UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1996
Commission file number 1-10466
St. Joe Corporation
(Exact name of registrant as specified in its charter)
Florida 59-0432511
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
Suite 400, 1650 Prudential Drive, Jacksonville, Florida 32207
(Address of principal executive offices) (Zip Code)
(904) 396-6600
(Registrant's telephone number, including area code)
St. Joe Paper Company
(Former name, former address and former fiscal year, if changed since last
report)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. YES X NO
APPLICABLE ONLY TO CORPORATE ISSUERS:
As of June 30, 1996 there were 30,498,650 shares of common stock, no par
value, outstanding.
ST. JOE CORPORATION
INDEX
Page No.
PART I Financial Information:
Consolidated Balance Sheet -
June 30, 1996 and December 31, 1995 3
Consolidated Statement of Income and
Retained Earnings - Six months
ended June 30, 1996 and 1995 4
Consolidated Statement of Cash Flows -
Six months ended June 30, 1996 and 1995 5
Notes to Consolidated Financial Statements 6
Management's Discussion and Analysis of
Consolidated Financial Condition and
Results of Operations 8
PART II Other Information 12
ST. JOE CORPORATION
CONSOLIDATED BALANCE SHEET
(Unaudited)
(Dollars in thousands)
June 30 December 31
1996 1995
ASSETS
Current Assets:
Cash and cash equivalents $ 557,581 $ 16,802
Short-term investments 102,917 96,923
Accounts receivable 45,882 44,390
Income taxes refundable - 4,314
Inventories 26,046 20,592
Other assets 24,339 18,162
Net assets of discontinued operations - 296,001
---------- ----------
Total Current Assets 756,765 497,184
Investment and Other Assets:
Marketable securities 239,895 189,865
Other assets 55,962 38,971
---------- ----------
Total Investments and Other Assets 295,857 228,836
Property, Plant and Equipment, Net 820,568 804,974
---------- ----------
Total Assets $1,873,190 $1,530,994
============ ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable $ 32,544 $ 26,024
Accrued liabilities 46,229 18,445
Income taxes payable 131,390 -
---------- ----------
Total Current Liabilities 210,163 44,469
Accrued casualty reserves and other liabilities 20,125 11,043
Deferred income taxes 198,815 192,036
Minority interest in consolidated subsidiaries 271,971 266,741
Stockholders' Equity:
Common stock, no par value; 60,000,000 shares
authorized; 30,498,650 shares issued and
outstanding 8,714 8,714
Retained earnings 1,108,774 955,239
Net unrealized gains on debt and marketable
equity securities 54,628 52,114
--------- ---------
Total Stockholders' Equity 1,172,116 1,016,067
---------- ----------
Total Liabilities and Stockholders' Equity $1,873,190 $1,530,994
See accompanying notes.
ST. JOE CORPORATION
CONSOLIDATED STATEMENT OF INCOME AND RETAINED EARNINGS
(Unaudited)
(Dollars in thousands except per share amounts)
Three Months Six Months
ended June 30 ended June 30
1996 1995 1996 1995
Net sales $ 33,195 $ 37,145 $ 158,714 $ 70,347
Operating revenues 46,995 48,760 92,438 91,936
---------- ---------- ---------- ----------
Net sales and operating revenue 80,190 85,905 251,152 162,283
Cost of sales 16,394 29,216 50,670 55,553
Operating expenses 35,213 36,758 69,865 68,424
Selling, general and
administrative expenses 5,530 7,074 14,166 14,621
---------- ---------- ---------- ----------
Operating profit 23,053 12,857 116,451 23,685
Other income (expense):
Dividends 1,009 768 1,715 1,333
Interest income 6,493 4,052 10,553 7,067
Interest expense (257) (1,086) (324) (1,893)
Gain on sales and other
dispositions of property 125 1,274 2,936 2,089
Other, net 1,208 2,229 2,605 2,672
---------- ---------- ---------- ----------
8,578 7,237 17,485 11,268
---------- ---------- ---------- ----------
Income before income taxes
and minority interest 31,631 20,094 133,936 34,953
Provision for income taxes 22,875 8,614 62,072 14,306
---------- ---------- ---------- ----------
Income before minority interest 8,756 11,480 71,864 20,647
Income applicable to minority
interest in consolidated
subsidiaries 2,966 3,141 6,395 5,656
--------- ---------- ---------- ----------
Income from continuing operations 5,790 8,339 65,469 14,991
Earnings from discontinued
operations net of income taxes
of ($4,448), $8,536, $527 and
$16,912 respectively (8,143) 17,997 746 32,859
Gain on sale of discontinued
operations, net of income taxes
of $61,638, $0, $61,638 and
$0, respectively 90,370 - 90,370 -
---------- ---------- ---------- ----------
82,227 17,997 91,116 32,859
---------- ---------- ---------- ----------
Net income $ 88,017 $ 26,336 $ 156,585 $ 47,850
Retained earnings at beginning
of period 1,022,282 907,509 955,239 887,520
Dividends (1,525) (1,525) (3,050) (3,050)
---------- ---------- ---------- ----------
Retained earnings at end
of period $1,108,774 $ 932,320 $1,108,774 $ 932,320
========== ========== ========== ==========
Per share data:
Dividends $ 0.05 $ 0.05 $ 0.10 $ 0.10
========== ========== ========== ==========
Income from continuing
operations $ 0.19 $ 0.27 $ 2.15 $ 0.49
Earnings of discontinued
operations 2.70 0.59 2.98 1.08
---------- ---------- ---------- ----------
Net income $ 2.89 $ 0.86 $ 5.13 $ 1.57
========== ========== ========== ==========
See accompanying notes.
ST. JOE CORPORATION
CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited)
(Dollars in thousands except per share amounts)
Six Months ended June 30
1996 1995
Cash flows from operating activities:
Net income $ 156,585 $ 47,850
Adjustments to reconcile net income to cash
provided by operating activities:
Depreciation and depletion 13,652 13,614
Minority interest in income 6,395 5,656
Gain on sale of property (2,936) (2,089)
Gain on sale of discontinued operations (90,370) -
Increase in deferred income taxes 6,779 7,857
Changes in operating assets and liabilities:
Accounts receivable (1,492) 3,099
Inventories (5,454) (5,118)
Other assets (23,168) 1,852
Accounts payable, accrued liabilities and
casualty reserves 43,386 5,926
Income taxes payable 29,335 (7,012)
Discontinued operations - noncash
charges and working capital changes 12,165 (7,295)
---------- ----------
Cash provided by operating activities 144,877 64,340
---------- ----------
Cash flows from investing activities:
Purchases of property, plant and equipment (31,116) (51,040)
Investing activities of discontinued operations - (6,411)
Purchases of investments:
Available for sale (14,515) (16,351)
Held to maturity (118,171) (77,695)
Proceeds from dispositions of assets 4,806 11,682
Proceeds from sale of discontinued operations 497,937 -
Maturities and redemption of investments:
Available for sale 8,420 18,193
Held to maturity 70,421 78,863
---------- ----------
Cash provided by (used in) investing activities 399,782 (42,759)
---------- ----------
Cash flows from financing activities:
Financing activities of discontinued operation - (7,626)
Dividends paid to stockholders (3,050) (3,050)
Dividends paid to minority interest (830) (825)
---------- ----------
Cash used in financing activities (3,880) (11,501)
---------- ----------
Net decrease in cash and cash equivalents 540,779 10,080
Cash and cash equivalents at beginning of period 16,802 71,890
---------- ----------
Cash and cash equivalents at end of period $ 557,581 $ 81,970
========== ==========
Supplemental disclosure of cash flow information:
Cash paid during the year for:
Interest $ 733 $ 2,524
Income taxes $ 23,136 $ 26,572
See accompanying notes
ST. JOE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(Dollars in thousands)
1. In the opinion of the Company, the accompanying unaudited consolidated
financial statements contain all adjustments (consisting of only normal
recurring accruals) necessary to present fairly the financial position as
of June 30, 1996 and December 31, 1995 and the results of operations and
cash flows for the three and six month periods ended June 30, 1996 and
1995. The 1995 statements have been restated to reflect the reclass-
ification of the Communications segment and linerboard mill and container
plants as discontinued operations.
