10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE  

SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2002

OR

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE  

SECURITIES EXCHANGE ACT OF 1934

Commission file number 1-10239

PLUM CREEK TIMBER COMPANY, INC.

(Exact name of registrant as specified in its charter)

999 Third Avenue, Seattle, Washington 98104-4096    Telephone: (206) 467-3600

Organized in the State of Delaware I.R.S. Employer Identification No. 91-1912863

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 ¨

The number of outstanding shares of the registrant’s common stock as of April 25, 2002 was 184,672,538.

PART I.    FINANCIAL INFORMATION

ITEM 1.    FINANCIAL STATEMENTS

PLUM CREEK TIMBER COMPANY, INC.

CONSOLIDATED STATEMENT OF INCOME

(UNAUDITED)

	Quarter Ended
	March 31, 2002		March 31, 2001
	(In Millions, except per share)
Revenues
Timber	$	157	$	110
Real Estate		23		4
Manufacturing		93		—
Other		2		3
Total Revenues		275		117
Costs and Expenses:
Cost of Goods Sold:
Timber		74		37
Real Estate		11		—
Manufacturing		89		—
Other		—		—
Total Cost of Goods Sold		174		37
Selling, General and Administrative		17		9
Total Costs and Expenses		191		46
Operating Income		84		71
Interest Expense, net		26		11
Income before Income Taxes		58		60
Provision for Income Taxes		2		23
Net Income	$	56	$	37
Net Income per Share—Basic	$	0.30	$	0.33
Net Income per Share—Diluted	$	0.30	$	0.32
Weighted average number of Shares outstanding—Basic		184.5		112.7
Weighted average number of Shares outstanding—Diluted		185.3		113.9

See accompanying Notes to Consolidated Financial Statements

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PLUM CREEK TIMBER COMPANY, INC.

CONSOLIDATED BALANCE SHEET

	March 31, 2002		December 31, 2001
	(UNAUDITED)
	(In Millions, except share data)
ASSETS
Current Assets:
Cash and Cash Equivalents	$	285	$	193
Restricted Advance from Customer		31		—
Accounts Receivable		47		35
Inventories		53		52
Investment in Grantor Trust		10		12
Other Current Assets		14		14
		440		306
Timber and Timberlands—Net		3,473		3,480
Property, Plant and Equipment—Net		311		316
Other Assets		13		20
Total Assets	$	4,237	$	4,122
LIABILITIES
Current Liabilities:
Current Portion of Long-Term Debt	$	34	$	34
Accounts Payable		17		27
Interest Payable		35		21
Wages Payable		11		21
Taxes Payable		13		9
Deferred Revenue		42		14
Liabilities Associated with Grantor Trust		10		11
Other Current Liabilities		15		12
		177		149
Long-Term Debt		1,177		1,178
Line of Credit		492		469
Deferred Tax Liability		38		38
Capital Leases		20		20
Other Liabilities		17		21
Total Liabilities		1,921		1,875
Commitments and Contingencies
STOCKHOLDERS’ EQUITY
Preferred stock, $0.01 par value, authorized shares—75 million, outstanding—none		—		—
Common stock, $0.01 par value, authorized shares—300 million, outstanding—184,654,751 at March 31, 2002 and 183,825,407 at December 31, 2001		2		2
Additional Paid-In Capital		2,241		2,227
Retained Earnings		73		17
Other Equity		—		1
Total Stockholders’ Equity		2,316		2,247
Total Liabilities and Stockholders’ Equity	$	4,237	$	4,122

See accompanying Notes to Consolidated Financial Statements

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PLUM CREEK TIMBER COMPANY, INC.

CONSOLIDATED STATEMENT OF CASH FLOWS

(UNAUDITED)

	Three Months Ended
	March 31, 2002			March 31, 2001
	(In Millions)
Cash Flows From Operating Activities:
Net Income	$	56		$	37
Adjustments to Reconcile Net Income to
Net Cash Provided By Operating Activities:
Depreciation, Depletion and Amortization		26			10
Basis of Real Estate Sold		9			—
Deferred Income Taxes		—			15
Working Capital Changes		(15	)		(13	)
Other		(3	)		—
Net Cash Provided By Operating Activities		73			49
Cash Flows From Investing Activities:
Additions to Properties Including Tax-Free Exchanges		(17	)		(20	)
Net Cash Used In Investing Activities		(17	)		(20	)
Cash Flows From Financing Activities:
Cash Dividend to G-P		—			(9	)
Borrowings of Long-term Debt and Line of Credit		263			—
Repayments of Long-term Debt and Line of Credit		(241	)		(19	)
Proceeds from Stock Option Exercises		14			—
Other		—			(1	)
Net Cash Provided By (Used In) Financing Activities		36			(29	)
Increase In Cash and Cash Equivalents		92			—
Cash and Cash Equivalents:
Beginning of Period		193			—
End of Period	$	285		$	—

See accompanying Notes to Consolidated Financial Statements

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PLUM CREEK TIMBER COMPANY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

Note 1.    Basis of Presentation

References to “Plum Creek,” “the company,” “we” or “our” are references to Plum Creek Timber Company, Inc., a Delaware corporation and a real estate investment trust, or REIT, for federal income tax purposes, and all of its wholly owned subsidiaries.

The consolidated financial statements include all of the accounts of Plum Creek. At March 31, 2002, the company owned and managed approximately 7.8 million acres of timberlands in the Northwest, Southern and Northeast United States, and owned and operated ten wood product conversion facilities in the Northwest United States. The company estimates that 400,000 acres of its 7.8 million acres may be better suited for conservation, residential or recreational purposes rather than for long-term commercial timber management. Certain reclassifications have been made, none of which affected operating income or net income, to present the financial statements on a consistent basis. All significant intercompany transactions have been eliminated in consolidation of the financial statements.

On October 6, 2001, The Timber Company, a separate operating group of Georgia-Pacific Corporation, merged with and into Plum Creek. The merger was accounted for as a reverse acquisition. As a consequence, even though The Timber Company ceased to exist for legal purposes, the historical financial statements of The Timber Company have become the historical financial statements of Plum Creek. Therefore, the financial statements reflect the combined operations of Plum Creek and The Timber Company for periods subsequent to October 6, 2001, and reflect solely the operations of The Timber Company for periods prior to October 6, 2001.

The financial statements included in this Form 10-Q are unaudited and do not contain all of the information required by generally accepted accounting principles to be included in a full set of financial statements. The audited financial statements in the company’s 2001 annual report on Form 10-K include a summary of significant accounting policies of the company and should be read in conjunction with this Form 10-Q. In the opinion of management, all material adjustments necessary to present fairly the results of operations for such periods have been included. All such adjustments are of a normal and recurring nature. The results of operations for interim periods are not necessarily indicative of the results of operations for the entire year.

In the fourth quarter of 2001, consistent with Plum Creek’s historical policy, the company elected to capitalize certain timber reforestation costs and other costs associated with the planting and growing of timber that were previously expensed by The Timber Company. Because our merger with The Timber Company was accounted for as a reverse

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acquisition, the adoption of Plum Creek’s historical policy was accounted for as a change in accounting method. This new capitalization policy was applied retroactively as of January 1, 2001, and as a consequence, operating results and cash flow for the quarter ended March 31, 2001 have been restated to reflect this change.

Note 2.    Timber and Timberlands, Property, Plant and Equipment, and Inventory

Timber and timberlands consisted of the following (in millions):

	March 31, 2002		December 31, 2001
Timber and logging roads—net	$	2,286	$	2,267
Timberlands		1,187		1,213
Timber and Timberlands—net	$	3,473	$	3,480

Property, plant and equipment consisted of the following (in millions):

	March 31, 2002			December 31, 2001
Land, buildings and improvements	$	82		$	80
Machinery and equipment		271			271
		353			351
Accumulated depreciation		(42	)		(35	)
Property, Plant and Equipment—net	$	311		$	316

Inventories, accounted for using the average cost method for logs, work-in-process and finished goods and cost for supplies, consisted of the following (in millions):

	March 31, 2002		December 31, 2001
Raw materials (logs)	$	18	$	17
Work-in-process		4		4
Finished goods		21		21
		43		42
Supplies		10		10
Total	$	53	$	52

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Note 3.    Income Taxes

References to the company’s “taxable REIT subsidiaries” are references to subsidiaries of Plum Creek Timber Company, Inc. which conduct activities that generate non-qualifying REIT income. References to the company’s “REIT operating partnerships” are references to subsidiaries of Plum Creek Timber Company, Inc. which primarily conduct activities that generate qualifying REIT income.

Plum Creek has elected to be taxed as a REIT under sections 856-860 of the United States Internal Revenue Code commencing July 1, 1999. A REIT is generally not subject to corporate-level tax if it satisfies certain requirements set forth in the Internal Revenue Code. Under the Internal Revenue Code, a REIT is permitted to deduct dividends paid to stockholders in computing its taxable income. The company anticipates that distributions will exceed its taxable income for the year ended December 31, 2002. Therefore, except for taxes relating to built-in gains (discussed below), no provision for federal or state income tax with respect to the company’s REIT activities has been provided for the quarter ended March 31, 2002. During the quarter ended March 31, 2001, The Timber Company was a taxable entity and therefore, given that The Timber Company’s historical financial statements have become our historical financial statements, a tax provision with an effective tax rate of approximately 38% has been recorded for the quarter ended March 31, 2001.

The activities of the company are conducted through various wholly owned subsidiaries. The company’s REIT activities, which are conducted through its wholly owned REIT operating partnerships, consist primarily of sales of timber under cutting contracts, and the income from such sales is not subject to income tax to the extent such income is distributed to stockholders. Our various taxable REIT subsidiaries harvest and sell logs, purchase and sell timber under cutting contracts or lump-sum sales, conduct our manufacturing operations and sell some of our higher and better use lands. The income from these activities is subject to income tax. Therefore, an income tax provision of less than $1 million for the quarter ended March 31, 2002 was provided for the operations conducted by the taxable REIT subsidiaries. Because a substantial portion of the company’s consolidated activities are conducted by its REIT operating partnerships, the annual consolidated effective tax rate is anticipated to average less than five percent. Furthermore, because the manufacturing of wood products has historically been a cyclical business, there may be periods in which we report consolidated pre-tax income, while the taxable REIT subsidiaries generate a pre-tax loss. In this case, a tax benefit may be recorded in the consolidated financial statements.

A built-in gains tax of $2 million was recorded during the quarter ended March 31, 2002 related to the disposition of timberlands that were acquired in connection with the merger with The Timber Company. Proceeds from certain dispositions are currently being held by a third party intermediary and may be reinvested in like-kind property within the required time period as prescribed under the Internal Revenue Code (referred to as “deferred exchanges”). Currently, it is not probable that the proceeds will be reinvested in like-kind property within the required time period. It is the company’s policy to record a tax expense for real estate

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sales that are consummated through a third party deferred exchange intermediary to the extent that (1) the disposition would be subject to corporate-level income tax (including the built-in gains tax) if the proceeds are not reinvested within the required time period and (2) management does not believe that it is probable that the proceeds will be reinvested in like-kind property within the required time period. If such proceeds are reinvested within the required time period, the tax expense will be reversed.

Note 4.    Borrowings

As of March 31, 2002, we had $492 million of borrowings outstanding under our line of credit. The line of credit consists of a $600 million revolving line of credit maturing September 30, 2005 and a $100 million term facility maturing on September 30, 2002. Borrowings on the line of credit fluctuate daily based on cash needs. Subject to customary covenants, the line of credit allows for borrowings from time to time up to $600 million, including up to $50 million of standby letters of credit. The $100 million term facility was classified as long-term debt due in 2005 because of the company’s intent and ability to finance these borrowings on a long-term basis. As of March 31, 2002, $208 million remained available for borrowing under the line of credit and there were outstanding standby letters of credit of $93,000. On April 4, 2002, $250 million of the borrowings under the line of credit were repaid.

Note 5.    Earnings Per Share

The following table sets forth the reconciliation of basic and diluted earnings per share for the quarters ended:

	March 31, 2002		March 31, 2001
	(In millions, except per share amounts)
Net income allocable to common stockholders	$	56	$	37
Denominator for basic earnings per share		184.5		112.7
Effect of dilutive securities—stock options		0.7		1.2
Effect of dilutive securities—unvested restricted stock, dividend equivalent rights, and value management plan		0.1		—
Denominator for diluted earnings per share—adjusted for dilutive securities		185.3		113.9
Basic Earnings per Share	$	0.30	$	0.33
Dilutive Earnings per Share	$	0.30	$	0.32

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Note 6.    Segment Information

The table below presents information about reported segments for the quarters ending March 31 (in millions).

	Northern Resources		Southern Resources		Real Estate		Manu- factured Products		Other		Total
2002
External revenues	$	57	$	100	$	23	$	93	$	2	$	275
Intersegment revenues		21		—		—		—		—		21
Depreciation, depletion and amortization		9		12		—		5		—		26
Operating income		20		55		12		2		2		91
2001
External revenues	$	19	$	91	$	4		—		3	$	117
Intersegment revenues		—		—		—		—		—		—
Depreciation, depletion and amortization		1		9		—		—		—		10
Operating income		5		63		4		—		3		75

Prior to the October 6, 2001 merger, The Timber Company had one reportable segment. The segment information for 2001 has been restated to reflect our new segments.

A reconciliation of total operating income to income before income taxes for the quarters ended March 31 is presented below (in millions).

	2002		2001
Total segment operating income	$	91	$	75
Interest expense, net		26		11
Corporate and other unallocated expenses		7		4
Income before income taxes	$	58	$	60

Note 7.     Subsequent Event

On April 23, 2002, the board of directors authorized the company to make a dividend payment of $0.57 per share. Total dividends will approximate $105 million and will be paid on May 30, 2002 to stockholders of record on May 15, 2002.

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ITEM 2.    MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

References to “Plum Creek,” “the company,” “we” or “our” are references to Plum Creek Timber Company, Inc., a Delaware corporation and a real estate investment trust, or REIT, for federal income tax purposes, and all of its wholly owned subsidiaries.

This Report contains forward-looking statements within the meaning of the Private Litigation Reform Act of 1995. Some of the forward-looking statements can be identified by the use of forward-looking words such as “believes,” “expects,” “may,” “will,” “should,” “seeks,” “approximately,” “intends,” “plans,” “estimates,” “projects,” “strategy” or “anticipates” or the negative of those words or other comparable terminology. Forward-looking statements involve inherent risks and uncertainties. A number of important factors could cause actual results to differ materially from those described in the forward-looking statements. Some factors include changes in governmental, legislative and environmental restrictions, catastrophic losses from fires, floods, windstorms, earthquakes, volcanic eruptions, insect infestations or diseases, as well as changes in economic conditions and competition in our domestic and export markets and other factors described from time to time in our filings with the Securities and Exchange Commission. In addition, factors that could cause our actual results to differ from those contemplated by our projected, forecasted, estimated or budgeted results as reflected in forward-looking statements relating to our operations and business include, but are not limited to:

· our failure to qualify as a REIT or our failure to achieve the expected competitive advantages of operating as a REIT;

· an unanticipated reduction in the demand for timber products and/or an unanticipated increase in the supply of timber products;

· our failure to make strategic acquisitions or to integrate any such acquisitions effectively or, conversely, our failure to make strategic divestitures; and

· the failure to meet our expectations with respect to our likely future performance.

