a) This option grant will vest on the 3rd anniversary of the Grant Date if the Corporation's Total Shareholder Return for the immediately preceding 3 full fiscal years exceeds the Weighted Average Total Shareholder Return of all Peer Group Companies for the same period. (b) This option grant will vest on the 4th anniversary of the Grant Date if the Corporation's Total Shareholder Return for the immediately preceding 4 full fiscal years exceeds the Weighted Average Total Shareholder Return of all Peer Group Companies for the same period. (c) This option grant will vest on the 5th anniversary of the Grant Date if the Corporation's Total Shareholder Return for the immediately preceding 5 full fiscal years exceeds the Weighted Average Total Shareholder Return of all Peer Group Companies for the same period. Vesting under subsections (a), (b) and (c) shall be conditioned upon the Committee's written certification that the performance vesting standards of this Section 2 have been met. Vesting of this option grant under this Section 2 is subject in all cases to the restrictions/forfeiture rules in Sections 4 and 5. Subject to those rules, if this option grant vests pursuant to this Section 2, it may be exercised at any time on or after the Vesting Date and prior to the 10th anniversary of the Grant Date (not inclusive), provided that if the Optionee's employment with the Corporation and its Subsidiaries terminates for any reason other than retirement (as defined in Section 3(b)(i)), death or disability (as defined in Section 3(b)(iii)) after the Vesting Date of this option grant and before it has expired, the option grant may be exercised only during the 90-day period following the Optionee's date of termination or, if shorter, during the remaining period before this option grant expires in accordance with this Agreement. If a Participant's employment with the Corporation and its Subsidiaries terminates for any reason other than retirement (as defined in Section 3(b)(i)), death or disability (as defined in Section 3(b)(iii)) prior to the Vesting Date of this option grant, this option grant will terminate as of the Participant's termination date, and the Participant will have no further rights hereunder. 3. SPECIAL VESTING. This option grant (or the portion designated below in Section 3(c)) shall vest and become exercisable under the circumstances and subject to the terms and conditions specified in this Section 3 (subject to the provisions of Section 5): (a) Notwithstanding anything in Sections 2 or 4 to the contrary, the performance-based vesting provisions of subsections (a), (b) and (c) of Section 2 shall operate to vest this option grant to the extent that it remains outstanding when the Optionee retires (as defined in Section 3(b)(i)), dies or becomes disabled (as defined in Section 3(b)(iii)) prior to its Vesting Date even if such vesting occurs after the termination of the Optionee's employment with the Corporation and its Subsidiaries. (b) Notwithstanding anything in Sections 2 or 4 to the contrary, if this option grant is not vested pursuant to the performance- based vesting standards of subsections (a), (b) and (c) of Section 2 or another provision of this Agreement, it will vest in the circumstances and on the date specified in paragraphs (i) through (iii) below to the extent permitted by the schedule set forth in Section 3(c): (i) If the Optionee terminates employment with the Corporation and its Subsidiaries after attaining age 65 or age 55 and 10 years of service for vesting purposes under the Georgia-Pacific Corporation Savings and Capital Growth Plan (other than a termination for Cause), on the later of his/her retirement date or the 5th anniversary of the Grant Date; (ii) If the Optionee dies, on the later of his/her date of death or the 5th anniversary of the Grant Date; or (iii) If the Optionee becomes totally disabled as defined under the Georgia-Pacific Corporation Salaried Long-Term Disability Plan (whether or not the Optionee actually participates in that plan), as determined by the Plan Administrator in its sole discretion, on the later of his/her date of termination of employment with the Corporation and its Subsidiaries because of such disability or the 5th anniversary of the Grant Date. (c) If the Optionee becomes entitled to special vesting in accordance with Section 3(b) above, this option grant, if then still outstanding, will vest as of the applicable date specified in Section 3(b) to the extent indicated in paragraphs (i) through (iii) below: (i) If the special vesting event described in Section 3(b)(i) through (iii) occurs prior to the 5th anniversary of the Grant Date of this option grant (which has not otherwise vested), 50% of this option grant will vest and 50% will be forfeited. (ii) If special vesting described in Section 3(b)(i) through (iii) occurs on or after the 5th anniversary, but prior to the 6th anniversary, of the Grant Date of this option grant (which has not otherwise vested), 60% of this option grant will vest and 40% will be forfeited. (iii) If special vesting described in Section 3(b)(i) through (iii) occurs on or after the 6th anniversary, but prior to the 7th anniversary, of the Grant Date of this option grant (which has not otherwise vested), 70% of this option grant will vest and 30% will be forfeited. (iv) If special vesting described in Section 3(b)(i) through (iii) occurs on or after the 7th anniversary, but prior to the 8th anniversary, of the Grant Date of this option grant (which has not otherwise vested), 80% of this option grant will vest and 20% will be forfeited. (v) If special vesting described in Section 3(b)(i) through (iii) occurs on or after the 8th anniversary, but prior to the 9th anniversary, of the Grant Date of this option grant (which has not otherwise vested), 90% of this option grant will vest and 10% will be forfeited. (vi) If special vesting described in Section 3(b)(i) through (iii) occurs on or after the 9th anniversary of the Grant Date of this option grant (which has not otherwise vested), 100% of this option grant will vest. (d) The special vesting dates specified in this Section 3 shall be considered Vesting Dates for purposes of this Agreement. (e) If this option grant vests pursuant to Section 3(a), it may be exercised at any time on or after its Vesting Date and prior to the 10th anniversary of its Grant Date (not inclusive). If this option grant (or any portion thereof) vests pursuant to Section 3(b), it may be exercised (to the extent it has vested) at any time on or after its Vesting Date and prior to the 183rd day following its Vesting Date (not inclusive) or, if earlier, prior to the 10th anniversary of its Grant Date (not inclusive). 4. RESTRICTIONS/FORFEITURE RULES. This option grant will be subject to the following restrictions and forfeiture rules: (a) Subject to Section 3, if the Optionee's employment with the Corporation and its Subsidiaries is terminated for any reason prior to the Vesting Date for this option grant (or any portion thereof), the Optionee shall forfeit all rights with respect to this option grant, and this Agreement shall be null, void and of no effect as of the date his/her employment terminates. (b) This option grant shall be nontransferable and may not be sold, hypothecated or otherwise assigned or conveyed by the Optionee to any party; provided that in the event of the incapacity (as determined by the Plan Administrator) or death of the Optionee, his/her attorney-in-fact pursuant to a valid power of attorney giving general or specific authority to make elections with respect to this option grant, his/her court-appointed guardian or the custodian of his/her affairs or the executor or administrator of his/her estate (as the case may be) may exercise any rights with respect to this option grant that the Participant could have exercised if he/she were still alive or not incapacitated. No assignment or transfer of this option or the rights represented thereby, whether voluntary, involuntary, or by operation of law or otherwise, except by will or the laws of descent and distribution, shall vest in the assignee or transferee any interest or right herein whatsoever, and immediately upon any attempt to assign or transfer this option, this option shall terminate and be of no force or effect. Notwithstanding anything in this subsection (b) to the contrary, an Optionee may designate a person or persons to receive, in the event of his death, any rights to which he would be entitled under this Option Agreement. Such a designation shall be made in writing, and filed with the Corporation's Treasurer's Department. A beneficiary designation may be changed or revoked by an Optionee at any time by filing a written statement of such change or revocation with the Corporation's Treasurer's Department. No beneficiary designation or change of beneficiary designation will be effective until actually received by the Corporation's Treasurer's Department. If an Optionee fails to designate a beneficiary (or the beneficiary predeceases the Optionee), this subsection (b) will apply without regard to the provisions relating to the designation of a beneficiary. (c) The Optionee shall not be deemed to be a shareholder of the Corporation - and shall have no rights as a stockholder - with respect to the shares covered by this option grant until the date (i) such shares have been issued or transferred to him/her and (ii) payment in full for such shares has been received by the Corporation as provided in this Agreement. No adjustment shall be made for dividends or other rights for which the record date is prior to the date of such issuance or transfer. (d) To the extent that this option grant is vested, but not exercised during the period provided for its exercise under this Agreement, the Participant shall forfeit all rights with respect to this option grant and this Agreement shall expire as of the close of the last day of the prescribed exercise period. 5. TERMINATION FOR CAUSE. Notwithstanding anything in this Option Agreement to the contrary, if the Optionee is terminated for Cause, this option grant shall terminate as of such date of termination regardless whether a Vesting Date has occurred on or prior to his/her date of termination unless and to the extent that the Committee determines (after taking into account the provisions of Section 16) that such forfeiture in a given case would violate applicable law. 6. EXERCISE OF OPTION. The option hereby granted shall be exercised by the delivery to the Treasurer of the Corporation or his delegate, from time to time, of written notice, signed by the Optionee, specifying the number of shares the Optionee then desires to purchase, together with cash, certified check, bank draft or postal or express money order to the order of the Corporation for an amount in United States dollars equal to the sum of: (a) the option price of such shares and (b) an amount sufficient to pay all state and federal withholding taxes (including, without limitation, FICA) with respect to the exercise (the total of (a) and (b) shall be referred to as the "Exercise Amount"). In the alternative, the Optionee may tender payment for the option shares in the form of shares of Timber Stock having a Fair Market Value on the date of exercise equal to the Exercise Amount or a combination of (i) shares of Timber Stock and (ii) cash, certified check, bank draft or postal or express money order to the order of the Corporation in an amount in United States dollars equal to the difference between the Exercise Amount and the Fair Market Value of the tendered shares of Timber Stock on the date of exercise. If the written notice of exercise is mailed, the date of its receipt by the Treasurer of the Corporation or his delegate shall be considered the date of exercise of the option by the Optionee. An exercise of stock options granted under this Agreement will generate compensation subject to federal and state tax withholding (including, without limitation, FICA withholding) in the calendar year of each exercise, and all such withholding taxes shall be the responsibility of the Optionee. The Committee may also authorize alternative procedures for exercising options under this Agreement. Within thirty (30) business days after any such exercise of the option in whole or in part by the Optionee, the Corporation shall deliver to the Optionee a certificate or certificates representing the aggregate number of shares with respect to which such option shall be so exercised, registered in the Optionee's name. The Optionee shall not have the right, in lieu of the exercise of the option, to surrender the option granted hereby, or any portion thereof, in order to receive shares covered by this option grant. 7. DATE OF TERMINATION. Except to the extent otherwise provided in subsections (a) through (c) of this Section 7, for purposes of this Agreement, the Optionee's date of termination shall be deemed to be his/her last day worked: (a) The Optionee's employment by the Corporation shall be deemed to continue during such periods as he/she is employed by a Subsidiary. If the Optionee shall be transferred from the Corporation to a Subsidiary or from a Subsidiary to the Corporation or from a Subsidiary to another Subsidiary, his/her employment shall not be deemed to be terminated by reason of such transfer. If, while the Optionee is employed by a Subsidiary, such Subsidiary shall cease to be a Subsidiary and the Optionee is not thereupon transferred to and employed by the Corporation or another Subsidiary, the date that the Optionee's employer ceases to be a Subsidiary shall be deemed to be a termination of employment. (b) The Optionee's date of termination on account of total disability shall be the last day of his/her salary continuation period under the Corporation's policy providing for salary continuation for salaried employees who are medically unable to work because of illness or injury or, if later, the date any personal leave of absence he/she may be granted under the policies of the Corporation immediately following such period of salary continuation terminates in accordance with such policies. (c) The Plan Administrator (as hereinafter defined) shall have absolute and uncontrolled discretion to determine whether any authorized leave of absence or absence on military or government service taken by the Optionee shall constitute a termination of employment for the purposes of this Agreement. 8. NO BAR TO CORPORATE RESTRUCTURING. The existence of this option shall not affect in any way the right or power of the Corporation or its stockholders to make or authorize any and all adjustments, recapitalizations, reorganizations or other changes in the Corporation's capital structure or its business, or any merger or consolidation of the Corporation, or any issue of bonds, debentures, preferred or preference stocks ahead of or affecting Timber Stock or the rights thereof, or the dissolution or liquidation of the Corporation, or any sale or transfer of all or part of its assets or business, or any other corporate act or proceeding, whether of a similar character or otherwise. 9. CAPITAL READJUSTMENTS/STOCK OPTION MODIFICATIONS. The option grant under this Plan will be made in Timber Stock as constituted on the Grant Date for this option grant. In the event of any merger, reorganization, consolidation, recapitalization, stock dividend, stock split, or extraordinary distribution with respect to Timber Stock or other change in corporate structure affecting Timber Stock, the Plan Administrator shall have the authority to make such substitution or adjustments in the number, kind and option price of shares subject to this option grant and/or such other equitable substitution or adjustments as it may determine in its sole discretion to be appropriate to ensure that all similarly situated optionees under the Plan are treated equitably as a result of any such event; provided, however, that the number of shares subject to any option grant shall always be a whole number. In the event any adjustment to this option grant pursuant to this Agreement would otherwise result in the creation of a fractional share interest, the number of shares under this option grant shall be rounded to the nearest whole share (with 0.5 share rounded to the next higher whole number). 