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Amended And Restated By-laws - BUCKEYE TECHNOLOGIES INC - 9-25-2000

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Amended And Restated By-laws - BUCKEYE TECHNOLOGIES INC - 9-25-2000 Powered By Docstoc
					EXHIBIT 3.2 AMENDED AND RESTATED BY-LAWS OF BUCKEYE TECHNOLOGIES INC. A DELAWARE CORPORATION ARTICLE I OFFICES Section 1. Registered Office. The registered office of the corporation in the State of Delaware shall be located at 1013 Centre Road, Wilmington, Delaware 19805. The name of the corporation's registered agent at such address is Corporation Service Company (CSC). The registered office and/or registered agent of the corporation may be changed from time to time by action of the board of directors. 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 or the business of the corporation may require. ARTICLE II MEETINGS OF STOCKHOLDERS Section 1. Annual Meetings. An annual meeting of the stockholders shall be held each year for the purpose of electing directors and conducting such other proper business as may come before the meeting. The annual meeting of the stockholders shall be held on such date and at such time as may be designated by the board of directors. At the annual meeting stockholders shall elect directors and transact such other business as properly may be brought before the meeting pursuant to Article II, Section 11 hereof. Section 2. Special Meetings. Special meetings of stockholders may be called for any purpose and may be held at such time and place, within or without the State of Delaware, as shall be stated in a notice of meeting or in a duly executed waiver of notice thereof. Such meetings may be called at any time by the chairman of the board, the president or the board of directors pursuant to a resolution adopted by the affirmative vote of the majority of the total number of directors then in office. The only matters that may be considered at any special meeting of the stockholders are the matters specified in the notice of the meeting.

Section 3. Place of Meetings. The board of directors may designate any place, either within or without the State of Delaware, as the place of meeting for any annual meeting or for any special meeting called by the board of directors. If no designation is made, or if a special meeting be otherwise called, the place of meeting shall be the principal executive office of the corporation. Section 4. Notice. Whenever stockholders are required or permitted to take action at a meeting, written or printed notice stating the place, date, time, and, in the case of special meetings, the purpose or purposes, of such meeting, shall be given to each stockholder entitled to vote at such meeting not less than ten (10) nor more than sixty (60) days before the date of the meeting. All such notices shall be delivered, either personally, by courier or by mail, by or at the direction of the board of directors, the chairman of the board, the president or the secretary.If mailed, such notice shall be deemed to be delivered when deposited in the United States Mail, postage prepaid, addressed to the stockholder at his, her or its address as the same appears on the records of the corporation. If delivered by courier, such notice shall be deemed delivered when deposited with such courier, addressed to the stockholder at his, her or its address as the same appears on the records of the corporation.

Section 3. Place of Meetings. The board of directors may designate any place, either within or without the State of Delaware, as the place of meeting for any annual meeting or for any special meeting called by the board of directors. If no designation is made, or if a special meeting be otherwise called, the place of meeting shall be the principal executive office of the corporation. Section 4. Notice. Whenever stockholders are required or permitted to take action at a meeting, written or printed notice stating the place, date, time, and, in the case of special meetings, the purpose or purposes, of such meeting, shall be given to each stockholder entitled to vote at such meeting not less than ten (10) nor more than sixty (60) days before the date of the meeting. All such notices shall be delivered, either personally, by courier or by mail, by or at the direction of the board of directors, the chairman of the board, the president or the secretary.If mailed, such notice shall be deemed to be delivered when deposited in the United States Mail, postage prepaid, addressed to the stockholder at his, her or its address as the same appears on the records of the corporation. If delivered by courier, such notice shall be deemed delivered when deposited with such courier, addressed to the stockholder at his, her or its address as the same appears on the records of the corporation. Attendance of a person at a meeting shall constitute a waiver of notice of such meeting, except when the person attends 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. Section 5. Stockholders List. The officer having charge of the stock ledger of the corporation shall make, at least 10 days before every meeting of the stockholders, a complete list of the stockholders entitled to vote at such meeting arranged in alphabetical order, 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 10 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 who is present. Section 6. Quorum. The holders of a majority of the outstanding shares of capital stock entitled to vote, present in person or represented by proxy, shall constitute a quorum at all meetings of the stockholders, except as otherwise provided by statute or by the certificate of incorporation. If a quorum is not present, the presiding officer or the holders of a majority of the shares present in person or represented by proxy at the meeting, and entitled to vote at the meeting, may adjourn the meeting to another time and/or place. When a specified item of business requires a vote by a class or series (if the corporation shall then have outstanding shares of more than one class or series) voting as a class, the holders of a majority of the shares of such class or series shall constitute a quorum (as to such class or series) for the transaction of such item of business. Section 7. Adjourned Meetings. When a meeting is adjourned to another time and place, notice need not be given of the adjourned meeting if the time and place thereof are announced at the -2-

