Exhibit 4(c)
RAYONIER INC.
383,000 Common Shares
RAYONIER SUBSTITUTE STOCK OPTION PLAN
PLAN INFORMATION
THIS DOCUMENT CONSTITUTES PART OF A PROSPECTUS COVERING SECURITIES
THAT HAVE BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933.
The Prospectus covers such additional securities as may be issuable as a result
of anti-dilution provisions contained in the instruments pursuant to which
securities covered by the Prospectus are issued.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THE
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
March 21, 1994
Additional information about the Plan and its administration may be
obtained by writing the Manager of Stock Option Plan Administration, Rayonier
Inc., 1177 Summer Street, Stamford, CT 06904 or telephoning the Manager at
(203) 348-7000.
Any statement contained in a document incorporated or deemed to be
incorporated by reference in the Prospectus shall be deemed to be modified or
superseded for purposes of the Prospectus to the extent that a statement
contained in the Prospectus or in any other subsequently filed document which
also is or is deemed to be incorporated by reference in the Prospectus modifies
or supersedes such statement. Any such statement so modified or superseded
shall not be deemed, except as so modified or superseded, to constitute a part
of the Prospectus. Any such document, as well as Rayonier's most recent annual
report to shareholders and any other report or communication distributed to
Rayonier shareholders generally, may be obtained without charge by written
request to John B. Canning, Corporate Secretary, Rayonier Inc., 1177 Summer
Street, Stamford, CT 06904 or by telephoning John Canning at (203) 348-7000.
TABLE OF CONTENTS
General Information . . . . . . . . . . . . . . . . . . 3
The Plan. . . . . . . . . . . . . . . . . . . . . . . . 4
Administration. . . . . . . . . . . . . . . . . . . . . 6
Federal Tax Treatment . . . . . . . . . . . . . . . . . 6
GENERAL INFORMATION
The Rayonier Substitute Stock Option Plan (the "Plan") has been appoved by
shareholders and by the Board of Directors of Rayonier Inc. and becomes
effective March 21, 1994.
This Prospectus covers Common Shares that may be subject to stock options
granted to certain executive officers of Rayonier Inc. under the Plan. The
maximum number of common shares of Rayonier Inc. (the "Common Shares") for
which options may be issued under the Plan is three hundred and eighty three
thousand shares (383,000). The options granted pursuant to the plan
("Substitute Stock Options") are in substitution for stock options previously
granted by ITT Corporation ("ITT") to such executives and surrendered by them
for cancellation. The Substitute Stock Options are designed to maintain the
economic value of each ITT option and the total number of Substitute Stock
Options granted is determined so that the aggregate spread between the exercise
price and the fair market value with respect thereto will equal such aggregate
spread with respect to the ITT options. It is believed that the granting of
Substitute Stock Options is beneficial to Rayonier and its shareholders since
it will allow Rayonier to restore meaningful compensation incentives to key
employees. Reference is made to the text of the Plan herein for a complete
description of awards permitted under the Plan and the relevant provisions and
conditions applicable thereto.
The prospectus does not cover resales of Common Shares acquired pursuant
to the provisions of the Plan. Resales may be subject to restrictions or
limitations imposed by the Securities Act of 1933 and the Securities Exchange
Act of 1934.
The Plan is not subject to any of the provisions of the Employee
Retirement Income Security Act of 1974. Furthermore, Section 401 of the
Internal Revenue Code relating to certain qualified pension, profit-sharing and
stock bonus plans does not apply to the Plan.
Plan participants receive information with respect to their participation,
including the date of grant, the exercise price, the amount exercisable and the
expiration date.
RAYONIER SUBSTITUTE STOCK OPTION PLAN
The following is the text of the Rayonier Substitute Stock Option Plan:
1. Purpose. The purpose of this Rayonier Substitute Stock Plan (the "Plan")
is to provide meaningful compensation in the form of options to acquire common
shares of Rayonier Inc. to selected executive employees of the Company who
surrendered options to acquire stock in ITT Corporation in connection with the
spin off of the shares of Rayonier Inc. to its shareholders on February 28,
1994.
2. Definitions. When used herein, the following terms shall have the
indicated meanings:
"Board" means the Board of Directors of the Company.
"Committee" means the Compensation and Management Development Committee of
the Board or such other committee as may be designated by the Board to
administer the Plan, each member of which shall be both a member of the Board
and a "disinterested person" within the meaning of Rule 16b-3 under the
Securities Exchange Act of 1934 or successor rule or regulation and no member
of which shall be, or shall have been, eligible to receive an Option under the
Plan or any other plan maintained by the Company to acquire stock options of
the Company at any time within the one year immediately preceding the member's
appointment to the Committee.