10. CHANGE OF CONTROL. Notwithstanding any other provision of this Agreement to the contrary, in the event of a Change of Control of the Corporation (as defined in this Section 10), this option grant, if then outstanding and not yet vested, shall vest as of the effective date of such Change of Control if the Total Shareholder Return of the Corporation for at least one of the 3-year, 4-year or 5-year periods ending on the effective date of the Change of Control exceeds the Weighted Average Total Shareholder Return of all Peer Group Companies for the same period. If this option grant vests pursuant to this Section 10, it may be exercised at any time from and after the effective date of the Change of Control (which shall be considered the applicable Vesting Date) and prior to the 10th anniversary of its Grant Date. For the purposes of this Agreement, a `Change of Control'' shall mean: (a) The acquisition by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the `Exchange Act'')) (a `Person'') of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 20% or more of the combined voting power of the then outstanding voting securities of the Corporation entitled to vote generally in the election of directors (the `Outstanding Voting Securities''); provided, however, that for purposes of this subsection (a), the following acquisitions shall not constitute a Change of Control: (i) any acquisition by a Person who on the effective date of the Original Plan was the beneficial owner of 20% or more of the Outstanding Voting Securities; (ii) any acquisition directly from the Corporation, including without limitation a public offering of securities; (iii) any acquisition by the Corporation, (iv) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Corporation or any of its Subsidiaries or (v) any acquisition by any corporation pursuant to a transaction which complies with clauses (i), (ii), and (iii) of subsection (c) of this Section 10; or (b) Individuals who, as of the effective date of the Original Plan, constitute the Board (the `Incumbent Board'') cease for any reason to constitute at least a majority of the Board; provided, however, that any individual becoming a director subsequent to the effective date of the Original Plan whose election, or nomination for election by the Corporation's shareholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board or actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board; or (c) Consummation of a reorganization, merger or consolidation to which the Corporation is a party or sale or other disposition of all or substantially all of the assets of the Corporation (a "Business Combination"), in each case, unless, following such Business Combination, (i) all or substantially all of the individuals and entities who were the beneficial owners, respectively, of the Outstanding Stock and Outstanding Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly, more than 50% of the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors, as the case may be, of the corporation resulting from such Business Combination (including, without limitation, a corporation which as a result of such transaction owns the Corporation or all or substantially all of the Corporation's assets either directly or through one or more subsidiaries) (the "Successor Entity") in substantially the same proportions as their ownership, immediately prior to such Business Combination, of Outstanding Voting Securities and (ii) no Person (excluding any Successor Entity or any employee benefit plan, or related trust, of the Corporation or such Successor Entity) beneficially owns, directly or indirectly, 20% or more of, respectively, the combined voting power of the then outstanding voting securities of the Successor Entity, except to the extent that such ownership existed prior to the Business Combination and (iii) at least a majority of the members of the board of directors of the Successor Entity were members of the Incumbent Board (including persons deemed to be members of the Incumbent Board by reason of the proviso to subsection (c) of this Section 10) at the time of the execution of the initial agreement, or of the action of the Board, providing for such Business Combination; or (d) Approval by the shareholders of the Corporation of a complete liquidation or dissolution of the Corporation. 11. LEGAL IMPEDIMENTS TO EXERCISE. Anything in this Agreement to the contrary notwithstanding, if, at any time specified herein for the exercise of this option or the delivery of shares to the Optionee, any law or regulations of any governmental authority having jurisdiction in the matter shall require either the Corporation or the Optionee to take any action or refrain from action in connection therewith or to delay such exercise, then the delivery of such shares on such exercise shall be deferred until such action shall have been taken or such restriction on action shall have been removed. 12. AUTHORITY OF PLAN ADMINISTRATOR. As conditions precedent to the granting of the option and all other rights provided hereunder, the Optionee and any other person who acquires any rights hereunder agrees that any dispute or disagreement which shall arise under, or as a result of, or pursuant to, this Agreement may be determined by the Plan Administrator constituted under the Plan (the "Plan Administrator") in the Plan Administrator's absolute and uncontrolled discretion; and that any such determination or interpretation of the terms of this Agreement or the Plan or any other determination by either such Plan Administrator shall be final, binding and conclusive on all persons affected thereby. The Plan Administrator shall have the authority to administer the Plan, make all determinations with respect to the construction and application of the Plan, the Board resolutions establishing the Plan and this Agreement, adopt and revise rules and regulations relating to the Plan and make any other determinations which it believes necessary or advisable for the administration of the Plan (subject to the provisions of the Plan regarding Plan administration). Questions regarding the options granted under this Agreement and the administration of the Plan may be addressed to the Treasurer's Department of the Corporation. 13. NOT INCENTIVE STOCK OPTIONS. Anything in this Agreement to the contrary notwithstanding, the Corporation and Optionee acknowledge and agree that the Plan was not intended to provide for the issuance of "incentive stock options" as defined in Section 422 of the Internal Revenue Code of 1986, as amended, and that the options granted pursuant to this Agreement are not "incentive stock options" as so defined. 14. CONTINUED EMPLOYMENT. This Agreement shall not be deemed to limit or restrict the right of the Corporation or any Subsidiary to terminate the Optionee's employment at any time, for any reason, with or without cause, or to limit or restrict the right of the Optionee to terminate his employment with the Corporation or any Subsidiary at any time. In the event of termination of the Optionee's employment with the Corporation and all Subsidiaries, such employee shall be eligible to exercise only options on the number of shares that then or thereafter become available for purchase pursuant to Section 3 hereof (but subject to Section 5). Optionee's services shall be subject to the direction of the Board of Directors of the Corporation or such Subsidiary or such officer or officers as the respective Boards may designate from time to time and shall be rendered at such locations as the respective Boards or any such officer may determine. 15. AMENDMENT OR TERMINATION. This Agreement may be amended or terminated prior to the expiration dates set forth herein only with the mutual agreement and consent of the Optionee and the Corporation, and then only to the extent permitted under the Plan. 16. GOVERNING LAW. This Agreement shall be construed and its provisions enforced and administered in accordance with the laws of the State of Georgia and, where applicable, federal law. 17. INTERPRETATION. This Agreement shall at all times be interpreted so as to be consistent with the intent, purposes and specific language of the Plan. 18. SEVERABILITY. If any provision of this Agreement should be held illegal or invalid for any reason, such determination shall not affect the other provisions of this Agreement, but instead the Agreement shall be construed as if such provisions had never been included herein. 19. HEADINGS/GENDER. Headings contained in this Agreement are for convenience only and shall in no event be construed as part of this Agreement. Any reference to the masculine, feminine or neuter gender shall be a reference to other genders as appropriate. 20. NOTICES. Any notice which either party hereto may be required or permitted to give to the other shall be in writing, and may be delivered personally or by mail, postage prepaid, addressed as follows: (i) to the Corporation, Georgia-Pacific Corporation, l33 Peachtree Street, N.E., Atlanta, Georgia 30303, Attention: Vice President and Treasurer, or at such other address as the Corporation, by notice to the Optionee, may designate in writing from time to time; (ii) to the Optionee at the address indicated in the Optionee's then current personnel records, or at such other address as the Optionee, by notice to the Treasurer of the Corporation at the above address, may designate in writing from time to time. Such notices shall be deemed given upon receipt. 21. DEFINITIONS. For purposes of this Agreement, the following terms shall be defined as follows (certain other definitions are found in the premises to this Option Agreement): (a) "Cause" for the purposes of this Agreement shall mean any of the following: (i) the willful failure of the Optionee to perform satisfactorily the duties consistent with his title and position reasonably required of him by the Board or supervising management (other than by reason of incapacity due to physical or mental illness); (ii) the commission by the Optionee of a felony, or the perpetration by the Optionee of a dishonest act or common law fraud against the Corporation or any of its Subsidiaries; or (iii) any other willful act or omission (including without limitation the violation of any corporate policy or regulation) which could reasonably be expected to expose the Corporation to civil liability under the law of the applicable jurisdiction or causes or may reasonably be expected to cause significant injury to the financial condition or business reputation of the Corporation or any of its Subsidiaries. (b) "Corporation" shall mean Georgia-Pacific Corporation, a Georgia corporation, its successors and assigns. (c) "Committee" shall mean the Compensation Committee of the Board of Directors of the Corporation, as constituted from time to time, or such subcommittee of that body as the Compensation Committee shall specify to act for the Compensation Committee with respect to the options granted under the Plan, provided however that any such subcommittee shall have at least two members and shall consist entirely of "outside directors" as that term is defined pursuant to Section 162(m) of the Internal Revenue Code of 1986, as amended from time to time, or any statute which is a successor or replacement for such statute (and applicable regulations promulgated thereunder). (d) "Fair Market Value of the Stock" shall mean, on any date, the mean between the high and low sales prices of a share of Timber Stock on that date as reported in The Wall Street Journal, New York Stock Exchange - Composite Transactions, or as reported in any successor quotation system adopted prospectively for this purpose by the Committee, in its discretion. The Fair Market Value of the Stock shall be rounded to the nearest whole cent (with 0.5 cent being rounded to the next higher whole cent). (e) "Grant Date" shall mean the date upon which the Original Option was granted under the Original Plan. (f) "Original Plan" shall mean the Georgia-Pacific Corporation 1995 Shareholder Value Incentive Plan as adopted by the Corporation's Board of Directors effective April 1, 1995 and approved by its shareholders on May 2, 1995 (as in effect at the time the Original Option was granted). (g) "Plan" shall mean the amendment and restatement of the Original Plan as adopted by the Corporation's Board of Directors on September 17, 1997, and approved by its shareholders on December 16, 1997 (as amended from time to time thereafter) (g) "Plan Administrator" shall mean the person or entity having administrative authority under the Plan, as specified in Article IV of the Plan. (h) "Peer Group Companies" shall mean the companies included in the Standard & Poors Paper and Forest Products Industry Index from time to time (but excluding the Corporation). (j) "Subsidiary" shall mean any corporation (other than the Corporation) in any unbroken chain of corporations beginning with the Corporation if, at the time of reference, each of the corporations other than the last corporation in the unbroken chain owns stock possessing fifty percent (50%) or more of the total combined voting power of all classes of stock in one of the other corporations in such chain. (k) "Total Shareholder Return" shall mean, for a given period and a given common stock, the number determined by the formula [(SB+SD)PE - 100] , 100, where (i) `SB'' is the number of shares of the common stock (including fractional shares) that could be bought with an initial $100 investment at PB, or $100 , PB; (ii) `SD'' is the total number of shares of the common stock (including fractional shares) which could be purchased with the dividends (or allocated portion of a per share dividend) paid on SB shares of the common stock during the measurement period (and any additional shares or fractional shares allocated in accordance with this subsection (ii) with respect to dividends paid during the measurement period but prior to the dividend in question), determined in the case of each such dividend paid using the closing price of the common stock on the trading date coincident with or next preceding the date of payment of the dividend; (iii) `PB'' is the closing price of the common stock on the last trading day before the first day of the measurement period; and (iv) `PE'' is the closing price of the common stock on the last trading day of the measurement period; provided, however, that in determining Total Shareholder Return of G-P Common Stock for any period ending after December 16, 1997, the following adjustments shall be made: (i) the sum of SB and SD shall be calculated through the December 16, 1997 using G-P Common Stock; (ii) effective December 17, 1997, each share of G-P Common Stock determined in (i) above shall automatically be converted to one share of G-P Group Stock and one share of Timber Stock; (iii) from and after the December 17, 1997, the sum of SB and SD will be calculated separately with respect to each class of the Corporation's common stock, and additions to SD for each such class of common stock will be based on the dividends declared on that class of common stock and the stock price for that class of common stock on the appropriate date; (iv) at the end of a measurement period, the Total Shareholder Return for the Corporation's common stock used for purposes of comparison with Total Shareholder Return of the common stock of Peer Group Companies will be based on the sum of (A) the product of the number of shares of G-P Group Stock (SB + SD) accrued through the close of the measurement period in accordance with (ii) and (iii) above and PE determined for this class of common stock and (B) a corresponding product with respect to the number of shares of Timber Stock. In calculating the Total Shareholder Return for a given common stock, the Plan Administrator will apply the principles of Section 9 (except for the last sentence of that section) as if that section applied to the common stock. (l) "Vesting Date" shall mean the date upon which options granted under this Agreement first become exercisable in accordance with the provisions of Sections 2, 3 or 10. (m) "Weighted Average Total Shareholder Return" shall mean, for any given measurement period, the average of the Total Shareholder Returns for a named group of corporations with the return of each such corporation weighted on the basis of its market capitalization at the beginning of the measurement period. IN WITNESS WHEREOF, the Corporation has caused this Agreement to be executed by its duly authorized officers, under its corporate seal, and the Optionee has executed this Agreement, as of this day and year first above written. GEORGIA-PACIFIC CORPORATION By: -------------------- A. D. Correll