Ex 10_11(XV)

 

GEORGIA-PACIFIC CORPORATION

 

LONG-TERM INCENTIVE PLAN

 

ADOPTED BY THE BOARD OF DIRECTORS, SEPTEMBER 17, 1997

 

APPROVED BY THE SHAREHOLDERS, DECEMBER 16, 1997

 

(As Amended)

 

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TABLE OF CONTENTS

 

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1. ADOPTION AND PURPOSE

   1

2. DEFINITIONS

   1

(a) Award

   1

(b) Award Agreement

   1

(c) Board

   1

(d) Cause

   1

(e) Change of Control

   1

(f) Code

   2

(g) Committee

   2

(h) Common Stock

   2

(i) Company

   2

(j) Dividend Equivalent

   2

(k) Effective Date

   2

(l) Employee

   2

(m) Exchange Act

   2

(n) Fair Market Value

   2

(o) Incentive Stock Option

   3

(p) Non-Qualified Stock Option

   3

(q) Option

   3

(r) Participant

   3

(s) Performance Goals

   3

(t) Performance Award

   3

(u) Performance Period

   3

(v) Plan

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(w) Plan Year

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(x) Restricted Shares

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(y) Restriction Period

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(z) Subsidiary

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(aa) SAR

   4

(ab) SAR Unit

   4

3. ELIGIBILITY

   4

4. STOCK SUBJECT TO THE PROVISIONS OF THIS PLAN; LIMITATIONS.

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(a) Applicable Stock

   4

(b) Plan Limitations

   4

(c) Individual Limitations

   4

(d) Calculation Procedures

   4

5. AWARDS UNDER THIS PLAN

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(a) Stock Options

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(b) Performance Awards

   5

(i) Administration

   5

(ii) Payment of Award

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(iii) Further Restriction Period

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(c) Restricted Shares

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(i) Issuance of Stock Certificates

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(ii) Status of Restricted Shares

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(iii) Participant Rights With Respect to Issued Restricted

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(d) Dividend Equivalents

   7

(e) SARs

   8

6. OTHER TERMS AND CONDITIONS

   8

(a) Assignability; Designation of Beneficiaries

   8

(i) Prohibition on Transfer

   8

(ii) Designation of Beneficiaries

   9

(b) Award Agreement

   9

(c) Rights as a Shareholder

   9

(d) No Obligation to Exercise

   9

(e) Payments by Participants

   9

(f) Tax Withholding

   10

(g) Restrictions on Exercise

   10

(h) Surrender of Options

   10

(i) Additional Options Upon Exercise

   10

(j) Requirements of Law

   10

(k) Non-Exclusivity of the Plan

   11

(l) Unfunded Plan

   11

(m) Legends

   11

(n) Company’s Retirement and Welfare Plans

   11

(o) Forfeitures

   11

(i) Violations of Company Policies

   11

(ii) For Cause Termination

   12

(p) Requirement of Employment

   12

(q) Code Section 162(m)

   12

(r) Deferred Transfer of Shares Upon Exercise of Options

   12

7. PLAN ADMINISTRATION

   13

(a) Committee as Plan Administrator

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(b) Delegation

   13

(c) Determinations Final

   13

8. AMENDMENTS AND TERMINATION

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(a) Authority to Amend or Terminate

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(b) Awards Previously Granted

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(c) Limitations

   14

 

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9. CORPORATE RESTRUCTURING

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(a) No Bar to Corporate Restructuring

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(b) Capital Readjustments/Award Modifications

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10. NO RIGHT TO EMPLOYMENT

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11. CHANGE OF CONTROL

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(a) Special Rights Upon Change of Control

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(i) Lapse of Restrictions; Acceleration of Exercise and/or Vesting

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(ii) Election of Cash or Stock Distribution

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(iii) Extended Exercise Period

   15

(iv) Awards Non-Cancellable

   16

(b) Definition of “Change of Control

   16

(i) Acquisition of Stock

   16

(ii) Change in Board Membership

   16

(iii) Shareholder-Approved Reorganization, Merger or Consolidation

   16

(iv) Liquidation or Dissolution

   17

12. GOVERNING LAW

   17

13. CAPTIONS

   17

14. RESERVATION OF SHARES

   17

15. SAVINGS CLAUSE

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16. EFFECTIVE DATE AND TERM

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GEORGIA-PACIFIC CORPORATION

 

LONG-TERM INCENTIVE PLAN

 

1. ADOPTION AND PURPOSE

 

Georgia-Pacific Corporation (the “Company”) hereby adopts this Georgia- Pacific
Corporation Long-Term Incentive Plan, which was approved by its Board of
Directors on September 17, 1997, subject to further approval by the Company’s
shareholders (the “Plan”). The purposes of the Plan are to promote the interests
of the Company and its stockholders by (a) attracting and retaining exceptional
executive personnel and other key employees for the Company and its Subsidiaries
(as defined below), (b) motivating such employees by means of
performance-related incentives to achieve long-range performance goals and (c)
enabling such employees to participate in the long-term growth and financial
success of the Company.

 

2. DEFINITIONS

 

The following words and phrases shall have the following meanings unless a
different meaning is plainly required by the context:

 

“(a) Award. “Award” means, individually or collectively, a grant under this Plan
of Options, Restricted Shares, Dividend Equivalents, a Performance Award, and/or
SARs. The issuance of Options, Restricted Shares, shares of unrestricted Common
Stock, Dividend Equivalents, SARs and/or cash pursuant to an Award or the taking
of any other action mandated under the terms and conditions of an Award, shall
not be deemed to be a new Award for any purpose under this Plan (including, but
not limited to, Section 16).”

 

(b) Award Agreement. “Award Agreement” means a written agreement entered into
between the Company and a Participant setting forth the terms and conditions of
an Award made to such Participant under this Plan, in the form prescribed by the
Committee.