Accordingly, actual results may not conform to the forward-looking statements contained in this Report.

The following discussion and analysis should be read in conjunction with the financial information and analysis included in our Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 25, 2002.

Overview

Merger with The Timber Company.    On October 6, 2001, the six entities that comprised The Timber Company, formerly a separate operating group of Georgia-Pacific Corporation (“Georgia-Pacific”), merged with and into Plum Creek, with Plum Creek as the

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surviving company. As a part of the merger, the shareholders of Georgia-Pacific Corporation—Timber Group Common Stock (“Timber Company Stock”) received 1.37 shares of Plum Creek’s common stock for each share of the Timber Company Stock, or approximately 112.7 million shares. The merger was accounted for as a reverse acquisition, with The Timber Company being treated as the acquirer for accounting and financial reporting purposes. As a consequence of this accounting treatment, the historical financial statements of The Timber Company became the historical financial statements of Plum Creek effective as of the consummation of the merger. Therefore, the financial statements reflect the combined operations of Plum Creek and The Timber Company for periods subsequent to October 6, 2001 and reflect solely the operations of The Timber Company for periods prior to October 6, 2001.

Prior to the merger with Plum Creek, The Timber Company had only one reportable segment. Subsequent to the merger, Plum Creek has five reportable segments. The Timber Company’s historical segment information has been restated to reflect these new segments. Furthermore, the period-to-period comparison of the results of operations for the First Quarter of 2002 compared to the First Quarter of 2001 is based on these new segments. See Note 6 of the Notes to Financial Statements.

Plum Creek (The Timber Company prior to the October 6, 2001 merger) historically recognized revenue from timber sales under three different methods, depending upon the terms of the sale. These methods were (1) delivered log sales, (2) cutting contracts and (3) timber deeds. Timber deeds are agreements pursuant to which the buyer agrees to harvest all of the trees on a given tract of land during the term of a contract (usually 12 to 18 months). Risk of loss and title to the trees transfer to the buyer when the contract is signed. The buyer also pays the full purchase price when the contract is signed. Revenue from a timber deed sale is recognized when the contract is signed.

Subsequent to the October 6, 2001 merger, we replaced timber deed agreements with lump-sum sale agreements because of certain REIT requirements. Under a lump-sum sale, the parties agree to a lump-sum price for all the timber available for harvest on a tract of land. Generally the lump-sum price is paid when the contract is signed. However, unlike timber deeds, title to the timber and risk of loss transfers to the buyer as the timber is cut. Therefore, revenue is recognized each month based on the timber harvested, compared to total timber available to be harvested, on a given tract of land over the term of a contract (usually 12 to 18 months).

Accounting Method Change.    In the fourth quarter of 2001, the company changed its accounting policy to capitalize certain timber reforestation costs that had been previously expensed. The new capitalization policy was applied retroactively as of January 1, 2001.

U.S.-Canada Softwood Lumber Agreement

The trade dispute between the United States and Canada continues to be a major source of uncertainty for U.S. lumber markets. On March 31, 2001, the five-year lumber trade agreement between the U.S. and Canada expired. The agreement was intended to limit the

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volume of lumber that was exported to the U.S. through the assessment of a tariff on annual lumber exports in excess of certain levels from the four major lumber producing Canadian provinces. Prior to this five-year agreement, Canadian lumber producers were aggressively increasing their penetration into the U.S. market as a result of their lower wood fiber costs and favorable exchange rates.

Following the expiration of the trade agreement, U.S. industry coalitions submitted anti-dumping and countervailing duty petitions to the International Trade Commission and the U.S. Department of Commerce. On March 22, 2002, the Department of Commerce, rendered its final determination in favor of the U.S. industry coalitions and issued a 19.3% countervailing duty on Canadian lumber imports and an anti-dumping duty on all non-investigated Canadian exporters averaging 9.7% (representing the weighted average of the anti-dumping rates imposed on the investigated Canadian exporters). The Department of Commerce decreased these duties on April 26, 2002 to 18.8% and 8.4%, respectively. On May 2, 2002, the International Trade Commission rendered a final determination that the U.S. industry is threatened with material injury by Canadian lumber imports. As a result of this determination, it is expected that the Department of Commerce will issue the countervailing and anti-dumping duties within two to three weeks.

However, there is a strong indication that the Canadian government will appeal the decision by the International Trade Commission to the World Trade Organization. That appeal process would likely extend beyond 2002. If an appeal to the World Trade Organization were determined adversely to U.S. interests, then an increase in the supply of lumber to U.S. markets from Canadian sources would likely result. Other factors remaining unchanged, such an increase would increase downward pressure on lumber and log prices.

Results of Operations—First Quarter 2002 Compared to First Quarter 2001

The following table compares operating income by segment for the quarters ended March 31:

Operating Income by Segment

(In Millions)

	March 31, 2002			March 31, 2001
Northern Resources	$	20		$	5
Southern Resources		55			63
Real Estate		12			4
Manufactured Products		2			—
Other		2			3
Total Segment Operating Income		91			75
Other Costs & Eliminations		(7	)		(4	)
Operating Income	$	84		$	71

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Northern Resources Segment.    Revenues increased by $59 million, or 310%, to $78 million in 2002. Excluding revenues associated with the October 6, 2001 merger with Plum Creek, revenues increased by $2 million, or 11%, to $21 million. This increase of $2 million was due primarily to higher softwood sawlog sales volume. Softwood sawlog sales volume increased ($3 million) due primarily to the age class distribution of our Oregon timberlands, which has an increasing percentage of timber approaching maturity.

Excluding the impact of the October 6, 2001 merger, Northern Resources Segment operating income was 28% of its revenues for 2002 and 26% for 2001. Northern Resources Segment costs and expenses increased by $44 million, or 314%, to $58 million in 2002. Excluding costs and expenses associated with the October 6, 2001 merger, costs and expenses increased by $1 million, or 7%, to $15 million and was due primarily to higher log and haul costs associated with higher sales volume.

Southern Resources Segment.    Revenues increased by $9 million, or 10%, to $100 million in 2002. Excluding revenues associated with the October 6, 2001 merger, revenues decreased by $5 million, or 6%, to $85 million. This decrease of $5 million was due primarily to lower softwood sawlog sales ($13 million), offset in part by a higher percentage of delivered log sales ($7 million).

Softwood sawlog sales decreased primarily because of the effect of modifications to the terms of our supply contract with Georgia-Pacific. During 2001, a substantial portion of The Timber Company’s sales was to Georgia-Pacific under a long-term supply agreement pursuant to which Georgia-Pacific purchased standing timber, or timber deeds, twice a year ? in February and August. Because these sales to Georgia-Pacific were made pursuant to timber deeds, which pass title to the timber at the time of sale, all of the revenue from each semi-annual sale to Georgia-Pacific was recognized at the time the timber deed was sold, regardless of when the timber was actually harvested. Therefore, The Timber Company was able to recognize in the first quarter of 2001 all of the revenue from its February 2001 timber deed sales to Georgia-Pacific (along with revenue from other timber deed sales made during the quarter), even though all of the timber represented by the timber deeds was not actually harvested during the quarter. Following the October 6, 2001 merger, we discontinued making sales of timber under timber deeds because of REIT requirements. To comply with these requirements, we also modified our long-term supply agreement with Georgia-Pacific to provide for timber sales on a lump-sum basis rather than under timber deeds. As a result, revenue from the lump-sum contract sales is recognized as the timber is actually harvested.

The decrease in revenues was offset by $7 million due to a greater percentage of delivered log sales compared to sales of standing timber. Under a delivered log sale agreement, the seller is responsible for log and haul costs. When standing timber is sold the buyer incurs the log and haul costs. While revenues are higher when the seller is responsible for the logging and hauling of timber, costs of sales generally increase by a similar amount. As a result, the company realizes lower operating margins as a percent of revenue, although operating income is not generally affected.

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Excluding the impact of the October 6, 2001 merger, Southern Resources Segment operating income was 61% of its revenues for 2002 and 69% for 2001. This decline was due primarily to two factors: the increased percentage of delivered log sales; and the effect of lump-sum contract timber sales on our pricing average. As described above, lump-sum contract timber sales are recognized in the quarter in which timber is actually harvested. Because timber sales under lump-sum contracts (formerly under timber deeds) generally target higher margin sawlog timber stands, the effect of deferring a significant portion of these sales to subsequent quarters reduces operating margin. Southern Resources Segment costs and expenses increased by $17 million, or 61%, to $45 million in 2002. Excluding costs and expenses associated with the October 6, 2001 merger, costs and expenses increased by $5 million, or 18%, to $33 million. This increase of $5 million was due primarily to an increase in log and haul costs offset in part by lower depletion expense. Log and haul costs increased by $7 million due primarily to a higher percentage of delivered log sales compared to sales of standing timber. Depletion expense decreased by $1 million due primarily to lower softwood sawlog sales.

Real Estate Segment.    Revenues increased by $19 million, or 475%, to $23 million in 2002. Excluding revenues associated with the October 6, 2001 merger, revenues increased by $10 million, or 250%, to $14 million. This increase of $10 million is due primarily to the timing of real estate sales. Approximately 5% of the company’s timberlands may be better suited for conservation, residential or recreational purposes rather than for long-term commercial timber management. The timing of real estate sales is a function of many factors, including the availability of government and not-for-profit funding, the general state of the economy, the plans of adjacent landowners, the company’s expectation of future price appreciation and the timing of harvesting activities.

Excluding the impact of the October 6, 2001 merger, Real Estate Segment operating income was 89% of its revenues for 2002 and 90% for 2001. Real Estate Segment costs and expenses increased by more than $10 million to $11 million in 2002. Excluding costs and expenses associated with the October 6, 2001 merger, costs and expenses increased by $1 million in 2002 from less than $1 million in 2001.

Manufactured Products Segment.    The company’s historical financial statements for periods prior to the October 6, 2001 merger are the historical financial statements of The Timber Company, which did not have any manufacturing operations. For the first quarter of 2002, Manufactured Products Segment revenues were $93 million, expenses were $91 million and operating income was $2 million.

Other Segment.    Revenues decreased by $1 million to $2 million in 2002. Expenses were less than $1 million during 2002 and 2001.

Other Costs and Eliminations.    Other Costs and Eliminations (which consists of corporate overhead and intercompany profit elimination) decreased operating income by $7 million in 2002, compared to a decrease of $4 million in 2001. This change of $3 million was due primarily to $5 million of higher corporate expenses due to the increase in size of the company, offset by $2 million of intercompany profit released during the quarter. At March 31, 2002, the deferred profit on intercompany log sales was $7 million. Profit on intercompany log sales is deferred until the lumber and plywood manufacturing facilities convert existing log inventories into finished products and sell them to third parties. Prior to the October 6, 2001 merger, The Timber Company did not have any deferred profit on log sales.

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Interest Expense.    Net interest expense increased by $15 million, or 136%, to $26 million for 2002. This increase was due primarily to the $837 million of Plum Creek’s debt that was acquired in connection with the October 6, 2001 merger.

Financial Condition and Liquidity

Net cash provided by operating activities totaled $73 million for the first quarter of 2002, compared to $49 million in the same period of 2001. The increase of $24 million is due primarily to the October 6, 2001 merger. As a result of the merger, operating income increased by $13 million and non-cash operating expenses (depletion and depreciation) increased by $16 million.

Cash and cash equivalents at March 31, 2002 was $285 million compared to $193 million at December 31, 2001. The increase was due primarily to Plum Creek accelerating the payment of the fourth quarter 2001 dividend. Plum Creek paid the dividend for the fourth quarter of 2001 on December 28, 2001. Normally, the fourth quarter dividend would have been paid in February of the following year. The payment of the fourth quarter 2001 dividend was accelerated because of our merger with The Timber Company and the REIT requirement under the Internal Revenue Code that all earnings and profits inherited in connection with a merger must be distributed by January 31st of the year following the merger.

Subsequent to the October 6, 2001 merger, the company replaced timber deed agreements with lump-sum sale agreements because of certain REIT requirements. As a consequence, revenue that previously was recognized when the contract was signed is now deferred and is recognized as the timber is harvested. At March 31, 2002 deferred revenue associated with lump-sum sale agreements was $38 million. Additionally, $31 million of cash received from a customer for a lump-sum contract was restricted at March 31, 2002. The restricted cash is in a separate bank account and the restriction is lifted when the customer advises us that the timber under the lump-sum contract has been cut.

Our borrowing agreements contain various restrictive covenants, including limitations on harvest levels, sales of assets, the incurrence of indebtedness and payment of cash dividends. Our borrowing agreements restrict dividends to stockholders based on available cash, which is generally our net income after adjusting for non-cash charges (such as depreciation and depletion), changes in various reserves and capital expenditures and principal payments on indebtedness that are not financed. In addition, our line of credit requires that we maintain an interest coverage ratio and maximum leverage ratio. We were in compliance with all of our borrowing agreement covenants as of March 31, 2002. If market conditions experienced during 2001 and the first quarter of 2002 were to persist for an extended period of time, our debt agreements would restrict our ability to maintain our current dividend level.

15

Cash required to meet our financial needs will be significant. We believe, however, that cash on hand and cash flows from continuing operations will be sufficient to fund planned capital expenditures, and interest and principal payments on our indebtedness for the next year.

Future dividends will be determined by our board of directors, in its sole discretion, based on consideration of a number of factors including, but not limited to, our results of operations, cash flow and capital requirements, economic conditions, tax considerations, debt covenant restrictions that may impose limitations on the company’s ability to make cash payments, borrowing capacity, changes in the price and demand for Plum Creek’s products and the general market for timberlands and those timberland properties that have higher and better uses. Other factors that our board of directors might consider include the appropriate timing of timber harvests, acquisition and divestiture opportunities, stock repurchases, debt repayment and other means by which the company could deliver value to its stockholders.

Capital expenditures for the first quarter of 2002 were $17 million, compared to $20 million for the same period in 2001. Planned capital expenditures for 2002 are expected to be approximately $100 million and include approximately $80 million for our timberlands, $15 million for the development of our coalbed methane and $5 million for our manufacturing facilities. The timberland expenditures are primarily for reforestation and other expenditures associated with the planting and growing of trees.

Other Information

In June 2001, the Financial Accounting Standards Board issued SFAS No. 143, “Accounting for Asset Retirement Obligations,” which is effective for fiscal years beginning after June 15, 2002. The statement provides accounting and reporting standards for recognizing obligations related to asset retirement costs associated with the retirement of tangible long-lived assets. Under this statement, legal obligations associated with the retirement of long-lived assets are to be recognized at their fair value in the period in which they are incurred if a reasonable estimate of fair value can be made. The fair value of the asset retirement costs is capitalized as part of the carrying amount of the long-lived asset and expensed using a systematic and rational method over the assets’ useful life. Any subsequent changes to the fair value of the liability will be expensed. Management is currently assessing the impact of this statement on our results of operations, financial position and cash flows.

16

ITEM 3.    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Approximately $1.21 billion of debt of the company bears interest at fixed rates, and therefore the fair value of these instruments is affected by changes in market interest rates. The following table presents principal cash flows (in millions) based upon maturity dates of the debt obligations and the related weighted-average interest rates by expected maturity dates for the fixed-rate debt. The interest rate on the variable-rate debt as of March 31, 2002, was LIBOR plus 1.5% which includes facility fees (3.4%). However, this rate could range from LIBOR plus 0.75% to LIBOR plus 1.75% depending on our financial results.