2. The results of operations for the three and six month periods ended June
30, 1996 and 1995 are not necessarily indicative of the results that may
be expected for the full year.
3. On April 11, 1996, St. Joe Industries, Inc., a wholly owned subsidiary of
the Company, sold the stock of St. Joe Communications, Inc. (SJCI) to TPG
Communications, Inc. as previously discussed. SJCI also sold its interest
in four cellular partnerships. These sales represent the CompanyOs entire
Communication segment. On May 30, 1996, the Company sold its linerboard
mill and container plants. The Company retains its timberlands and will
continue to operate in this segment.
Operating revenues for the three month periods ended June 30, 1996 and 1995
for the Communications segment were $0 and $8,060, respectively and for the
six month periods ended June 30, 1996 and 1995 were $8,435 and $15,859
respectively and net sales for the linerboard mill and container plants
for the three month periods ended June 30, 1996 and 1995 were $60,100 and
$156,533, respectively and for the six month periods ended June 30, 1996
and 1995 were $153,406 and $302,104, respectively. These amounts are not
included in net sales and operating revenues in the accompanying statement
of income and retained earnings. The gain on the sale of these operations
was $90.4 million after income taxes of $61.6 million. The gain is subject
to final post closing working capital adjustments.
Net operating results of the Communications segment and for the liner-
board mill and container plants for the three and six month periods ended
June 30, 1996 and 1995 are shown separately as earnings from discontinued
operations in the accompanying statement of income and retained earnings.
Net assets to be disposed of have been separately classified in the
accompanying balance sheets at December 31, 1995. At June 30, there
were no assets or liabilities to be disposed of.
4. As a result of the sale of the Communications segment and the linerboard
mill and container plants and the attendant reduction in employees covered
by the Company's pension plans, an estimated gain from curtailment of the
pension plans of $1,200, net of tax, was recorded as part of the gain on sale
of discontinued operations.
In addition, the Company's pension plans are in an overfunded position and,
with the reduction in employees resulting from the sales, it is unlikely
that the overfunding will be realized other than by a plan termination and
reversion of excess assets. Accordingly, the Company has recorded the 50%
excise tax applicable to plan terminations as additional deferred taxes
which amounted to approximately $11,000. The Company has no immediate plans
to terminate the pension plans and is in the process of evaluating other
alternatives.
5. Inventories at June 30, 1996 and December 31, 1995:
June 30 December 31
1996 1995
Materials and supplies $14,766 $12,875
Sugar 11,280 7,717
------- -------
$26,046 $20,592
======= =======
6. Accrued liabilities at June 30, 1996 consist of real estate and personal
property taxes of $9,026, accrued casualty and other reserves of $14,910,
purchase price adjustments on the sale of discontinued operations of $14,888
and other accrued liabilities of $7,405.
7. The Company and its subsidiaries are involved in litigation on a number
of matters and are subject to certain claims which arise in the normal
course of business, none of which, in the opinion of management, is expected
to have a material adverse effect on the Company's consolidated financial
position or results of operations.
The Company has retained certain self-insurance risks with respect to
losses for third party liability, property damage and group health
insurance provided to employees.
The Company is subject to costs arising out of environmental laws and
regulations, which include obligations to remove or limit the effects
on the environment of the disposal or release of certain wastes or
substances at various sites. It is the Company's policy to accrue and
charge against earnings environmental cleanup costs when it is probable
that a liability has been incurred and an amount is reasonably estimable.
As assessments and cleanups proceed, these accruals are reviewed and
adjusted, if necessary, as additional information becomes available.
The Company is currently a party to, or involved in, legal proceedings
directed at the cleanup of three Superfund sites. The Company has accrued
its allocated share of the total estimated cleanup costs for these three
sites. Based upon management's evaluation of the other potentially
responsible parties, the Company does not expect to incur additional
amounts even though the Company has joint and several liability. Other
proceedings involving environmental matters such as alleged discharge of
oil or waste material into water or soil are pending against the Company.
It is not possible to quantify future environmental costs because many
issues relate to actions by third parties or changes in environmental
regulation. However, based on information presently available, management
believes that the ultimate disposition of currently known matters will not
have a material effect on the financial position, liquidity, or results of
operation of the Company. As of June 30, 1996 and December 31, 1995, the
aggregate environmental related accruals were $6.2 million. Environmental
liabilities are paid over an extended period and the timing of such payments
cannot be predicted with any confidence.
ST. JOE CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF THE CONSOLIDATED
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
OVERVIEW
During the second quarter, the Company sold its Communication segment and its
linerboard mill and container plants. Sale of the Communications segment
occured on April 11, 1996 and the linerboard mill and containter plants on
May 30, 1996. Operating revenues for the three month periods ended June 30,
1996 and 1995 for the Communications segment were $0 and $8,060, respectively
and for the six month periods ended June 30, 1996 and 1995 were $8,435 and
$15,859 respectively and net sales for the linerboard mill and container
plants for the three month periods ended June 30, 1996 and 1995 were $60,100
and $156,635, respectively and for the six month periods ended June 30, 1996
and 1995 were $153,406 and $302,104, respectively. These amounts are not
included in net sales and operating revenues in the accompanying statement of
income and retained earnings.
The gain on the sale of these operations was $90.4 million after income taxes
of $61.6 million. The gain is subject to final post-closing working capital
adjustments.
Upon the completion of these sales, revenues of the Company will be
materially lower than historical levels. Net income, earnings per share
and cash flows may also be materially different than previous periods.
Quarter ended June 30, 1996
Net sales and operating revenues for the quarter were $80.2 million, a $5.7
million decrease from the same period in 1995 and a $90.8 million decrease
from the first quarter of 1996. A land sale to the State of Florida for $13.7
million was offset by a decline of $11.6 million in sales by the sugar
segment and a $5.4 million dollar decline in forestry net sales. Cost of
sales and operating expenses were $51.6 million, down from $66.0 million in
1995 and $68.9 million in the first quarter of 1996. These costs were 64.4% of
net sales and operating revenues in 1996 compared to 76.8% in 1995 and 40.3%
in the first quarter of 1996. Selling, general and administrative expenses
were $5.5 million in the second quarter of 1996 compared to $7.1 million in
the second quarter of 1995 and $8.7 million in the first quarter 1996. As a
result of these changes, operating profit was $23.1 million compared to $12.8
million in the same quarter of 1995 and $93.4 million in the first quarter of
1996.
Six Months ended June 30, 1996
Net sales and operating revenues were $251.2 million for the first half of
1996, an increase of $88.8 million over the same period in 1995. The increase
was due to land sales to the State of Florida of $97.8 million. Cost of
sales and operating expenses dropped to $120.5 million from 1995's $124.0
million. Selling, general and administrative expenses declined slightly
to $14.2 million in 1996. Operating profit increased to $116.5 million
compared to 1995's $23.7 million.
An analysis of operating results by segment follows:
Forestry
Quarter ended June 30, 1996
1996 1995 % Decrease
Net Sales 11.6 17.0 (31.8)
Cost of Sales 10.9 16.8 (35.1)
Selling, General and Administrative Expenses (0.7) 0.9 (177.8)
Operating Profit (Loss) 1.4 (0.7) 300.0
A month long shutdown at the Company's linerboard mill prior to its sale
resulted in sales to the mill decreasing. Delivered prices to the mill
dropped by $0.42 per ton from the first quarter reflecting the execution of
the fiber supply agreement with the purchaser of the linerboard mill on
May 30, 1996. The fiber supply agreement is for fifteen years with two five
year extensions. Annual wood fiber tonnage to be supplied from the Company's
lands will not exceed that previously provided and is be at negotiated
market prices adjusted on a quarterly basis. The Company plans in the future
to shift its remaining fiber production from the Company's lands to higher
margin timber products.