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, a notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at the meeting. Section 8. Vote Required. When a quorum is present, the affirmative vote of the majority of shares present in person or represented by proxy at the meeting and entitled to vote on the subject matter shall be the act of the stockholders, unless (i) by express provisions of an applicable law or of the certificate of incorporation a different vote is required, in which case such express provision shall govern and control the decision of such question, or (ii) the subject matter is the election of directors, in which case Section 2 of Article III hereof shall govern and control the approval of such subject matter. Section 9. Voting Rights. Except as otherwise provided by the General Corporation Law of the State of Delaware or by the certificate of incorporation of the corporation or any amendments thereto and subject to Section 3 of Article VI hereof, every stockholder shall at every meeting of the stockholders be entitled to one

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, a notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at the meeting. Section 8. Vote Required. When a quorum is present, the affirmative vote of the majority of shares present in person or represented by proxy at the meeting and entitled to vote on the subject matter shall be the act of the stockholders, unless (i) by express provisions of an applicable law or of the certificate of incorporation a different vote is required, in which case such express provision shall govern and control the decision of such question, or (ii) the subject matter is the election of directors, in which case Section 2 of Article III hereof shall govern and control the approval of such subject matter. Section 9. Voting Rights. Except as otherwise provided by the General Corporation Law of the State of Delaware or by the certificate of incorporation of the corporation or any amendments thereto and subject to Section 3 of Article VI hereof, every stockholder shall at every meeting of the stockholders be entitled to one vote in person or by proxy for each share of common stock held by such stockholder. Section 10. Proxies. Each stockholder entitled to vote at a meeting of stockholders may authorize another person or persons to act for him or her by proxy, but no such proxy shall be voted or acted upon after three years from its date, unless the proxy provides for a longer period. A duly executed proxy shall be irrevocable if it states that it is irrevocable and if, and only as long as, it is coupled with an interest sufficient in law to support an irrevocable power. A proxy may be made irrevocable regardless of whether the interest with which it is coupled is an interest in the stock itself or an interest in the corporation generally. Any proxy is suspended when the person executing the proxy is present at a meeting of stockholders and elects to vote, except that when such proxy is coupled with an interest and the fact of the interest appears on the face of the proxy, the agent named in the proxy shall have all voting and other rights referred to in the proxy, notwithstanding the presence of the person executing the proxy. At each meeting of the stockholders, and before any voting commences, all proxies filed at or before the meeting shall be submitted to and examined by the secretary or a person designated by the secretary, and no shares may be represented or voted under a proxy that has been found to be invalid or irregular. Any copy, facsimile telecommunication or other reliable reproduction of the writing or transmission created pursuant to this section may be substituted or used in lieu of the original writing or transmission for any and all purposes for which the original writing or transmission could be used. Section 11. Business Brought Before A Meeting. At an annual meeting of the stockholders, only such business shall be conducted as shall have been properly brought before the meeting. To be properly brought before an annual meeting, business must be (a) specified in the notice of meeting (or any supplement thereto) given by or at the direction of the board of directors, (b) brought before -3-

the meeting by or at the direction of the board of directors, or (c) otherwise properly brought before the meeting by a stockholder. For business to be properly brought before an annual meeting by a stockholder, the stockholder must have given timely notice thereof in writing to the secretary of the corporation. To be timely, a stockholder's notice 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 meeting; provided, however, that in the event that less than seventy (70) days' notice or prior public disclosure of the date of the meeting is given or made to stockholders, notice by the stockholder to be timely must be so received not later than the close of business on the tenth (10) day following the date on which such notice of the date of the annual meeting was mailed or such public disclosure was made. A stockholder's notice to the secretary shall set forth as to each matter the stockholder proposes to bring before the annual meeting (a) a brief description of the business desired to be brought before the annual meeting, (b) the name and address, as they appear on the corporation's books, of the stockholder proposing such business, (c) the class and number of shares of the corporation which are beneficially owned by the stockholder, and (d) any material interest of the stockholder in such business. Notwithstanding anything in these by-laws to the contrary, no business shall be conducted at an annual meeting except in accordance with the procedures set forth in this Section 11 of Article II. The presiding officer of an annual meeting shall, if the facts warrant, determine that the business was not properly brought before the meeting and in accordance with the provisions of this Section 10 of Article II; and if he should so determine, he shall so