March 31, 2002: Long-term debt, including current portion	2002			2003			2004			2005			2006			There- after			Total		Fair Value
Fixed rate debt	$	33		$	33		$	33		$	32		$	161		$	919		$	1,184	$	1,200
Avg. interest rate		8.2	%		8.2	%		8.1	%		8.0	%		7.9	%		7.8	%
Premium Amortization	$	6		$	6		$	6		$	5		$	3		$	1		$	27
Variable rate debt(1)										$	492								$	492	$	492

(1) As of April 4, 2002, $250 million of variable rate debt was repaid.

At March 31, 2001, The Timber Company’s debt was an allocated portion of Georgia-Pacific’s total outstanding debt and, therefore, the fair value of the allocated debt was not impacted by changes in market interest rates. The interest charged on the allocated debt was adjusted quarterly based on the weighted-average interest rate of Georgia-Pacific’s debt.

17

PART II

ITEM 1.    LEGAL PROCEEDINGS

There is no pending or threatened litigation involving the company that we believe would have a material adverse effect on the company’s financial position, results of operations or liquidity.

Items 2, 3, 4 and 5 of Part II are not applicable and have been omitted.

ITEM 6.    EXHIBITS AND REPORTS ON FORM 8-K

(a) List of Exhibits

Each exhibit set forth below in the Index to Exhibits is filed as a part of this report. All exhibits not filed herewith are incorporated herein by reference to a prior filing as indicated.

INDEX TO EXHIBITS

Exhibit Designation	Nature of Exhibit
2.5	Agreement and Plan of Merger by and among Georgia-Pacific Corporation, North American Timber Corp., NPI Timber, Inc., GNN Timber, Inc., GPW Timber, Inc., LRFP Timber, Inc., NPC Timber, Inc. and Plum Creek Timber Company, Inc. (incorporated herein by reference to Plum Creek’s Current Report on Form 8-K/A, dated July 18, 2000). Amendment No. 1 to the Agreement and Plan of Merger, dated as of June 12, 2001 (incorporated herein by reference to Plum Creek’s Current Report on Form 8-K, dated June 12, 2001).
3.1	Restated Certificate of Incorporation of Plum Creek Timber Company, Inc. (filed herewith)
3.2	Amended and Restated By-laws of Plum Creek Timber Company, Inc. (filed herewith)

(b) Reports on Form 8–K

None

18

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.

PLUM CREEK TIMBER COMPANY, INC. (Registrant)
By:	/s/    WILLIAM R. BROWN
	WILLIAM R. BROWN Executive Vice President and Chief Financial Officer (Duly Authorized Officer and Principal Financial and Accounting Officer)

Date: May 3, 2002

19

INDEX TO EXHIBITS

Exhibit Designation	Nature of Exhibit
2.5	Agreement and Plan of Merger by and among Georgia-Pacific Corporation, North American Timber Corp., NPI Timber, Inc., GNN Timber, Inc., GPW Timber, Inc., LRFP Timber, Inc., NPC Timber, Inc. and Plum Creek Timber Company, Inc. (incorporated herein by reference to Plum Creek’s Current Report on Form 8-K/A, dated July 18, 2000). Amendment No. 1 to the Agreement and Plan of Merger, dated as of June 12, 2001 (incorporated herein by reference to Plum Creek’s Current Report on Form 8-K, dated June 12, 2001).
3.1	Restated Certificate of Incorporation of Plum Creek Timber Company, Inc. (filed herewith)
3.2	Amended and Restated By-laws of Plum Creek Timber Company, Inc. (filed herewith)

20

EX-3.1

                                                                     Exhibit 3.1

                                    RESTATED

                          CERTIFICATE OF INCORPORATION

                                       OF

                         PLUM CREEK TIMBER COMPANY, INC.

     The undersigned, James A. Kraft, certifies that he is the Senior Vice
President, General Counsel and Secretary of Plum Creek Timber Company, Inc., a
corporation organized and existing under the laws of the State of Delaware (the
"Corporation"), and does hereby further certify as follows:

          (1) The name of the Corporation is Plum Creek Timber Company, Inc.

          (2) The original Certificate of Incorporation of the Corporation was
     filed with the Secretary of State of the State of Delaware on June 5, 1998.

          (3) The Restated Certificate of Incorporation of the Corporation (the
     "Restated Certificate of Incorporation") was duly adopted by in accordance
     with the provisions of Section 245 of the General Corporation Law of the
     State of Delaware.

          (4) The Restated Certificate of Incorporation only restates and
     integrates and does not further amend the provisions of the Certificate of
     Incorporation of the Corporation (the "Existing Certificate of
     Incorporation"), and there is no discrepancy between the provisions of the
     Existing Certificate of Incorporation and the provisions of the Restated
     Certificate of Incorporation.

          (5) The text of the Restated Certificate of Incorporation hereby is
     restated to read in its entirety as set forth in Exhibit A hereto.



          IN WITNESS WHEREOF, Plum Creek Timber Company, Inc., has caused this
     Certificate to be duly executed in its corporate name this 5th day of
     April, 2002.

                                       PLUM CREEK TIMBER COMPANY, INC.


                                       By: /s/ James A. Kraft
                                           -------------------------------------
                                           Name:  James A. Kraft
                                           Title: Senior Vice President,
                                                  General Counsel and Secretary



                                                                       Exhibit A

                                    RESTATED

                          CERTIFICATE OF INCORPORATION

                                       OF

                         PLUM CREEK TIMBER COMPANY, INC.


I.   FIRST:  The name of the corporation is:  Plum Creek Timber Company, Inc.
     (hereinafter, the "Corporation").

II.  SECOND:  The address of the registered office of the Corporation in the
     State of Delaware is The Corporation Trust Company, 1209 Orange Street, in
     the City of Wilmington, County of New Castle.  The name of its registered
     agent at such address is The Corporation Trust Company.

III. THIRD:  The nature of the business or purposes to be conducted or promoted
     is to engage in any lawful act or activity for which corporations may be
     organized under the General Corporation Law of the State of Delaware (the
     "GCL").

IV.  FOURTH:  A.  The total number of shares of all classes of capital stock
     that the Corporation shall have authority to issue is 525,634,567 shares of
     which (i) 300,634,566 shares shall be shares of Common Stock, par value
     $.01 per share (the "Common Stock"), (ii) 150,000,001 shares shall be
     shares of Excess Stock, par value $.01 per share (the "Excess Stock"), and
     (iii) 75,000,000 shares shall be shares of Preferred Stock, par value $.01
     per share (the "Preferred Stock").

     B.   The number of authorized shares of any class or classes of capital
          stock may be increased or decreased (but not below the number of
          shares thereof then outstanding) by the affirmative vote of the
          holders of a majority of the total voting power of the shares of
          capital stock entitled to vote thereon, voting together as a single
          class, and without the vote of the holders of such class or each such
          class.

     C.   The following is a statement of the powers, preferences, and relative
          participating, optional or other special rights and qualifications,
          limitations and restrictions of the Common Stock of the Corporation:

          1. Subject to the rights of the holders of Preferred Stock, and
subject to any other provisions of this Certificate of Incorporation, holders of
Common Stock shall be entitled to receive such dividends and other distributions
in cash, stock or property of the Corporation as may be declared thereon by the
Board of Directors of the Corporation from time to time out of assets or funds
of the Corporation legally available therefor.

                                       1



          2. (a) At every meeting of the stockholders of the Corporation, every
holder of Common Stock shall be entitled to one vote in person or by proxy for
each share of Common Stock standing in such holder's name on the transfer books
of the Corporation.

             (b) The provisions of this Certificate of Incorporation shall not
be modified, revised, altered or amended, repealed or rescinded in whole or in
part, without the approval of a majority (or such greater percentage as is
required by Article TENTH of this Certificate of Incorporation) of the votes
entitled to be cast by the holders of the Common Stock or, in the case of
amendments or changes to this Certificate of Incorporation to be effected by a
merger, without the approval of the agreement of merger by a majority of the
votes entitled to be cast by the holders of the Common Stock.

          3. In the event of any dissolution, liquidation or winding up of the
affairs of the Corporation, whether voluntary or involuntary, after payment in
full of the amounts required to be paid to the holders of Preferred Stock, the
remaining assets and funds of the Corporation shall be distributed pro rata to
the holders of Common Stock based on the aggregate number of shares of Common
Stock outstanding. For the purposes of this section C.3, the voluntary sale,
conveyance, lease, exchange or transfer (for cash, shares of stock, securities
or other consideration) of all or substantially all of the assets of the
Corporation or a consolidation or merger of the Corporation with one or more
other corporations (whether or not the Corporation is the corporation surviving
such consolidation or merger) shall not be deemed to be a liquidation,
dissolution or winding up, voluntary or involuntary.

          4. All rights to vote and all voting power (including, without
limitation thereto, the right to elect directors) shall be vested exclusively in
the holders of Common Stock, except as otherwise expressly provided in this
Certificate of Incorporation, in a Preferred Stock Designation (as defined in
section D of this Article FOURTH) or as otherwise expressly required by
applicable law.

     D.   The Board of Directors is hereby authorized to provide by resolution
          or resolutions from time to time for the issuance of shares of
          Preferred Stock in one or more series and, by filing a certificate
          pursuant to the GCL (hereinafter, along with any similar designation
          relating to any other series of Preferred Stock which may hereafter be
          authorized, referred to as a "Preferred Stock Designation," each of
          which shall be part of this Certificate of Incorporation), to
          establish from time to time the number of shares to be included in
          each such series, and to fix the designation, powers (including voting
          powers), preferences and rights of the shares of each such series and
          the qualifications, limitations and restrictions thereof.

     E.   Restrictions on Ownership and Transfer of Equity Stock.

          1. (a) Limitation on Beneficial Ownership.

                                       2



               (i) Except as provided in section E.3 of this Article FOURTH, no
          person shall Beneficially Own (as hereinafter defined) shares of
          Equity Stock (as hereinafter defined) in excess of the Ownership Limit
          (as hereinafter defined).

               (ii) Except as provided in section E.3 of this Article FOURTH,
          any purported Transfer that, if effective, would result in any Person
          Beneficially Owning shares of Equity Stock in excess of the Ownership
          Limit shall be void ab initio as to the Transfer of that number of
          shares of Equity Stock which would cause the transferee to
          Beneficially Own Equity Stock in excess of the Ownership Limit, and
          the intended transferee shall acquire no rights in such shares of
          Equity Stock.

             (b) Transfers Resulting in "Closely Held" Status. Any purported
Transfer of shares of Equity Stock that, if effective, would result in the
Corporation being "closely held" within the meaning of section 856(h) of the
Code (as hereinafter defined) shall be void ab initio as to the Transfer of that
number of shares of Equity Stock that would cause the Corporation to be "closely
held" within the meaning of Section 856(h) of the Code, and the intended
transferee shall acquire no rights in such shares of Equity Stock.

             (c) Transfers Resulting in Ownership by fewer than 100 Persons. Any
purported Transfer of shares of Equity Stock that, if effective, would result in
shares of Equity Stock being beneficially owned by fewer than 100 persons within
the meaning of Section 856(a)(5) of the Code shall be void ab initio and the
intended transferee shall acquire no rights in such shares of Equity Stock.

             (d) Transfers Resulting in Corporation Failing to Qualify as a
"Domestically Controlled REIT". Any purported Transfer of shares of Equity Stock
that, if effective, would result in the failure of the Corporation to qualify as
a "domestically controlled REIT" within the meaning of Section 897(h)(4)(B) of
the Code shall be void ab initio and the intended transferee shall acquire no
rights in the shares of Equity Stock which are the subject of such purported
Transfer.

             (e) Transfers Resulting in Corporation Failing to Qualify as a
REIT. Any purported Transfer of shares of Equity Stock that, if effective, would
cause the Corporation to fail to qualify as a REIT (as hereinafter defined)
shall be void ab initio and the intended transferee shall acquire no rights in
the shares of Equity Stock which are the subject of such purported Transfer.

          2. Beneficial Owners Required to Provide Information.

             (a) Annual Disclosure. Every Beneficial Owner of more than 3%, or
such lower percentages as are then required pursuant to regulations under the
Code, of the outstanding shares of any class or series of Equity Stock of the
Corporation shall, within 30 days after January 1 of each year, provide to the
Corporation a written statement or affidavit stating the name and address of
such Beneficial Owner, the number

                                       3



of shares of Equity Stock Beneficially Owned by such Beneficial Owner and a
description of how such shares are held. Each such Beneficial Owner shall
provide to the Corporation such additional information as the Corporation may
request in order to determine the effect, if any, of such Beneficial Ownership
on the Corporation's status as a REIT and to ensure compliance with the
Ownership Limit.

             (b) Disclosure at the Request of the Corporation. Each Person who
is a Beneficial Owner of shares of Equity Stock and each Person (including the
stockholder of record) who is holding shares of Equity Stock for a Beneficial
Owner shall provide to the Corporation a written statement or affidavit stating
such information as the Corporation may request in order to determine the
Corporation's status as a REIT and to ensure compliance with the Ownership
Limit. In addition, the Excluded Holder shall promptly notify the Corporation
upon any transfer of Equity Stock.

          3. Waiver of the Ownership Limit. The Board of Directors, upon receipt
of a ruling from the Internal Revenue Service or an opinion of counsel or other
evidence or undertakings acceptable to it, may, in its sole discretion, waive
the application of the Ownership Limit to a Person subject to such limit,
provided that (A) the Board of Directors obtains such representations and
undertakings from such Person as are reasonably necessary to ascertain that such
Person's Beneficial Ownership or Constructive Ownership of shares of Equity
Stock will now and in the future (i) not result in the Corporation being
"closely held" within the meaning of Section 856(h) of the Code, (ii) not result
in the shares of Equity Stock of the Corporation being Beneficially Owned by
fewer than 100 persons within the meaning of Section 856(a)(5) of the Code,
(iii) not result in the Corporation failing to qualify as a "domestically
controlled REIT" within the meaning of Section 897(h)(4)(B) of the Code and (iv)
will not otherwise result in the Corporation failing to qualify as a REIT, and
(B) such Person agrees in writing that any violation or attempted violation of
any other limitations, restrictions and conditions that the Board of Directors
may in its sole discretion impose at the time of such waiver with respect to
such Person will result, as of the time of such violation even if discovered
after such violation, in the conversion of such shares in excess of the original
limit applicable to such Person into shares of Excess Stock pursuant to section
F.1 of this Article FOURTH.

          4. Settlement. Notwithstanding any provision contained herein to the
contrary, nothing in this Certificate of Incorporation shall preclude the
settlement of any transaction entered into through the facilities of the New
York Stock Exchange or any other national securities exchange or the NASDAQ
Stock Market, Inc. or any other automated quotation system. In no event shall
the existence or application of the preceding sentence have the effect of
deterring or preventing the conversion of Equity Stock into Excess Stock as
contemplated herein.