Six Months ended June 30, 1996
1996 1995 % Decrease
Net Sales 25.7 31.9 (19.4)
Cost of Sales 25.1 30.3 (17.2)
Selling, General and Administrative Expenses 0.6 2.1 (71.4)
Operating Loss (0.0) (0.5) (100.0)
Reduced production at the Company's linerboard mill prior to its sale
resulted in sales to the mill decreasing. Cost of sales increased from 95.0%
of sales in the first half of 1995 to 97.6% in the same period of 1996.
Transportation
Quarter ended June 30, 1996
1996 1995 % Increase
(Decrease)
Operating Revenues 47.0 48.7 (3.5)
Operating Expenses 35.2 36.7 (4.1)
Selling, General and Administrative Expenses 4.6 5.0 (7.8)
Operating Profit 7.2 7.0 2.5
Rail traffic continued to decline on both the Company's rail subsidiaries.
The lower operating revenues are primarily attributable to a decline in rail
traffic of 1.6% on FEC and 5.8% on ANRR.
Six Months ended June 30, 1996
1996 1995 % Increase
(Decrease)
Operating Revenues 92.4 91.9 0.5
Operating Expenses 69.9 68.4 2.1
Selling, General and Administrative Expenses 9.8 9.3 5.3
Operating Profit 12.7 14.2 (10.3)
A decline of approximately 4.4% in rail shipments for the first six months
together with the revenue reduction due to the haulage agreement, were the
main contributors to the fall in operating profit.
Sugar
Quarter ended June 30, 1996
1996 1995 % Increase
(Decrease)
Net Sales 0.0 11.6 (100.0)
Cost of Sales 0.0 7.9 (100.0)
Selling, General and Administrative Expenses 0.8 0.5 60.0
Operating Profit (Loss) (0.8) 3.2 (125.0)
The sugar segment had no shipments in the second quarter of 1996. The contract
with the segment's customer calls for specific shipment levels throughout the
year, but, at the request of the customer, the Company had shipped in the
first quarter of 1996 in advance of the contract in an amount equal to
approximately four months additional shipments. Normal shipments resumed in
August.
Six Months ended June 30, 1996
1996 1995 % Decrease
Net Sales 18.7 23.9 (21.8)
Cost of Sales 13.1 16.2 (19.1)
Selling, General and Administrative Expenses 1.9 2.0 (5.0)
Operating Profit 3.7 5.7 (35.1)
Shipments in 1996 dropped 18.2% from 1995 levels. Prices also declined 4.3%.
The cost of production declined by $3.89 in 1996 from $311.53 in 1995.
Real Estate
Quarter ended June 30, 1996
1996 1995 % Increase
Net Sales 21.6 8.6 151.2
Cost of Sales 5.5 4.6 20.2
Selling, General and Administrative Expenses 0.9 0.6 46.6
Operating Profit 15.2 3.4 346.8
In 1996, a single realty property sale of $13.8 million was made to the State
of Florida which did not occur in 1995. Rent and other income increased by
$1.1 million in the second quarter of 1996 compared to the same period in
1995. Cost of sales increased due to cost associated with the sale of the
property to the State of Florida. Selling, general and administrative
expenses increased by $0.3 million.
Six Months ended June 30, 1996
1996 1995 % Increase
Net Sales 114.3 14.6 682.9
Cost of Sales 12.5 9.1 37.8
Selling, General and Administrative Expenses 1.8 1.2 51.5
Operating Profit 99.9 4.3 2,224.3
In 1996, realty property sales of $97.8 million were made to the State of
Florida which did not occur in 1995. Rent and other income increased by $3.1
million in 1996 compared to the same period in 1995. Cost of sales increased
principally due to cost associated with the sale of the property to the State
of Florida. Selling, general and administrative expenses increased by $0.6
million.
Other Income increased $1.5 million in the second quarter of 1996 compared to
1995. Interest income increased by $2.4 million reflecting increased
investment and higher rates. Gain on sales and other dispositions of property,
plant and equipment decreased $1.1 million. Other income, net fell by $1.0
million.
Income from Continuing Operations decreased $2.5 million (31%) during the
second quarter of 1996 from the same period in 1995.
As a result of the sale of the Communications segment and the linerboard mill
and container plants and the attendant reduction in employees covered by the
Company's pension plans, an estimated gain from curtailment of the pension
plans of $1.2 million, net of tax, was recorded as a part of the gain on the
sale of discontinued operations.
In addition, the Company's pension plans are in an overfunded position and,
with the reduction in employees resulting from the sales, it is unlikely that
the overfunding will be realized other than by a plan termination and
reversion of the excess assets. Accordingly, the Company has recorded the 50%
excise tax applicable to plan terminations as additional deferred taxes which
amounted to approximately $11.0 million. The Company has no immediate plans to
terminate the pension plans and is in the process of evaluating other
alternatives.
Earnings from discontinued operations (net of income taxes), representing the
Company's former Communication segment and linerboard mill and container
plants, were $26.1 million less than the second quarter of 1995. Net income
for the quarter was 234% above the same period in 1995, due mainly to the
$90.4 million gain on the sale of discontinued operations. Net income per
share increased $2.03 to $2.89. Income from continuing operations
was $0.19 per share.
Financial Position
The Company's financial position remains strong. Current assets rose to
$756.8 million, an $259.6 million increase from year end. Current liabilities
increased by $162.2 million causing the current ratio to drop from 11.2 to 1
at year end to 3.7 to 1 at the end of the second quarter.
The Company increased its investment in marketable securities by $50.1
million over year end. Net property, plant and equipment increased by $15.6
million, largely in FECI. Deferred income taxes grew by $6.8 million, due
primarily to deferred taxes on the proceeds of the condemnation sale to the
State of Florida.
Stockholders' equity at June 30, 1996 was $38.43 per share, an increase of
$5.11 from December 31, 1995.
PART II - OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
At a Special Meeting of the stockholders held on April 24, 1996, the
stockholders approved a proposal for the sale by the Company of those assets of
St. Joe Forest Products Company ("SJFP") related to its paper mill business to
PSJ Paper company L.L.C. ("JV") (a joint venture organized by Four M Corporation
("FMC") and Stone Container Corporation) and of St. Joe Container Company
("SJCC") related to its container business to FMC pursuant to an Asset Purchase
Agreement dated as of November 1, 1995, as amended, among the Company, SJFP, and
SJCC on one hand, and FMC and JV on the other hand. 25,155,461 votes were cast
for, 17,002 votes were cast against, and 3,440 votes abstained as to the
proposal.
At the Annual Meeting of the stockholders held on May 14, 1996,
stockholders approved a proposed change in the name of the corporation from
St. Joe Paper Company to St. Joe Corporation and an amendment to the
company's articles of incorporation to effect the same. 24,095,914 votes
were cast for, 3,275 votes were cast against, and 3,637 abstained as to the
proposal.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
3(i) Articles of Incorporation
3(ii)Bylaws
10 Wood Fiber Supply Agreement between St. Joseph Land and Development
Company and Florida Coast Paper Company dated as of May 30, 1996
27 Financial Data Schedule
(b) Reports on Form 8-K
A Current Report on Form 8-K was filed on August 19, 1996 to report the
closing on May 30, 1996 of the sale of the linerboard mill and container plant
under Item 2, "Acquisition or Disposition of Assets." Except for the actual
date of closing that was announced by press release on May 30, 1996, essentially
all information concerning the sale was previously reported in the Company's
Special Meeting Proxy Statement dated April 11, 1996 in connection with
stockholder approval of the sale and the Company's Quarterly Report on Form 10-Q
for the quarter ended March 31, 1996 which segregated discontinued operations.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
St. Joe Corporation
(Registrant)
/s/ J. M. Jones, Jr.