"Company" means Rayonier Inc. and its successors and assigns.
"Executive Employee" means an executive employee of the Company who held an
ITT Option.
"ITT" and "ITT Option" mean, respectively, the ITT Corporation and options to
acquire the common stock of ITT surrendered by executive employees in
connection with the spin off of the Company to its shareholders on February 28,
1994.
"Option" and "Option Agreement" mean, respectively, an option awarded
hereunder to purchase Stock of the Company and the written agreement evidencing
such Option.
"Stock" means the common shares of the Company.
3. Shares Subject to the Plan. The aggregate number of shares of Stock that
may be the subject of Options under the Plan is 383,000. Subject to this
limitation, shares of Stock to be issued upon the exercise of Options may be
made available from authorized but unissued shares or from shares purchased in
the open market.
4. Grant of Options and Option Agreements. It is intended that the Options
granted hereunder be in substitution for the ITT Options and that such Options
be designed to maintain the economic value of each ITT Option such that the
aggregate spread between the exercise price and the fair market value of the
Options granted hereunder will equal such aggregate spread with respect to the
ITT Options. With the foregoing intention in mind, the Committee shall (i)
designate the Execuitve Employees to be granted Options hereunder, (ii)
determine the number of shares of Stock subject to each Option, and (iii)
determine the terms and conditions of each Option, including without
limitation, the time or times when, and the manner in which, each Option shall
be exercisable, the duration of the exercise period, the Option price per
share, the permitted method of exercise, settlement and payment, the rules that
shall apply in the event of the termination of employment of the Executive
Employee and the events, if any, that may give rise to an Executive Employee's
right to accelerate the time of exercise of an Option. Each Option granted
under the Plan shall be evidenced by a written Option Agreement. Such
agreement shall be subject to and incorporate the express terms and conditions,
if any, required under the Plan or required by the Committee and shall be
governed by all of the terms and conditions applicable to non-qualified options
under the Rayonier 1994 Incentive Stock Plan, except to the extent specifically
provided by the Committee.
5. Stock Certificates. The Company shall not be required to issue or deliver
any certificates for shares of Stock prior to (i) the listing of such shares on
any stock exchange on which the Stock may then be listed and (ii) the
completion of any registration or qualification of such shares under any
federal or state law, or any ruling or regulation of any government body which
the Company shall, in its sole discretion, determine to be necessary or
advisable. All certificates for shares of Stock delivered under the Plan shall
also be subject to such stop-transfer orders and other restrictions as the
Committee may deem advisable under the rules, regulations, and other
requirements of the Securities and Exchange Commission, any stock exchange upon
which the Stock is then listed and any applicable federal or state securities
laws, and the Committee may cause a legend or legends to be placed on any such
certificates to make appropriate reference to such restrictions. The foregoing
provisions of this Section 5(b) shall not be effective if and to the extent
that the shares of Stock delivered under the Plan are covered by an effective
and current registration statement under the Securities Act of 1933, or if and
so long as the Committee determines that application of such provisions is no
longer required or desirable. In making such determination, the Committee may
rely upon an opinion of counsel for the Company. No Executive Employee awarded
an Option shall have any right as a shareholder with respect to any shares
covered by his or her Option prior to the date of issuance to him or her of a
certificate or certificates for such shares.
6. Administration of the Plan. All decisions, determinations or actions of
the Committee made or taken pursuant to grants of authority under the Plan
shall be made or taken in the sole discretion of the Committee and shall be
final, conclusive and binding on all persons for all purposes. The Committee
shall have full power, discretion and authority to interpret, construe and
administer the Plan and any part thereof, including the Option Agreements
entered into thereunder, and its interpretations and constructions thereof and
actions taken thereunder shall be, except as otherwise determined by the Board,
final, conclusive and binding on all persons for all purposes. The Committee's
decisions and determinations under the Plan need not be uniform and may be made
selectively among Executive Employees, whether or not such Executive Employees
are similarly situated. The Committee may, in its sole discretion, delegate
such of its powers as it deems appropriate.