     F. Excess Stock

          1. (a) Transfers in Excess of Ownership Limit. If, notwithstanding the
other provisions contained in this Article FOURTH, there is a purported Transfer
or Non-Transfer Event (as hereinafter defined) such that any Person would
Beneficially Own

                                       4



shares of Equity Stock in excess of the Ownership Limit, then, (i) except as
otherwise provided in section E.3 of this Article FOURTH, the Purported Record
Transferee (as hereinafter defined) (and the Purported Beneficial Transferee (as
hereinafter defined), if different) shall acquire no right or interest (or, in
the case of a Non-Transfer Event, the Person holding record title to the shares
of Equity Stock Beneficially Owned by such Beneficial Owner shall cease to own
any right or interest) in such number of shares of Equity Stock which would
cause such Beneficial Owner to Beneficially Own shares of Equity Stock in excess
of the Ownership Limit, (ii) such number of shares (rounded up to the nearest
whole share) of Equity Stock in excess of the Ownership Limit shall be
automatically converted into an equal number of shares of Excess Stock and
transferred to a Trust (as hereinafter defined) in accordance with section F.4
of this Article FOURTH and (iii) such Purported Record Transferee (and such
Purported Beneficial Transferee, if different) or, in the case of a Non-Transfer
Event, the Person who, immediately prior to such automatic conversion, was the
holder of record title to the shares of Equity Stock automatically converted,
shall submit the certificates representing such number of shares of Equity Stock
to the Corporation, accompanied by all requisite and duly executed assignments
of Transfer thereof, for registration in the name of the Trustee (as hereinafter
defined) of the Trust. Such conversion into Excess Stock and Transfer to a Trust
shall be effective as of the close of trading on the Trading Day (as hereinafter
defined) prior to the date of the purported Transfer or Non-Transfer Event, as
the case may be, even though the certificates representing the shares of Equity
Stock so converted may be submitted to the Corporation at a later date.

             (b) Other Prohibited Transfers. If, notwithstanding the other
provisions contained in this Article FOURTH, there is a purported Transfer or
Non-Transfer Event that, if effective, would (i) result in the Corporation being
"closely held" within the meaning of Section 856(h) of the Code, (ii) result in
the shares of Equity Stock being beneficially owned by fewer than 100 persons
within the meaning of Section 856(a)(5) of the Code, (iii) result in the
Corporation failing to qualify as a "domestically controlled REIT" within the
meaning of Section 897(h)(4)(B) of the Code, or (iv) otherwise cause the
Corporation to fail to qualify as a REIT, then (x) the Purported Record
Transferee (and the Purported Beneficial Transferee, if different) shall acquire
no right or interest, and, in the case of a Non-Transfer Event, the Person
holding record title to the shares of Equity Stock Beneficially Owned by the
Person whose Beneficial Ownership of Equity Stock would result in any of the
events referred to in clauses (i) - (v) above shall cease to own any right or
interest, in such number of shares of Equity Stock the ownership of which would
(A) result in the Corporation being "closely held" within the meaning of Section
856(h) of the Code, (B) result in the shares of Equity Stock being beneficially
owned by fewer than 100 persons within the meaning of Section 856(a)(5) of the
Code, (C) result in the Corporation failing to qualify as a "domestically
controlled REIT" within the meaning of Section 897(h)(4)(B) of the Code, or (D)
otherwise cause the Corporation to fail to qualify as a REIT, (y) such number of
shares of Equity Stock (rounded up to the nearest whole share) shall be
automatically converted into an equal number of shares of Excess Stock and
transferred to a Trust in accordance with section F.4 of this Article FOURTH and
(z) the Purported Record Transferee (and the Purported Beneficial Transferee, if
different) or, in the case of a Non-Transfer Event, the Person who, immediately
prior to such automatic conversion, was the holder of

                                       5



record title to the shares of Equity Stock automatically converted, shall submit
such number of shares of Equity Stock to the Corporation, accompanied by all
requisite and duly executed assignments of Transfer thereof, for registration in
the name of the Trustee of the Trust. Such conversion into Excess Stock and
Transfer to a Trust shall be effective as of the close of trading on the Trading
Day prior to the date of the purported Transfer or Non-Transfer Event, as the
case may be, even though the certificates representing the shares of Equity
Stock so converted may be submitted to the Corporation at a later date.

             (c) Conversion to Excess Stock. Upon the occurrence of such a
conversion of shares of Equity Stock into an equal number of shares of Excess
Stock, such shares of Equity Stock shall be automatically retired and canceled,
without any action required by the Board of Directors of the Corporation, and
shall thereupon be restored to the status of authorized but unissued shares of
the particular class or series of Equity Stock from which such Excess Stock was
converted and may be reissued by the Corporation as that particular class or
series of Equity Stock.

          2. Remedies for Breach. If the Corporation, or its designees, shall at
any time determine in good faith that a Transfer has taken place in violation of
section E.1 of this Article FOURTH or that a Person intends to acquire or has
attempted to acquire Beneficial Ownership or Constructive Ownership of any
shares of Equity Stock in violation of section E.1 of this Article FOURTH, the
Corporation shall take such action as it deems advisable to refuse to give
effect to or to prevent such Transfer or acquisition, including, but not limited
to, refusing to give effect to such Transfer on the stock transfer books of the
Corporation or instituting proceedings to enjoin such Transfer or acquisition,
but the failure to take any such action shall not affect the automatic
conversion of shares of Equity Stock into Excess Stock and their Transfer to a
Trust in accordance with section F.4.

          3. Notice of Restricted Transfer. Any Person who acquires or attempts
to acquire shares of Equity Stock in violation of section E.1 of this Article
FOURTH, or any Person who owns shares of Equity Stock that were converted into
shares of Excess Stock and transferred to a Trust pursuant to section F.4 of
this Article FOURTH, shall immediately give written notice to the Corporation of
such event and shall provide to the Corporation such other information as the
Corporation may request in order to determine the effect, if any, of such
Transfer or Non-Transfer Event, as the case may be, on the Corporation's status
as a REIT.

          4. Transfer in Trust. Upon any purported Transfer or Non-Transfer
Event that results in Excess Stock pursuant to section F.1 of this Article
FOURTH, (i) the Corporation shall create, or cause to be created, a Trust, and
shall designate a Trustee and name a Beneficiary (as hereinafter defined)
thereof and (ii) such Excess Stock shall be automatically transferred to such
Trust to be held for the exclusive benefit of the Beneficiary. Any conversion of
shares of Equity Stock into shares of Excess Stock and transfer to a Trust shall
be effective as of the close of trading on the Trading Day prior to the date of
the purported Transfer or Non-Transfer Event that results in the conversion.
Shares of Excess Stock so held in trust shall be issued and outstanding shares
of stock of the Corporation.

                                       6



          5. Dividend Rights. Each share of Excess Stock shall be entitled to
the same dividends and distributions (as to both timing and amount) as may be
declared by the Board of Directors of the Corporation with respect to each share
of Equity Stock which was converted into such Excess Stock. The Trustee, as
record holder of the shares of Excess Stock, shall be entitled to receive all
dividends and distributions and shall hold all such dividends or distributions
in trust for the benefit of the Beneficiary. The Prohibited Owner (as
hereinafter defined) with respect to such shares of Excess Stock shall repay to
the Trust the amount of any dividends or distributions received by it (i) that
are attributable to any shares of Equity Stock that have been converted into
shares of Excess Stock and (ii) the record date of which was on or after the
date that such shares were converted into shares of Excess Stock. The
Corporation shall take all measures that it determines are reasonably necessary
to recover the amount of any such dividend or distribution paid to a Prohibited
Owner, including, if necessary, withholding any portion of future dividends or
distributions payable on shares of Equity Stock Beneficially Owned by the Person
who, but for the provisions of this Article FOURTH, would Constructively Own or
Beneficially Own the shares of Equity Stock that were converted into shares of
Excess Stock; and, as soon as reasonably practicable following the Corporation's
receipt or withholding thereof, shall pay over to the Trust for the benefit of
the Beneficiary the dividends so received or withheld, as the case may be.

          6. Liquidation of the Corporation. In the event of any voluntary or
involuntary liquidation of, or winding up of, or any distribution of the assets
of, the Corporation, each holder of shares of Excess Stock shall be entitled to
receive, ratably with each other holder of shares of the same class and series
of Equity Stock which was converted into such Excess Stock, that portion of the
assets of the Corporation that is available for distribution to the holders of
the same class and series of Equity Stock which was converted into such Excess
Stock. The Trust shall distribute to the Prohibited Owner the amounts received
upon such liquidation, dissolution, or winding up, or distribution; provided,
however, that the Prohibited Owner shall not be entitled to receive amounts in
excess of, in the case of a purported Transfer in which the Prohibited Owner
gave value for shares of Equity Stock and which Transfer resulted in the
conversion of such shares of Equity Stock into shares of Excess Stock, the
product of (x) the price per share, if any, such Prohibited Owner paid for the
shares of Equity Stock and (y) the number of shares of Equity Stock which were
so converted into Excess Stock, and, in the case of a Non-Transfer Event or
purported Transfer in which the Prohibited Owner did not give value for such
shares (e.g., if the shares were received through a gift or devise) and which
Non-Transfer Event or purported Transfer, as the case may be, resulted in the
conversion of the shares into shares of Excess Stock, the product of (x) the
price per share equal to the Market Price (as hereinafter defined) on the date
of such Non-Transfer Event or purported Transfer and (y) the number of shares of
Equity Stock which were so converted into Excess Stock. Any remaining amount in
such Trust shall be distributed to the Beneficiary.

          7. Voting Rights. Each share of Excess Stock shall entitle the holder
to no voting rights other than those voting rights which accompany a class of
capital stock under Delaware law. The Trustee, as record holder of the Excess
Stock, shall be entitled to vote all shares of Excess Stock. Any vote by a
Prohibited Owner as a purported holder

                                       7



of shares of Equity Stock prior to the discovery by the Corporation that such
shares of Equity Stock have been converted into shares of Excess Stock shall,
subject to applicable law, be rescinded and shall be void ab initio with respect
to such shares of Excess Stock.

          8. Restrictions on Transfer. (a) As soon as practicable after the
Trustee acquires Excess Stock and complies with the last sentence of this
Section 8(a), but in an orderly fashion so as not to materially adversely affect
the trading price of the same class and series of Equity Stock from which such
Excess Stock was converted, the Trustee shall designate one or more Persons as
Permitted Transferees (as hereinafter defined) and sell to such Permitted
Transferees any shares of Excess Stock held by the Trustee; provided, however,
that (i) any Permitted Transferee so designated purchases for valuable
consideration (whether in a public or private sale) the shares of Excess Stock
and (ii) any Permitted Transferee so designated may acquire the shares of the
same class and series of Equity Stock from which such Excess Stock was converted
without violating any of the restrictions set forth in section E.1 of this
Article FOURTH and without such acquisition resulting in the conversion of such
shares of Equity Stock into shares of Excess Stock and the Transfer of such
shares to a Trust pursuant to sections F.1 and F.4 of this Article FOURTH. The
Trustee shall have the exclusive and absolute right to designate Permitted
Transferees of any and all shares of Excess Stock. Prior to any Transfer by the
Trustee of shares of Excess Stock to a Permitted Transferee, the Trustee shall
give not less than five Trading Days prior written notice to the Corporation of
such intended Transfer and the Corporation must have waived in writing its
purchase rights under section F.10 of this Article FOURTH if such intended
Transfer would occur during the 90-day period referred to therein.

             (b) Upon the designation by the Trustee of a Permitted Transferee
in accordance with the provisions of this section F.8, the Trustee shall cause
to be Transferred to the Permitted Transferee shares of Excess Stock acquired by
the Trustee pursuant to section F.4 of this Article FOURTH. Upon such Transfer
of shares of Excess Stock to the Permitted Transferee, such shares of Excess
Stock shall be automatically converted into an equal number of shares of Equity
Stock of the same class and series from which such Excess Stock was converted.
Upon the occurrence of such a conversion of shares of Excess Stock into an equal
number of shares of Equity Stock, such shares of Excess Stock shall be
automatically retired and canceled, without any action required by the Board of
Directors of the Corporation, and shall thereupon be restored to the status of
authorized but unissued shares of Excess Stock and may be reissued by the
Corporation as Excess Stock. The Trustee shall (i) cause to be recorded on the
stock transfer books of the Corporation that the Permitted Transferee is the
holder of record of such number of shares of Equity Stock, and (ii) distribute
to the Beneficiary any and all amounts held with respect to such shares of
Excess Stock after making payment to the Prohibited Owner pursuant to section
F.9 of this Article FOURTH.

             (c) If the Transfer of shares of Excess Stock to a purported
Permitted Transferee would or does violate any of the transfer restrictions set
forth in Section E.1 of this Article FOURTH, such Transfer shall be void ab
initio as to that number of shares of Excess Stock that cause the violation of
any such restriction when such shares are converted into shares of Equity Stock
(as described in section 8(b) above)

                                       8



and the purported Permitted Transferee shall be deemed to be a Prohibited Owner
and shall acquire no rights in such shares of Excess Stock or Equity Stock. Such
shares of Equity Stock shall be automatically converted into Excess Stock and
transferred to the Trust from which they were originally Transferred. Such
conversion and transfer to the Trust shall be effective as of the close of
trading on the Trading Day prior to the date of the Transfer to the purported
Permitted Transferee and the provisions of this Article FOURTH shall apply to
such shares, including, without limitation, the provisions of sections F.8
through F.10 with respect to any future transfer of such shares by the Trust.

          9. Any Prohibited Owner shall be entitled (following acquisition of
the shares of Excess Stock and subsequent designation of and sale of Excess
Stock to a Permitted Transferee in accordance with section F.8 of this Article
FOURTH or following the acceptance of the offer to purchase such shares in
accordance with section F.10 of this Article FOURTH) to receive from the Trustee
following the sale or other disposition of such shares of Excess Stock the
lesser of (a)(i) in the case of a purported Transfer in which the Prohibited
Owner gave value for shares of Equity Stock and which Transfer resulted in the
conversion of such shares into shares of Excess Stock, the product of (x) the
price per share, if any, such Prohibited Owner paid for the shares of Equity
Stock and (y) the number of shares of Equity Stock which were so converted into
Excess Stock and (ii) in the case of a Non-Transfer Event or purported Transfer
in which the Prohibited Owner did not give value for such shares (e.g., if the
shares were received through a gift or devise) and which Non-Transfer Event or
purported Transfer, as the case may be, resulted in the conversion of such
shares into shares of Excess Stock, the product of (x) the price per share equal
to the Market Price on the date of such Non-Transfer Event or purported Transfer
and (y) the number of shares of Equity Stock which were so converted into Excess
Stock or (b) the proceeds received by the Trustee from the sale or other
disposition of such shares of Excess Stock in accordance with section F.8 or
section F.10 of this Article FOURTH. Any amounts received by the Trustee in
respect of such shares of Excess Stock which are in excess of such amounts to be
paid to the Prohibited Owner pursuant to this section F.9 shall be distributed
to the Beneficiary in accordance with the provisions of section F.8 of this
Article FOURTH. The Trustee and the Trust shall not be liable for, and each
Beneficiary and Prohibited Owner shall be deemed to have irrevocably waived, any
claim by a Beneficiary or Prohibited Owner arising out of the disposition of
shares of Excess Stock, except for claims arising out of the gross negligence or
willful misconduct of, or any failure to make payments in accordance with this
section F of this Article FOURTH by, such Trustee.