Chairman, Chief Executive Officer, and President ATTEST: W. Edwin Frazier, III, Assistant Secretary OPTIONEE NOTE: PLEASE COMPLETE THE ATTACHED PERSONAL DATA SHEET. OPTIONEE'S PERSONAL DATA (Please Print) Full Name ADDRESS: ========================================================== ---------------------------------------------------------- SOCIAL SECURITY NUMBER: --------------------------------------------- DATE OF BIRTH: --------------------------------------------------------- Month, Day and Year DIVISION: LOCATION: ------------------------- -------------------------- 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. EX-99.17 16 SVIP (SPECIAL 1997 GRANT OPTION) GEORGIA-PACIFIC CORPORATION SHAREHOLDER VALUE SPECIAL INCENTIVE STOCK OPTION THIS AGREEMENT, dated February 3, 1997 by and between GEORGIA- PACIFIC CORPORATION, a Georgia corporation (hereinafter called the "Corporation"), and (hereinafter called "Optionee"); W I T N E S S E T H: WHEREAS, the Optionee is now employed by the Corporation or a Subsidiary in a key capacity and the Corporation desires to have him/her remain in the employment of the Corporation or a Subsidiary and to afford him/her the opportunity to acquire or enlarge his/her stock ownership in the Corporation by granting him/her options to purchase from the Corporation up to, but not exceeding in the aggregate, shares of the Corporation's Stock, as hereinafter more specifically stated, the exercise of which is subject to attainment of stated corporate, business segment and division performance goals, so that he may have a direct proprietary interest in the Corporation's general success and in the achievement of the specific performance goals related to the Corporation as a whole and the business segment and division in which he/she works; and WHEREAS, the options described in this Agreement have been granted pursuant to, and are governed by, the Georgia-Pacific Corporation 1995 Shareholder Value Incentive Plan adopted by the Corporation's Board of Directors effective April 1, 1995 (the "Plan") and approved by the shareholders of the Corporation on May 2, 1995, as heretofore amended and modified (in particular, but without limitation, by Amendment No. 2 to the Plan adopted by the Corporation's Board of Directors effective February 3, 1997; NOW, THEREFORE, in consideration of the mutual covenants and agreements hereinafter set forth, the parties hereto do hereby mutually agree as follows: 1. OPTION GRANT. Subject to the terms and conditions set forth herein, the Corporation hereby grants to the Optionee during the period commencing on the date hereof (the "Grant Date") and ending on August 4, 2002, the option to purchase from the Corporation, from time to time, as hereinafter more specifically stated, at a price of $74.25 per share, up to but not exceeding in the aggregate, the number of shares of the Corporation's Stock as set forth on the preceding page of this Agreement (or such portion of such shares as may be vested and exercisable), which option may be exercised, in whole or in part, from time to time, commencing on the applicable Vesting Date as determined in accordance with Section 2 (but only as to the portion then becoming exercisable) and for the exercise period beginning on such Vesting Date and continuing to the end of the applicable exercise period specified in this Agreement. Notwithstanding anything to the contrary in this Agreement (but subject to the exercise limitations specified in this Agreement), if the Optionee is on a leave of absence or is absent on military or government service as of the date of this Agreement, the Optionee may not exercise all or any part of the options granted hereby prior to the later of (i) the date the Optionee returns to active employment with the Corporation or a Subsidiary or (ii) the Vesting Date for all or any portion of this option grant (but only as to the portion then becoming exercisable). If the Optionee is not on leave of absence or absent on military or government service at the date of this Agreement or returns to active employment with the Corporation or a Subsidiary thereafter, the options described in this Agreement shall be immediately effective (subject to the exercise limitations provided in Section 2) and may become exercisable and may be exercised during a subsequent leave of absence or absence for military or government service. 2. VESTING. This option grant (or any portion thereof) may in no event be exercised prior to its Vesting Date, but on and after its Vesting Date (to the extent of the number option shares then becoming exercisable), it may be exercised in accordance with - and to the extent permitted under - the terms of the Plan and this Agreement. This option grant is subject to performance-based vesting in accordance with any of the following rules: (a) This option grant will vest on the 3rd anniversary of the Grant Date if the Corporation's Total Shareholder Return for the immediately preceding 3 full fiscal years exceeds the Weighted Average Total Shareholder Return of all Peer Group Companies for the same period. (b) This option grant will vest on the 4th anniversary of the Grant Date if the Corporation's Total Shareholder Return for the immediately preceding 4 full fiscal years exceeds the Weighted Average Total Shareholder Return of all Peer Group Companies for the same period. (c) This option grant will vest on the 5th anniversary of the Grant Date if the Corporation's Total Shareholder Return for the immediately preceding 5 full fiscal years exceeds the Weighted Average Total Shareholder Return of all Peer Group Companies for the same period. Vesting under subsections (a), (b) and (c) shall be conditioned upon the Committee's written certification that the performance vesting standards of this Section 2 have been met. Vesting of this option grant under this Section 2 is subject in all cases to the restrictions/forfeiture rules in Sections 4 and 5. Subject to those rules, if this option grant vests pursuant to this Section 2, it may be exercised at any time on or after the Vesting Date and on or prior to August 4, 2002, provided that if the Optionee's employment with the Corporation and its Subsidiaries terminates for any reason other than Cause after the Vesting Date of this option grant and before it has expired, the option grant may be exercised only during the 90-day period following the Optionee's date of termination or, if shorter, during the remaining period before this option grant expires in accordance with this Agreement. If a Participant's employment with the Corporation and its Subsidiaries terminates for any reason prior to the Vesting Date of this option grant, this option grant will terminate as of the Participant's termination date, and the Participant will have no further rights hereunder. 3. DEFINITIONS OF RETIREMENT AND DISABILITY. For purposes of this Option Agreement: (a) "Retirement" means termination of employment with the Corporation and its Subsidiaries after attaining age 65 or age 55 and 10 years of service for vesting purposes under the Georgia-Pacific Corporation Savings and Capital Growth Plan (other than a termination for Cause); and (b) "Disability" means "total disability" as defined under the Georgia-Pacific Corporation Salaried Long-Term Disability Plan (whether or not the Optionee actually participates in that plan), as determined by the Plan Administrator in its sole discretion. 4. RESTRICTIONS/FORFEITURE RULES. This option grant will be subject to the following restrictions and forfeiture rules: (a) If the Optionee's employment with the Corporation and its Subsidiaries is terminated for any reason prior to the Vesting Date for this option grant (or any portion thereof), the Optionee shall forfeit all rights with respect to this option grant, and this Agreement shall be null, void and of no effect as of the date his/her employment terminates. (b) This option grant shall be nontransferable and may not be sold, hypothecated or otherwise assigned or conveyed by the Optionee to any party; provided that in the event of the incapacity (as determined by the Plan Administrator) or death of the Optionee, his/her attorney-in-fact pursuant to a valid power of attorney giving general or specific authority to make elections with respect to this option grant, his/her court-appointed guardian or the custodian of his/her affairs or the executor or administrator of his/her estate (as the case may be) may exercise any rights with respect to this option grant that the Participant could have exercised if he/she were still alive or not incapacitated. no assignment or transfer of this option or the rights represented thereby, whether voluntary, involuntary, or by operation of law or otherwise, except by will or the laws of descent and distribution, shall vest in the assignee or transferee any interest or right herein whatsoever, and immediately upon any attempt to assign or transfer this option, this option shall terminate and be of no force or effect. Notwithstanding anything in this subsection (b) to the contrary, an Optionee may designate a person or persons to receive, in the event of his death, any rights to which he would be entitled under this Option Agreement. Such a designation shall be made in writing, and filed with the Corporation's Treasurer's Department. A beneficiary designation may be changed or revoked by an Optionee at any time by filing a written statement of such change or revocation with the Corporation's Treasurer's Department. No beneficiary designation or change of beneficiary designation will be effective until actually received by the Corporation's Treasurer's Department. If an Optionee fails to designate a beneficiary (or the beneficiary predeceases the Optionee), this subsection (b) will apply without regard to the provisions relating to the designation of a beneficiary. (c) The Optionee shall not be deemed to be a shareholder of the Corporation - and shall have no rights as a stockholder - with respect to the shares covered by this option grant until the date (i) such shares have been issued or transferred to him/her and (ii) payment in full for such shares has been received by the Corporation as provided in this Agreement. No adjustment - 5 - shall be made for dividends or other rights for which the record date is prior to the date of such issuance or transfer. (d) To the extent that this option grant is vested, but not exercised during the period provided for its exercise under this Agreement, the Participant shall forfeit all rights with respect to this option grant and this Agreement shall expire as of the close of the last day of the prescribed exercise period. 5. TERMINATION FOR CAUSE. Notwithstanding anything in this Option Agreement to the contrary, if the Optionee is terminated for Cause, this option grant shall terminate as of such date of termination regardless whether a Vesting Date has occurred on or prior to his/her date of termination unless and to the extent that the Committee determines (after taking into account the provisions of Section 16) that such forfeiture in a given case would violate applicable law. 6. EXERCISE OF OPTION. The option hereby granted shall be exercised by the delivery to the Treasurer of the Corporation or his delegate, from time to time, of written notice, signed by the Optionee, specifying the number of shares the Optionee then desires to purchase, together with cash, certified check, bank draft or postal or express money order to the order of the Corporation for an amount in United States dollars equal to the sum of: (a) the option price of such shares and (b) an amount sufficient to pay all state and federal withholding taxes (including, without limitation, FICA) with respect to the exercise (the total of (a) and (b) shall be referred to as the `Exercise Amount'). In the alternative, the Optionee may tender payment for the option shares in the form of shares of Stock having a Fair Market Value on the date of exercise equal to the Exercise Amount or a combination of (i) shares of Stock and (ii) cash, certified check, bank draft or postal or express money order to the order of the Corporation in an amount in United States dollars equal to the difference between the Exercise Amount and the Fair Market Value of the tendered shares of Stock on the date of exercise. If the written notice of exercise is mailed, the date of its receipt by the Treasurer of the Corporation or his delegate shall be considered the date of exercise of the option by the Optionee. An exercise of stock options granted under this Agreement will generate compensation subject to federal and state tax withholding (including, without limitation, FICA withholding) in the calendar year of each exercise, and all such withholding taxes shall be the responsibility of the Optionee. The Committee may also authorize alternative procedures for exercising options under this Agreement. Within thirty (30) business days after any such exercise of the option in whole or in part by the Optionee, the Corporation shall deliver to the Optionee a certificate or certificates representing the aggregate number of shares with respect to which such option shall be so exercised, registered in the Optionee's name. The Optionee shall not have the right, in lieu of the exercise of the option, to surrender the option granted hereby, or any portion thereof, in order to receive shares covered by this option grant. 7. DATE OF TERMINATION. Except to the extent otherwise provided in subsections (a) through (c) of this Section 7, for purposes of this Agreement, the Optionee's date of termination shall be deemed to be his/her last day worked: (a) The Optionee's employment by the Corporation shall be deemed to continue during such periods as he/she is employed by a Subsidiary. If the Optionee shall be transferred from the Corporation to a Subsidiary or from a Subsidiary to the Corporation or from a Subsidiary to another Subsidiary, his/her employment shall not be deemed to be terminated by reason of such transfer. If, while the Optionee is employed by a Subsidiary, such Subsidiary shall cease to be a Subsidiary and the Optionee is not thereupon transferred to and employed by the Corporation or another Subsidiary, the date that the Optionee's employer ceases to be a Subsidiary shall be deemed to be a termination of employment. (b) The Optionee's date of termination on account of total disability (as defined in Section 3) shall be the last day of his/her salary continuation period under the Corporation's policy providing for salary continuation for salaried employees who are medically unable to work because of illness or injury or, if later, the date any personal leave of absence he/she may be granted under the policies of the Corporation immediately following such period of salary continuation terminates in accordance with such policies. The Optionee's date of termination on account of retirement (as defined in Section 3) shall be his/her official date of separation from employment with the Corporation and its Subsidiaries as defined under the policies of the Corporation. (c) The Plan Administrator (as hereinafter defined) shall have absolute and uncontrolled discretion to determine whether any authorized leave of absence or absence on military or government service taken by the Optionee shall constitute a termination of employment for the purposes of this Agreement. 8. NO BAR TO CORPORATE RESTRUCTURING. The existence of this option shall not affect in any way the right or power of the Corporation or its stockholders to make or authorize any and all adjustments, recapitalizations, reorganizations or other changes in the Corporation's capital structure or its business, or any merger or consolidation of the Corporation, or any issue of bonds, debentures, preferred or preference stocks ahead of or affecting the Stock or the rights thereof, or the dissolution or liquidation of the Corporation, or any sale or transfer of all or part of its assets or business, or any other corporate act or proceeding, whether of a similar character or otherwise. 