 

(c) Board. “Board” means the Board of Directors of the Company.

 

(d) Cause. “Cause” shall mean any of the following: (i) the willful failure of a
Participant 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 a Participant of a felony, or the perpetration by a Participant of
a dishonest act or common law fraud against the Company or any of its
Subsidiaries; or (iii) any other willful act or omission (including without
limitation the deliberate and willful violation of any corporate policy or
regulation) which could reasonably be expected to expose the Company 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 Company or any of its Subsidiaries.

 

(e) Change of Control. “Change of Control” shall have the meaning specified in
Section 11(b).

 

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(f) Code. “Code” means the Internal Revenue Code of 1986, as amended. Reference
to a specific section of the Code or regulation thereunder shall include such
section or regulation, any valid regulation promulgated under such section, and
any comparable provision of any future legislation or regulation amending,
supplementing or superseding such section or regulation.

 

(g) Committee. “Committee” means the Compensation Committee of the Board of
Directors of the Company, 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 this Plan. Each member of the Committee
shall be a “non-employee director” within the meaning of Rule 16b-3 under the
Exchange Act and shall be an “outside director” within the meaning of Section
162(m) of the Code. The Committee shall be composed of at least two (2) such
directors.

 

(h) Common Stock. “Common Stock” means the Company’s common stock, par value
$0.80 per share.

 

(i) Company. “Company” means Georgia-Pacific Corporation, a Georgia corporation
headquartered in Atlanta, Georgia.

 

(j) Dividend Equivalent. “Dividend Equivalent” means an Award granted to a
Participant under Section 5(d).

 

(k) Effective Date. “Effective Date” means the effective date of this Plan as
defined in Section 16.

 

(l) Employee. “Employee” means a common law employee of the Company or a
Subsidiary (including, without limitation, any Company or Subsidiary officer).

 

(m) Exchange Act. “Exchange Act” means the Securities Exchange Act of 1934, as
amended. Reference to a specific section of the Exchange Act or regulation
thereunder shall include such section or regulation, any valid regulation
promulgated under such section, and any comparable provision of any future
legislation or regulation amending, supplementing or superseding such section or
regulation.

 

(n) Fair Market Value. “Fair Market Value” means, on any date, the mean between
the high and low sales prices of a share of Common 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. If the date
of determination is not a trading date on the New York Stock Exchange, Fair
Market Value shall be determined using the high and low sales prices of a share
of Common Stock on the next preceding trading date. 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).

 

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(o) Incentive Stock Option. “Incentive Stock Option” has the meaning specified
in Section 5(a).

 

(p) Non-Qualified Stock Option. “Non-Qualified Stock Option” has the meaning
specified in Section 5(a).

 

(q) Option. “Option” means an Incentive Stock Option or a Non-Qualified Stock
Option as defined in this Plan.

 

(r) Participant. “Participant” means an Employee who has been designated as such
by the Committee pursuant to this Plan.

 

(s) Performance Goals. “Performance Goals” means, with respect to any
Performance Period, one or more objective performance goals based on one of more
of the following objective criteria established by the Committee prior to the
beginning of such Performance Period or within such period after the beginning
of the Performance Period as shall meet the requirements to be considered
“pre-established performance goals” for purposes of Code Section 162(m): (i)
increases in the price of the Common Stock; (ii) market share; (iii) sales; (iv)
return on equity, assets or capital; (v) economic profit (economic value added);
(vi) total shareholder return; (vii) costs; (viii) margins; (ix) earnings or
earnings per share; (x) cash flow; (xi) customer satisfaction; (xii) operating
profit; or (xiii) any combination of the foregoing. Such Performance Goals may
be particular to an Employee or may be based, in whole or part, on the
performance of the division, department, line of business, Subsidiary or other
business unit, whether or not legally constituted, in which the Employee works
or on the performance of the Company generally.

 

(t) Performance Award. “Performance Award” shall have the meaning specified in
Section 5(b).

 

(u) Performance Period. “Performance Period” means the period of service
designated by the Committee applicable to a Performance Award during which the
Performance Goals will be measured.

 

(v) Plan. “Plan” means the Georgia-Pacific Corporation Long-Term Incentive Plan
(formerly known as the Georgia-Pacific Corporation/Georgia-Pacific Group 1997
Long-Term Incentive Plan) as described in this plan document.

 

(w) Plan Year. “Plan Year” means the calendar year.

 

(x) Restricted Shares. “Restricted Shares” shall have the meaning specified in
Section 5(c).

 

(y) Restriction Period. “Restriction Period” means a Performance Period and/or
any other period during which full ownership of compensation contemplated in an
Award remains restricted pursuant to the terms and conditions of that Award.

 

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(z) Subsidiary. “Subsidiary” means any corporation or other entity, whether
domestic or foreign, in which the Company has or obtains, directly or
indirectly, a proprietary interest of more than 20% by reason of stock ownership
or otherwise.

 

(aa) SAR. “SAR” has the meaning specified in Section 5(e).

 

(ab) SAR Unit. “SAR Unit” means a bookkeeping entry maintained by the Company on
the Company’s books and records for each share of Common Stock with respect to
which a Participant has a SAR.

 

3. ELIGIBILITY

 

Any Employee designated by the Committee (in its sole discretion) as a
Participant under this Plan will be eligible to receive an Award specified by
the Committee in accordance with this Plan.

 

4. STOCK SUBJECT TO THE PROVISIONS OF THIS PLAN; LIMITATIONS

 

(a) Applicable Stock. The stock subject to the provisions of this Plan shall
either be shares of authorized but unissued Common Stock, shares of Common Stock
held as treasury stock or previously issued shares reacquired by the Company,
including shares purchased on the open market.