          10. Purchase Right in Stock Transferred to Trustee. Shares of Excess
Stock shall be deemed to have been offered for sale to the Corporation, or its
designee, at a price per share equal to the lesser of (a) the price per share in
the transaction that created such shares of Excess Stock (or, in the case of a
Non-Transfer Event or Transfer in which the Prohibited Owner did not give value
for the shares (e.g., if the shares were received through a gift or devise), the
Market Price on the date of such Non Transfer Event or Transfer in which the
Prohibited Owner did not give value for the shares) or (b) the Market Price on
the date the Corporation, or its designee, accepts such offer. The Corporation
shall have the right to accept such offer for a period of 90 days following the
later of (x) the date of the Non-Transfer Event or purported Transfer which
results in

                                       9



such shares of Excess Stock or (y) the date the Board of Directors of the
Corporation first determined that a Transfer or Non-Transfer Event resulting in
shares of Excess Stock has occurred, if the Corporation does not receive a
notice of such Transfer or Non-Transfer Event pursuant to section F.3 of this
Article FOURTH.

     G.   Remedies Not Limited. Except as set forth in section E.4 of this
          Article FOURTH, nothing contained in this Article FOURTH shall limit
          the authority of the Corporation to take such other action as it deems
          necessary or advisable to protect the Corporation and the interests of
          its stockholders by preservation of the Corporation's status as a REIT
          and to ensure compliance with the Ownership Limit.

     H.   Ambiguity. In the case of an ambiguity in the application of any of
          the provisions of this Article FOURTH, including any definition
          contained in Article ELEVENTH hereof, the Board of Directors shall
          have the power to determine the application of the provisions of this
          Article FOURTH with respect to any situation based on the facts known
          to it and any such determination made in good faith shall be binding
          on all stockholders of the Corporation.

     I.   Legend. Each certificate for shares of Equity Stock shall bear the
          following legend:

          "The shares of Plum Creek Timber Company, Inc. (the "Corporation")
          represented by this certificate are subject to restrictions set forth
          in the Corporation's Certificate of Incorporation which prohibit in
          general (a) any Person from Beneficially Owning shares of Equity Stock
          in excess of the Ownership Limit and (b) any Person from acquiring or
          maintaining any ownership interest in the capital stock of the
          Corporation that is inconsistent with (i) the requirements of the Code
          pertaining to real estate investment trusts or (ii) the Certificate of
          Incorporation of the Corporation, and the holder of this certificate
          by his acceptance hereof consents to be bound by such restrictions.
          Any purported transfer of Equity Stock in violation of such
          restrictions shall be void ab initio and the Equity Stock in violation
          of such restrictions, whether as a result of a Transfer or the Non-
          Transfer Event, shall be automatically converted into shares of Excess
          Stock and transferred to a Trust for disposition as provided in the
          Certificate of Incorporation. Capitalized terms used in this paragraph
          and not defined herein are defined in the Corporation's Certificate of
          Incorporation. The Corporation will furnish without charge, to each
          stockholder who so requests, a copy of the Certificate of
          Incorporation of the Corporation, containing, among other things, a
          statement of the powers, designations, preferences and relative,
          participating, optional or other special rights of each class of stock
          or series thereof that the Corporation is authorized to issue and the
          qualifications, limitations or restrictions of such preferences and/or
          rights. Any such request shall be addressed to the Secretary of the
          Corporation.

                                       10



     J.   Each provision of this Article FOURTH shall be severable and any such
          provision determined to be invalid by a court having jurisdiction
          shall in no way affect the validity of any other provision.

V.   FIFTH: A. At each annual meeting of stockholders, the directors shall be
     elected by a plurality of the votes of the shares present in person or
     represented by proxy at such meeting and entitled to vote on the election
     of directors, and each director so elected shall hold office for a term
     expiring at the next annual meeting of stockholders and until such
     director's successor is duly elected and qualified or until such director's
     earlier death, resignation or removal. Notwithstanding the foregoing,
     directors in office as of October 9, 2001 shall serve until the expiration
     of their respective current terms of office in 2002, 2003 or 2004. The
     Board of Directors shall have the authority, upon the approval and at the
     direction of a majority of its members, to designate a Nominating Committee
     and one or more committees, each committee to consist of one or more of the
     directors of the Corporation as selected by a majority of the members of
     the Board of Directors. To the extent permitted by law and provided in the
     resolution authorizing such committee, any such committee shall have and
     may exercise all the powers and authority of the Board of Directors in the
     management of the business and affairs of the Corporation.

     Notwithstanding the foregoing, whenever, pursuant to the provisions of
Article FOURTH of this Certificate, the holders of any one or more series of
Preferred Stock shall have the right, voting separately as a series or together
with holders of other such series, to elect directors at an annual or special
meeting of stockholders, the election, term of office, filling of vacancies and
other features of such directorships shall be governed by the terms of this
Certificate of Incorporation, including any Preferred Stock Designation
applicable thereto.

     During any period when the holders of any series of Preferred Stock have
     the right to elect additional directors as provided for or fixed pursuant
     to the provisions of Article FOURTH of this Certificate of Incorporation,
     then upon commencement and for the duration of the period during which such
     right continues: (a) the then otherwise total authorized number of
     directors of the Corporation shall automatically be increased by such
     specified number of directors, and the holders of such Preferred Stock
     shall be entitled to elect the additional directors so provided for or
     fixed pursuant to said provisions and (b) each such additional director
     shall serve until such director's successor shall have been duly elected
     and qualified, or until such director's right to hold such office
     terminates pursuant to said provisions, whichever occurs earlier, subject
     to such director's earlier death, disqualification, resignation or removal.
     Except as otherwise provided by the Board of Directors in the resolution or
     resolutions establishing such series, whenever the holders of any series of
     Preferred Stock having such right to elect additional directors are
     divested of such right pursuant to the provisions of such stock, the terms
     of office of all such additional directors elected by the holders of such
     stock, or elected to fill any vacancies resulting from the death,
     resignation, disqualification or removal of such additional directors,

                                       11



     shall forthwith terminate and the total authorized number of directors of
     the Corporation shall be reduced accordingly.

     B.   Subject to the rights, if any, of the holders of any series of
          Preferred Stock to elect directors and to remove any director whom
          such holders have the right to elect, any director (including persons
          elected by directors to fill vacancies in the Board of Directors) may
          be removed from office only by the affirmative vote of the holders of
          at least 66 2/3% of the total voting power of the shares of capital
          stock of the Corporation then entitled to vote at a meeting of the
          stockholders called for that purpose. At least 30 days prior to any
          meeting of stockholders at which it is proposed that any director be
          removed from office, written notice of such proposed removal shall be
          sent to the director whose removal will be considered at the meeting.

     C.   Subject to the rights, if any, of the holders of any series of
          Preferred Stock to elect directors and to fill vacancies in the Board
          of Directors relating thereto, any and all vacancies in the Board of
          Directors, however occurring, including, without limitation, through
          death, resignation, removal, an increase in the number of directors or
          otherwise may be filled only by a majority of the directors then in
          office, though less than a quorum, or by a sole remaining director,
          and the directors so chosen shall hold office until the end of the
          term of office to which they are appointed and until their successors
          are duly elected and qualified, or until their earlier death,
          resignation or removal. Any director appointed in accordance with the
          preceding sentence shall hold office until the end of the term of
          office to which they are appointed and until such director's successor
          is duly elected and qualified, or until such director's earlier death,
          resignation or removal. If such director was designated by the
          Principals, pursuant to the Conversion Agreement or such increase in
          the number of directors would result in the Principals no longer
          having designated a majority of the Board of Directors at a time when
          the Principals are entitled under the Conversion Agreement to
          designate a majority of the Board of Directors, such vacancy shall be
          filled by a designee of the Principals. In the event of a vacancy in
          the Board of Directors, the remaining directors, except as otherwise
          provided by law, may exercise the powers of the full Board of
          Directors until such vacancy is filled.

VI.  SIXTH: Any action required to be taken at any annual or special meeting of
     stockholders of the Corporation, or any action which may be taken at any
     annual or special meeting of the stockholders, may be taken only at a duly
     called annual or special meeting of stockholders and may not be taken by
     written consent of the stockholders in lieu of such meeting.

VII. SEVENTH: The Board of Directors is expressly authorized to make, amend or
     repeal the bylaws of the Corporation, without any action on the part of the

                                       12



     stockholders, solely by the affirmative vote of at least 66 2/3% of the
     directors of the Corporation then in office. In addition to any other vote
     required by law, the bylaws may be amended or repealed by the stockholders
     by the affirmative vote of the holders of shares representing at least 66
     2/3% of the combined voting power of the outstanding shares of capital
     stock of the corporation entitled to vote.

VIII. EIGHTH: No director of the Corporation shall be liable to the Corporation
      or its stockholders for monetary damages for breach of fiduciary duty as a
      director, except for liability (i) for any breach of the director's duty
      of loyalty to the Corporation or its stockholders, (ii) for acts or
      omissions not in good faith or which involve intentional misconduct or a
      knowing violation of law, (iii) under Section 174 of the GCL, or (iv) for
      any transaction from which the director derived an improper personal
      benefit.

     If the GCL hereafter is amended to further eliminate or limit the liability
of directors, then the liability of a director of the Corporation, in addition
to the limitation on personal liability provided herein, shall be limited to the
fullest extent permitted by the amended GCL. Any repeal or modification of this
Article EIGHTH by the stockholders of the Corporation shall be prospective only,
and shall not adversely affect any limitation on the liability of a director of
the Corporation existing at the time of such repeal or modification.

IX.  NINTH: The Corporation shall seek to satisfy the requirements for
     qualification as a REIT under the Code until such time as the Board of
     Directors shall determine otherwise, such determination being approved by
     the affirmative vote of at least 66 2/3% of the directors of the
     Corporation then in office.

X.   TENTH: In addition to any other vote required by law, the amendment or
     repeal of, or adoption of any provisions inconsistent with, Articles FIFTH,
     SIXTH, SEVENTH, EIGHTH, NINTH or this Article TENTH or any term defined in
     Article ELEVENTH to the extent such term is used in any such Article shall
     require the approval of the holders of at least 66 2/3% of the total voting
     power of the shares of capital stock entitled to vote thereon, voting as a
     single class.

XI.  ELEVENTH: For purposes of this Certificate of Incorporation, the following
     terms shall have the meanings set forth below:

     "Affiliate" shall mean, with respect to any Person or Persons, (i) any
natural person who is related by blood or marriage to any such Person, (ii) any
trust of which there are no principal beneficiaries other than any such Person
or Permitted Transferees of such Person, (iii) any charitable foundation over
which any such Person has discretionary authority and (iv) any heirs or
executors of any such Person.

     "Beneficial Ownership," shall be calculated as follows:

          (i) when used in sections E and F of Article FOURTH or in any defined
     term used therein, shall mean ownership of Equity Stock by a Person who
     would be treated as an owner of Equity Stock either

                                       13



     directly or indirectly under Section 542(a)(2) of the Code, taking into
     account, for this purpose, constructive ownership determined under Section
     544 of the Code, as modified by Section 856(h) of the Code (except where
     expressly provided otherwise); and

          (ii) when used elsewhere in this Certificate of Incorporation, shall
     mean beneficial ownership determined under Rule 13d-3 under the Exchange
     Act (as hereinafter defined).

     The terms "Beneficial Owner," "Beneficially Owns" and "Beneficially Owned"
shall have the correlative meanings.

     "Beneficiary" shall mean, with respect to any Trust, one or more
organizations described in each of Section 170(b)(1)(A) (other than clauses
(vii) and (viii) thereof) and Section 170(c)(2) of the Code that are named by
the Corporation as the beneficiary or beneficiaries of such Trust, in accordance
with the provisions of section F.4 of Article FOURTH.

     "Code" shall mean the Internal Revenue Code of 1986, as amended.

     "Constructive Ownership" shall mean ownership of shares of Equity Stock by
a Person who is or would be treated as a direct or indirect owner of such shares
of Equity Stock through the application of Section 318 of the Code. The terms
"Constructive Owner," "Constructively Owns" and "Constructively Owned" shall
have correlative meanings.

     "Conversion Agreement" shall mean the Agreement and Plan of Conversion,
dated as of June 5, 1998, by and among Plum Creek Timber Company, L.P., the
Corporation and PCMC Partners, as amended by the Amended and Restated Agreement
and Plan of Conversion, dated as of July 17, 1998.

     "Equity Stock" shall mean the Common Stock and the Preferred Stock of the
Corporation.

     "Exchange Act" shall mean the Securities Exchange Act of 1934, as amended.

     "Excluded Holder" shall mean Mr. John H. Scully, Mr. William J. Patterson
and Mr. William E. Oberndorf and their respective Affiliates, collectively.

     "Market Price" of Equity Stock on any date shall mean the average of the
closing price for shares of such Equity Stock for the five consecutive Trading
Days ending on the Trading Day immediately prior to such date. The "Closing
Price" on any date shall mean the last sale price, regular way, or, in case no
such sale takes place on such day, the average of the closing bid and asked
prices, regular way, in either case as reported in the principal consolidated
transactions reporting system with respect to securities listed or admitted to
trading on the New York Stock Exchange or, if the shares of Equity Stock are not
listed or admitted to trading on the New York Stock Exchange, as reported in the
principal consolidated transaction reporting system with respect to securities
listed on the

                                       14



principal national securities exchange on which the shares of Equity Stock are
listed or admitted to trading or, if the shares of Equity Stock are not listed
or admitted to trading on any national securities exchange, the last quoted
price, or if not so quoted, the average of the high bid and low asked prices in
the over-the-counter market, as reported by the Nasdaq Stock Market, Inc. or, if
such system is no longer in use, the principal other automated quotation system
that may be in use or, if the shares of Equity Stock are not quoted by any such
organization, the average of the closing bid and asked prices as furnished by a
professional market maker selected by the Board of Directors making a market in
the shares of Equity Stock.

     "Non-Transfer Event" shall mean an event other than a purported Transfer
that would cause or result in an increase in the percentage of any Person's
Beneficial Ownership of the outstanding shares of Equity Stock.

     "Ownership Limit" shall mean (i) with respect to Persons other than the
Excluded Holder (a) with respect to the Common Stock, 5% of the lesser of (1)
the total number of shares of Common Stock outstanding, or (2) the value of the
outstanding shares of Common Stock, or (b) with respect to Preferred Stock, 5%
of the lesser of (1) the total number of shares of Preferred Stock outstanding,
or (2) the value of the outstanding shares of Preferred Stock (or such other
number or value of Preferred Stock as the Board of Directors may determine in
fixing the terms of the Preferred Stock); and (ii) with respect to the Excluded
Holder, the Ownership Limit shall be the lesser of 27% of the outstanding Common
Stock and the lowest percentage of the outstanding Common Stock either
Beneficially Owned or Constructively Owned by the Excluded Holder at any time.

     "PCMC Partners" shall mean PC Advisory Partners I, L.P., a Delaware limited
partnership, and PC Intermediate Holdings, L.P., a Delaware limited partnership.

     "Permitted Transferee" shall mean any Person designated as a Permitted
Transferee in accordance with the provisions of section F.8 of Article FOURTH.

     "Person" shall mean (a) an individual or any corporation, partnership,
estate, trust, association, private foundation, joint stock company or any other
entity and (b) a "group" as the term is used for purposes of Section 13(d)(3) of
the Exchange Act; but shall not include an underwriter that participates in a
public offering of Equity Stock for a period of 90 days following purchase by
such underwriter of such Equity Stock.