9. CAPITAL READJUSTMENTS/STOCK OPTION MODIFICATIONS. The option grant under this Plan will be made in shares of the Stock of the Corporation as constituted on the Grant Date for this option grant. In the event of any merger, reorganization, consolidation, recapitalization, stock dividend, stock split, or extraordinary distribution with respect to the Stock or other change in corporate structure affecting the Stock, the Plan Administrator shall have the authority to make such substitution or adjustments in the number, kind and option price of shares subject to this option grant and/or such other equitable substitution or adjustments as it may determine in its sole discretion to be appropriate to ensure that all similarly situated optionees under the Plan are treated equitably as a result of any such event; provided, however, that the number of shares subject to any option grant shall always be a whole number. In the event any adjustment to this option grant pursuant to this Agreement would otherwise result in the creation of a fractional share interest, the number of shares under this option grant shall be rounded to the nearest whole share (with 0.5 share rounded to the next higher whole number). 10. CHANGE OF CONTROL. Notwithstanding any other provision of this Agreement to the contrary, in the event of a Change of Control of the Corporation (as defined in this Section 10), this option grant, if then outstanding and not yet vested, shall vest as of the effective date of such Change of Control if the Total Shareholder Return of the Corporation for at least one of the 3-year, 4-year or 5-year periods ending on the effective date of the Change of Control exceeds the Weighted Average Total Shareholder Return of all Peer Group Companies for the same period. If this option grant vests pursuant to this Section 10, it may be exercised at any time from and after the effective date of the Change of Control (which shall be considered the applicable Vesting Date) and prior to its expiration date (as specified in Section 1). For the purposes of this Agreement, a `Change of Control'' shall mean: (a) The acquisition by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the `Exchange Act'')) (a "Person") of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 20% of more of either (i) the then outstanding shares of Stock (the "Outstanding Stock") or (ii) the combined voting power of the then outstanding voting securities of the Corporation entitled to vote generally in the election of directors (the "Outstanding Voting Securities"); provided, however, that for purposes of this subsection (a), the following acquisitions shall not constitute a Change of Control: (i) any acquisition directly from the Corporation, (ii) any acquisition by the Corporation, (iii) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Corporation or any corporation controlled by the Corporation or (iv) any acquisition by any corporation pursuant to a transaction which complies with clauses (i), (ii), and (iii) of subsection (c) of this Section 10; or (b) Individuals who, as of the Effective Date, constitute the Board (the "Incumbent Board") cease for any reason to constitute at least a majority of the Board; provided, however, that any individual becoming a director subsequent to the date hereof whose election, or nomination for election by the Corporation's shareholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board; or (c) Consummation of a reorganization, merger or consolidation or sale or other disposition of all or substantially all of the assets of the Corporation (a `Business Combination''), in each case, unless, following such Business Combination, (i) all or substantially all of the individuals and entities who were the beneficial owners, respectively, of the Outstanding Stock and Outstanding Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly, more than 50% of, respectively, the then outstanding shares of common stock and the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors, as the case may be, of the corporation resulting from such Business Combination (including, without limitation, a corporation which as a result of such transaction owns the Corporation or all or substantially all of the Corporation's assets either directly or through one or more subsidiaries) in substantially the same proportions as their ownership, immediately prior to such Business Combination, of the Outstanding Stock and Outstanding Voting Securities, as the case may be, (ii) no Person (excluding any corporation resulting from such Business Combination or any employee benefit plan (or related trust) of the Corporation or such corporation resulting from such Business Combination) beneficially owns, directly or indirectly, 20% or more of, respectively, the then outstanding shares of common stock of the corporation resulting from such Business Combination or the combined voting power of the then outstanding voting securities of such corporation except to the extent that such ownership existed prior to the Business Combination and (iii) at least a majority of the members of the board of directors of the corporation resulting from such Business Combination were members of the Incumbent Board at the time of the execution of the initial agreement, or of the action of the Board, providing for such Business Combination; or (d) Approval by the shareholders of the Corporation of a complete liquidation or dissolution of the Corporation. 11. LEGAL IMPEDIMENTS TO EXERCISE. Anything in this Agreement to the contrary notwithstanding, if, at any time specified herein for the exercise of this option or the delivery of shares to the Optionee, any law or regulations of any governmental authority having jurisdiction in the matter shall require either the Corporation or the Optionee to take any action or refrain from action in connection therewith or to delay such exercise, then the delivery of such shares on such exercise shall be deferred until such action shall have been taken or such restriction on action shall have been removed. 12. AUTHORITY OF PLAN ADMINISTRATOR. As conditions precedent to the granting of the option and all other rights provided hereunder, the Optionee and any other person who acquires any rights hereunder agrees that any dispute or disagreement which shall arise under, or as a result of, or pursuant to, this Agreement may be determined by the Plan Administrator constituted under the Plan (the "Plan Administrator") in the Plan Administrator's absolute and uncontrolled discretion; and that any such determination or interpretation of the terms of this Agreement or the Plan or any other determination by either such Plan Administrator shall be final, binding and conclusive on all persons affected thereby. The Plan Administrator shall have the authority to administer the Plan, make all determinations with respect to the construction and application of the Plan, the Board resolutions establishing the Plan and this Agreement, adopt and revise rules and regulations relating to the Plan and make any other determinations which it believes necessary or advisable for the administration of the Plan (subject to the provisions of the Plan regarding Plan administration). Questions regarding the options granted under this Agreement and the administration of the Georgia-Pacific Corporation 1995 Shareholder Value Incentive Plan may be addressed to the Treasurer's Department of the Corporation. 13. NOT INCENTIVE STOCK OPTIONS. Anything in this Agreement to the contrary notwithstanding, the Corporation and Optionee acknowledge and agree that the Plan was not intended to provide for the issuance of "incentive stock options" as defined in Section 422 of the Internal Revenue Code of 1986, as amended, and that the options granted pursuant to this Agreement are not "incentive stock options" as so defined. 14. CONTINUED EMPLOYMENT. This Agreement shall not be deemed to limit or restrict the right of the Corporation or any Subsidiary to terminate the Optionee's employment at any time, for any reason, with or without cause, or to limit or restrict the right of the Optionee to terminate his employment with the Corporation or any Subsidiary at any time. In the event of termination of the Optionee's employment with the Corporation and all Subsidiaries, such employee shall be eligible to exercise only options on the number of shares that then have vested in accordance with this Agreement (but subject to Section 5). Optionee's services shall be subject to the direction of the Board of Directors of the Corporation or such Subsidiary or such officer or officers as the respective Boards may designate from time to time and shall be rendered at such locations as the respective Boards or any such officer may determine. 15. AMENDMENT OR TERMINATION. This Agreement may be amended or terminated prior to the expiration dates set forth herein only with the mutual agreement and consent of the Optionee and the Corporation, and then only to the extent permitted under the Plan. 16. GOVERNING LAW. This Agreement shall be construed and its provisions enforced and administered in accordance with the laws of the State of Georgia and, where applicable, federal law. 17. INTERPRETATION. This Agreement shall at all times be interpreted so as to be consistent with the intent, purposes and specific language of the Plan. 18. SEVERABILITY. If any provision of this Agreement should be held illegal or invalid for any reason, such determination shall not affect the other provisions of this Agreement, but instead the Agreement shall be construed as if such provisions had never been included herein. 19. HEADINGS/GENDER. Headings contained in this Agreement are for convenience only and shall in no event be construed as part of this Agreement. Any reference to the masculine, feminine or neuter gender shall be a reference to other genders as appropriate. 20. NOTICES. Any notice which either party hereto may be required or permitted to give to the other shall be in writing, and may be delivered personally or by mail, postage prepaid, addressed as follows: (i) to the Corporation, Georgia-Pacific Corporation, l33 Peachtree Street, N.E., Atlanta, Georgia 30303, Attention: Treasurer, or at such other address as the Corporation, by notice to the Optionee, may designate in writing from time to time; (ii) to the Optionee at the address indicated in the Optionee's then current personnel records, or at such other address as the Optionee, by notice to the Treasurer of the Corporation at the above address, may designate in writing from time to time. Such notices shall be deemed given upon receipt. 21. DEFINITIONS. For purposes of this Agreement, the following terms shall be defined as follows: (a) "Cause" for the purposes of this Agreement shall mean any of the following: (i) the willful failure of the Optionee to perform satisfactorily the duties consistent with his title and position reasonably required of him by the Board or supervising management (other than by reason of incapacity due to physical or mental illness); (ii) the commission by the Optionee of a felony, or the perpetration by the Optionee of a dishonest act or common law fraud against the Corporation or any of its Subsidiaries; or (iii) any other willful act or omission (including without limitation the violation of any corporate policy or regulation) which could reasonably be expected to expose the Corporation to civil liability under the law of the applicable jurisdiction or causes or may reasonably be expected to cause significant injury to the financial condition or business reputation of the Corporation or any of its Subsidiaries. (b) "Corporation" shall mean Georgia-Pacific Corporation, a Georgia corporation, its successors and assigns. (c) "Committee" shall mean the Compensation Committee of the Board of Directors of the Corporation, as constituted from time to time, or such subcommittee of that body as the Compensation Committee shall specify to act for the Compensation Committee with respect to the options granted under the Plan, provided however that any such subcommittee shall have at least two members and shall consist entirely of `outside directors'' as that term is defined pursuant to Section 162(m) of the Internal Revenue Code of 1986, as amended from time to time, or any statute which is a successor or replacement for such statute (and applicable regulations promulgated thereunder). (d) "Fair Market Value of the Stock" shall mean, on any date, the mean between the high and low sales prices of a share of Stock on that date as reported in The Wall Street Journal, New York Stock Exchange - Composite Transactions, or as reported in any successor quotation system adopted prospectively for this purpose by the Committee, in its discretion. The Fair Market Value of the Stock shall be rounded to the nearest whole cent (with 0.5 cent being rounded to the next higher whole cent). (e) "Grant Date" shall mean the date of this Agreement. (f) "Plan" shall mean the Georgia-Pacific Corporation 1995 Shareholder Value Incentive Plan as adopted by the Corporation's Board of Directors effective April 1, 1995 and approved by its shareholders on May 2, 1995. (g) "Plan Administrator" shall mean the person or entity having administrative authority under the Plan, as specified in Article IV of the Plan. (h) "Peer Group Companies" shall mean the companies included in the Standard & Poors Paper and Forest Products Industry Index from time to time (but excluding the Corporation). (i) "Stock" shall mean Georgia-Pacific Corporation common stock, eighty cents ($0.80) par value per share. (j) "Subsidiary" shall mean any corporation (other than the Corporation) in any unbroken chain of corporations beginning with the Corporation if, at the time of reference, each of the corporations other than the last corporation in the unbroken chain owns stock possessing fifty percent (50%) or more of the total combined voting power of all classes of stock in one of the other corporations in such chain. (k) "Total Shareholder Return" shall mean, for a given period and a given common stock, the number determined by the formula [(SB+SD)PE - 100] , 100, where (i) `SB'' is the number of shares of the common stock (including fractional shares) that could be bought with an initial $100 investment at PB, or $100 , PB; (ii) `SD'' is the total number of shares of the common stock (including fractional shares) which could be purchased with the dividends (or allocated portion of a per share dividend) paid on SB shares of the common stock during the measurement period (and any additional shares or fractional shares allocated in accordance with this subsection (ii) with respect to dividends paid during the measurement period but prior to the dividend in question), determined in the case of each such dividend paid using the closing price of the common stock on the trading date coincident with or next preceding the date of payment of the dividend; (iii) `PB'' is the closing price of the common stock on the last trading day before the first day of the measurement period; and (iv) `PE'' is the closing price of the common stock on the last trading day of the measurement period. In calculating the Total Shareholder Return for a given common stock, the Plan Administrator will apply the principles of Section 9 (except for the last sentence of that section) as if that section applied to the common stock. (l) "Vesting Date" shall mean the date upon which options granted under this Agreement first become exercisable in accordance with the provisions of Sections 2 or 10. (m) "Weighted Average Total Shareholder Return" shall mean, for any given measurement period, the average of the Total Shareholder Returns for a named group of corporations with the return of each such corporation weighted on the basis of its market capitalization at the beginning of the measurement period. IN WITNESS WHEREOF, the Corporation has caused this Agreement to be executed by its duly authorized officers, under its corporate seal, and the Optionee has executed this Agreement, as of this day and year first above written. GEORGIA-PACIFIC CORPORATION By: ----------------------------- A. D. Correll Chairman, Chief Executive Officer and President ATTEST: W. Edwin Frazier, III, Assistant Secretary OPTIONEE NOTE: PLEASE COMPLETE THE ATTACHED PERSONAL DATA SHEET. AND BENEFICIARY DESIGNATION FORM OPTIONEE'S PERSONAL DATA (Please Print) Full Name ADDRESS: ========================================================== ---------------------------------------------------------- SOCIAL SECURITY NUMBER: --------------------------------------------- DATE OF BIRTH: --------------------------------------------------------- Month, Day and Year DIVISION: LOCATION: ------------------------- -------------------------- BENEFICIARY DESIGNATION FORM (Includes Special Options) Under the terms of the 1995 Shareholder Value Incentive Plan, you have the right to designate a beneficiary to exercise