7. Amendment, Extension or Termination. The Board may, at any time, amend or
terminate the Plan and, specifically, may make such modifications to the Plan
as it deems necessary to avoid the application of Section 162(m) of the
Internal Revenue Code of 1986 (as now in effect or as hereafter amended) and
the Treasury regulations issued thereunder. No Option granted under the Plan
shall be transferable other than by will or by the laws of descent and
distribution. During the lifetime of the optionee, an Option shall be
exercisable only by the Executive Employee to whom the Option is granted. In
the event of an Executive Employee's termination of employment, the following
provisions shall apply:
(A) If employment terminates because of the Executive Employee's Retirement or
Total Disability or death, any Option may be exercised to the full extent
permitted on the date of such event, by the Executive Employee or the person or
persons to whom the Executive Employee's rights under the Option pass by will,
or if none, by his or her executors or administrators, as the case may be, at
any time or from time to time within five years after the date of the Executive
Employee's termination of employment or death, as applicable, or within such
other period and subject to such terms and conditions as the Committee may
specify, but in any event not later than the original expiration date of the
Option. Any unexpired Option not fully exercisable immediately prior to such
optionee's retirement, disability or death shall become fully exercisable upon
such event unless the Committee, in its sole discretion, shall otherwise
determine.
(B) If employment terminates for any other reason, the Executive Employee may
exercise his or her Option to the extent that he or she shall have been
entitled to do so at the date of the termination of employment, at any time or
from time to time, within three months after the date of the termination of
employment or within such other period and subject to such terms and conditions
as the Committee may specify, but not later than the original expiration date
of the Option; provided that, if the Executive Employee voluntarily resigns
before eligibility for Retirement or he or she is terminated for cause as
determined by the Committee, the Option shall be cancelled coincident with the
effective date of the termination of employment.
8. Adjustments in Event of Change in Common Stock. In the event of any
recapitalization, reclassification, split-up or consolidation of shares of
Stock or, stock dividend, merger or consolidation of the Company or sale by the
Company of all or a portion of its assets, the Committee may make such
adjustments in the Stock subject to purchase by an Option, or the terms,
conditions or restrictions on Options, including the price payable upon the
exercise of such Option, as the Committee deems equitable.
9. Miscellaneous. Nothing in this Plan or any Option granted hereunder shall
confer upon any employee any right to continue in the employ of any the Company
or interfere in any way with the right of the Company to terminate his or her
employment at any time. No Executive Employee shall have any claim to an
Option until it is actually granted under the Plan. The Committee may cause to
be made, as a condition precedent to the exercise of an Option or otherwise,
appropriate arrangements with the Executive Employee or his or her beneficiary,
for the withholding of any federal, state, local or foreign taxes. The Plan
and the grant of Options shall be subject to all applicable federal and state
laws, rules, and regulations and to such approvals by any government or
regulatory agency as may be required. The terms of the Plan shall be binding
upon the Company and its successors and assigns. Captions preceding the
sections hereof are inserted solely as a matter of convenience and in no way
define or limit the scope or intent of any provision hereof.
10. Effective Date; Term of Plan. The effective date of the Plan shall be
March 21, 1994 and the Plan's termination date is December 31, 1994. No
Option shall be granted under this Plan after the Plan's termination date. The
Plan will continue in effect for existing Options as long as any such Option is
outstanding.
ADMINISTRATION
The Plan is administered by a Committee of the Board of Directors of
Rayonier, presently designated as the Compensation and Management Development
Committee, the members of which serve during the pleasure of the Board. The
Committee is composed of directors none of whom is an officer or employee of
Rayonier and none of whom is eligible to receive any award under the Plan.
FEDERAL INCOME TAX TREATMENT
The following is a brief summary of the current Federal income tax rules
generally applicable to Substitute Stock Options. Recipients of Substitute
Stock Options should consult their own tax advisors as to the specific Federal,
state and local tax consequences applicable to them.
Non-qualified Options. The Substitute Stock Options are non-qualified options.
An optionee is not subject to Federal income tax upon grant of a non-qualified
option. At the time of exercise, the optionee will realize compensation income
(subject to withholding) to the extent that the then fair market value of the
stock exceeds the option price. The amount of such income will constitute an
addition to the optionee's tax basis in the optioned stock. Sale of the shares
will result in capital gain or loss (long-term or short-term depending on the
optionee's holding period). Rayonier is entitled to a Federal tax deduction at
the same time and to the same extent that the optionee realizes compensation
income.
Golden Parachute Tax Penalties. The grant, acceleration or enhancment of a
Substitute Stock Options upon the occurrence of a change in control of the
Company may give rise, in whole or in part, to "excess parachute payments"
within the meaning of Section 280G of the Internal Revenue Code and, to such
extent, will be nondeductible by Rayonier and subject to a 20% excise tax to
the recipient.