 

(b) Plan Limitations. Subject to adjustment in accordance with the provisions of
Sections 4(d) and 9, the total number of shares of Common Stock with respect to
which Awards of Options, Restricted Shares, SARs, Performance Awards, and/or
unrestricted Common Stock may be granted under this Plan may not exceed
16,000,000 shares.

 

(c) Individual Limitations. Subject to adjustment in accordance with Section 9,
and subject to Section 4(b), (i) the total number of shares of Common Stock with
respect to which Awards of Options may be granted in any Plan Year to any
Employee shall not exceed 1,200,000 shares, (ii) the total number of Restricted
Shares which may be granted in any Plan Year to any Employee shall not exceed
150,000 shares, (iii) the total number of Performance Award shares which may be
granted in any Plan Year to any Employee shall not exceed 300,000 shares, (iv)
the value of any Performance Awards payable in cash that may be granted in any
Plan Year to any Employee shall not exceed $2,500,000 (as determined on the date
the Award is granted), and (v) the total number of shares of Common Stock with
respect to which Awards of SARs may be granted in any Plan Year to any Employee
shall not exceed 1,200,000 shares.

 

(d) Calculation Procedures. For purposes of calculating the total number of
shares of Common Stock available under this Plan for grants of Awards, (i) the
grant of an Award of Options, Restricted Shares, SARs or a Performance Award
shall be deemed to be equal to the maximum number of shares of Common Stock
which may be issued under the Award, (ii) the total number of shares of Common
Stock with respect to which Awards may be granted under this Plan shall be
increased by the number of Restricted Shares issued under this Plan pursuant to
the 2003 Exchange Offer (as defined in Section 8(b)) in exchange for surrendered
options that

 

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were granted under other option plans of the Company or its Subsidiaries; and
(iii) subject to the provisions of Sections 4(b) and 4(c), there shall again be
available for Awards under this Plan all of the following: (A) shares of Common
Stock represented by Awards which have been cancelled, forfeited, surrendered or
terminated or which expire unexercised (other than Restricted Shares granted in
the 2003 Exchange Offer in exchange for surrendered options that were granted
under other option plans of the Company or its Subsidiaries); (B) the excess
portion of variable Awards which become fixed at less than their maximum
limitations; and (C) the number of shares of Common Stock delivered in full or
partial payment of the exercise price of any Option granted under this Plan;
provided, however, that shares so delivered by an Employee in full or partial
payment of the exercise of his/her Option shall not reduce the number of Options
granted to the Employee in any Plan Year for purposes of Section 4(c)(i); and
provided further that in no event shall the aggregate number of shares issued or
delivered pursuant to the exercise of Incentive Stock Options exceed 16,000,000
shares.”

 

5. AWARDS UNDER THIS PLAN

 

Subject to the provisions of this Plan, the Committee shall have the sole and
complete authority to determine the Employees to whom Awards shall be granted
and the type, terms and conditions of such Awards. As the Committee may
determine, the following types of Awards may be granted under this Plan to
Employees on a stand alone, combination or tandem basis:

 

(a) Options. An Award consisting of a right to buy a specified number of shares
of Common Stock at a fixed exercise price during a specified time, and subject
to such other terms and conditions, all as the Committee may determine. Such
Options may be Non-Qualified Stock Options or Incentive Stock Options. The
exercise price for an Award of Options (whether or not they are Incentive Stock
Options) may not be less than 100% of the Fair Market Value of the Common Stock
on the grant date. The terms and conditions for an Award of Incentive Stock
Options must otherwise comply with the requirements of Section 422 of the Code
or any successor Section as it may be amended from time to time. Non-Qualified
Stock Options are not intended to satisfy the Code requirements for Incentive
Stock Options and need not meet such requirements. Each Stock Option granted as
an Award under this Plan shall be subject to the provisions of this Plan and the
applicable Award Agreement approved by the Committee pursuant to Section 6(b)
governing that Option.

 

(b) Performance Awards. An Award granted to an Employee consisting of the right
to receive cash, shares of Common Stock, Options or Restricted Shares that are
not to be issued to the Employee until after the satisfaction of the related
Performance Goals during the related Performance Period. Such Awards shall be
subject to the following conditions and procedures:

 

  (i)

Administration. Performance Awards may be granted to Employees either alone or
in addition to other Awards granted under this Plan. The Committee shall
determine the Employees to whom Performance Awards shall be awarded for any
Performance Period, the duration of the applicable Performance Period, the
Performance Goals which must be met for the Award to be paid and the amount of
cash and/or the number of shares of Common Stock, Options and/or Restricted
Shares to be awarded

 

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at the end of a Performance Period to Employees if the Performance Goals are met
or exceeded. Each such Performance Award shall be subject to the provisions of
this Plan and the applicable Award Agreement approved by the Committee pursuant
to Section 6(b) governing that Award.

 

  (ii) Payment of Award. After the end of a Performance Period, the degree to
which the Performance Goals related to such Performance Period have been met
shall be determined by the Committee. If the Performance Goals are not met, no
compensation shall be issued pursuant to the Performance Award. If the
Performance Goals are met or exceeded, the Committee shall certify that fact in
writing in the Committee minutes or elsewhere and authorize the payment of the
amount of cash or issuance of the number of shares of Common Stock, Options
and/or Restricted Shares as contemplated under the affected Performance Award in
accordance with the related Award Agreement.

 

  (iii) Further Restriction Period. At the discretion of the Committee, a
Performance Award may provide for deferral of vesting and/or transfer rights
with respect to all or some of the incidents of ownership of the compensation
contemplated in the Award based on the satisfaction of terms and conditions in
addition to the attainment of the stated Performance Goals during the related
Performance Period over a further Restriction Period following the Performance
Period. In such a case, such vesting and/or transfer rights with respect to the
affected incidents of ownership shall be postponed until the Committee certifies
that the additional conditions have been timely met and authorizes such vesting
and/or transfer. Such acts by the Committee shall not be deemed to be a new
Award.