Vice President and CFO
/s/ D. M. Groos
Comptroller
AMENDED CERTIFICATE OF INCORPORATION
OF
ST. JOE CORPORATION
ARTICLE I. LAWS OF FLORIDA TO GOVERN. The Laws of Florida shall
govern the corporation.
ARTICLE II. NAME. The name of the corporation is ST. JOE
CORPORATION.
ARTICLE III. GENERAL NATURE OF BUSINESS. The general nature of the
business and the objects and purposes to be transacted, promoted and
carried on by the corporation are as follows:
To manufacture, buy, sell, import, export and deal in pulp wood, wood
pulp, paper, paper board, and all raw materials thereof and products and
by-products therefrom, and articles of commerce made wholly or partly of
pulp wood, wood pulp, paper, or paper board, and to establish, operate and
maintain mills, plants and factories for such purposes;
To engage generally in the real estate business in all of its
branches; to hold, buy, own, hire, control, work, develop, sell, convey,
lease, mortgage, pledge, exchange, cultivate, improve and otherwise deal
in or dispose of real estate and property, and any right, interest or
estate therein, including fixtures, leases, tax titles and liens and other
liens, as well as mineral rights and water rights; to plan, construct,
build, erect, layout, open, repair and improve or otherwise deal in and
with public or private roads, parks, streets, sidewalks, avenues, lanes,
alleys, sewers, city, town and village sites and any and all other
conveniences and facilities for the operation, development, improvement
and use of real estate and
To engage generally in the business of buying, selling and dealing in
stocks, bonds, and all manner of securities, both for its own account and
for the account of others, upon commission or otherwise; to draw, make,
accept, endorse, discount, execute and issue promissory notes, drafts,
bills of exchange, warrants, debentures and other negotiable or
transferable instruments; to borrow, advance and lend money, and assets of
all kinds upon such terms as may seem expedient; to execute and issue
debentures, debenture stocks, bonds, obligations and securities of all
kinds, and to evidence and secure the same as may seem expedient, with
full power to make the same transferable by delivery or by instrument of
transfer or otherwise and either perpetual or terminable and redeemable or
otherwise, and to charge and secure the same by mortgage or trust deed, or
otherwise on the undertaking of the corporation, or upon any specific
property rights, present and future, of the corporation, or otherwise; to
guarantee, purchase, hold, sell assign, transfer, mortgage, pledge, or
otherwise dispose of the shares of the capital stock of, or any bonds,
securities, or evidences of indebtedness erected by this or any other
corporation or corporations of this State or any other State or Country,
Nation or Government, and while the owner of said stock to exercise all
the rights, powers and privileges of ownership, including the right to
vote thereon, to the same extent as natural persons might or could do;
To purchase or otherwise acquire, apply for, register, hold, use,
sell or in any manner dispose of and to grant licenses or other rights in
and in any manner deal with patents, inventions, improvements, processes,
formulas, trade-marks, trade names, rights, and licenses secured under
letters patent, copyrights or otherwise;
To enter into, make and perform contracts of every kind with any
person, firm, association or corporation, municipality, body politic,
country, territory or state;
To hold and re-issue any of the shares of its capital stock and to
provide for the redemption of said stock; to have a lien upon all of the
shares of any stockholder who may become indebted to this corporation,
either individually, as co-partner, surety or otherwise, with the right to
sell and dispose of such stock, or such portion or portions thereof, as
may be necessary to pay off such indebtedness at either public or private
sale and upon such notice and terms as the Board of Directors may
prescribe, and with the further right to refuse to transfer said stock
until full payment of all such indebtedness is made;
To own and/or operate mills or factories for the manufacture and/or
furnishing of building material, fixtures and supplies of all kinds; to
own and operate newspapers and publishing plants; to raise, breed and deal
in live stock of all kinds; to construct harbors and improve the same; to
improve rivers and streams by clearing and straightening the channels
thereof, closing sloughs, erecting sluiceways, be_____ or dams of all
kinds, and other works therein, to acquire construct, lease, operate and
maintain radio broadcasting stations of any and all kinds;
To build, maintain, operate, purchase, lease, rent and sell
saw-mills, and manufacture and distill turpentine, tar, pitch, rosin and
other timber products, and to make and execute any and all manner of
contracts and timber leases for logging, lumbering and naval stores
operations; to carry on a general logging and lumbering business;
And to conduct any and every mercantile, trading, mineral,
prospecting, shipping, forwarding, manufacturing and commission business
at such place or places in the State of Florida and at any and all other
places in the United States, or, outside the United States, as the
corporation may determine;
To do any or all of the things hereinabove set forth as principal,
agent, contractor, trustee or otherwise, along or in company with others;
to carry on any and all of its operations and business and to promote its
objects within the State of Florida or elsewhere without restriction as to
place or amount; to have, use, exercise and enjoy all of the general
powers of like corporations; and to do any or all of the things
hereinabove set forth to the same extent as natural persons might or could
do; and to do and perform all such other things and acts as may be
necessary, profitable or expedient in carrying on any of the businesses or
acts above named.
The intention is that none of the objects and powers hereinabove
specified and clauses contained in this Article, except where otherwise
specified in this Article, shall be in anywise limited or restricted by
reference to or inference from the terms of any other objects, powers or
clauses of this or any other Article, but that the several objects and
powers specified above shall be regarded as independent objects and
powers; the broader meaning shall be given to each word of the foregoing
enumeration of the general nature of the businesses of this corporation
and the use of no one word shall be construed to limit the meaning or
effect of any other word or words used elsewhere.
ARTICLE V. STOCK. The maximum number of shares of stock that the
corporation is authorized to have outstanding at any time is sixty million
(60,000,000) shares having no par value per share, all of which shall be
common voting stock of the same class. All shares of common stock issued
shall be fully paid and non-assessable. The corporation shall have the
right to issue fractional shares.
ARTICLE V. CAPITAL. The amount of capital with which the
corporation shall begin business is the aggregate par value of the shares
of stock outstanding, vis: $9,179,460. Additional shares of authorized
stock may be issued as provided by law.
ARTICLE VI. TERM OF EXISTENCE. The corporation shall have perpetual
existence.
ARTICLE VII. PRINCIPAL OFFICE. The principal office of the
corporation shall be located in the City of Jacksonville, County of Duval,
State of Florida.
ARTICLE VIII. DIRECTORS. The number of Directors of the corporation
shall be not less than nine (9) nor more than fifteen (15).
ARTICLE IX. BOARD OF DIRECTORS. The names and post office addresses
of the Board of Directors who, subject to the By-Laws of the corporation
and the Laws of Florida, shall hold office until the next annual meeting
of the stockholders of the corporation or until their successors are
elected and have qualified, are
NAME POST OFFICE ADDRESS
Jessie Ball duPont 152h Barnett Bank Building, Jacksonville
Florida
Edward Ball P.O. Box 191, Tallahassee, Florida
Robert L. Main 152h Barnett Bank Building, Jacksonville
Florida
Henry W. Dow 152h Barnett Bank Building, Jacksonville
Florida
Elbert Dent Greenville, Wilmington 7, Delaware
Irene Walsh 152h Barnett Bank Building, Jacksonville
Florida
W.H. Goedman P.O. Box 720, Jacksonville 1, Florida
Francis P. Gaines Washington-Lee University, Lexington, Virginia
H.P. Adair Barnett Bank Building, Jacksonville Florida
Harry H. Saunders St. Joe Paper Company, Port St. Joe, Florida
R.C. Brant, Jr. P.O. Box 191, Tallahassee, Florida
T.S. Coldsway St. Joe Paper Company, Port St. Joe, Florida
J.C. Belin St. Joe Paper Company, Port St. Joe, Florida
W.T. Edwards 1785 Southwood Street, Sarasota, Florida
ARTICLE X. OFFICERS. The officers of the corporation shall be a
President, one or more Vice Presidents, a Secretary, a Treasurer, and such
other officers, agents and factors as may be deemed necessary. The names
and post office addresses of the President, Secretary, and Treasurer, of
the corporation, who shall hold office until the next Annual Meeting of
the Board of Directors or until their successors are elected, are:
Roger L. Main, President, 152h Barnett Bank Building, Jacksonville,
Florida;
Irene Walsh, Secretary, 152h Barnett Bank Building, Jacksonville,
Florida;
S. D. Staneburner, Treasurer, 152h Barnett Bank Building,
Jacksonville, Florida.