     "Principals" shall mean Mr. John H. Scully, Mr. William J. Patterson and
Mr. William E. Oberndorf, collectively.

     "Prohibited Owner" shall mean, with respect to any purported Transfer or
Non-Transfer Event, any Person who is prevented from becoming or remaining the
owner of record title to shares of Equity Stock by the provisions of section F.1
of Article FOURTH.

     "Purported Beneficial Transferee" shall mean, with respect to any purported
Transfer of Beneficial Ownership of shares of Equity Stock that results in the
automatic conversion of such shares into Excess Stock, the purported transferee
of Beneficial

                                       15



Ownership of such shares if such purported Transfer had been valid under Section
E.1 of Article FOURTH.

     "Purported Record Transferee" shall mean, with respect to any purported
Transfer of Beneficial Ownership of shares of Equity Stock that results in the
automatic conversion of such shares into Excess Stock, the purported record
transferee of such shares if such purported Transfer had been valid under
Section E.1 of Article FOURTH.

     "REIT" shall mean a real estate investment trust under Section 856 et seq.
of the Code.

     "Subsidiary" shall mean any Person in which the Corporation beneficially
owns, directly or indirectly, more than 50% of the voting power of the
outstanding voting equity securities.

     "Trading Day" shall mean a day on which the principal national securities
exchange on which any of the shares of Equity Stock are listed or admitted to
trading is open for the transaction of business or, if none of the shares of
Equity Stock are listed or admitted to trading on any national securities
exchange, any day other than a Saturday, a Sunday or a day on which banking
institutions in the State of New York are authorized or obligated by law or
executive order to close.

     "Transfer" (as a noun) shall mean any sale, transfer, gift, assignment,
devise or other disposition of Beneficial Ownership of Equity Stock, whether
voluntary or involuntary and whether by operation of law or otherwise.
"Transfer" (as a verb) shall have the correlative meaning.

     "Trust" shall mean any separate trust created and administered in
accordance with the terms of section F of Article FOURTH, for the exclusive
benefit of any Beneficiary.

     "Trustee" shall mean any Person, unaffiliated with both the Corporation and
any Prohibited Owner (and, if different than the Prohibited Owner, the Person
who would have had Beneficial Ownership of the Shares that would have been owned
of record by the Prohibited Owner), designated by the Corporation to act as
trustee of any Trust, or any successor trustee thereof.

                                       16

EX-3.2

                                                                     Exhibit 3.2

                              AMENDED AND RESTATED

                                     BY-LAWS

                                       OF

                         PLUM CREEK TIMBER COMPANY, INC.

                     (hereinafter called the "Corporation")


                                    ARTICLE I

                                     OFFICES

     Section 1. Registered Office. The registered office of the Corporation
shall be in the City of Wilmington, County of New Castle, State of Delaware.

     Section 2. Other Offices. The Corporation may also have offices at such
other places both within and without the State of Delaware as the Board of
Directors may from time to time determine.


                                   ARTICLE II

                            MEETINGS OF STOCKHOLDERS

     Section 1. Place of Meetings. Meetings of the stockholders for the election
of directors or for any other purpose shall be held at such time and place,
either within or without the State of Delaware as shall be designated from time
to time by the Board of Directors.

     Section 2. Annual Meetings. The annual meetings of stockholders for the
election of directors shall be held on such date and at such time as shall be
designated from time to time by the Board of Directors. Any other proper
business may be transacted at the annual meeting of stockholders.

     Section 3. Special Meetings. Unless otherwise required by law or by the
certificate of incorporation of the Corporation, as amended and restated from
time to time (the "Certificate of Incorporation"), Special Meetings of
Stockholders, for any purpose or purposes, may be called by either (i) the
Chairman, if there be one, or (ii) the President, (iii) any Vice President, if
there be one, (iv) the Secretary or (v) any Assistant Secretary, if there be
one, and shall be called by any such officer at the request in writing of (i)
the Board of Directors, (ii) a committee of the Board of Directors that has been
duly designated by the Board of Directors and whose powers and authority include
the power to call such meetings or (iii) stockholders owning a majority of the
capital stock of the Corporation issued and outstanding and entitled to vote.
Such request shall state the



purpose or purposes of the proposed meeting. At a Special Meeting of
Stockholders, only such business shall be conducted as shall be specified in the
notice of meeting (or any supplement thereto).

     Section 4. Notice. Whenever stockholders are required or permitted to take
any action at a meeting, a written notice of the meeting shall be given which
shall state the place, date and hour of the meeting, and, in the case of a
special meeting, the purpose or purposes for which the meeting is called. Unless
otherwise required by law, the written notice of any meeting shall be given not
less than ten nor more than sixty days before the date of the meeting to each
stockholder entitled to vote at such meeting.

     Section 5. Nature of Business at Meetings of Stockholders. No business may
be transacted at an annual meeting of stockholders, other than business that is
either (a) specified in the notice of meeting (or any supplement thereto) given
by or at the direction of the Board of Directors (or any duly authorized
committee thereof), (b) otherwise properly brought before the annual meeting by
or at the direction of the Board of Directors (or any duly authorized committee
thereof) or (c) otherwise properly brought before the annual meeting by any
stockholder of the Corporation (i) who is a stockholder of record on the date of
the giving of the notice provided for in this Section 5 and on the record date
for the determination of stockholders entitled to vote at such annual meeting
and (ii) who complies with the notice procedures set forth in this Section 5.

     In addition to any other applicable requirements, for business to be
properly brought before an annual meeting by a stockholder, such stockholder
must have given timely notice thereof in proper written form to the Secretary of
the Corporation.

     To be timely, a stockholder's notice to the Secretary must be delivered to
or mailed and received at the principal executive offices of the Corporation not
less than sixty (60) days nor more than ninety (90) days prior to the
anniversary date of the immediately preceding annual meeting of stockholders;
provided, however, that in the event that the annual meeting is called for a
date that is not within thirty (30) days before or after such anniversary date,
notice by the stockholder in order to be timely must be so received not later
than the close of business on the tenth (10th) day following the day on which
such notice of the date of the annual meeting was mailed or such public
disclosure of the date of the annual meeting was made, whichever first occurs.

     To be in proper written form, a stockholder's notice to the Secretary must
set forth as to each matter such stockholder proposes to bring before the annual
meeting (i) a brief description of the business desired to be brought before the
annual meeting and the reasons for conducting such business at the annual
meeting, (ii) the name and record address of such stockholder, (iii) the class
or series and number of shares of capital stock of the Corporation which are
owned beneficially or of record by such stockholder, (iv) a description of all
arrangements or understandings between such stockholder and any other person or
persons (including their names) in connection with the proposal of such business
by such stockholder and any material interest of such stockholder in such
business and (v) a representation that such stockholder intends to appear in
person or by proxy at the annual meeting to bring such business before the
meeting.


                                       2



     No business shall be conducted at the annual meeting of stockholders except
business brought before the annual meeting in accordance with the procedures set
forth in this Section 5; provided, however, that, once business has been
properly brought before the annual meeting in accordance with such procedures,
nothing in this Section 5 shall be deemed to preclude discussion by any
stockholder of any such business. If the Chairman of an annual meeting
determines that business was not properly brought before the annual meeting in
accordance with the foregoing procedures, the Chairman shall declare to the
meeting that the business was not properly brought before the meeting and such
business shall not be transacted.

     Section 6. Nomination of Directors. Only persons who are nominated in
accordance with the following procedures shall be eligible for election as
directors of the Corporation, except as may be otherwise provided in the
Certificate of Incorporation with respect to the right of holders of preferred
stock of the Corporation to nominate and elect a specified number of directors
in certain circumstances. Nominations of persons for election to the Board of
Directors may be made at any annual meeting of stockholders, or at any special
meeting of stockholders called for the purpose of electing directors, (a) by or
at the direction of the Board of Directors (or any duly authorized committee
thereof) or (b) by any stockholder of the Corporation (i) who is a stockholder
of record on the date of the giving of the notice provided for in this Section 6
and on the record date for the determination of stockholders entitled to vote at
such meeting and (ii) who complies with the notice procedures set forth in this
Section 6.

     In addition to any other applicable requirements, for a nomination to be
made by a stockholder, such stockholder must have given timely notice thereof in
proper written form to the Secretary of the Corporation.

     To be timely, a stockholder's notice to the Secretary must be delivered to
or mailed and received at the principal executive offices of the Corporation (a)
in the case of an annual meeting, not less than sixty (60) days nor more than
ninety (90) days prior to the anniversary date of the immediately preceding
annual meeting of stockholders; provided, however, that in the event that the
annual meeting is called for a date that is not within thirty (30) days before
or after such anniversary date, notice by the stockholder in order to be timely
must be so received not later than the close of business on the tenth (10th) day
following the day on which such notice of the date of the annual meeting was
mailed or such public disclosure of the date of the annual meeting was made,
whichever first occurs; and (b) in the case of a special meeting of stockholders
called for the purpose of electing directors, not later than the close of
business on the tenth (10th) day following the day on which notice of the date
of the special meeting was mailed or public disclosure of the date of the
special meeting was made, whichever first occurs.

     To be in proper written form, a stockholder's notice to the Secretary must
set forth (a) as to each person whom the stockholder proposes to nominate for
election as a director (i) the name, age, business address and residence address
of the person, (ii) the principal occupation or employment of the person, (iii)
the class or series and number of shares of capital stock of the Corporation
which are owned beneficially or of record by the person and (iv) any other
information relating to the person that would be required to


                                       3



be disclosed in a proxy statement or other filings required to be made in
connection with solicitations of proxies for election of directors pursuant to
Section 14 of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and the rules and regulations promulgated thereunder; and (b) as to the
stockholder giving the notice (i) the name and record address of such
stockholder, (ii) the class or series and number of shares of capital stock of
the Corporation which are owned beneficially or of record by such stockholder,
(iii) a description of all arrangements or understandings between such
stockholder and each proposed nominee and any other person or persons (including
their names) pursuant to which the nomination(s) are to be made by such
stockholder, (iv) a representation that such stockholder intends to appear in
person or by proxy at the meeting to nominate the persons named in its notice
and (v) any other information relating to such stockholder that would be
required to be disclosed in a proxy statement or other filings required to be
made in connection with solicitations of proxies for election of directors
pursuant to Section 14 of the Exchange Act and the rules and regulations
promulgated thereunder. Such notice must be accompanied by a written consent of
each proposed nominee to being named as a nominee and to serve as a director if
elected.

     No person shall be eligible for election as a director of the Corporation
unless nominated in accordance with the procedures set forth in this Section 6.
If the Chairman of the meeting determines that a nomination was not made in
accordance with the foregoing procedures, the Chairman shall declare to the
meeting that the nomination was defective and such defective nomination shall be
disregarded.

     Section 7. Adjournments. Only the Chairman of the meeting has the power to
adjourn stockholder meetings. Any meeting of the stockholders may be adjourned
from time to time to reconvene at the same or some other place, and notice need
not be given of any such adjourned meeting if the time and place thereof are
announced at the meeting at which the adjournment is taken. At the adjourned
meeting, the Corporation may transact any business which might have been
transacted at the original meeting. If the adjournment is for more than thirty
days, or if after the adjournment a new record date is fixed for the adjourned
meeting, notice of the adjourned meeting shall be given to each stockholder of
record entitled to vote at the meeting.

     Section 8. Quorum. Unless otherwise required by law or the Certificate of
Incorporation, the holders of the number of shares of Common Stock, par value
$0.01 per share, issued and outstanding which constitutes at least a majority of
the votes entitled to be cast thereat, present in person or represented by
proxy, shall constitute a quorum at all meetings of the stockholders for the
transaction of business. A quorum, once established, shall not be broken by the
withdrawal of enough votes to leave less than a quorum. If, however, such quorum
shall not be present or represented at any meeting of the stockholders, the
stockholders entitled to vote thereat, present in person or represented by
proxy, shall have power to adjourn the meeting from time to time, in the manner
provided in Section 7, until a quorum shall be present or represented.

     Section 9. Voting. Unless otherwise required by law, the Certificate of
Incorporation or these By-laws, any question brought before any meeting of
stockholders, other than the election of directors, shall be decided by the vote
of the


                                       4



holders of a majority of the total number of votes of the capital stock
represented and entitled to vote thereat, voting as a single class. Unless
otherwise provided in the Certificate of Incorporation, and subject to Section 5
of Article V hereof, each stockholder represented at a meeting of stockholders
shall be entitled to cast one vote for each share of the capital stock entitled
to vote thereat held by such stockholder. Such votes may be cast in person or by
proxy but no proxy shall be voted on or after three years from its date, unless
such proxy provides for a longer period. The Board of Directors, in its
discretion, or the officer of the Corporation presiding at a meeting of
stockholders, in such officer's discretion, may require that any votes cast at
such meeting shall be cast by written ballot.

     Section 10. List of Stockholders Entitled to Vote. The officer of the
Corporation who has charge of the stock ledger of the Corporation shall prepare
and make, at least ten days before every meeting of stockholders, a complete
list of the stockholders entitled to vote at the meeting, arranged in
alphabetical order, and showing the address of each stockholder and the number
of shares registered in the name of each stockholder. Such list shall be open to
the examination of any stockholder, for any purpose germane to the meeting,
during ordinary business hours, for a period of at least ten days prior to the
meeting either at a place within the city where the meeting is to be held, which
place shall be specified in the notice of the meeting, or, if not so specified,
at the place where the meeting is to be held. The list shall also be produced
and kept at the time and place of the meeting during the whole time thereof, and
may be inspected by any stockholder of the Corporation who is present.

     Section 11. Stock Ledger. The stock ledger of the Corporation shall be the
only evidence as to who are the stockholders entitled to examine the stock
ledger, the list required by Section 10 of this Article II or the books of the
Corporation, or to vote in person or by proxy at any meeting of stockholders.

     Section 12. Conduct of Meetings. The Board of Directors of the Corporation
may adopt by resolution such rules and regulations for the conduct of the
meeting of the stockholders as it shall deem appropriate. Except to the extent
inconsistent with such rules and regulations as adopted by the Board of
Directors, the chairman of any meeting of the stockholders shall have the right
and authority to prescribe such rules, regulations and procedures and to do all
such acts as, in the judgment of such chairman, are appropriate for the proper
conduct of the meeting. Such rules, regulations or procedures, whether adopted
by the Board of Directors or prescribed by the chairman of the meeting, may
include, without limitation, the following: (i) the establishment of an agenda
or order of business for the meeting; (ii) the determination of when the polls
shall open and close for any given matter to be voted on at the meeting; (iii)
rules and procedures for maintaining order at the meeting and the safety of
those present; (iv) limitations on attendance at or participation in the meeting
to stockholders of record of the corporation, their duly authorized and
constituted proxies or such other persons as the chairman of the meeting shall
determine; (v) restrictions on entry to the meeting after the time fixed for the
commencement thereof; and (vi) limitations on the time allotted to questions or
comments by participants.


                                       5



                                   ARTICLE III

                                    DIRECTORS

     Section 1. Number and Election of Directors. The Board of Directors shall
consist of not less than three nor more than fifteen members, the exact number
of which shall be determined from time to time by resolution adopted by the
Board of Directors. Except as provided in Section 2 of this Article III,
directors shall be elected by a plurality of the votes cast at the annual
meeting of stockholders and each director so elected shall hold office until the
next annual meeting of stockholders and until such director's successor is duly
elected and qualified, or until such director's earlier death, resignation or
removal. Any director may resign at any time upon written notice to the
Corporation. Directors need not be stockholders.