 

(c) Restricted Shares. An Award consisting of a transfer of shares of Common
Stock to a Participant, subject to such restrictions on transfer or other
incidents of ownership, for such periods of time (with respect to each Award,
the “Restriction Period”) as the Committee may determine. Restrictions on an
Award of Restricted Shares may include the attainment of specified Performance
Goals during a designated Performance Period having a minimum duration of at
least one year, the passage of a period of time having a minimum duration of at
least three years (during which Awards may vest incrementally), or a combination
of such restrictions and/or of other delayed vesting conditions; provided that
in no event may the minimum duration of such Restriction Period be waived except
in the case of death, disability, termination of employment or a Change of
Control. If the issuance, vesting and/or transfer of ownership of Restricted
Shares granted under this Plan is contingent upon the attainment of Performance
Goals during a designated Performance Period, the Award shall also be considered
a Performance Award and shall be subject to the provisions of Section 6(b) as
well as those of this Section 6(c). Awards of Restricted Shares under this Plan
shall be subject to the following conditions and procedures:

 

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  (i) Issuance of Stock Certificates. At the time specified for issuance of the
Restricted Shares under the applicable Award Agreement, the stock certificate or
certificates representing Restricted Shares shall be registered in the name of
the Participant to whom such Restricted Shares shall have been awarded. During
the Restriction Period, certificates representing the Restricted Shares shall
bear a restrictive legend to the effect that the Restricted Shares are subject
to the restrictions, terms and conditions provided in this Plan and the
applicable Award Agreement. Such certificates shall remain in the custody of the
Company and the Participant shall deposit with the Company stock powers or other
instruments of assignment, each endorsed in blank, so as to permit retransfer to
the Company of all or any portion of the Restricted Shares that shall be
forfeited or otherwise not become vested in accordance with the Plan and the
applicable Award Agreement.

 

  (ii) Status of Restricted Shares. Restricted Shares which have been issued in
accordance with an Award Agreement shall constitute issued and outstanding
shares of Common Stock for all corporate purposes.

 

  (iii) Participant Rights With Respect to Issued Restricted Shares. The
Participant will have the right to vote issued Restricted Shares, to receive and
retain all dividends and distributions paid or distributed on such Restricted
Shares, and to exercise all other rights, powers and privileges of a holder of
Common Stock with respect to such Restricted Shares; except that (A) the
Participant will not be entitled to delivery of the stock certificate or
certificates representing such Restricted Shares until the Restriction Period
shall have expired and unless all other vesting requirements with respect
thereto shall have been fulfilled or waived; (B) the Company will retain custody
of the stock certificate or certificates representing the Restricted Shares
during the Restriction Period; (C) any such dividends and distributions paid in
shares of Common Stock shall constitute Restricted Shares and be subject to all
of the same restrictions during the Restriction Period as the Restricted Shares
with respect to which they were paid; (D) the Participant may not sell, assign,
transfer, pledge, exchange, encumber or dispose of the Restricted Shares or his
or her interest in any of them during the Restriction Period; and (E) a breach
of any restrictions, terms or conditions provided in the Plan or established by
the Committee with respect to any Restricted Shares will cause a forfeiture of
such Restricted Shares.

 

(d) Dividend Equivalents. An Award granted to an Employee consisting of the
right to receive payment of dividends declared and paid on all or a portion of
the number of shares of Common Stock subject to a specified Award under this
Plan, as determined by the Committee. The Committee is authorized to grant
Dividend Equivalents to Participants subject to such terms and conditions as it
may determine. The Committee may provide that Dividend Equivalents be

 

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paid or distributed when accrued or be deemed to have been reinvested in
additional shares of Common Stock or otherwise reinvested.

 

(e) SARs. An Award granted to an Employee consisting of the right to receive the
appreciation, if any, in the Fair Market Value of a share of Common Stock on the
date of exercise over the Fair Market Value of a share of Common Stock on date
of grant, multiplied by the number of SAR Units exercised by the Employee. Each
SAR shall designate whether the payment of any such appreciation to an Employee
shall be paid in cash, in shares of Common Stock or in a combination of cash and
Common Stock. Each SAR granted as an Award under this Plan shall be subject to
the provisions of this Plan and the applicable Award Agreement approved by the
Committee pursuant to Section 6(b) governing that SAR.

 

6. OTHER TERMS AND CONDITIONS

 

(a) Assignability; Designation of Beneficiaries.

 

  (i) Prohibition on Transfer. An Award shall be nontransferable and may not be
sold, hypothecated, assigned, anticipated, alienated, commuted, pledged,
encumbered or otherwise conveyed by a Participant (whether voluntarily or
involuntarily) to any party, nor may any award be subject to attachment or
garnishment by any creditor or a Participant; provided that in the event of the
incapacity (as determined by the Plan Administrator) or death of the Participant
(but subject to Section 6(m) of this Plan), his/her attorney-in-fact pursuant to
a valid power of attorney giving general or specific authority to make elections
with respect to outstanding Awards, 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 any vested Award
that the Participant could have exercised if he/she were still alive or not
incapacitated. No assignment or transfer of any Award 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 an Award, the Award shall terminate and
be of no force or effect. Notwithstanding anything in this Section 6(a)(i) to
the contrary, the Committee in its sole discretion may (but need not) permit
transfers of Awards in other situations where the Committee concludes that such
transferability (A) does not result in accelerated taxation, (B) does not cause
any Option intended to be an Incentive Stock Option to fail to meet the
statutory requirements for such Options referenced in Section 5(a), and (C) is
otherwise appropriate and desirable, taking into account the impact on the
Participant and the Company of applicable tax laws and/or securities laws as
applied to transferable Awards.