All officers, agents and factors shall be chose in such manner, hold their
offices for such terms, and have such powers and duties as may be
prescribed by the By-Laws or determined by the Board of Directors. Any
person may hold two or more offices, except that the President shall not
be also the Secretary or an Assistant Secretary of the corporation. Until
their respective successors shall have been duly elected and qualified,
the present officers of St. Joe Paper Company shall be the officers of the
corporation.
ARTICLE XI. BY-LAWS. Subject to the By-Laws, if any, adopted by
the stockholders, the Directors may make the By-Laws of the corporation.
ARTICLE XII. The amended Certificate of Incorporation contains all
of the currently effective provisions of the Charter of said corporation,
it being the purpose of this Amendment of the Certificate of Incorporation
that any previous charter provision as set forth in the original
Certificate of Incorporation, the amendments thereto, and the agreements
of merger, shall be deemed to have been amended, modified, or revoked, so
as to be consistent with the Articles I through XI hereof.
AMENDED BY-LAWS
OF
ST. JOE CORPORATION
ARTICLE I - STOCK
1. CERTIFICATE OF STOCK shall be issued in numerical order from the
Stock Certificate Book, and be signed by the President and by the
Secretary and sealed with the Corporate Seal. A record of each
certificate issued shall be kept on the stub thereof.
2. TRANSFER OF STOCK shall be made only on the books of the
Company, in person or by attorney upon surrender of the certificate
evidencing the stock sought to be transferred, properly endorsed; the
certificate so surrendered shall be cancelled as and when the
new certificate or certificates are issued.
ARTICLE II - STOCKHOLDERS
1. The Annual Meeting of the Stockholders of this Corporation shall
be held at 10:30 A.M. local time on the second Tuesday in May of each year
commencing with the year 1994 A.D. Each Annual Meeting shall be held at
the principal office of the Company in Jacksonville, Florida, unless some
other place in or out of the State of Florida is designated by the Board
of Directors, three weeks or more before the day of such Annual Meeting.
2. SPECIAL MEETINGS of the Stockholders may be called or held at
any place in or out of the State of Florida, at any time by resolution of
the Board of Directors, and shall be called at any time upon written
request of Stockholders holding one-third of the outstanding stock.
3. NOTICE OF STOCKHOLDERS' MEETINGS of the Corporation shall be in
writing and signed by the President or a Vice President or the Secretary
or an Assistant Secretary of the Corporation. Such notice shall state the
purpose or purposes for which the meeting is called and time when and the
place where it is to be held. A copy of such notice shall be served upon
or mailed to each stockholder of record entitled to vote at such meeting
not less than ten nor more than sixty days before such meeting. If
mailed, it shall be directed to the stockholder at his home address as it
appears upon the records of the Corporation. Notice duly served upon or
mailed to a stockholder in accordance with the provisions of this by-law
shall be deemed sufficient, and in the event of the transfer of his stock
after such service and prior to the holding of the meeting, it shall not
be necessary to serve notice of the meeting upon the transferee. Any
meeting of stockholders may be held either within or without the State of
Florida. Any stockholder may waive notice of any meeting either before,
at or after the meeting. When the stockholders who hold four-fifths of
the stock of the Corporation shall be present at a meeting, however
called, or notified, and shall sign a written consent thereto on the
record of the meeting, the acts of such meeting shall be as valid as if
legally called and notified.
4. A QUORUM at any meeting of the Stockholders shall consist of a
majority of the stock of the Company represented in person or by proxy,
and a majority of such quorum shall decide any question that may come
before the meeting.
5. THE ORDER OF BUSINESS of the Annual Meetings, and as far as
possible, at all other meetings of the stockholders shall be:
1. Calling of roll.
2. Proof of due notice of meeting.
3. Reading and disposal of any unapproved minutes.
4. Annual reports of officers and committees.
5. Election of directors.
6. Unfinished business.
7. New business.
8. Adjournment.
ARTICLE III - DIRECTORS
1. THE BUSINESS AND PROPERTY of the Corporation shall be managed by
a Board of not less than nine nor more than fifteen Directors, the number
to be determined by the stockholders of the Corporation or the Board, all
of whom shall be of full age and at least one of whom shall be a citizen
of the United States and such Board of Directors shall have full control
over the affairs of the Corporation and shall be authorized to exercise
all of its corporate powers unless otherwise provided in these by-laws.
The Directors shall be elected at the annual meeting of the stockholders
by a plurality of the votes cast at such election, for the term of one
year, and shall serve until the election and acceptance of their duly
qualified successors. Vacancies in the Board of Directors shall be filled
by the Directors remaining in office.
2. A CHAIRMAN OF THE BOARD of Directors shall be selected, who
shall be considered an officer of the Corporation.
3. A REGULAR MEETING of the Board of Directors shall be held
immediately upon adjournment of the annual meeting of the stockholders
each year at the place where the annual meeting of the stockholders is
held that year.
4. SPECIAL MEETINGS of the Board of Directors may be held in or out
of the State of Florida, and may be called at any time or place by the
President or by any three members of the Board, on at least three days
notice in writing or by telegraph or may be held at any time and place
without notice, by unanimous written consent of all the members, or by the
presence of all members at such meeting.
5. AN EXECUTIVE COMMITTEE may be appointed by the Board of
Directors from its membership, which shall be authorized to act for and in
behalf of the Board of Directors at any time between meetings of the Board
of Directors, but such committee shall have only the authority given it by
the Board of Directors and any acts thereof shall be subject to
ratification and approval by the Board of Directors at the next ensuing
meeting of the Board of Directors. The Executive Committee may appoint
one of its members to be Chairman of the Executive Committee, who may be
considered as an officer of the Corporation.
6. A QUORUM at any meeting shall consist of a majority of the
Board. A majority of such quorum shall decide any questions that may come
before the meeting. If at any meeting less than a quorum is present, the
Directors present, or a majority of them, may adjourn the meeting to
another time and/or place.
7. OFFICERS OF THE COMPANY shall be elected by ballot of the Board
of Directors at its first meeting after the annual meeting of the
stockholders each year. If any office becomes vacant during the year, the
Board of Directors shall fill the same for the unexpired term. The Board
of Directors shall fix the compensation of the officers and agents of the
Company.