certain rights that may arise under those grants in the event of your death. IF YOU DO NOT DESIGNATE A BENEFICIARY IN WRITING, THESE RIGHTS WILL PASS TO YOUR ESTATE UPON YOUR DEATH. In order to allow you to decide affirmatively which outcome you desire and, in the event you prefer to designate a beneficiary or beneficiaries other than your estate, to name that beneficiary or those beneficiaries, the Company has provided this form, which you may use to designate in writing the beneficiary(ies) you desire. This year, since we have not asked for this designation in the past, you will have the opportunity to select beneficiaries for each of your outstanding SVIP grants (1995, 1996, 1997 and 1997 Special). Of course, you may revoke and change your beneficiary designations at any time by notifying the Treasurer's Department in writing at the address indicated below. PLEASE TAKE TIME TO FILL OUT THIS FORM AND RETURN IT TO THE TREASURER'S DEPARTMENT AT ONE OF THE FOLLOWING ADDRESSES: STREET ADDRESS POST OFFICE ADDRESS INTEROFFICE MAIL CODE 133 Peachtree P. O. Box 105605 GA030-7 Street, N. E. Atlanta, GA 30348 ATTN: SVIP Atlanta, GA 30303 ATTN: SVIP Administrator-7th ATTN: SVIP Administrator-7th Floor Administrator-7th Floor Floor BENEFICIARY DESIGNATIONS OR MODIFICATIONS OF BENEFICIARY DESIGNATIONS SENT TO ANY OTHER ADDRESS WILL NOT BE EFFECTIVE UNTIL ACTUALLY RECEIVED BY THE TREASURER'S DEPARTMENT. THE COMPANY HAS NO RESPONSIBILITY FOR BENEFICIARY DESIGNATION FORMS WHICH ARE NOT SUBMITTED AS INDICATED ABOVE. NOTE: You may designate multiple beneficiaries, in which case those living at the time of your death will equally share the rights accorded to a beneficiary for the particular grant(s) in question. I designate my estate as my beneficiary under my 1995, 1996, 1997 and 1997 Special SVIP grants. I designate the following person(s) as my beneficiary(ies) under my 1995, 1996, 1997 and 1997 Special SVIP grants: NAME ADDRESS RELATIONSHIP TO SOCIAL SECURITY YOU NUMBER (IF KNOWN) I designate the following person(s) as my beneficiary(ies) under my specified SVIP grant or grants: 1995 GRANT NAME ADDRESS RELATIONSHIP TO SOCIAL SECURITY YOU NUMBER (IF KNOWN) 1996 GRANT NAME ADDRESS RELATIONSHIP TO SOCIAL SECURITY YOU NUMBER (IF KNOWN) 1997 GRANT NAME ADDRESS RELATIONSHIP TO SOCIAL SECURITY YOU NUMBER (IF KNOWN) 1997 SPECIAL GRANT NAME ADDRESS RELATIONSHIP TO SOCIAL SECURITY YOU NUMBER (IF KNOWN) If you have any questions, please call Barby Trammell in Atlanta at 404-652- 4491. PLEASE NOTE THAT NO BENEFICIARY DESIGNATION OR MODIFICATION OF ANY BENEFICIARY DESIGNATION IS EFFECTIVE UNTIL REDUCED TO WRITING AND RECEIVED BY THE TREASURER'S DEPARTMENT IN ATLANTA AT THE ADDRESS GIVEN ABOVE. Signature: -------------------------- Printed Name: ---------------------------- Date: , 19 ---------------------- ----- EX-99.18 17 SVIP (SPECIAL TIMBER 1997 GRANT OPTION) 1997 GEORGIA-PACIFIC CORPORATION REPLACEMENT SHAREHOLDER VALUE SPECIAL INCENTIVE STOCK OPTION (Timber Stock) THIS AGREEMENT, dated December 17, 1997 by and between GEORGIA- PACIFIC CORPORATION, a Georgia corporation (hereinafter called the "Corporation"), and (hereinafter called "Optionee"); W I T N E S S E T H: WHEREAS, on February 3, 1997, the Optionee was granted pursuant to the Georgia-Pacific Corporation 1995 Shareholder Value Incentive Plan (as then in effect, the "Original Plan") the option to purchase from the Company up to, but not exceeding in the aggregate, shares of the Company's then existing ----- common stock ("G-P Common Stock") at a price of $74.25 per share (the "Original Option"); WHEREAS, the shareholders of the Corporation have approved, effective December 16, 1997, a recapitalization of the Corporation'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, in conjunction with the approval of the Letter Stock Transaction, the shareholders of the Corporation also approved, effective December 16, 1997, an amendment and restatement of the Original Plan (the "Plan"), which upon approval of the Letter Stock Transaction provides for the conversion 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; WHEREAS, in making the options conversion contemplated in the Letter Stock Transaction and in the Plan, 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 (the "Timber Stock Price"), and the exercise price for the Timber Stock option is equal to the exercise price under the Original Option Price multiplied by a fraction, the numerator of which is the Timber Stock Price and the denominator of which is the sum of the G-P Group Stock Price and the Timber Stock Price; 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. OPTION GRANT. Subject to the terms and conditions set forth herein, the Corporation hereby grants to the Optionee during the period commencing on the date hereof and ending on August 4, 2002, the option to purchase from the Corporation, from time to time, as hereinafter more specifically stated, at a price of $21.41 per share, up to but not exceeding in the aggregate, shares of the Timber Stock (or such portion of such -------- shares as may be vested and exercisable), which option may be exercised, in whole or in part, from time to time, commencing on the applicable Vesting Date as determined in accordance with Section 2 or 3 (but only as to the portion then becoming exercisable) and for the exercise period beginning on such Vesting Date and continuing to the end of the applicable exercise period specified in this Agreement.. 2. NORMAL VESTING. This option grant (or any portion thereof) may in no event be exercised prior to its Vesting Date, but on and after its Vesting Date (to the extent of the number option shares then becoming exercisable), it may be exercised in accordance with - and to the extent permitted under - the terms of the Plan and this Agreement. This option grant is subject to accelerated performance-based vesting in accordance with any of the following rules: (a) This option grant will vest on the 3rd anniversary of the Grant Date if the Corporation's Total Shareholder Return for the immediately preceding 3 full fiscal years exceeds the Weighted Average Total Shareholder Return of all Peer Group Companies for the same period. (b) This option grant will vest on the 4th anniversary of the Grant Date if the Corporation's Total Shareholder Return for the immediately preceding 4 full fiscal years exceeds the Weighted Average Total Shareholder Return of all Peer Group Companies for the same period. (c) This option grant will vest on the 5th anniversary of the Grant Date if the Corporation's Total Shareholder Return for the immediately preceding 5 full fiscal years exceeds the Weighted Average Total Shareholder Return of all Peer Group Companies for the same period. Vesting under subsections (a), (b) and (c) shall be conditioned upon the Committee's written certification that the performance vesting standards of this Section 2 have been met. Vesting of this option grant under this Section 2 is subject in all cases to the restrictions/forfeiture rules in Sections 4 and 5. Subject to those rules, if this option grant vests pursuant to this Section 2, it may be exercised at any time on or after the Vesting Date and on or prior to August 4, 2002, provided that if the Optionee's employment with the Corporation and its Subsidiaries terminates for any reason other than Cause after the Vesting Date of this option grant and before it has expired, the option grant may be exercised only during the 90-day period following the Optionee's date of termination or, if shorter, during the remaining period before this option grant expires in accordance with this Agreement. If a Participant's employment with the Corporation and its Subsidiaries terminates for any reason prior to the Vesting Date of this option grant, this option grant will terminate as of the Participant's termination date, and the Participant will have no further rights hereunder. 3. DEFINITIONS OF RETIREMENT AND DISABILITY. For purposes of this Option Agreement: (a) "Retirement" means termination of employment with the Corporation and its Subsidiaries after attaining age 65 or age 55 and 10 years of service for vesting purposes under the Georgia-Pacific Corporation Savings and Capital Growth Plan (other than a termination for Cause); and (b) "Disability" means "total disability" as defined under the Georgia-Pacific Corporation Salaried Long-Term Disability Plan (whether or not the Optionee actually participates in that plan), as determined by the Plan Administrator in its sole discretion. 4. RESTRICTIONS/FORFEITURE RULES. This option grant will be subject to the following restrictions and forfeiture rules: (a) Subject to Section 3, if the Optionee's employment with the Corporation and its Subsidiaries is terminated for any reason prior to the Vesting Date for this option grant (or any portion thereof), the Optionee shall forfeit all rights with respect to this option grant, and this Agreement shall be null, void and of no effect as of the date his/her employment terminates. (b) This option grant shall be nontransferable and may not be sold, hypothecated or otherwise assigned or conveyed by the Optionee to any party; provided that in the event of the incapacity (as determined by the Plan Administrator) or death of the Optionee, his/her attorney-in-fact pursuant to a valid power of attorney giving general or specific authority to make elections with respect to this option grant, his/her court-appointed guardian or the custodian of his/her affairs or the executor or administrator of his/her estate (as the case may be) may exercise any rights with respect to this option grant that the Participant could have exercised if he/she were still alive or not incapacitated. No assignment or transfer of this option or the rights represented thereby, whether voluntary, involuntary, or by operation of law or otherwise, except by will or the laws of descent and distribution, shall vest in the assignee or transferee any interest or right herein whatsoever, and immediately upon any attempt to assign or transfer this option, this option shall terminate and be of no force or effect. Notwithstanding anything in this subsection (b) to the contrary, an Optionee may designate a person or persons to receive, in the event of his death, any rights to which he would be entitled under this Option Agreement. Such a designation shall be made in writing, and filed with the Corporation's Treasurer's Department. A beneficiary designation may be changed or revoked by an Optionee at any time by filing a written statement of such change or revocation with the Corporation's Treasurer's Department. No beneficiary designation or change of beneficiary designation will be effective until actually received by the Corporation's Treasurer's Department. If an Optionee fails to designate a beneficiary (or the beneficiary predeceases the Optionee), this subsection (b) will apply without regard to the provisions relating to the designation of a beneficiary. (c) The Optionee shall not be deemed to be a shareholder of the Corporation - and shall have no rights as a stockholder - with respect to the shares covered by this option grant until the date (i) such shares have been issued or transferred to him/her and (ii) payment in full for such shares has been received by the Corporation as provided in this Agreement. No adjustment shall be made for dividends or other rights for which the record date is prior to the date of such issuance or transfer. (d) To the extent that this option grant is vested, but not exercised during the period provided for its exercise under this Agreement, the Participant shall forfeit all rights with respect to this option grant and this Agreement shall expire as of the close of the last day of the prescribed exercise period. 5. TERMINATION FOR CAUSE. Notwithstanding anything in this Option Agreement to the contrary, if the Optionee is terminated for Cause, this option grant shall terminate as of such date of termination regardless whether a Vesting Date has occurred on or prior to his/her date of termination unless and to the extent that the Committee determines (after taking into account the provisions of Section 16) that such forfeiture in a given case would violate applicable law. 6. EXERCISE OF OPTION. The option hereby granted shall be exercised by the delivery to the Treasurer of the Corporation or his delegate, from time to time, of written notice, signed by the Optionee, specifying the number of shares the Optionee then desires to purchase, together with cash, certified check, bank draft or postal or express money order to the order of the Corporation for an amount in United States dollars equal to the sum of: (a) the option price of such shares and (b) an amount sufficient to pay all state and federal withholding taxes (including, without limitation, FICA) with respect to the exercise (the total of (a) and (b) shall be referred to as the `Exercise Amount'). In the alternative, the Optionee may tender payment for the option shares in the form of shares of Timber Stock having a Fair Market Value on the date of exercise equal to the Exercise Amount or a combination of (i) shares of Timber Stock and (ii) cash, certified check, bank draft or postal or express money order to the order of the Corporation in an amount in United States dollars equal to the difference between the Exercise Amount and the Fair Market Value of the tendered shares of Timber Stock on the date of exercise. If the written notice of exercise is mailed, the date of its receipt by the Treasurer of the Corporation or his delegate shall be considered the date of exercise of the option by the Optionee. An exercise of stock options granted under this Agreement will generate compensation subject to federal and state tax withholding (including, without limitation, FICA withholding) in the calendar year of each exercise, and all such withholding taxes shall be the responsibility of the Optionee. The Committee may also authorize alternative procedures for exercising options under this Agreement. Within thirty (30) business days after any such exercise of the option in whole or in part by the Optionee, the Corporation shall deliver to the Optionee a certificate or certificates representing the aggregate number of shares with respect to which such option shall be so exercised, registered in the Optionee's name. The Optionee shall not have the right, in lieu of the exercise of the option, to surrender the option granted hereby, or any portion thereof, in order to receive shares covered by this option grant. 7. DATE OF TERMINATION. Except to the extent otherwise provided in subsections (a) through (c) of this Section 7, for purposes of this Agreement, the Optionee's date of termination shall be deemed to be his/her last day worked: (a) The Optionee's employment by the Corporation shall be deemed to continue during such periods as he/she is employed by a Subsidiary. If the Optionee shall be transferred from the Corporation to a Subsidiary or from a Subsidiary to the Corporation or from a Subsidiary to another Subsidiary, his/her employment shall not be deemed to be terminated by reason of such transfer. If, while the Optionee is employed by a Subsidiary, such Subsidiary shall cease to be a Subsidiary and the Optionee is not thereupon transferred to and employed by the Corporation or another Subsidiary, the date that the Optionee's employer ceases to be a Subsidiary shall be deemed to be a termination of employment. (b) The Optionee's date of termination on account of total disability shall be the last day of his/her salary continuation period under the Corporation's policy providing for salary continuation for salaried employees who are medically unable to work because of illness or injury or, if later, the date any personal leave of absence he/she may be granted under the policies of the Corporation immediately following such period of salary continuation terminates in accordance with such policies. (c) The Plan Administrator (as hereinafter defined) shall have absolute and uncontrolled discretion to determine whether any authorized leave of absence or absence on military or government service taken by the Optionee shall constitute a termination of employment for the purposes of this Agreement. 