 

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  (ii) Designation of Beneficiaries. Notwithstanding anything in Section 6(a)(i)
to the contrary, a Participant may designate a person or persons to receive, in
the event of his death, any rights to which he would be entitled under an Award
granted under this Plan (the extent permitted under the applicable Award
Agreement). A beneficiary designation may be changed or revoked by a Participant
at any time by filing a written statement of such change or revocation with the
Company. Such a designation (or modification of designation) shall be made in
writing, and filed with the office of the Company designated in the Award
Agreement. If a Participant fails to designate a beneficiary, then Section
6(a)(i) will apply.

 

(b) Award Agreement. Awards made pursuant to the Plan shall be evidenced by
Award Agreements in such form as the Committee shall, from time to time,
approve, provided that such agreements shall comply with, reflect and be subject
to all the terms of this Plan. The Award Agreement will state the
characteristics of the Award and all terms and conditions applicable to the
Award, provided that the provisions of this Plan which apply to an Award
Agreement will be deemed incorporated in such agreement regardless of whether
they are specifically reiterated in the text of the Award Agreement. Whenever an
Employee is granted an Award under this Plan, the Plan Administrator shall have
the responsibility to provide to the designated Participant an Award Agreement
governing the particular Award executed on behalf of the Company and, if one has
not been supplied previously, a copy of this Plan.

 

Notwithstanding the terms of any Award Agreement granting options, on and after
the Effective Time as defined under the Agreement and Plan of Merger by and
among Plum Creek Timber Company, Inc., Georgia-Pacific Corporation and the
Spincos (as defined therein) dated July 18, 2000, the period of time a
Participant shall have to exercise an option granted to him under an Award
Agreement shall include any period of employment with Plum Creek Timber Company,
Inc., provided that in no event shall such period extend beyond the 10th
anniversary of the date of grant of such option as set forth in the
Participant’s Award Agreement.

 

(c) Rights as a Shareholder. Except as otherwise specifically provided in this
Plan or in any Award Agreement, a Participant shall have no rights as a
shareholder with respect to shares of Common Stock covered by an Award until the
date the Participant is the holder of record of such shares.

 

(d) No Obligation to Exercise. The grant of an Award shall impose no obligation
upon the Participant to exercise the Award.

 

(e) Payments by Participants. No payments or contributions are required to be
made by Participants in this Plan other than such payments as may be required
under an applicable Award Agreement, as specified by the Committee. The
Committee may determine that Awards for which a payment is due from a
Participant may be payable: (i) in U. S. dollars by personal check, bank draft
or money order payable to the order of the Company, by money transfers or direct
account debits; (ii) through the delivery or deemed delivery based on
attestation to the ownership of shares of Common Stock with a Fair Market Value
on the date of delivery to the Company equal to the total payment due from the
Participant; (iii) by a combination of the

 

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methods described in (i) and (ii) above; or (iv) by such other methods as the
Committee may deem appropriate. If shares of Common Stock are to be used in
payment pursuant to an Award and such shares were acquired upon the exercise of
a stock option (whether or not granted under this Plan), such shares must have
been held by the Participant for at least six months.

 

(f) Tax Withholding. The Company shall have the power and the right to deduct or
withhold, or require a Participant to remit to the Company, an amount sufficient
to satisfy federal, state and local taxes (including the Participant’s FICA
obligation) required to be withheld with respect to an Award or any dividends or
other distributions payable with respect thereto. The Committee, in its sole
discretion and pursuant to such procedures as it may specify from time to time,
may permit a Participant to satisfy such tax withholding obligation, in whole or
in part, by (i) electing to have the Company withhold otherwise deliverable
shares of Common Stock having a Fair Market Value not exceeding the minimum
amount required to be withheld, (ii) delivering to the Company shares of Common
Stock then owned by the Participant or (iii) such other methods as the Committee
may deem appropriate. If shares of Common Stock are to be used in payment of
such taxes and such shares were acquired upon the exercise of a stock option
(whether or not granted under this Plan), such shares must have been held by the
Participant for at least six months. The amount of the withholding obligation
satisfied by shares of Common Stock withheld or delivered shall be the Fair
Market Value of such shares determined as of the date that the taxes are
required to be withheld.

 

(g) Restrictions on Exercise. No Option or SAR may be exercisable on or after
the date which is the tenth anniversary of the date such Option or SAR was
granted.

 

(h) Surrender of Options. The Committee, in its sole discretion, may incorporate
one or more provisions in any Option granted under this Plan to allow a
Participant to surrender his/her Option in whole or part in lieu of the exercise
of all or part of that Option or in payment of any amounts due the Company upon
the exercise of such Award. Such provision(s) may specify that the Committee may
authorize such surrender after the grant, but before the exercise, of any such
Option.

 

(i) Additional Options Upon Exercise. The Committee, in its sole discretion, may
incorporate in any Option granted under this Plan a provision which requires the
automatic grant of a new Option under this Plan (subject to the terms and
limitations of this Plan) to any Participant who delivers shares of Common Stock
as full or partial payment of the exercise price of the original Option. Any new
Option granted in such a case (i) will be for the same number of shares of
Common Stock as the Participant delivered in exercising the original Option,
(ii) will have an exercise price equal to 100% of the Fair Market Value of the
delivered shares on the date of such delivery (which shall be deemed to be the
grant date for such new Option) and (iii) will have a term equal to the
unexpired term of the original Option.

 

(j) Requirements of Law. The granting of Awards and the issuance of shares of
Common Stock upon the exercise of Awards shall be subject to all applicable
requirements imposed by federal and state securities and other laws, rules and
regulations and by any regulatory agencies having jurisdiction, and by any stock
exchanges upon which the Common Stock may be listed. As a condition precedent to
the issuance of shares of Common Stock

 

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pursuant to the grant or exercise of an Award, the Company may require the
Participant to take any reasonable action to meet such requirements.