8. THE ORDER OF BUSINESS at any regular or special meeting of the
Board of Directors shall be:
1. Reading and disposal of any unapproved minutes.
2. Reports of officers and committees.
3. Unfinished business.
4. New business.
5. Adjournment.
9. INDEMNIFICATION OF OFFICERS AND DIRECTORS. The Corporation
shall indemnify each officer and director, whether or not then in office
(and his or her executor, administrator and heirs), against all reasonable
expenses actually and necessarily incurred including but not limited to,
judgments, costs and counsel fees in connection with the defense of any
litigation, civil or administrative action, suit or proceeding, to which
he or she may have been made a party because he or she is or was a
director or officer of the Corporation. He or she shall have no right to
reimbursement, however, in relation to matters as to which he or she has
been adjudged liable to the Corporation for negligence or misconduct in
the performance of his or her duties or was derelict in the performance of
his or her duty as director or officer by reason of willful misconduct,
bad faith, gross negligence or reckless disregard of the duties of his or
her office or employment. The right to indemnity for expenses shall also
apply to expenses in connection with suits that are compromised or settled
if (1) the court having jurisdiction of the action shall approve such
settlement, or (2) a majority of the Board of Directors, excluding
interested directors, votes to approve such settlement. As used in this
paragraph an "interested director or officer" is one against whom the
proceeding in question or another proceeding on the same or similar
grounds is then pending.
The foregoing right of indemnification shall be in addition to, and
not exclusive of, all other rights to which that director or officer may
be entitled.
ARTICLE IV - OFFICERS
1. THE OFFICERS OF THE CORPORATION shall be a Chairman of the Board
of Directors, a President, one or more Vice Presidents, a Secretary, a
Treasurer, and a Comptroller, each of whom shall be elected annually for
the term of one year unless sooner removed by the Board of Directors, and
each of whom shall hold office until his successor shall be elected and
qualified. The President shall be a director of the Corporation. Any
person may hold two or more offices except that the President shall not be
also the Secretary or an Assistant Secretary of the Corporation.
2. THE CHAIRMAN OF THE BOARD OF DIRECTORS shall preside at all
meetings of stockholders and directors. Except where by law the signature
of the President is required, he shall possess the same power as the
President to sign all certificates, contracts and other instruments of the
corporation which may be authorized by the Board of Directors. During the
absence or disability of the President he shall exercise all the powers
and discharge all the duties of the President.
3. THE PRESIDENT, in the absence of the Chairman of the Board,
shall preside at all meetings. He shall also have general supervision of
the affairs of the Company, shall make reports to the Directors and
Stockholders and perform all such other duties as are incident to his
office or are properly required of him by the Board of Directors. In the
absence, disqualification or disability of the President, or at his
direction, any Vice President shall exercise all the functions of the
President, and in any case, so far as the dealing by third parties with
the Corporation is concerned, any Vice President shall have equal
authority with the President to bind the corporation.
4. THE SECRETARY shall keep the minutes of all meetings, shall have
charge of the seal and the corporate books, shall execute with the
President or Vice President such instruments as require such signatures,
and shall make such reports and perform such other duties as are incident
to his office, or are properly required of him by the Board of Directors.
The Board of Directors may appoint one or more Assistant Secretaries; and
in the absence, disqualification or disability of the Secretary, any such
Assistant Secretary shall exercise the functions of the Secretary.
5. THE TREASURER shall have the custody of all moneys and
securities of the Corporation and shall keep regular books of account
under the direction of the Board of Directors. He shall deposit all funds
and moneys of the Corporation in banks to be designated by the Board of
Directors, and shall perform such other duties as may be required of him
by the Board of Directors. The Board of Directors may appoint one or more
Assistant Treasurers, and in the absence, disqualification or disability
of the Treasurer, or at his direction, any such Assistant Treasurer shall
exercise the functions of the Treasurer.
6. THE COMPTROLLER shall maintain adequate records of all assets,
liabilities, and transactions of the Corporation, shall see that adequate
audits thereof are currently and regularly made, and, in conjunction with
other officers and department heads, shall initiate and enforce measures
and procedures whereby the business of the Corporation shall be conducted
with the maximum safety, efficiency, and economy. He shall attend such
meetings of the Directors and Stockholders of the Corporation and shall
make such reports to the President and/or the Board of Directors as said
Board of Directors may prescribe, and shall perform such other duties as
may be required of him by the Board of Directors.
7. REMOVAL OF OFFICERS. The Chairman of the Board, the President,
any Vice President, the Secretary, any Assistant Secretary, the Treasurer,
any Assistant Treasurer, and the Comptroller of the Corporation, any or
all of them, may be removed from office for malfeasance in office or
conduct prejudicial to the Corporation's interest by the vote of not less
than two-thirds of the whole membership of the Board of Directors at any
regular or special meeting of the Board. Provided, however, that the
officer so sought to be removed shall be given not less than ten days
notice in writing of the charges to be preferred against him, and be given
an opportunity to refute the same before the board.
8. THE BOARD OF DIRECTORS may, from time to time, appoint such
additional officers as it deems necessary, prescribe their duties, and fix
their salaries, and may remove them at pleasure and may authorize any or
all of the officers of the corporation to execute in the Corporation's
name notes, purchases or sales of real estate, leases, bills of sale,
mortgages, pledges, exchanges, contracts, checks, bills of exchange and
any and all other papers and documents on behalf of the corporation.
ARTICLE V - DIVIDENDS AND FINANCE
1. DIVIDENDS shall be declared only at such times and in such
amounts as theBoard of Directors shall direct.
ARTICLE VI - SEAL
1. THE CORPORATE SEAL of the Company shall consist of two
concentric circles, between which is the following: "St. Joe Corporation,
Florida", and in the center shall be inscribed, "Corporate - Seal -
1936".
ARTICLE VII - AMENDMENTS
1. THESE BY-LAWS MAY BE AMENDED, repealed or altered, in whole or
in part, at any meeting, regular or special, regardless of notice, by the
vote of no less than four- fifths of the members of the Board of
Directors, or by the majority vote of the Directors present at any meeting
if notice of the proposed amendment and of the time and place of the
meeting at which the amendment is to be voted on shall have been given in
writing to each member of the Board of Directors at least ten days before
such meeting is held.
Conformed Execution Copy
WOOD FIBER SUPPLY AGREEMENT
THIS AGREEMENT, made and entered into this 30th day of May, 1996,
between ST. JOSEPH LAND AND DEVELOPMENT COMPANY, a Florida corporation,
hereinafter "Seller", and FLORIDA COAST PAPER COMPANY, L.L.C., a Delaware
limited liability company, hereinafter "Buyer."
W I T N E S S E T H
-------------------
Whereas, Buyer is desirous of procuring wood fiber in the form of
pulpwood, wood chips, and fuel wood from Seller for its paper mill at Port
St. Joe, Florida (the "Mill"); Whereas, Seller is desirous of selling
pulpwood, wood chips, and fuel wood to Buyer for its mill at Port St. Joe,
Florida;
NOW, THEREFORE, in consideration of the mutual covenants hereinafter
set forth and for other good and valuable consideration, Seller and Buyer
agree that Seller shall sell to and Buyer shall purchase from Seller
pulpwood, wood chips, and fuel wood upon the following terms and
conditions:
1. AMOUNT:
Seller shall deliver to Buyer and Buyer shall accept from Seller,
upon and subject to the terms and conditions of this Agreement, pulpwood
and wood chips in the aggregate as follows:
first twelve months -- 1,600,000 tons
second twelve months -- 1,400,000 tons
third twelve months -- 1,200,000 tons
fourth twelve months -- 900,000 tons
thereafter -- 900,000 tons
Starting in the twenty-fifth month, and annually thereafter during the
term of this Agreement, 900,000 tons of the tonnage delivered to Buyer
must originate from Seller's land with the understanding that wood chips
generated from higher margin wood fiber products shall not be required to
originate from Seller's land but shall be deemed for this purpose to so
originate. During the term of this Agreement, Seller shall notify
contemporaneously with notice to other third parties Buyer of any upcoming
sales of pulpwood or pine wood chips in the open market and Buyer shall
have the right to bid on the same basis as other third parties. From time
to time during the term of this Agreement Buyer may elect in its sole
option upon 120 days notice to Seller to reduce in increments the minimum
tonnage (the "Minimum Tonnage") required of Seller hereunder to an amount
not less than 600,000 tons per year, but each and every reduction shall be
permanent.