8. NO BAR TO CORPORATE RESTRUCTURING. The existence of this option shall not affect in any way the right or power of the Corporation or its stockholders to make or authorize any and all adjustments, recapitalizations, reorganizations or other changes in the Corporation's capital structure or its business, or any merger or consolidation of the Corporation, or any issue of bonds, debentures, preferred or preference stocks ahead of or affecting Timber Stock or the rights thereof, or the dissolution or liquidation of the Corporation, or any sale or transfer of all or part of its assets or business, or any other corporate act or proceeding, whether of a similar character or otherwise. 9. CAPITAL READJUSTMENTS/STOCK OPTION MODIFICATIONS. The option grant under this Plan will be made in Timber Stock as constituted on the Grant Date for this option grant. In the event of any merger, reorganization, consolidation, recapitalization, stock dividend, stock split, or extraordinary distribution with respect to Timber Stock or other change in corporate structure affecting Timber Stock, the Plan Administrator shall have the authority to make such substitution or adjustments in the number, kind and option price of shares subject to this option grant and/or such other equitable substitution or adjustments as it may determine in its sole discretion to be appropriate to ensure that all similarly situated optionees under the Plan are treated equitably as a result of any such event; provided, however, that the number of shares subject to any option grant shall always be a whole number. In the event any adjustment to this option grant pursuant to this Agreement would otherwise result in the creation of a fractional share interest, the number of shares under this option grant shall be rounded to the nearest whole share (with 0.5 share rounded to the next higher whole number). 10. CHANGE OF CONTROL. Notwithstanding any other provision of this Agreement to the contrary, in the event of a Change of Control of the Corporation (as defined in this Section 10), this option grant, if then outstanding and not yet vested, shall vest as of the effective date of such Change of Control if the Total Shareholder Return of the Corporation for at least one of the 3-year, 4-year or 5-year periods ending on the effective date of the Change of Control exceeds the Weighted Average Total Shareholder Return of all Peer Group Companies for the same period. If this option grant vests pursuant to this Section 10, it may be exercised at any time from and after the effective date of the Change of Control (which shall be considered the applicable Vesting Date) and prior to the 10th anniversary of its Grant Date. For the purposes of this Agreement, a "Change of Control" shall mean: (a) The acquisition by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the "Exchange Act")) (a "Person") of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 20% or more of the combined voting power of the then outstanding voting securities of the Corporation entitled to vote generally in the election of directors (the "Outstanding Voting Securities"); provided, however, that for purposes of this subsection (a), the following acquisitions shall not constitute a Change of Control: (i) any acquisition by a Person who on the effective date of the Original Plan was the beneficial owner of 20% or more of the Outstanding Voting Securities; (ii) any acquisition directly from the Corporation, including without limitation a public offering of securities; (iii) any acquisition by the Corporation, (iv) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Corporation or any of its Subsidiaries or (v) any acquisition by any corporation pursuant to a transaction which complies with clauses (i), (ii), and (iii) of subsection (c) of this Section 10; or (b) Individuals who, as of the effective date of the Original Plan, constitute the Board (the `Incumbent Board'') cease for any reason to constitute at least a majority of the Board; provided, however, that any individual becoming a director subsequent to the effective date of the Original Plan whose election, or nomination for election by the Corporation's shareholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board or actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board; or (c) Consummation of a reorganization, merger or consolidation to which the Corporation is a party or sale or other disposition of all or substantially all of the assets of the Corporation (a "Business Combination"), in each case, unless, following such Business Combination, (i) all or substantially all of the individuals and entities who were the beneficial owners, respectively, of the Outstanding Stock and Outstanding Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly, more than 50% of the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors, as the case may be, of the corporation resulting from such Business Combination (including, without limitation, a corporation which as a result of such transaction owns the Corporation or all or substantially all of the Corporation's assets either directly or through one or more subsidiaries) (the "Successor Entity") in substantially the same proportions as their ownership, immediately prior to such Business Combination, of Outstanding Voting Securities and (ii) no Person (excluding any Successor Entity or any employee benefit plan, or related trust, of the Corporation or such Successor Entity) beneficially owns, directly or indirectly, 20% or more of, respectively, the combined voting power of the then outstanding voting securities of the Successor Entity, except to the extent that such ownership existed prior to the Business Combination and (iii) at least a majority of the members of the board of directors of the Successor Entity were members of the Incumbent Board (including persons deemed to be members of the Incumbent Board by reason of the proviso to subsection (c) of this Section 10) at the time of the execution of the initial agreement, or of the action of the Board, providing for such Business Combination; or (d) Approval by the shareholders of the Corporation of a complete liquidation or dissolution of the Corporation. 11. LEGAL IMPEDIMENTS TO EXERCISE. Anything in this Agreement to the contrary notwithstanding, if, at any time specified herein for the exercise of this option or the delivery of shares to the Optionee, any law or regulations of any governmental authority having jurisdiction in the matter shall require either the Corporation or the Optionee to take any action or refrain from action in connection therewith or to delay such exercise, then the delivery of such shares on such exercise shall be deferred until such action shall have been taken or such restriction on action shall have been removed. 12. AUTHORITY OF PLAN ADMINISTRATOR. As conditions precedent to the granting of the option and all other rights provided hereunder, the Optionee and any other person who acquires any rights hereunder agrees that any dispute or disagreement which shall arise under, or as a result of, or pursuant to, this Agreement may be determined by the Plan Administrator constituted under the Plan (the "Plan Administrator") in the Plan Administrator's absolute and uncontrolled discretion; and that any such determination or interpretation of the terms of this Agreement or the Plan or any other determination by either such Plan Administrator shall be final, binding and conclusive on all persons affected thereby. The Plan Administrator shall have the authority to administer the Plan, make all determinations with respect to the construction and application of the Plan, the Board resolutions establishing the Plan and this Agreement, adopt and revise rules and regulations relating to the Plan and make any other determinations which it believes necessary or advisable for the administration of the Plan (subject to the provisions of the Plan regarding Plan administration). Questions regarding the options granted under this Agreement and the administration of the Plan may be addressed to the Treasurer's Department of the Corporation. 13. NOT INCENTIVE STOCK OPTIONS. Anything in this Agreement to the contrary notwithstanding, the Corporation and Optionee acknowledge and agree that the Plan was not intended to provide for the issuance of "incentive stock options" as defined in Section 422 of the Internal Revenue Code of 1986, as amended, and that the options granted pursuant to this Agreement are not "incentive stock options" as so defined. 14. CONTINUED EMPLOYMENT. This Agreement shall not be deemed to limit or restrict the right of the Corporation or any Subsidiary to terminate the Optionee's employment at any time, for any reason, with or without cause, or to limit or restrict the right of the Optionee to terminate his employment with the Corporation or any Subsidiary at any time. In the event of termination of the Optionee's employment with the Corporation and all Subsidiaries, such employee shall be eligible to exercise only options on the number of shares that then or thereafter become available for purchase pursuant to Section 3 hereof (but subject to Section 5). Optionee's services shall be subject to the direction of the Board of Directors of the Corporation or such Subsidiary or such officer or officers as the respective Boards may designate from time to time and shall be rendered at such locations as the respective Boards or any such officer may determine. 15. AMENDMENT OR TERMINATION. This Agreement may be amended or terminated prior to the expiration dates set forth herein only with the mutual agreement and consent of the Optionee and the Corporation, and then only to the extent permitted under the Plan. 16. GOVERNING LAW. This Agreement shall be construed and its provisions enforced and administered in accordance with the laws of the State of Georgia and, where applicable, federal law. 17. INTERPRETATION. This Agreement shall at all times be interpreted so as to be consistent with the intent, purposes and specific language of the Plan. 18. SEVERABILITY. If any provision of this Agreement should be held illegal or invalid for any reason, such determination shall not affect the other provisions of this Agreement, but instead the Agreement shall be construed as if such provisions had never been included herein. 19. HEADINGS/GENDER. Headings contained in this Agreement are for convenience only and shall in no event be construed as part of this Agreement. Any reference to the masculine, feminine or neuter gender shall be a reference to other genders as appropriate. 20. NOTICES. Any notice which either party hereto may be required or permitted to give to the other shall be in writing, and may be delivered personally or by mail, postage prepaid, addressed as follows: (i) to the Corporation, Georgia-Pacific Corporation, l33 Peachtree Street, N.E., Atlanta, Georgia 30303, Attention: Vice President and Treasurer, or at such other address as the Corporation, by notice to the Optionee, may designate in writing from time to time; (ii) to the Optionee at the address indicated in the Optionee's then current personnel records, or at such other address as the Optionee, by notice to the Treasurer of the Corporation at the above address, may designate in writing from time to time. Such notices shall be deemed given upon receipt. 21. DEFINITIONS. For purposes of this Agreement, the following terms shall be defined as follows (certain other definitions are found in the premises to this Option Agreement): (a) "Cause" for the purposes of this Agreement shall mean any of the following: (i) the willful failure of the Optionee to perform satisfactorily the duties consistent with his title and position reasonably required of him by the Board or supervising management (other than by reason of incapacity due to physical or mental illness); (ii) the commission by the Optionee of a felony, or the perpetration by the Optionee of a dishonest act or common law fraud against the Corporation or any of its Subsidiaries; or (iii) any other willful act or omission (including without limitation the violation of any corporate policy or regulation) which could reasonably be expected to expose the Corporation to civil liability under the law of the applicable jurisdiction or causes or may reasonably be expected to cause significant injury to the financial condition or business reputation of the Corporation or any of its Subsidiaries. (b) "Corporation" shall mean Georgia-Pacific Corporation, a Georgia corporation, its successors and assigns. (c) "Committee" shall mean the Compensation Committee of the Board of Directors of the Corporation, as constituted from time to time, or such subcommittee of that body as the Compensation Committee shall specify to act for the Compensation Committee with respect to the options granted under the Plan, provided however that any such subcommittee shall have at least two members and shall consist entirely of "outside directors" as that term is defined pursuant to Section 162(m) of the Internal Revenue Code of 1986, as amended from time to time, or any statute which is a successor or replacement for such statute (and applicable regulations promulgated thereunder). (d) "`Fair Market Value of the Stock" shall mean, on any date, the mean between the high and low sales prices of a share of Timber Stock on that date as reported in The Wall Street Journal, New York Stock Exchange - Composite Transactions, or as reported in any successor quotation system adopted prospectively for this purpose by the Committee, in its discretion. The Fair Market Value of the Stock shall be rounded to the nearest whole cent (with 0.5 cent being rounded to the next higher whole cent). (e) "Grant Date" shall mean the date upon which the Original Option was granted under the Original Plan. (f) "Original Plan" shall mean the Georgia-Pacific Corporation 1995 Shareholder Value Incentive Plan as adopted by the Corporation's Board of Directors effective April 1, 1995 and approved by its shareholders on May 2, 1995 (as in effect at the time the Original Option was granted). (g) "Plan" shall mean the amendment and restatement of the Original Plan as adopted by the Corporation's Board of Directors on September 17, 1997, and approved by its shareholders on December 16, 1997 (as amended from time to time thereafter). (g) "Plan Administrator" shall mean the person or entity having administrative authority under the Plan, as specified in Article IV of the Plan. (h) "Peer Group Companies" shall mean the companies included in the Standard & Poors Paper and Forest Products Industry Index from time to time (but excluding the Corporation). (j) "Subsidiary" shall mean any corporation (other than the Corporation) in any unbroken chain of corporations beginning with the Corporation if, at the time of reference, each of the corporations other than the last corporation in the unbroken chain owns stock possessing fifty percent (50%) or more of the total combined voting power of all classes of stock in one of the other corporations in such chain. (k) "Total Shareholder Return" shall mean, for a given period and a given common stock, the number determined by the formula [(SB+SD)PE - 100] , 100, where (i) `SB'' is the number of shares of the common stock (including fractional shares) that could be bought with an initial $100 investment at PB, or $100 , PB; (ii) `SD'' is the total number of shares of the common stock (including fractional shares) which could be purchased with the dividends (or allocated portion of a per share dividend) paid on SB shares of the common stock during the measurement period (and any additional shares or fractional shares allocated in accordance with this subsection (ii) with respect to dividends paid during the measurement period but prior to the dividend in question), determined in the case of each such dividend paid using the closing price of the common stock on the trading date coincident with or next preceding the date of payment of the dividend; (iii) `PB'' is the closing price of the common stock on the last trading day before the first day of the measurement period; and (iv) `PE'' is the closing price of the common stock on the last trading day of the measurement period; provided, however, that in determining Total Shareholder Return of G-P Common Stock for any period ending after December 16, 1997, the following adjustments shall be made: (i) the sum of SB and SD shall be calculated through the December 16, 1997 using G-P Common Stock; (ii) effective December 17, 1997, each share of G-P Common Stock determined in (i) above shall automatically be converted to one share of G-P Group Stock and one share of Timber Stock; (iii) from and after the December 17, 1997, the sum of SB and SD