 

(k) Non-Exclusivity of the Plan. Neither the adoption of the Plan by the Board
nor the submission of the Plan to the shareholders of the Company for approval
shall be construed as creating any limitations on the power of the Board to
adopt such other incentive arrangements as it may deem desirable, including,
without limitation, the granting of stock options and the awarding of stock and
cash otherwise than under the Plan, and such arrangements may be either
generally applicable or applicable only in specific cases.

 

(l) Unfunded Plan. Neither the Company nor any Subsidiary shall be required to
segregate any cash or any shares of Common Stock which may at any time be
represented by Awards, and the Plan shall constitute an “unfunded” plan of the
Company. Neither the Company nor any Subsidiary shall, by any provisions of the
Plan, be deemed to be a trustee of any Common Stock or any other property, and
the liabilities of the Company and any subsidiary to any Employee pursuant to
the Plan shall be those of a debtor pursuant to such contract obligations as are
created by or pursuant to the Plan, and the rights of any Employee, former
employee or beneficiary under the Plan shall be limited to those of a general
creditor of the Company or the applicable Subsidiary, as the case may be. In its
sole discretion, the Board may authorize the creation of trusts or other
arrangements to meet the obligations of the Company under the Plan, provided,
however, that the existence of such trusts or other arrangements shall be
consistent with the unfunded status of the Plan.

 

(m) Legends. In addition to any legend contemplated by Section 5(c), each
certificate evidencing Common Stock subject to an Award shall bear such legends
as the Committee deems necessary or appropriate to reflect or refer to any
terms, conditions or restrictions of the Award applicable to such shares,
including, without limitation, any to the effect that the shares represented
thereby may not be disposed of unless the Company has received an opinion of
counsel, acceptable to the Company, that such disposition will not violate any
federal or state securities laws.

 

(n) Company’s Retirement and Welfare Plans. The value of compensation under this
Plan will not be included as “compensation” for purposes of computing the
benefits payable to any participant under the Company’s retirement plans (both
qualified and non- qualified) or welfare benefit plans unless such other plan
expressly provides that such compensation shall be taken into account in
computing a participant’s benefit. No compensation paid pursuant to any Award
under this Plan will constitute “annual management incentive bonuses” for
purposes of calculating benefits under any Executive Retirement Agreement
covering any Employee.

 

(o) Forfeitures. Notwithstanding anything in this Plan to the contrary, to the
extent permitted by applicable law:

 

  (i)

Violations of Company Policies. Any Award under this Plan may be reduced by the
Committee (including reduction to zero) in the event that it determines (in its
sole discretion) that any act (or failure to act) by the Participant or the
business unit for which the Participant is responsible

 

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constitutes a deliberate violation of the Company’s standing corporate policies
(as in effect from time to time) and/or a violation of federal, state or local
statutes or regulations. The Company policies considered for this purpose will
include in particular (but without limitation) the Company’s Code of Business
Conduct and its antitrust, safety and environmental policies.

 

  (ii) For Cause Termination. If the Committee (in its sole discretion)
determines that a Participant has been terminated for Cause, all of such
Participant’s outstanding Awards under this Plan (whether or not vested under
the terms of the applicable Award Agreement) shall terminate as of the
Participant’s date of termination.

 

(p) Requirement of Employment. To be entitled to receive the benefit of an Award
under this Plan, a Participant must remain in the employment of the Company or
its Subsidiaries through the end of the applicable Performance Period or further
Restriction Period; provided, however, that the Committee may provide for
partial or complete exceptions to this requirement (e.g., in the case of
retirement, death or disability) as it deems equitable in its sole discretion.

 

(q) Code Section 162(m). Except where the Committee deems it in the best
interest of the Company, the Committee shall use its best efforts to grant
Awards under this plan which will qualify as “performance based compensation”
under Code Section 162(m) or under such other circumstances as the Committee
deems likely to result in an income tax deduction for the Company for the full
amount of the compensation paid with respect to such Awards.

 

(r) Deferred Transfer of Shares Upon Exercise of Options. The Committee may
determine, either at the time of grant of an Award or later, whether, and to
what extent and under what circumstances, the transfer of shares issuable in
connection with the exercise of a Non-Qualified Stock Option may be deferred at
the election of the affected Participant.

 

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7. PLAN ADMINISTRATION

 

(a) Committee as Plan Administrator. This Plan shall be administered by the
Committee. The Committee shall periodically make determinations with respect to
the participation of Employees in this Plan and, except as otherwise required by
law or this Plan, the grant terms of Awards including vesting schedules, price,
performance standards (including Performance Goals), length of relevant
performance, restriction or option period, dividend rights, post-retirement and
termination rights, payment alternatives such as cash, stock, contingent awards
or other means of payment consistent with the purposes of this Plan, and such
other terms and conditions as the Committee deems appropriate. Except as
otherwise expressly required by this Plan, the Committee shall have the complete
authority and absolute discretion to interpret and construe the provisions of
this Plan and the Award Agreements and make determinations pursuant to any Plan
provision or Award Agreement which shall be final and binding on all persons. No
member of the Committee shall be liable to any person for any action taken or
omitted in connection with the interpretation and administration of this Plan
unless attributable to the member’s own willful misconduct or lack of good
faith.

 

(b) Delegation. The Committee, in its sole discretion and on such terms and
conditions as it may provide, may delegate all or any part of its authority and
powers under this Plan to one or more directors or officers of the Company;
provided, however, that the Committee may not delegate its authority and powers
(i) to identify Participants under this Plan, (ii) to make or adjust Awards
under this Plan or (iii) in any way which would jeopardize this Plan’s
qualification under Section 162(m) of the Code.

 

(c) Determinations Final. All determinations and decisions made by the
Committee, the Board and any delegate of the Committee appointed in accordance
with Section 7(b) shall be final, conclusive, and binding on all persons, and
shall be given the maximum deference permitted by law.