2. SPECIFICATIONS:
All wood fiber delivered pursuant to this Agreement shall meet the
specifications set forth in Exhibit A hereto. Of the aggregate annual
amount of wood fiber in the form of pulpwood and wood chips to be
delivered, at least 25% shall be comprised of wood chips.
3. DELIVERY SCHEDULE:
Seller shall deliver to Buyer and Buyer shall accept from Seller wood
fiber on a generally uniform weekly schedule which may be adjusted by the
parties to conform so far as practical to (a) Buyer's paper mill operating
schedule; (b) cessation of paper mill operations that are scheduled in
advance of stoppage, for maintenance of the mill and inventory
adjustments; (c) loss of rail transportation; or (d) excessive unfavorable
weather conditions; (e) labor disputes or (f) insufficient customer
orders. Each party will give to the other party notice in writing in
advance of 3(a), (b), (c), (d), (e) and (f) of this Agreement.
2
In the event Buyer does not accept wood fiber from Seller for reasons
other than those in this Section 3 or by Force Majeure (Section 11) for a
period of two (2) weeks, Buyer shall pay to Seller weekly an amount equal
to the pine pulpwood Zone 2 price as determined from time to time in
accordance with the terms of this Agreement (1/52 x the Minimum Tonnage).
In the event the circumstances in the preceding sentence arise, Buyer may
instruct Seller to deliver wood fiber to third parties at destinations
other than the Port St. Joe mill. Additional cost incurred for delivery
to third parties shall be for the account of Buyer.
4. FUEL WOOD:
Biomass used for fuel required by Buyer consistent with past practice
at its Port St. Joe Mill shall be delivered to Buyer by Seller for its
Port St. Joe mill for the first twelve (12) months hereof. No later than
120 days before the first anniversary of the date of this Agreement and
each succeeding anniversary, if extended, Buyer shall notify Seller in
writing whether it desires fuel wood produced at Seller's wholly owned or
leased wood chipping facilities to be delivered to Buyer in the second
twelve (12) months and thereafter in which case Buyer shall be solely
responsible for obtaining the balance, if any, of its fuelwood
requirements otherwise. In such event, Seller shall so deliver such fuel
wood to Buyer.
5. SCALES:
A ton used in this Agreement shall be defined as 2,000 pounds by
weight for trucks and 78 cubic feet by scale for rail wood chip cars.
Buyer shall provide and maintain at its expense, adequate printing scales
at its paper mill at Port St. Joe, Florida for the purpose of determining
the weight of pulpwood, wood chips, and fuel wood sold and delivered by
truck to the mill.
Upon request of Seller, Buyer shall promptly provide Seller copies of
the certifications of the scales by the Florida Department of Agriculture
and Consumer Services.
3
Buyer shall be responsible for all scaling and measuring of
pulpwood, wood chips, and fuel wood pursuant to this Agreement. Buyer
shall, at its expense, furnish qualified scalers acceptable to Seller.
Such scalers shall be employees of Buyer.
Notwithstanding the foregoing, Buyer may, at its option, utilize the
weight equivalency methodology of (stick) scaling for the purpose of
determining the weight of wood chips delivered by rail to the Port St. Joe
mill based on 78 cubic feet per ton.
Scaling shall be done upon delivery of pulpwood, wood chips, and fuel
wood to Buyer's scales, and Buyer shall expeditiously unload and release
all trucks and rail cars.
Seller may, upon reasonable notice to Buyer, at its sole option and
cost, utilize scalers other than those supplied by Buyer to verify the
scaling and culling. Buyer shall adjust its scaling and culling to
reflect the results of such verification, provided, however, that such
verification shall have determined that Buyer's scaling methods were in
error.
6. PRICE OF WOOD FIBER:
The prices of all wood fiber produced by Seller and purchased by
Buyer hereunder is shown in Exhibit B attached to this Agreement and is
made a part hereof, as adjusted in accordance with the provisions of this
Section 6.
The prices shown in Exhibit B shall be adjusted at the beginning of
each month following the most recent quarterly publication of Timber Mart
South (or a successor publication). The prices, including the prices
currently set forth in Exhibit B and the quarterly adjusted prices as
defined below, shall be adjusted by that percentage change rounded to the
fourth decimal place between (a) the average of the prices reflected in
the four most recent quarterly publications of Timber Mart South (or a
successor publication), for Stumpage Price Mart, Standing Timber, Pine
Pulpwood, Dollars Per Ton, Zone 2, Average Price for Florida, and (b) the
average of the
4
prices reflected in the four quarterly publications prior to the most
recent quarterly publication of Timber Mart South (or a successor
publication), for Stumpage Price Mart, Standing Timber, Pine Pulpwood,
Dollars Per Ton, Zone 2, Average Price for Florida; provided that each
quarterly adjustment shall not be greater than a 5% increase or decrease.
However, the prices reflected in Exhibit B (September 30, 1995) attached
hereto shall be adjusted without limitation by the percentage change
determined by the most recent publication of Timber Mart South (or a
successor publication) immediately preceding the closing date hereof.
In the event that Timber Mart South (or a successor publication) is
no longer published or such publication (or a successor publication) is
prepared on a basis different than that in effect on the date of this
Agreement, the parties hereto shall use reasonable efforts to agree on an
appropriate substitute publication. Failing such agreement, the parties
shall select an arbitrator to select the substitute publication in
accordance with the procedures set forth in Section 12
hereof.
Notwithstanding the foregoing, no later than thirty days prior to
each 24 month period beginning on the second anniversary date of this
Agreement, Buyer and Seller shall use their best efforts to agree on
prices reflecting fair market value for each category of wood fiber as
reflected on Exhibit B hereto, to become effective on the anniversary
date. Such annually negotiated prices shall be adjusted quarterly as
described above for the next 24 month period. In the event that Buyer and
Seller are unable to agree on prices by the end of each 24 month
anniversary date then the parties shall select an arbitrator to determine
the prices in compliance with Section 12 hereof. The prices so determined
will be applied retroactively to the applicable anniversary date.
5
7. PRICE OF BIOMASS (FUEL WOOD):
The price of biomass used for fuel wood produced by Seller and
delivered to Buyer hereunder is shown in Exhibit B hereto.
The price of fuel wood may be adjusted every 24 months as mutually
agreed between the parties.
8. PAYMENT:
Seller shall invoice Buyer on a weekly basis for deliveries made
during each week and for all deliveries made during the first year of this
Agreement, Buyer shall pay Seller within 30 days from the date of such
invoices, which date shall not be earlier than the Friday of the week
during which the deliveries were made, for the next four years of the term
of this Agreement, Buyer shall pay Seller within 14 days from the date of
such invoices and for the remainder of the term of this Agreement, Buyer
shall pay Seller within seven days from the date of such invoices.
9. RECORDS:
Buyer shall furnish Seller daily numbered weight tickets and numbered
scaling tickets evidencing the weights of pulpwood, wood chips and fuel
wood delivered to it; listing the name of the timber dealer, the name of
the timber producer, the time, the date, the truck number, the rail car
number, the zone and the tract from which the pulpwood, wood chips and
fuel wood originated; provided, however, that Seller shall have provided
such information to Buyer at the time of the applicable delivery. Buyer
shall furnish all documents detailing the amount and nature of any culling
to Seller daily as performed and shall make available to Seller, upon
Seller's request, the samples taken on which the culling was done. Buyer
shall assist Seller in effecting timber security activities. Unless the
quantity received by Buyer under the foregoing
6
records is contested within sixty (60) days from date of such numbered
tickets and documents, such records shall be deemed final by the parties
hereto.