     Section 2. Vacancies. Unless otherwise required by law or the Certificate
of Incorporation, vacancies arising through death, resignation, removal, an
increase in the number of directors or otherwise may be filled only by a
majority of the directors then in office, though less than a quorum, or by a
sole remaining director, and the directors so chosen shall hold office until the
end of the term of office to which they are appointed and until their successors
are duly elected and qualified, or until their earlier death, resignation or
removal.

     Section 3. Resignation. Any director of the Corporation may resign at any
time by giving written notice to the Chairman of the Board, or to the President
or to the Secretary of the Corporation. The resignation of any director shall
take effect at the date of receipt of such notice or at any later date specified
therein; and unless otherwise specified therein the acceptance of such
resignation by the Board of Directors shall not be necessary to make if
effective.

     Section 4. Duties and Powers. The business and affairs of the Corporation
shall be managed by or under the direction of the Board of Directors which may
exercise all such powers of the Corporation and do all such lawful acts and
things as are not by statute or by the Certificate of Incorporation or by these
By-Laws required to be exercised or done by the stockholders.

     Section 5. Meetings. The Board of Directors may hold meetings, both regular
and special, either within or without the State of Delaware. Regular meetings of
the Board of Directors may be held without notice at such time and at such place
as may from time to time be determined by the Board of Directors. Special
meetings of the Board of Directors may be called by the Chairman, if there be
one, the President, or by any director. Notice thereof stating the place, date
and hour of the meeting shall be given to each director either by mail not less
than forty-eight (48) hours before the date of the meeting, by telephone or
telegram on twenty-four (24) hours' notice, or on such shorter notice as the
person or persons calling such meeting may deem necessary or appropriate in the
circumstances.


                                       6



     Section 6. Quorum. Except as otherwise required by law or the Certificate
of Incorporation, at all meetings of the Board of Directors, a majority of the
entire Board of Directors shall constitute a quorum for the transaction of
business and the act of a majority of the directors present at any meeting at
which there is a quorum shall be the act of the Board of Directors. If a quorum
shall not be present at any meeting of the Board of Directors, the directors
present thereat may adjourn the meeting from time to time, without notice other
than announcement at the meeting of the time and place of the adjourned meeting,
until a quorum shall be present.

     Section 7. Actions by Written Consent. Unless otherwise provided in the
Certificate of Incorporation, or these By-Laws, any action required or permitted
to be taken at any meeting of the Board of Directors or of any committee thereof
may be taken without a meeting, if all the members of the Board of Directors or
committee, as the case may be, consent thereto in writing, and the writing or
writings are filed with the minutes of proceedings of the Board of Directors or
committee.

     Section 8. Meetings by Means of Conference Telephone. Unless otherwise
provided in the Certificate of Incorporation, members of the Board of Directors
of the Corporation, or any committee thereof, may participate in a meeting of
the Board of Directors or such committee by means of a conference telephone or
similar communications equipment by means of which all persons participating in
the meeting can hear each other, and participation in a meeting pursuant to this
Section 8 shall constitute presence in person at such meeting.

     Section 9. Committees. A majority of the Board of Directors shall designate
a Nominating Committee and may designate one or more committees, each committee
to consist of one or more of the directors of the Corporation. The Board of
Directors may designate one or more directors as alternate members of any
committee, who may replace any absent or disqualified member at any meeting of
any such committee. In the absence or disqualification of a member of a
committee, and in the absence of a designation by the Board of Directors of an
alternate member to replace the absent or disqualified member, the member or
members thereof present at any meeting and not disqualified from voting, whether
or not such member or members constitute a quorum, may unanimously appoint
another member of the Board of Directors to act at the meeting in the place of
any absent or disqualified member. Any committee, to the extent permitted by law
and provided in the resolution establishing such committee, shall have and may
exercise all the powers and authority of the Board of Directors in the
management of the business and affairs of the Corporation, and may authorize the
seal of the Corporation to be affixed to all papers which may require it. Each
committee shall keep regular minutes and report to the Board of Directors when
required.

     Section 10. Compensation. The directors may be paid their expenses, if any,
of attendance at each meeting of the Board of Directors and may be paid a fixed
sum for attendance at each meeting of the Board of Directors or a stated salary
as director, payable in cash or securities. No such payment shall preclude any
director from serving the Corporation in any other capacity and receiving
compensation therefor.


                                       7



Members of special or standing committees may be allowed like compensation for
attending committee meetings.

     Section 11. Interested Directors. No contract or transaction between the
Corporation and one or more of its directors or officers, or between the
Corporation and any other corporation, partnership, association, or other
organization in which one or more of its directors or officers are directors or
officers or have a financial interest, shall be void or voidable solely for this
reason, or solely because the director or officer is present at or participates
in the meeting of the Board of Directors or committee thereof which authorizes
the contract or transaction, or solely because the director or officer's vote is
counted for such purpose if (i) the material facts as to the director or
officer's relationship or interest and as to the contract or transaction are
disclosed or are known to the Board of Directors or the committee, and the Board
of Directors or committee in good faith authorizes the contract or transaction
by the affirmative votes of a majority of the disinterested directors, even
though the disinterested directors be less than a quorum; or (ii) the material
facts as to the director or officer's relationship or interest and as to the
contract or transaction are disclosed or are known to the stockholders entitled
to vote thereon, and the contract or transaction is specifically approved in
good faith by vote of the stockholders; or (iii) the contract or transaction is
fair as to the Corporation as of the time it is authorized, approved or ratified
by the Board of Directors, a committee thereof or the stockholders. Common or
interested directors may be counted in determining the presence of a quorum at a
meeting of the Board of Directors or of a committee which authorizes the
contract or transaction.

                                   ARTICLE IV

                                    OFFICERS

     Section 1. General. The officers of the Corporation shall be chosen by the
Board of Directors and shall be a President, a Secretary and a Treasurer. The
Board of Directors, in its discretion, also may choose a Chairman of the Board
of Directors (who must be a director) and one or more Vice Presidents, Assistant
Secretaries, Assistant Treasurers and other officers. Any number of offices may
be held by the same person, unless otherwise prohibited by law or the
Certificate of Incorporation. The officers of the Corporation need not be
stockholders of the Corporation nor, except in the case of the Chairman of the
Board of Directors, need such officers be directors of the Corporation.

     Section 2. Election. The Board of Directors, at its first meeting held
after each annual meeting of stockholders (or action by written consent of
stockholders in lieu of the annual meeting of stockholders), shall elect the
officers of the Corporation who shall hold their offices for such terms and
shall exercise such powers and perform such duties as shall be determined from
time to time by the Board of Directors; and all officers of the Corporation
shall hold office until their successors are chosen and qualified, or until
their earlier death, resignation or removal. Any officer elected by the Board of
Directors may be removed at any time by the affirmative vote of the Board of


                                       8



Directors. Any vacancy occurring in any office of the Corporation shall be
filled by the Board of Directors. The salaries of all officers of the
Corporation shall be fixed by the Board of Directors.

     Section 3. Voting Securities Owned by the Corporation. Powers of attorney,
proxies, waivers of notice of meeting, consents and other instruments relating
to securities owned by the Corporation may be executed in the name of and on
behalf of the Corporation by the President or any Vice President or any other
officer authorized to do so by the Board of Directors and any such officer may,
in the name of and on behalf of the Corporation, take all such action as any
such officer may deem advisable to vote in person or by proxy at any meeting of
security holders of any corporation in which the Corporation may own securities
and at any such meeting shall possess and may exercise any and all rights and
power incident to the ownership of such securities and which, as the owner
thereof, the Corporation might have exercised and possessed if present. The
Board of Directors may, by resolution, from time to time confer like powers upon
any other person or persons.

     Section 4. Chairman of the Board of Directors. The Chairman of the Board of
Directors, if there be one, shall preside at all meetings of the stockholders
and of the Board of Directors. The Chairman of the Board of Directors shall be
the Chief Executive Officer of the Corporation, unless the Board of Directors
designates the President as the Chief Executive Officer, and, except where by
law the signature of the President is required, the Chairman of the Board of
Directors shall possess the same power as the President to sign all contracts,
certificates and other instruments of the Corporation which may be authorized by
the Board of Directors. During the absence or disability of the President, the
Board of Directors shall appoint one member of the Board of Directors who shall
exercise all the powers and discharge all the duties of the President. Such
member of the Board of Directors shall also perform such other duties and may
exercise such other powers as may from time to time be assigned by these By-Laws
or by the Board of Directors.

     Section 5. President. The President shall, subject to the control of the
Board of Directors and, if there be one, the Chairman of the Board of Directors,
have general supervision of the business of the Corporation and shall see that
all orders and resolutions of the Board of Directors are carried into effect.
The President shall execute all bonds, mortgages, contracts and other
instruments of the Corporation requiring a seal, under the seal of the
Corporation, except where required or permitted by law to be otherwise signed
and executed and except that the other officers of the Corporation may sign and
execute documents when so authorized by these By-Laws, the Board of Directors or
the President. In the absence or disability of the Chairman of the Board of
Directors, if there be one, the President shall preside at all meetings of the
stockholders and the Board of Directors. If there be no Chairman of the Board of
Directors, or if the Board of Directors shall otherwise designate, the President
shall be the Chief Executive Officer of the Corporation. The President shall
also perform such other duties and may exercise such other powers as may from
time to time be assigned to such officer by these By-Laws or by the Board of
Directors.


                                       9



     Section 6. Vice Presidents. The Vice President, or the Vice Presidents if
there is more than one (in the order designated by the Board of Directors),
shall perform such duties and have such powers as the Board of Directors from
time to time may prescribe. If there be no Chairman of the Board of Directors
and no Vice President, the Board of Directors shall designate the officer of the
Corporation who, in the absence of the President or in the event of the
inability or refusal of the President to act, shall perform the duties of the
President, and when so acting, shall have all the powers of and be subject to
all the restrictions upon the President.

     Section 7. Secretary. The Secretary shall attend all meetings of the Board
of Directors and all meetings of stockholders and record all the proceedings
thereat in a book or books to be kept for that purpose; the Secretary shall also
perform like duties for committees of the Board of Directors when required. The
Secretary shall give, or cause to be given, notice of all meetings of the
stockholders and special meetings of the Board of Directors, and shall perform
such other duties as may be prescribed by the Board of Directors, the Chairman
of the Board of Directors or the President, under whose supervision the
Secretary shall be. If the Secretary shall be unable or shall refuse to cause to
be given notice of all meetings of the stockholders and special meetings of the
Board of Directors, and if there be no Assistant Secretary, then either the
Board of Directors or the President may choose another officer to cause such
notice to be given. The Secretary shall have custody of the seal of the
Corporation and the Secretary or any Assistant Secretary, if there be one, shall
have authority to affix the same to any instrument requiring it and when so
affixed, it may be attested by the signature of the Secretary or by the
signature of any such Assistant Secretary. The Board of Directors may give
general authority to any other officer to affix the seal of the Corporation and
to attest to the affixing by such officer's signature. The Secretary shall see
that all books, reports, statements, certificates and other documents and
records required by law to be kept or filed are properly kept or filed, as the
case may be.

     Section 8. Treasurer. The Treasurer shall have the custody of the corporate
funds and securities and shall keep full and accurate accounts of receipts and
disbursements in books belonging to the Corporation and shall deposit all moneys
and other valuable effects in the name and to the credit of the Corporation in
such depositories as may be designated by the Board of Directors. The Treasurer
shall disburse the funds of the Corporation as may be ordered by the Board of
Directors, taking proper vouchers for such disbursements, and shall render to
the President and the Board of Directors, at its regular meetings, or when the
Board of Directors so requires, an account of all transactions as Treasurer and
of the financial condition of the Corporation. If required by the Board of
Directors, the Treasurer shall give the Corporation a bond in such sum and with
such surety or sureties as shall be satisfactory to the Board of Directors for
the faithful performance of the duties of the office of the Treasurer and for
the restoration to the Corporation, in case of the Treasurer's death,
resignation, retirement or removal from office, of all books, papers, vouchers,
money and other property of whatever kind in the Treasurer's possession or under
the Treasurer's control belonging to the Corporation.


                                       10



     Section 9. Assistant Secretaries. Assistant Secretaries, if there be any,
shall perform such duties and have such powers as from time to time may be
assigned to them by the Board of Directors, the President, any Vice President,
if there be one, or the Secretary, and in the absence of the Secretary or in the
event of the Secretary's disability or refusal to act, shall perform the duties
of the Secretary, and when so acting, shall have all the powers of and be
subject to all the restrictions upon the Secretary.

     Section 10. Assistant Treasurers. Assistant Treasurers, if there be any,
shall perform such duties and have such powers as from time to time may be
assigned to them by the Board of Directors, the President, any Vice President,
if there be one, or the Treasurer, and in the absence of the Treasurer or in the
event of the Treasurer's disability or refusal to act, shall perform the duties
of the Treasurer, and when so acting, shall have all the powers of and be
subject to all the restrictions upon the Treasurer. If required by the Board of
Directors, an Assistant Treasurer shall give the Corporation a bond in such sum
and with such surety or sureties as shall be satisfactory to the Board of
Directors for the faithful performance of the duties of the office of Assistant
Treasurer and for the restoration to the Corporation, in case of the Assistant
Treasurer's death, resignation, retirement or removal from office, of all books,
papers, vouchers, money and other property of whatever kind in the Assistant
Treasurer's possession or under the Assistant Treasurer's control belonging to
the Corporation.

     Section 11. Other Officers. Such other officers as the Board of Directors
may choose shall perform such duties and have such powers as from time to time
may be assigned to them by the Board of Directors. The Board of Directors may
delegate to any other officer of the Corporation the power to choose such other
officers and to prescribe their respective duties and powers.

                                    ARTICLE V

                                      STOCK

     Section 1. Form of Certificates. Every holder of stock in the Corporation
shall be entitled to have a certificate signed, in the name of the Corporation
(i) by the Chairman of the Board of Directors, the President or a Vice President
and (ii) by the Treasurer or an Assistant Treasurer, or the Secretary or an
Assistant Secretary of the Corporation, certifying the number of shares owned by
such stockholder in the Corporation.

     Section 2. Signatures. Any or all of the signatures on a certificate may be
a facsimile. In case any officer, transfer agent or registrar who has signed or
whose facsimile signature has been placed upon a certificate shall have ceased
to be such officer, transfer agent or registrar before such certificate is
issued, it may be issued by the Corporation with the same effect as if such
person were such officer, transfer agent or registrar at the date of issue.


                                       11



     Section 3. Lost Certificates. The Board of Directors may direct a new
certificate to be issued in place of any certificate theretofore issued by the
Corporation alleged to have been lost, stolen or destroyed, upon the making of
an affidavit of that fact by the person claiming the certificate of stock to be
lost, stolen or destroyed. When authorizing such issue of a new certificate, the
Board of Directors may, in its discretion and as a condition precedent to the
issuance thereof, require the owner of such lost, stolen or destroyed
certificate, or the owner's legal representative, to advertise the same in such
manner as the Board of Directors shall require and/or to give the Corporation a
bond in such sum as it may direct as indemnity against any claim that may be
made against the Corporation with respect to the certificate alleged to have
been lost, stolen or destroyed or the issuance of such new certificate.