 

8. AMENDMENTS AND TERMINATION

 

(a) Authority to Amend or Terminate. Except as otherwise provided in this Plan,
the Board may at any time terminate and, from time to time, may amend or modify
this Plan. Any such action of the Board may be taken without the approval of the
Company’s shareholders, but only to the extent that such shareholder approval is
not required by applicable law or regulation.

 

(b) Awards Previously Granted. At any time and from time to time, the Committee
may amend, modify or terminate any outstanding Award without approval of the
Participant; provided, however, that such amendment, modification or termination
shall not, without the Participant’s consent, reduce or diminish the value of
such Award determined as if the Award had been vested, exercised, cashed in or
otherwise settled on the later of the effective date or execution date of such
amendment or termination; and provided further that, except as otherwise
provided in Section 9 of this Plan or approved in advance by the Company’s
shareholders, the term of an outstanding Option may not be extended, and the
exercise price of an outstanding Option may not be reduced, directly or
indirectly, whether through direct amendment to the

 

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exercise price, through cancellation and replacement of the Option, or
otherwise. Notwithstanding the foregoing, the Company may effect a one-time
exchange offer to be commenced in the discretion of the Company no sooner than
May 6, 2003 and no later than the 2004 annual meeting of the Company’s
shareholders, upon the terms and conditions described in the Company’s proxy
statement for the 2003 annual meeting of the Company’s shareholders and in a
Schedule TO to be filed with the Securities and Exchange Commission on or about
May 6, 2003, as the same may be amended (the “2003 Exchange Offer”).

 

(c) Limitations. Notwithstanding the foregoing: (i) no amendment may, without
the approval of the shareholders of the Company, (A) increase any of the grant
limitations under Section 4 of this Plan, (B) extend the term of this Plan, (C)
materially change the eligibility provisions of the Plan, or (D) change the
provisions governing the minimum exercise price for Options; (ii) no amendment,
modification or termination shall in any manner adversely affect a Participant’s
rights under any Awards theretofore granted to a Participant under this Plan
without the consent of such Participant; and (iii) no amendment may change any
Performance Goal or increase the compensation payable for the achievement of a
Performance Goal, after the Committee has established such Performance Goal with
respect to a Performance Award.

 

9. CORPORATE RESTRUCTURING

 

(a) No Bar to Corporate Restructuring. The existence of this Plan or outstanding
Award under this Plan shall not affect in any way the right or power of the
Company or its shareholders (i) 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, (ii)
to issue bonds, debentures, preferred or preference stocks ahead of or affecting
the Common Stock or the rights thereof, to dissolve or liquidate the Company,
(iii) to sell or transfer all or part of its assets or business or (iv) to
effect any other corporate act or proceeding, whether of a similar character or
otherwise.

 

(b) Capital Readjustments/Award Modifications. The Awards under this Plan
involving Common Stock will be made in shares of the Common Stock as constituted
on the date the Award is granted, but shares of stock actually issued in
connection with an Award shall reflect the adjustments (if any) with respect to
the Common Stock in connection with such Award contemplated in this Section
9(b). In the event of any merger, reorganization, consolidation,
recapitalization, stock dividend, stock split, or extraordinary distribution
with respect to the Common Stock or other change in corporate structure
affecting the Common Stock, the Plan Administrator shall have the authority to
make such substitution or adjustments in the aggregate number and kind of shares
reserved for issuance under the Plan, in the maximum number of shares which may
be granted in any calendar year and in the number, kind and exercise price of
shares subject to outstanding Awards and/or such other equitable substitution or
adjustments as it may determine in its sole discretion to be appropriate to
ensure that all Participants are treated equitably as a result of any such
event. Any such adjustment may provide for the elimination of fractional shares.
Any shares accruing to outstanding Awards as a result of any adjustment under
this Section 9(b) will be subject to the same restrictions (and have the same
terms and conditions) as the Awards to which they accrue.

 

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10. NO RIGHT TO EMPLOYMENT

 

No person shall have any claim or right to be granted an Award, and the grant of
an Award shall not be construed as giving a Participant the right to be retained
in the employ of the Company or a Subsidiary. Nothing in this Plan shall
interfere with or limit in any way the right of the Company or any Subsidiary to
terminate any Participant’s employment at any time, nor confer upon any
Participant any right to continue in the employ of the Company or any
Subsidiary.

 

11. CHANGE OF CONTROL

 

(a) Special Rights Upon Change of Control. Notwithstanding anything contained in
this Plan or any Award Agreement to the contrary, in the event of a Change of
Control, as defined below:

 

  (i) Lapse of Restrictions; Acceleration of Exercise and/or Vesting. All
restrictions relating to the exercise or vesting of any Award shall
automatically lapse and any time periods relating to the exercise or vesting of
any Award shall automatically be accelerated so that all such Awards may be
immediately exercised and shall be vested in full immediately before the date of
such Change of Control; and all Performance Goals applicable to any Award shall
be deemed automatically satisfied with respect to the maximum compensation
attainable pursuant to all such Awards, so that all of such compensation shall
be immediately vested and payable as of the date of such Change of Control;

 

  (ii) Election of Cash or Stock Distribution. The Committee may, in its sole
discretion, at any time before or after any Award is made or granted, provide
that upon exercise or vesting of an Award during the 60-day period from and
after the date of a Change of Control, the Participant may, in lieu of the
receipt of Common Stock upon the exercise or vesting of any Award, elect by
written notice to the Company to receive an amount in cash equal to the excess,
if any, of the aggregate Value (as defined below) of the shares of Common Stock
covered by the Award or portion thereof surrendered determined on the date the
Award is exercised or vested (as the case may be), over the aggregate exercise
price of the Award, if any. As used in this Section 11(a)(ii) the term “Value”
means the higher of (i) the highest Fair Market Value during the 60-day period
from and after the date of a Change of Control and (ii) if the Change of Control
is the result of a transaction or series of transactions described in paragraphs
(i) or (iii) of Section 11(b), the highest price per share of the Common Stock
paid in such transaction or series of transactions (which, in the case of
paragraph (i), shall be the highest price per share of the Common Stock as
reflected in a Schedule 13D filed by the person having made the acquisition);