will be calculated separately with respect to each class of the Corporation's common stock, and additions to SD for each such class of common stock will be based on the dividends declared on that class of common stock and the stock price for that class of common stock on the appropriate date; (iv) at the end of a measurement period, the Total Shareholder Return for the Corporation's common stock used for purposes of comparison with Total Shareholder Return of the common stock of Peer Group Companies will be based on the sum of (A) the product of the number of shares of G-P Group Stock (SB + SD) accrued through the close of the measurement period in accordance with (ii) and (iii) above and PE determined for this class of common stock and (B) a corresponding product with respect to the number of shares of Timber Stock. In calculating the Total Shareholder Return for a given common stock, the Plan Administrator will apply the principles of Section 9 (except for the last sentence of that section) as if that section applied to the common stock. (l) "Vesting Date" shall mean the date upon which options granted under this Agreement first become exercisable in accordance with the provisions of Sections 2, 3 or 10. (m) "Weighted Average Total Shareholder Return shall mean, for any given measurement period, the average of the Total Shareholder Returns for a named group of corporations with the return of each such corporation weighted on the basis of its market capitalization at the beginning of the measurement period. IN WITNESS WHEREOF, the Corporation has caused this Agreement to be executed by its duly authorized officers, under its corporate seal, and the Optionee has executed this Agreement, as of this day and year first above written. GEORGIA-PACIFIC CORPORATION By: --------------------- A. D. Correll Chairman, Chief Executive Officer, and President ATTEST: W. Edwin Frazier, III, Assistant Secretary OPTIONEE NOTE: PLEASE COMPLETE THE ATTACHED PERSONAL DATA SHEET. OPTIONEE'S PERSONAL DATA (Please Print) Full Name ADDRESS: ========================================================== ---------------------------------------------------------- SOCIAL SECURITY NUMBER: --------------------------------------------- DATE OF BIRTH: --------------------------------------------------------- Month, Day and Year DIVISION: ------------------------- LOCATION: -------------------------- 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. EX-99.21 18 1997 LTIP TIMBER OPTION) GEORGIA-PACIFIC CORPORATION/TIMBER GROUP 1997 LONG-TERM INCENTIVE PLAN EMPLOYEE STOCK OPTION THIS AGREEMENT, dated December 17, 1997 by and between GEORGIA- PACIFIC CORPORATION, a Georgia corporation (hereinafter called the "Corporation"), and (hereinafter called "Optionee"); W I T N E S S E T H: WHEREAS, the Optionee is now employed by the Corporation or a Subsidiary in a key capacity and the Corporation desires to have him/her remain in the employment of the Corporation or a Subsidiary and to afford him/her the opportunity to acquire or enlarge his/her stock ownership in the Corporation by granting him/her options to purchase from the Corporation up to, but not exceeding in the aggregate, shares of the Corporation's Timber Stock, the exercise of which is subject to vesting and other terms and conditions as hereinafter more specifically provided, so that he/she may have a direct proprietary interest in the success of the Corporation and, in particular, of its business segment known as "The Timber Company"; and WHEREAS, the options described in this Agreement have been granted pursuant to, and are governed by, the Georgia-Pacific Corporation/Timber Group 1997 Long-Term Incentive Plan adopted by the Corporation's Board of Directors on September 17, 1997 and approved by the shareholders of the Corporation on December 16, 1997 (the "Plan"); NOW, THEREFORE, in consideration of the mutual covenants and agreements hereinafter set forth, the parties hereto do hereby mutually agree as follows: 1. OPTION GRANT. Subject to the terms and conditions set forth herein, the Corporation hereby grants to the Optionee during the period commencing on the date hereof (the "Grant Date") and ending on December 16, 2007, the option to purchase from the Corporation, from time to time, as hereinafter more specifically stated, at a price of $25.13 per share, up to but not exceeding in the aggregate, the number of shares of the Corporation's Timber Stock as set forth in the introduction of this Agreement (or such portion of such shares as may be vested and exercisable), which option may be exercised, in whole or in part, from time to time, commencing on the applicable Vesting Date as determined in accordance with Section 2 (but only as to the portion then becoming exercisable) and for the exercise period beginning on such Vesting Date and continuing to the end of the applicable exercise period specified in this Agreement. Notwithstanding anything to the contrary in this Agreement (but subject to the exercise limitations specified in this Agreement), if the Optionee is on a leave of absence or is absent on military or government service as of the date of this Agreement, the Optionee may not exercise all or any part of the options granted hereby prior to the later of (i) the date the Optionee returns to active employment with the Corporation or a Subsidiary or (ii) the Vesting Date for all or any portion of this option grant (but only as to the portion then becoming exercisable). If the Optionee is not on leave of absence or absent on military or government service at the date of this Agreement or returns to active employment with the Corporation or a Subsidiary thereafter, the options described in this Agreement shall be immediately effective (subject to the exercise limitations provided in Section 2) and may become exercisable and may be exercised during a subsequent leave of absence or absence for military or government service. 2. VESTING. This option grant shall vest in accordance with the following schedule: VESTING DATE PERCENTAGE OF ORIGINALLY GRANTED SHARES VESTING1 December 17, 1998 25% December 17, 1999 25% December 17, 2000 25% December 17, 2001 25% Note 1: The actual number of shares vesting on any Vesting Date will be determined by multiplying the original grant under this Option Agreement by 0.25 and by rounding the result up to the nearest whole share, provided that the total shares vesting under this Agreement may not exceed the number originally granted. Vesting of this option grant under this Section 2 is subject in all cases to the restrictions/forfeiture rules in Sections 4 and 5. Subject to those rules and the provisions of Section 3, if this option grant vests pursuant to this Section 2, it may be exercised at any time on or after the Vesting Date and prior to the 10th anniversary of the Grant Date. 3. TERMINATION OF EMPLOYMENT. 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 Corporation and all Subsidiaries (other than as a result of his death or permanent disability while in the Corporation'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 Corporation. 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 Corporation. 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. 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 Cause) termination of employment with the Corporation 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 Corporation'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. 4. RESTRICTIONS/FORFEITURE RULES. This option grant will be subject to the following restrictions and forfeiture rules: (a) Subject to Section 3, if the Optionee's employment with the Corporation and its Subsidiaries is terminated for any reason prior to the Vesting Date for this option grant (or any portion thereof), the Optionee shall forfeit all rights with respect to this option grant, and this Agreement shall be null, void and of no effect as of the date his/her employment terminates. (b) This option grant shall be nontransferable and may not be sold, hypothecated or otherwise assigned or conveyed by the Optionee to any party; provided that in the event of the incapacity (as determined by the Plan Administrator) or death of the Optionee, his/her attorney-in-fact pursuant to a valid power of attorney giving general or specific authority to make elections with respect to this option grant, his/her court-appointed guardian or the custodian of his/her affairs or the executor or administrator of his/her estate (as the case may be) may exercise any rights with respect to this option grant that the Participant could have exercised if he/she were still alive or not incapacitated. No assignment or transfer of this option or the rights represented thereby, whether voluntary, involuntary, or by operation of law or otherwise, except by will or the laws of descent and distribution, shall vest in the assignee or transferee any interest or right herein whatsoever, and immediately upon any attempt to assign or transfer this option, this option shall terminate and be of no force or effect. Notwithstanding anything in this subsection (b) to the contrary, an Optionee may designate a person or persons to receive, in the event of his death, any rights to which he would be entitled under this Option Agreement. Such a designation shall be made in writing, and filed with the Corporation's Treasurer's Department. A beneficiary designation may be changed or revoked by an Optionee at any time by filing a written statement of such change or revocation with the Corporation's Treasurer's Department. No beneficiary designation or change of beneficiary designation will be effective until actually received by the Corporation's Treasurer's Department. If an Optionee fails to designate a beneficiary (or the beneficiary predeceases the Optionee), this subsection (b) will apply without regard to the provisions relating to the designation of a beneficiary. (c) The Optionee shall not be deemed to be a shareholder of the Corporation - and shall have no rights as a stockholder - with respect to the shares covered by this option grant until the date (i) such shares have been issued or transferred to him/her and (ii) payment in full for such shares has been received by the Corporation as provided in this Agreement. No adjustment shall be made for dividends or other rights for which the record date is prior to the date of such issuance or transfer. (d) To the extent that this option grant is vested, but not exercised during the period provided for its exercise under this Agreement, the Participant shall forfeit all rights with respect to this option grant and this Agreement shall expire as of the close of the last day of the prescribed exercise period. 5. TERMINATION FOR CAUSE. Notwithstanding anything in this Option Agreement to the contrary, if the Optionee is terminated for Cause, this option grant shall terminate as of such date of termination regardless whether a Vesting Date has occurred on or prior to his/her date of termination unless and to the extent that the Committee determines (after taking into account the provisions of Section 16) that such forfeiture in a given case would violate applicable law. 6. EXERCISE OF OPTION. The option hereby granted shall be exercised by the delivery to the Treasurer of the Corporation or his delegate, from time to time, of written notice, signed by the Optionee, specifying the number of shares the Optionee then desires to purchase, together with cash, certified check, bank draft or postal or express money order to the order of the Corporation for an amount in United States dollars equal to the sum of: (a) the option price of such shares and (b) an amount sufficient to pay all state and federal withholding taxes (including, without limitation, FICA) with respect to the exercise (the total of (a) and (b) shall be referred to as the "Exercise Amount"). In the alternative, the Optionee may tender payment for the option shares in the form of shares of Timber Stock having a Fair Market Value on the date of exercise equal to the Exercise Amount or a combination of (i) shares of Timber Stock and (ii) cash, certified check, bank draft or postal or express money order to the order of the Corporation in an amount in United States dollars equal to the difference between the Exercise Amount and the Fair Market Value of the tendered shares of Timber Stock on the date of exercise. If the written notice of exercise is mailed, the date of its receipt by the Treasurer of the Corporation or his delegate shall be considered the date of exercise of the option by the Optionee. An exercise of stock options granted under this Agreement will generate compensation subject to federal and state tax withholding (including, without limitation, FICA withholding) in the calendar year of each exercise, and all such withholding taxes shall be the responsibility of the Optionee. The Committee may also authorize alternative procedures for exercising options under this Agreement. Within thirty (30) business days after any such exercise of the option in whole or in part by the Optionee, the Corporation shall deliver to the Optionee a certificate or certificates representing the aggregate number of shares with respect to which such option shall be so exercised, registered in the Optionee's name. The Optionee shall not have the right, in lieu of the exercise of the option, to surrender the option granted hereby, or any portion thereof, in order to receive shares covered by this option grant. 7. DATE OF TERMINATION. Except to the extent otherwise provided in subsections (a) through (c) of this Section 7, for purposes of this Agreement, the Optionee's date of termination shall be deemed to be his/her last day worked: (a) The Optionee's employment by the Corporation shall be deemed to continue during such periods as he/she is employed by a Subsidiary. If the Optionee shall be transferred from the Corporation to a Subsidiary or from a Subsidiary to the Corporation or from a Subsidiary to another Subsidiary, his/her employment shall not be deemed to be terminated by reason of such transfer. If, while the Optionee is employed by a Subsidiary, such Subsidiary shall cease to be a Subsidiary and the Optionee is not thereupon transferred to and employed by the Corporation or another Subsidiary, the date that the Optionee's employer ceases to be a Subsidiary shall be deemed to be a termination of employment. (b) The Optionee's date of termination on account of total disability shall be the last day of his/her salary continuation period under the Corporation's policy providing for salary continuation for salaried employees who are medically unable to work because of illness or injury or, if later, the date any personal leave of absence he/she may be granted under the policies of the Corporation immediately following such period of salary continuation terminates in accordance with such policies. (c) The Plan Administrator (as hereinafter defined) shall have absolute and uncontrolled discretion to determine whether any authorized leave of absence or absence on military or government service taken by the Optionee shall constitute a termination of employment for the purposes of this Agreement. 8. NO BAR TO CORPORATE RESTRUCTURING. The existence of this option shall not affect in any way the right or power of the Corporation or its stockholders to make or authorize any and all adjustments, recapitalizations, reorganizations or other changes in the Corporation's capital structure or its business, or any merger or consolidation of the Corporation, or any issue of bonds, debentures, preferred or preference stocks ahead of or affecting Timber Stock or the rights thereof, or the dissolution or liquidation of the Corporation, or any sale or transfer of all or part of its assets or business, or any other corporate act or proceeding, whether of a similar character or otherwise. 9. CAPITAL READJUSTMENTS/STOCK OPTION MODIFICATIONS. The option grant under this Plan will be made in Timber Stock as constituted on the Grant Date for this option grant. In the event of any merger, reorganization, consolidation, recapitalization, stock dividend, stock split, or extraordinary distribution with respect to Timber Stock or other change in corporate structure affecting Timber Stock, the Plan Administrator shall have the authority to make such substitution or adjustments in the number, kind and option price of shares subject to this option grant and/or such other equitable substitution or adjustments as it may determine in its sole discretion to be appropriate to ensure that all similarly situated optionees under the Plan are treated equitably as a result of any such event; provided, however, that the number of shares subject to any option grant shall always be a whole number. In the event any adjustment to this option grant pursuant to this Agreement would otherwise result in the creation of a fractional share interest, the number of shares under this option grant shall be rounded to the nearest whole share (with 0.5 share rounded to the next higher whole number). 