10. TITLE:
The title of all pulpwood, wood chips and fuel wood under this
Agreement shall remain in Seller until delivered to Buyer. Delivery of
pulpwood, wood chips, and fuel wood by truck shall be deemed to have been
made when the truck has been placed in position for scaling at Buyer's
woodyard. Delivery of chips by rail shall be deemed to have been made
when the rail cars have been placed for scaling at Buyer's woodyard.
11. FORCE MAJEURE:
The parties hereto agree that Seller shall not be liable to Buyer for
any actual or consequential damages for Seller's failure to perform if:
A. The contract dealers and producers of pulpwood, wood chips or
fuel wood are prevented by strike, walkout, labor strife, riot, civil war,
acts of the public enemy, and/or acts of God from delivering to Buyer;
B. Restrictions or prohibitions imposed by Local, State, or Federal
Government or any of their agencies that prevent Seller from performing
under this Agreement.
C. The condemnation or taking of Seller's lands or any material
part thereof or of the timber thereon; or
D. Seller's timber is damaged by fire, storm, pestilence, wind,
lightning, rain, ice, floods, rising waters or other casualty to the
extent that the timber remaining and undamaged is insufficient to supply
pulpwood, wood chips, and fuel wood without deviating from sound forest
management principles.
7
In the event that Seller is unable to ship the pulpwood and wood chip
tonnage required hereunder on account of any such force majeure event,
Seller will allocate its available pulpwood and wood chip tonnage thereof
among its then existing customers, divisions and affiliated companies on
such basis as Seller may deem fair and practical, without liability for
any such failure to perform its obligations under this Agreement;
provided, however, that in making such allocation Seller shall, as near as
practicable, limit its reduction of shipments hereunder in such manner as
to have the same percentage of reduction apply to such customers,
divisions and affiliated companies.
12. DISAGREEMENT OF SPECIFICATIONS, QUALITY OR PRICE:
In the unlikely event that a disagreement should arise over the
specifications, quality, or price of any product produced by Seller and
delivered to Buyer, Seller and Buyer mutually agree to submit the matter
in dispute to a qualified testing laboratory, engineering firm, forestry
consultant, or other third party qualified to arbitrate the disagreement.
Seller and Buyer agree to accept the decision of the third party.
In the event that Seller and Buyer cannot agree on the third party
qualified to arbitrate the disagreement, a joint request shall be made to
the American Arbitration Association to appoint an arbitrator. The
arbitrator appointed shall be deemed to be the arbitrator selected by
mutual agreement.
If any of the prices of pulpwood, wood chips, or fuel wood is an
issue and the matter is submitted for arbitration, the arbitrator shall
have not less than ten (10) years experience in the supply of the wood
fiber products to be supplied hereunder to the geographic region in which
Buyer's mill is located and shall not be a current or prior employee of
Buyer, Seller or SCC. Each party shall submit to the arbitrator, within
five days after the arbitrator is chosen, the price
8
it feels reflects the fair market value for such category of wood fiber
as reflected in Exhibit B hereto, together with all data in support of its
position. The arbitrator will then rule within thirty days thereafter on
the price of either Seller or Buyer that most fairly represents fair
market value. The decision of the arbitrator shall be binding on both
parties. The expenses of the arbitrator shall be borne equally by
Seller and Buyer.
13. CHIPPING SERVICES AT LOWRY
Seller will provide chip service at Lowry for Buyer's private wood up
to a maximum of 100,000 tons per year. The charge for chipping Buyer's
private wood will be as shown on Exhibit B hereto. For each gross ton of
Buyer's private wood delivered to Lowry, Seller will deliver to the mill
at Port St. Joe eighty-three percent (83%) chips and seventeen percent
(17%) fuel wood. If the ratio of chips to fuel wood proves to be
different, the parties will negotiate an appropriate ratio based upon
actual outturn.
14. TERMS OF AGREEMENT:
This Agreement shall commence on May 30, 1996, and will terminate on
December 31 of the fifteenth calendar year thereafter. Notwithstanding
the foregoing, this Agreement may be extended by Buyer for two successive
five year terms, in each case upon one hundred twenty (120) days advance
notice in writing to Seller.
15. ASSIGNMENT:
This Agreement shall be binding on the successors and assigns of the
parties hereto; provided that without the prior written consent of Seller,
Buyer may only assign or transfer any of its rights or obligations under
this Agreement to a subsequent purchaser of the Mill which will only be
permitted to take delivery as prescribed in this Agreement at the Mill
except as otherwise provided in Section 3. Nothing herein shall prohibit
the Seller from employing any
9
subcontractors or agents; provided that such employment shall not relieve
the Seller of any of its obligations hereunder.
16. NOTICES:
All notices provided for in this Agreement shall be in writing signed
by the party giving such notice, and delivered personally or sent by
overnight courier or messenger against receipt thereof or sent by
registered or certified mail (air mail if overseas), return receipt
requested, or by Telex, facsimile transmission, telegram or similar means
of communication if confirmed by mail. Notices shall be deemed to have
been received on the date of personal delivery or telecopy or, if sent by
certified registered mail, return receipt requested, shall be deemed to be
delivered on the third business day after the date of mailing. Notices
shall be sent to the following addresses:
To Seller:St. Joseph Land and Development Company
P.O. Box 908
Port St. Joe, Florida 32456
Attention: Clay Smallwood, Manager
To Buyer: Florida Coast Paper Company, L.L.C.
300 First Street
Port St. Joe, Florida 32456
Attention: Clinton G. Ames, President
17. GOVERNING LAW; JURISDICTION; FORUM:
The parties hereto agree that all of the provisions of this Agreement
and any questions concerning its interpretation and enforcement shall be
governed by the laws of the State of Florida without regard to any
applicable principles of conflict of laws. Each of the parties
irrevocably and unconditionally consents that any suit, action or
proceeding relating to this Agreement may be brought in a court of the
United States sitting in the State of Florida or, if
10
jurisdiction is lacking in such a court, in a court of record in the
State of Florida, and each party hereby irrevocably waives, to the fullest
extent permitted by law, any objection that it may have, whether now or in
the future, to the laying of the venue in, or to the jurisdiction of, any
and each of such courts for the purpose of any such suit, action,
proceeding or judgment and further waives any claim that any such suit,
action, proceeding or judgment has been brought in an inconvenient forum,
and each party hereby submits to such jurisdiction.
18. COUNTERPARTS:
This Agreement may be executed in any number of counterparts, each
of which when so executed shall be deemed an original but all of which
together shall constitute one and the same instrument.
19. ENTIRE AGREEMENT:
This Agreement constitutes the entire agreement of the parties with
respect to the subject matter hereof.
20. HEADINGS:
The section headings of this Agreement are only for the purpose of
reference and shall not affect the meaning hereof.
11
IN WITNESS WHEREOF, the companies hereunto have caused this Agreement
to be
executed by their duly authorized officer, on the 30th day of May, 1996.
ST. JOSEPH LAND AND DEVELOPMENT
COMPANY
WITNESSES:
- ----------------- /s/ R.E. Nedley
Witness by: R.E. Nedley
its: Vice President
- -----------------
Witness
FLORIDA COAST PAPER COMPANY, L.L.C.
WITNESSES:
- ------------------ /s/ Mary B. Dopslaff
Witness by: Mary B. Dopslaff
its: Vice President
- ------------------
Witness
12
5
6-MOS YEAR
DEC-31-1996 DEC-31-1995
JUN-30-1996 DEC-31-1995
557,581 16,802
102,917 189,865
45,882 44,390
0 0
26,046 20,592
756,765 497,184
820,568 804,974
0 0
1,873,190 1,530,994
210,163 44,469
0 0
8,714 8,714
0 0
0 0
0 0
1,873,190 1,530,994
158,714 0
251,152 0
50,670 0
134,701 0
0 0
0 0
324 0
133,936 0
62,072 0
65,469 0
91,116 0
0 0
0 0
156,585 0
5.13 0
.0 0