 

  (iii)

Extended Exercise Period. Following a Change of Control, if a Participant’s
employment terminates for any reason other than retirement

 

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or death, any Options held by such Participant may be exercised by such
Participant until the earlier of ninety (90) days after the termination of
employment or the expiration date of such Options, provided, however, that this
provision shall not reduce the exercise period otherwise authorized under the
applicable Award Agreement; and

 

  (iv) Awards Non-Cancellable. All Awards shall become non-cancellable.

 

(b) Definition of “Change of Control”. A “Change of Control” of the Company
shall be deemed to have occurred upon the happening of any of the following
events:

 

  (i) Acquisition of Stock. The acquisition by any individual, entity or group
(within the meaning of Section 13(d)(3) or 14(d)(2) of 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 Company entitled to vote generally in the
election of directors (the “Outstanding Company Voting Securities”); provided,
however, that for purposes of this Section 11(b)(i), the following acquisitions
shall not constitute a Change of Control: (A) any acquisition by a Person who on
the Effective Date is the beneficial owner of 20% or more of the Outstanding
Company Voting Securities; (B) any acquisition directly from the Company,
including without limitation, a public offering of securities, (C) any
acquisition by the Company, (D) any acquisition by any employee benefit plan (or
related trust) sponsored or maintained by the Company or any of its Subsidiaries
or (E) any acquisition by any corporation pursuant to a transaction which
complies with subparagraphs (A), (B) and (C) of Section 11(c)(iii);

 

  (ii) Change in Board Membership. Individuals who constitute the Board as of
the Effective Date hereof (the “Incumbent Board”) cease for any reason to
constitute at least a majority of the Board, provided that any individual
becoming a director subsequent to the Effective Date whose election, or
nomination for election by the Company’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 is in connection with an actual or threatened election contest relating
to the election or removal of the directors of the Company or other actual or
threatened solicitation of proxies of consents by or on behalf of a Person other
than the Board; or

 

  (iii)

Shareholder-Approved Reorganization, Merger or Consolidation. Consummation of a
reorganization, merger or consolidation to which the Company is a party or a
sale or other disposition of all or substantially all of the assets of the
Company (a “Business Combination”), in each case

 

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unless, following such Business Combination: (A) all or substantially all of the
individuals and entities who were the beneficial owners of Outstanding Company
Voting Securities immediately prior to such Business Combination beneficially
own, directly or indirectly, more than 50% of the combined voting power of the
outstanding voting securities entitled to vote generally in the election of
directors of the corporation resulting from the Business Combination (including,
without limitation, a corporation which as a result of such transaction owns the
Company or all or substantially all of the Company’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 the Outstanding Company Voting Securities; and (B) no Person
(excluding any Successor Entity or any employee benefit plan, or related trust,
of the Company or such Successor Entity beneficially owns, directly or
indirectly, 20% or more of 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 (C) 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 paragraph (ii) of this Section 11(b)) at the
time of the execution of the initial agreement or of the action of the Board
providing for such Business Combination.; or

 

  (iv) Liquidation or Dissolution. Approval by the shareholders of the Company
of a complete liquidation or dissolution of the Company.

 

12. GOVERNING LAW

 

To the extent that federal laws do not otherwise control, this Plan shall be
construed in accordance with and governed by the law of the State of Georgia.

 

13. CAPTIONS

 

Captions are provided herein for convenience of reference only, and shall not
serve as a basis for interpretation or construction of this Plan.

 

14. RESERVATION OF SHARES

 

The Company, during the term of the Plan, will at all times reserve and keep
available such number of shares of Common Stock as shall be sufficient to
satisfy the requirements of the Plan. The final and unappealable inability of
the Company to obtain the necessary approvals from any regulatory body having
jurisdiction or approval deemed necessary by the Company’s counsel to the lawful
issuance and sale of any shares of Common Stock under the Plan shall relieve the
Company of any liability in respect of the nonissuance or sale of such shares of
Common Stock as to which such requisite authority shall not have been obtained.

 

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15. SAVINGS CLAUSE

 

This Plan is intended to comply in all aspects with applicable law and
regulations. In case any one or more of the provisions of this Plan shall be
held invalid, illegal or unenforceable in any respect under applicable law and
regulation, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby and the invalid,
illegal or unenforceable provision shall be deemed null and void; however, to
the extent permitted by law, any provision which could be deemed null and void
shall first be construed, interpreted or revised retroactively to permit this
Plan to be construed in compliance with all applicable laws so as to foster the
intent of this Plan.

 

16. EFFECTIVE DATE AND TERM

 

The effective date (the “Effective Date”) of this Plan shall be November 4,
1997. If shareholder approval is not obtained on or before November 4, 1998,
this Plan shall terminate on such date. No new Awards shall be granted under
this Plan after the tenth anniversary of the Effective Date. Unless otherwise
expressly provided in the Plan or in an applicable Award Agreement, any Award
granted hereunder may, and the authority of the Board or the Committee to amend,
alter, adjust, suspend, discontinue, or terminate any such Award or to waive any
conditions or rights under any such Award shall, continue after the authority
for grant of new Awards hereunder has been exhausted; provided, however, that
notwithstanding anything in this sentence to the contrary, except as otherwise
provided in Section 9 of this Plan, the exercise price of any Award of Options
granted under this Plan may not be reduced.

 

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