10. CHANGE OF CONTROL. Notwithstanding any other provision of this Agreement to the contrary, in the event of a Change of Control of the Corporation (as defined in this Section 10), this option grant, if then outstanding and not yet vested, shall vest as of the effective date of such Change of Control. If this option grant vests pursuant to this Section 10, it may be exercised at any time from and after the effective date of the Change of Control (which shall be considered the applicable Vesting Date) and prior to the 10th anniversary of its Grant Date. For the purposes of this Agreement, a `Change of Control'' shall mean: (a) The acquisition by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the "Exchange Act")) (a "Person") of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 20% or more of the combined voting power of the then outstanding voting securities of the Corporation entitled to vote generally in the election of directors (the "Outstanding Voting Securities"); provided, however, that for purposes of this subsection (a), the following acquisitions shall not constitute a Change of Control: (i) any acquisition by a Person who on the effective date of the Original Plan was the beneficial owner of 20% or more of the Outstanding Voting Securities; (ii) any acquisition directly from the Corporation, including without limitation a public offering of securities; (iii) any acquisition by the Corporation, (iv) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Corporation or any of its Subsidiaries or (v) any acquisition by any corporation pursuant to a transaction which complies with clauses (i), (ii), and (iii) of subsection (c) of this Section 10; or (b) Individuals who, as of the effective date of the Original Plan, constitute the Board (the `Incumbent Board'') cease for any reason to constitute at least a majority of the Board; provided, however, that any individual becoming a director subsequent to the effective date of the Original Plan whose election, or nomination for election by the Corporation's shareholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board or actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board; or (c) Consummation of a reorganization, merger or consolidation to which the Corporation is a party or sale or other disposition of all or substantially all of the assets of the Corporation (a "Business Combination"), in each case, unless, following such Business Combination, (i) all or substantially all of the individuals and entities who were the beneficial owners, respectively, of the Outstanding Stock and Outstanding Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly, more than 50% of the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors, as the case may be, of the corporation resulting from such Business Combination (including, without limitation, a corporation which as a result of such transaction owns the Corporation or all or substantially all of the Corporation's assets either directly or through one or more subsidiaries) (the "Successor Entity") in substantially the same proportions as their ownership, immediately prior to such Business Combination, of Outstanding Voting Securities and (ii) no Person (excluding any Successor Entity or any employee benefit plan, or related trust, of the Corporation or such Successor Entity) beneficially owns, directly or indirectly, 20% or more of, respectively, the combined voting power of the then outstanding voting securities of the Successor Entity, except to the extent that such ownership existed prior to the Business Combination and (iii) at least a majority of the members of the board of directors of the Successor Entity were members of the Incumbent Board (including persons deemed to be members of the Incumbent Board by reason of the proviso to subsection (c) of this Section 10) at the time of the execution of the initial agreement, or of the action of the Board, providing for such Business Combination; or (d) Approval by the shareholders of the Corporation of a complete liquidation or dissolution of the Corporation. 11. LEGAL IMPEDIMENTS TO EXERCISE. Anything in this Agreement to the contrary notwithstanding, if, at any time specified herein for the exercise of this option or the delivery of shares to the Optionee, any law or regulations of any governmental authority having jurisdiction in the matter shall require either the Corporation or the Optionee to take any action or refrain from action in connection therewith or to delay such exercise, then the delivery of such shares on such exercise shall be deferred until such action shall have been taken or such restriction on action shall have been removed. 12. AUTHORITY OF PLAN ADMINISTRATOR. As conditions precedent to the granting of the option and all other rights provided hereunder, the Optionee and any other person who acquires any rights hereunder agrees that any dispute or disagreement which shall arise under, or as a result of, or pursuant to, this Agreement may be determined by the Plan Administrator constituted under the Plan (the "Plan Administrator") in the Plan Administrator's absolute and uncontrolled discretion; and that any such determination or interpretation of the terms of this Agreement or the Plan or any other determination by either such Plan Administrator shall be final, binding and conclusive on all persons affected thereby. The Plan Administrator shall have the authority to administer the Plan, make all determinations with respect to the construction and application of the Plan, the Board resolutions establishing the Plan and this Agreement, adopt and revise rules and regulations relating to the Plan and make any other determinations which it believes necessary or advisable for the administration of the Plan (subject to the provisions of the Plan regarding Plan administration). Questions regarding the options granted under this Agreement and the administration of the Plan may be addressed to the Treasurer's Department of the Corporation. 13. NOT INCENTIVE STOCK OPTIONS. Anything in this Agreement to the contrary notwithstanding, the Corporation and Optionee acknowledge and agree that the Plan was not intended to provide for the issuance of "incentive stock options" as defined in Section 422 of the Internal Revenue Code of 1986, as amended, and that the options granted pursuant to this Agreement are not "incentive stock options" as so defined. 14. CONTINUED EMPLOYMENT. This Agreement shall not be deemed to limit or restrict the right of the Corporation or any Subsidiary to terminate the Optionee's employment at any time, for any reason, with or without cause, or to limit or restrict the right of the Optionee to terminate his employment with the Corporation or any Subsidiary at any time. In the event of termination of the Optionee's employment with the Corporation and all Subsidiaries, such employee shall be eligible to exercise (to the extent provided under Section 3) only options on the number of shares that have vested on or prior to his/her date of termination (subject, however, to the provisions of Section 5). Optionee's services shall be subject to the direction of the Board of Directors of the Corporation or such Subsidiary or such officer or officers as the respective Boards may designate from time to time and shall be rendered at such locations as the respective Boards or any such officer may determine. 15. AMENDMENT OR TERMINATION. This Agreement may be amended or terminated prior to the expiration dates set forth herein only with the mutual agreement and consent of the Optionee and the Corporation, and then only to the extent permitted under the Plan. 16. GOVERNING LAW. This Agreement shall be construed and its provisions enforced and administered in accordance with the laws of the State of Georgia and, where applicable, federal law. 17. INTERPRETATION. This Agreement shall at all times be interpreted so as to be consistent with the intent, purposes and specific language of the Plan. 18. SEVERABILITY. If any provision of this Agreement should be held illegal or invalid for any reason, such determination shall not affect the other provisions of this Agreement, but instead the Agreement shall be construed as if such provisions had never been included herein. 19. HEADINGS/GENDER. Headings contained in this Agreement are for convenience only and shall in no event be construed as part of this Agreement. Any reference to the masculine, feminine or neuter gender shall be a reference to other genders as appropriate. 20. NOTICES. Any notice which either party hereto may be required or permitted to give to the other shall be in writing, and may be delivered personally or by mail, postage prepaid, addressed as follows: (i) to the Corporation, Georgia-Pacific Corporation, l33 Peachtree Street, N.E., Atlanta, Georgia 30303, Attention: Vice President and Treasurer, or at such other address as the Corporation, by notice to the Optionee, may designate in writing from time to time; (ii) to the Optionee at the address indicated in the Optionee's then current personnel records, or at such other address as the Optionee, by notice to the Treasurer of the Corporation at the above address, may designate in writing from time to time. Such notices shall be deemed given upon receipt. 21. DEFINITIONS. For purposes of this Agreement, the following terms shall be defined as follows (certain other definitions are found in the premises to this Option Agreement): (a) "Cause" for the purposes of this Agreement shall mean any of the following: (i) the willful failure of the Optionee to perform satisfactorily the duties consistent with his title and position reasonably required of him by the Board or supervising management (other than by reason of incapacity due to physical or mental illness); (ii) the commission by the Optionee of a felony, or the perpetration by the Optionee of a dishonest act or common law fraud against the Corporation or any of its Subsidiaries; or (iii) any other willful act or omission (including without limitation the violation of any corporate policy or regulation) which could reasonably be expected to expose the Corporation to civil liability under the law of the applicable jurisdiction or causes or may reasonably be expected to cause significant injury to the financial condition or business reputation of the Corporation or any of its Subsidiaries. (b) "Corporation" shall mean Georgia-Pacific Corporation, a Georgia corporation, its successors and assigns. (c) "Committee" shall mean the Compensation Committee of the Board of Directors of the Corporation, as constituted from time to time, or such subcommittee of that body as the Compensation Committee shall specify to act for the Compensation Committee with respect to the options granted under the Plan, provided however that any such subcommittee shall have at least two members and shall consist entirely of `outside directors'' as that term is defined pursuant to Section 162(m) of the Internal Revenue Code of 1986, as amended from time to time, or any statute which is a successor or replacement for such statute (and applicable regulations promulgated thereunder). (d) "Fair Market Value" shall mean, with respect to Timber Stock on any date, the mean between the high and low sales prices of a share of Timber Stock on that date as reported in The Wall Street Journal, New York Stock Exchange - Composite Transactions, or as reported in any successor quotation system adopted prospectively for this purpose by the Committee, in its discretion. The Fair Market Value of the Stock shall be rounded to the nearest whole cent (with 0.5 cent being rounded to the next higher whole cent). (e) "Grant Date" shall mean the date upon which the Original Option was granted under the Original Plan. (f) "Plan" shall mean the Georgia-Pacific Corporation/Timber Group 1997 Long-Term Incentive Plan as adopted by the Corporation's Board of Directors on September 17, 1997, and approved by its shareholders on December 16, 1997 (and as amended from time to time thereafter) (g) "Plan Administrator" shall mean the person or entity having administrative authority under the Plan, as specified in Article IV of the Plan. (h) "Subsidiary" shall mean any corporation (other than the Corporation) in any unbroken chain of corporations beginning with the Corporation if, at the time of reference, each of the corporations other than the last corporation in the unbroken chain owns stock possessing fifty percent (50%) or more of the total combined voting power of all classes of stock in one of the other corporations in such chain. (i) "Timber Stock" shall mean the class of the Corporation's common stock which is intended to reflect the business and operations of the forest resources segment of the Corporation's business, the par value of which is $0.80 per share and which is designated `Georgia-Pacific Corporation--Timber Group Common Stock''. (j) `Vesting Date'' shall mean the date upon which options granted under this Agreement first become exercisable in accordance with the provisions of Sections 2 or 10. IN WITNESS WHEREOF, the Corporation has caused this Agreement to be executed by its duly authorized officers, under its corporate seal, and the Optionee has executed this Agreement, as of this day and year first above written. GEORGIA-PACIFIC CORPORATION By: ----------------------- A. D. Correll Chairman, Chief Executive Officer and President ATTEST: W. Edwin Frazier, III, Assistant Secretary OPTIONEE NOTE: PLEASE COMPLETE THE ATTACHED PERSONAL DATA SHEET AND BENEFICIARY DESIGNATION FORM. OPTIONEE'S PERSONAL DATA (Please Print) Full Name ADDRESS: ========================================================== ---------------------------------------------------------- SOCIAL SECURITY NUMBER: --------------------------------------------- DATE OF BIRTH: --------------------------------------------------------- Month, Day and Year DIVISION: LOCATION: ------------------------- -------------------------- BENEFICIARY DESIGNATION FORM Under the terms of the Georgia-Pacific Corporation/Timber Group 1997 Long- Term Incentive Plan ("1997 Timber LTIP"), you have the right to designate a beneficiary to exercise certain rights that may arise under those grants in the event of your death. IF YOU DO NOT DESIGNATE A BENEFICIARY IN WRITING, THESE RIGHTS WILL PASS TO YOUR ESTATE UPON YOUR DEATH. In order to allow you to decide affirmatively which outcome you desire and, in the event you prefer to designate a beneficiary or beneficiaries other than your estate, to name that beneficiary or those beneficiaries, the Corporation has provided this form, which you may use to designate in writing the beneficiary(ies) you desire. Of course, you may revoke and change your beneficiary designations at any time by notifying the Treasurer's Department in writing at the address indicated below. PLEASE TAKE TIME TO FILL OUT THIS FORM AND RETURN IT TO THE TREASURER'S DEPARTMENT AT ONE OF THE FOLLOWING ADDRESSES: STREET ADDRESS POST OFFICE ADDRESS INTEROFFICE MAIL CODE 133 Peachtree P. O. Box 105605 GA030-7 Street, N. E. Atlanta, GA 30348 ATTN: SVIP Atlanta, GA 30303 ATTN: SVIP Administrator-7th ATTN: SVIP Administrator-7th Floor Administrator-7th Floor Floor BENEFICIARY DESIGNATIONS OR MODIFICATIONS OF BENEFICIARY DESIGNATIONS SENT TO ANY OTHER ADDRESS WILL NOT BE EFFECTIVE UNTIL ACTUALLY RECEIVED BY THE TREASURER'S DEPARTMENT. THE CORPORATION HAS NO RESPONSIBILITY FOR BENEFICIARY DESIGNATION FORMS WHICH ARE NOT SUBMITTED AS INDICATED ABOVE. NOTE: You may designate multiple beneficiaries, in which case those living at the time of your death will equally share the rights accorded to a beneficiary for the particular grant(s) in question. I designate my estate as my beneficiary under my 1997 grants under the 1997 Timber LTIP. I designate the following person(s) as my beneficiary(ies) under my 1997 grants under the 1997 Timber LTIP: NAME ADDRESS RELATIONSHIP TO SOCIAL SECURITY YOU NUMBER (IF -----END PRIVACY-ENHANCED MESSAGE-----