     Section 4. Transfers. Stock of the Corporation shall be transferable in the
manner prescribed by law, in the Certificate of Incorporation, and in these
By-Laws. Transfers of stock shall be made on the books of the Corporation only
by the person named in the certificate or by such person's attorney lawfully
constituted in writing and upon the surrender of the certificate therefor, which
shall be cancelled before a new certificate shall be issued. No transfer of
stock shall be valid as against the Corporation for any purpose until it shall
have been entered in the stock records of the Corporation by an entry showing
from and to whom transferred.

     Section 5. Record Date. In order that the Corporation may determine the
stockholders entitled to notice of or to vote at any meeting of stockholders or
any adjournment thereof, the board of directors may fix a record date, which
record date shall not precede the date upon which the resolution fixing the
record date is adopted by the Board of Directors, and which record date shall
not be more than sixty nor less than ten days before the date of such meeting.
If no record date is fixed by the Board of Directors, the record date for
determining stockholders entitled to notice of or to vote at a meeting of
stockholders shall be at the close of business on the day next preceding the day
on which notice is given, or, if notice is waived, at the close of business on
the day next preceding the day on which the meeting is held. A determination of
stockholders of record entitled to notice of or to vote at a meeting of
stockholders shall apply to any adjournment of the meeting; providing, however,
that the Board of Directors may fix a new record date for the adjourned meeting.

     In order that the Corporation may determine the stockholders entitled to
receive payment of any dividend or other distribution or allotment of any rights
or the stockholders entitled to exercise any rights in respect of any change,
conversion or exchange of stock, or for the purpose of any other lawful action,
the Board of Directors may fix a record date, which record date shall not
precede the date upon which the resolution fixing the record date is adopted,
and which record date shall be not more than sixty days prior to such action. If
no record date is fixed, the record date for determining stockholders for any
such purpose shall be at the close of business on the day on which the Board of
Directors adopts the resolution relating thereto.

     Section 6. Record Owners. The Corporation shall be entitled to recognize
the exclusive right of a person registered on its books as the owner of shares
to


                                       12



receive dividends, and to vote as such owner, and to hold liable for calls and
assessments a person registered on its books as the owner of shares, and shall
not be bound to recognize any equitable or other claim to or interest in such
share or shares on the part of any other person, whether or not it shall have
express or other notice thereof, except as otherwise required by law.

                                   ARTICLE VI

                                     NOTICES

     Section 1. Notices. Whenever written notice is required by law, the
Certificate of Incorporation or these By-Laws, to be given to any director,
member of a committee or stockholder, such notice may be given by mail,
addressed to such director, member of a committee or stockholder, at such
person's address as it appears on the records of the Corporation, with postage
thereon prepaid, and such notice shall be deemed to be given at the time when
the same shall be deposited in the United States mail. Written notice may also
be given personally or by telecopy, facsimile or other electronic transmission.

     Section 2. Waivers of Notice. Whenever any notice is required by law, the
Certificate of Incorporation or these By-Laws, to be given to any director,
member of a committee or stockholder, a waiver thereof in writing, signed, by
the person or persons entitled to said notice, whether before or after the time
stated therein, shall be deemed equivalent thereto. Attendance of a person at a
meeting, present in person or represented by proxy, shall constitute a waiver of
notice of such meeting, except where the person attends the meeting for the
express purpose of objecting at the beginning of the meeting to the transaction
of any business because the meeting is not lawfully called or convened.

                                   ARTICLE VII

                               GENERAL PROVISIONS

     Section 1. Dividends. Dividends upon the capital stock of the Corporation,
subject to the requirements of the Delaware General Corporation Law and the
provisions of the Certificate of Incorporation, if any, may be declared by the
Board of Directors at any regular or special meeting of the Board of Directors
(or any action by written consent in lieu thereof in accordance with Section 7
of Article III hereof), and may be paid in cash, in property, or in shares of
the Corporation's capital stock. Before payment of any dividend, there may be
set aside out of any funds of the Corporation available for dividends such sum
or sums as the Board of Directors from time to time, in its absolute discretion,
deems proper as a reserve or reserves to meet contingencies, or for equalizing
dividends, or for repairing or maintaining any property of the Corporation, or
for any proper purpose, and the Board of Directors may modify or abolish any
such reserve.


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     Section 2. Disbursements. All checks or demands for money and notes of the
Corporation shall be signed by such officer or officers or such other person or
persons as the Board of Directors may from time to time designate.

     Section 3. Fiscal Year. The fiscal year of the Corporation shall begin on
January 1 and conclude on December 31, unless changed by resolution of the Board
of Directors.

     Section 4. Corporate Seal. The corporate seal shall have inscribed thereon
the name of the Corporation, the year of its organization and the words
"Corporate Seal, Delaware". The seal may be used by causing it or a facsimile
thereof to be impressed or affixed or reproduced or otherwise.

                                  ARTICLE VIII

                                 INDEMNIFICATION

     Section 1. Power to Indemnify in Actions, Suits or Proceedings other than
Those by or in the Right of the Corporation. Subject to Section 3 of this
Article VIII, the Corporation shall indemnify any person who was or is a party
or is threatened to be made a party to any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the Corporation) by
reason of the fact that such person is or was a director or officer of the
Corporation, or is or was a director or officer of the Corporation serving at
the request of the Corporation as a director or officer, employee or agent of
another corporation, partnership, joint venture, trust, employee benefit plan or
other enterprise, against expenses (including attorneys' fees), judgments, fines
and amounts paid in settlement actually and reasonably incurred by such person
in connection with such action, suit or proceeding if such person acted in good
faith and in a manner such person reasonably believed to be in or not opposed to
the best interests of the Corporation, and, with respect to any criminal action
or proceeding, had no reasonable cause to believe such person's conduct was
unlawful. The termination of any action, suit or proceeding by judgment, order,
settlement, conviction, or upon a plea of nolo contendere or its equivalent,
shall not, of itself, create a presumption that the person did not act in good
faith and in a manner which such person reasonably believed to be in or not
opposed to the best interests of the Corporation, and, with respect to any
criminal action or proceeding, had reasonable cause to believe that such
person's conduct was unlawful.

     Section 2. Power to Indemnify in Actions, Suits or Proceedings by or in the
Right of the Corporation. Subject to Section 3 of this Article VIII, the
Corporation shall indemnify any person who was or is a party or is threatened to
be made a party to any threatened, pending or completed action or suit by or in
the right of the Corporation to procure a judgment in its favor by reason of the
fact that such person is or was a director or officer of the Corporation, or is
or was a director or officer of the Corporation serving at the request of the
Corporation as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust, employee benefit plan or other


                                       14



enterprise against expenses (including attorneys' fees) actually and reasonably
incurred by such person in connection with the defense or settlement of such
action or suit if such person acted in good faith and in a manner such person
reasonably believed to be in or not opposed to the best interests of the
Corporation; except that no indemnification shall be made in respect of any
claim, issue or matter as to which such person shall have been adjudged to be
liable to the Corporation unless and only to the extent that the Court of
Chancery or the court in which such action or suit was brought shall determine
upon application that, despite the adjudication of liability but in view of all
the circumstances of the case, such person is fairly and reasonably entitled to
indemnity for such expenses which the Court of Chancery or such other court
shall deem proper.

     Section 3. Authorization of Indemnification. Any indemnification under this
Article VIII (unless ordered by a court) shall be made by the Corporation only
as authorized in the specific case upon a determination that indemnification of
the director or officer is proper in the circumstances because such person has
met the applicable standard of conduct set forth in Section 1 or Section 2 of
this Article VIII, as the case may be. Such determination shall be made, with
respect to a person who is a director or officer at the time of such
determination, (i) by a majority vote of the directors who are not parties to
such action, suit or proceeding, even though less than a quorum, or (ii) by a
committee of such directors designated by a majority vote of such directors,
even though less than a quorum, or (iii) if there are no such directors, or if
such directors so direct, by independent legal counsel in a written opinion or
(iv) by the stockholders. Such determination shall be made, with respect to
former directors and officers, by any person or persons having the authority to
act on the matter on behalf of the Corporation. To the extent, however, that a
present or former director or officer of the Corporation has been successful on
the merits or otherwise in defense of any action, suit or proceeding described
above, or in defense of any claim, issue or matter therein, such person shall be
indemnified against expenses (including attorneys' fees) actually and reasonably
incurred by such person in connection therewith, without the necessity of
authorization in the specific case.

     Section 4. Good Faith Defined. For purposes of any determination under
Section 3 of this Article VIII, a person shall be deemed to have acted in good
faith and in a manner such person reasonably believed to be in or not opposed to
the best interests of the Corporation, or, with respect to any criminal action
or proceeding, to have had no reasonable cause to believe such person's conduct
was unlawful, if such person's action is based on the records or books of
account of the Corporation or another enterprise, or on information supplied to
such person by the officers of the Corporation or another enterprise in the
course of their duties, or on the advice of legal counsel for the Corporation or
another enterprise or on information or records given or reports made to the
Corporation or another enterprise by an independent certified public accountant
or by an appraiser or other expert selected with reasonable care by the
Corporation or another enterprise. The term "another enterprise" as used in this
Section 4 shall mean any other corporation or any partnership, joint venture,
trust, employee benefit plan or other enterprise of which such person is or was
serving at the request of the Corporation as a director, officer, employee or
agent. The provisions of this Section 4 shall not be deemed to be exclusive or
to limit in any way the circumstances in which a person may be


                                       15



deemed to have met the applicable standard of conduct set forth in Section 1 or
2 of this Article VIII, as the case may be.

     Section 5. Indemnification by a Court. Notwithstanding any contrary
determination in the specific case under Section 3 of this Article VIII, and
notwithstanding the absence of any determination thereunder, any director or
officer may apply to the Court of Chancery in the State of Delaware for
indemnification to the extent otherwise permissible under Sections 1 and 2 of
this Article VIII. The basis of such indemnification by a court shall be a
determination by such court that indemnification of the director or officer is
proper in the circumstances because such person has met the applicable standards
of conduct set forth in Section 1 or 2 of this Article VIII, as the case may be.
Neither a contrary determination in the specific case under Section 3 of this
Article VIII nor the absence of any determination thereunder shall be a defense
to such application or create a presumption that the director or officer seeking
indemnification has not met any applicable standard of conduct. Notice of any
application for indemnification pursuant to this Section 5 shall be given to the
Corporation promptly upon the filing of such application. If successful, in
whole or in part, the director or officer seeking indemnification shall also be
entitled to be paid the expense of prosecuting such application.

     Section 6. Expenses Payable in Advance. Expenses incurred by a director or
officer in defending any civil, criminal, administrative or investigative
action, suit or proceeding shall be paid by the Corporation in advance of the
final disposition of such action, suit or proceeding upon receipt of an
undertaking by or on behalf of such director or officer to repay such amount if
it shall ultimately be determined that such person is not entitled to be
indemnified by the Corporation as authorized in this Article VIII.

     Section 7. Nonexclusivity of Indemnification and Advancement of Expenses.
The indemnification and advancement of expenses provided by or granted pursuant
to this Article VIII shall not be deemed exclusive of any other rights to which
those seeking indemnification or advancement of expenses may be entitled under
the Certificate of Incorporation, any By-Law, agreement, vote of stockholders or
disinterested directors or otherwise, both as to action in such person's
official capacity and as to action in another capacity while holding such
office, it being the policy of the Corporation that indemnification of the
persons specified in Sections 1 and 2 of this Article VIII shall be made to the
fullest extent permitted by law. The provisions of this Article VIII shall not
be deemed to preclude the indemnification of any person who is not specified in
Section 1 or 2 of this Article VIII but whom the Corporation has the power or
obligation to indemnify under the provisions of the General Corporation Law of
the State of Delaware, or otherwise.

     Section 8. Insurance. The Corporation may purchase and maintain insurance
on behalf of any person who is or was a director or officer of the Corporation,
or is or was a director or officer of the Corporation serving at the request of
the Corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust, employee benefit plan or other
enterprise against any liability asserted


                                       16



against such person and incurred by such person in any such capacity, or arising
out of such person's status as such, whether or not the Corporation would have
the power or the obligation to indemnify such person against such liability
under the provisions of this Article VIII.

     Section 9. Certain Definitions. For purposes of this Article VIII,
references to "the Corporation" shall include, in addition to the resulting
corporation, any constituent corporation (including any constituent of a
constituent) absorbed in a consolidation or merger which, if its separate
existence had continued, would have had power and authority to indemnify its
directors or officers, so that any person who is or was a director or officer of
such constituent corporation, or is or was a director or officer of such
constituent corporation serving at the request of such constituent corporation
as a director, officer, employee or agent of another corporation, partnership,
joint venture, trust, employee benefit plan or other enterprise, shall stand in
the same position under the provisions of this Article VIII with respect to the
resulting or surviving corporation as such person would have with respect to
such constituent corporation if its separate existence had continued. For
purposes of this Article VIII, references to "fines" shall include any excise
taxes assessed on a person with respect to an employee benefit plan; and
references to "serving at the request of the Corporation" shall include any
service as a director, officer, employee or agent of the Corporation which
imposes duties on, or involves services by, such director or officer with
respect to an employee benefit plan, its participants or beneficiaries; and a
person who acted in good faith and in a manner such person reasonably believed
to be in the interest of the participants and beneficiaries of an employee
benefit plan shall be deemed to have acted in a manner "not opposed to the best
interests of the Corporation" as referred to in this Article VIII.

     Section 10. Survival of Indemnification and Advancement of Expenses. The
indemnification and advancement of expenses provided by, or granted pursuant to,
this Article VIII shall, unless otherwise provided when authorized or ratified,
continue as to a person who has ceased to be a director or officer and shall
inure to the benefit of the heirs, executors and administrators of such a
person.

     Section 11. Limitation on Indemnification. Notwithstanding anything
contained in this Article VIII to the contrary, except for proceedings to
enforce rights to indemnification (which shall be governed by Section 5 hereof),
the Corporation shall not be obligated to indemnify any director or officer in
connection with a proceeding (or part thereof) initiated by such person unless
such proceeding (or part thereof) was authorized or consented to by the Board of
Directors of the Corporation.

     Section 12. Indemnification of Employees and Agents. The Corporation may,
to the extent authorized from time to time by the Board of Directors, provide
rights to indemnification and to the advancement of expenses to employees and
agents of the Corporation similar to those conferred in this Article VIII to
directors and officers of the Corporation.


                                       17



                                   ARTICLE IX

                                   AMENDMENTS

     Section 1. Amendments. These By-Laws may be altered, amended or repealed,
in whole or in part, or new By-Laws may be adopted by the stockholders or by the
Board of Directors, provided, however, that notice of such alteration,
amendment, repeal or adoption of new By-Laws be contained in the notice of such
meeting of stockholders or Board of Directors as the case may be. All such
amendments must be approved by either the holders of at least 66-2/3% of the
outstanding capital stock entitled to vote thereon (as well as any class vote
required pursuant to the Certificate of Incorporation) or by at least 66-2/3% of
the entire Board of Directors then in office.

     Section 2. Entire Board of Directors. As used in this Article IX and in
these By-Laws generally, the term "entire Board of Directors" means the total
number of directors which the Corporation would have if there were no vacancies.

                                      * * *


Adopted as of:      July 1, 1999
               -----------------------------
Last Amended as of:     April 23, 2002
                    ------------------------

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