the meeting by or at the direction of the board of directors, or (c) otherwise properly brought before the meeting by a stockholder. For business to be properly brought before an annual meeting by a stockholder, the stockholder must have given timely notice thereof in writing to the secretary of the corporation. To be timely, a stockholder's notice 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 meeting; provided, however, that in the event that less than seventy (70) days' notice or prior public disclosure of the date of the meeting is given or made to stockholders, notice by the stockholder to be timely must be so received not later than the close of business on the tenth (10) day following the date on which such notice of the date of the annual meeting was mailed or such public disclosure was made. A stockholder's notice to the secretary shall set forth as to each matter the stockholder proposes to bring before the annual meeting (a) a brief description of the business desired to be brought before the annual meeting, (b) the name and address, as they appear on the corporation's books, of the stockholder proposing such business, (c) the class and number of shares of the corporation which are beneficially owned by the stockholder, and (d) any material interest of the stockholder in such business. Notwithstanding anything in these by-laws to the contrary, no business shall be conducted at an annual meeting except in accordance with the procedures set forth in this Section 11 of Article II. The presiding officer of an annual meeting shall, if the facts warrant, determine that the business was not properly brought before the meeting and in accordance with the provisions of this Section 10 of Article II; and if he should so determine, he shall so declare to the meeting and any such business not properly brought before the meeting shall not be transacted. Section 12. Presiding over Meetings. At every meeting of stockholders, the chairman of the board of directors, or, if a chairman has not been appointed or is absent, the president, shall act as chairman. If both the chairman of the board of directors and the president are absent, a chairman of the meeting designated by the chairman of the board or by the president, shall act as chairman. The secretary of the corporation or an assistant secretary shall act as secretary of the meeting. Section 13. Conduct of Meetings. The board of directors of the corporation shall be entitled to make such rules or regulations for the conduct of meetings of stockholders as it shall deem necessary, appropriate or convenient. Subject to such rules and regulations of the board of directors, if any, the chairman of the meeting 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 necessary, appropriate or convenient for the proper conduct of the meeting. Unless and to the extent determined by the board of directors or the chairman of the meeting, meetings of stockholders shall not be required to be held in accordance with rules of parliamentary procedure. -4-

ARTICLE III DIRECTORS Section 1. General Powers. The business and affairs of the corporation shall be managed by or under the direction of the board of directors. In addition to such powers as are herein and in the certificate of incorporation expressly conferred upon it, the board of directors shall have and may exercise all the powers of the corporation, subject to the provisions of the laws of Delaware, the certificate of incorporation and these by-laws. Section 2. Number, Election and Term of Office. The number of directors which shall constitute the board shall be seven (7), but the number of directors may be changed and established from time to time by resolution of the board. The directors shall be elected by a plurality of the votes of the shares present in person or represented by proxy at the meeting and entitled to vote in the election of directors; provided that, whenever the holders of any class or series of capital stock of the corporation are entitled to elect one or more directors pursuant to the provisions of the certificate of incorporation of the corporation (including, but not limited to, for purposes of these by-laws, pursuant to any duly authorized certificate of designation), such directors shall be elected by a plurality of the votes of such class or series present in person or represented by proxy at the meeting and entitled to vote in the election of such directors. The directors shall be elected in this manner at the annual meeting of the stockholders, except as provided in Section 4 of this Article III. Each director elected shall hold office until a successor is duly elected and qualified or until his or her earlier death, resignation or removal as hereinafter provided.

ARTICLE III DIRECTORS Section 1. General Powers. The business and affairs of the corporation shall be managed by or under the direction of the board of directors. In addition to such powers as are herein and in the certificate of incorporation expressly conferred upon it, the board of directors shall have and may exercise all the powers of the corporation, subject to the provisions of the laws of Delaware, the certificate of incorporation and these by-laws. Section 2. Number, Election and Term of Office. The number of directors which shall constitute the board shall be seven (7), but the number of directors may be changed and established from time to time by resolution of the board. The directors shall be elected by a plurality of the votes of the shares present in person or represented by proxy at the meeting and entitled to vote in the election of directors; provided that, whenever the holders of any class or series of capital stock of the corporation are entitled to elect one or more directors pursuant to the provisions of the certificate of incorporation of the corporation (including, but not limited to, for purposes of these by-laws, pursuant to any duly authorized certificate of designation), such directors shall be elected by a plurality of the votes of such class or series present in person or represented by proxy at the meeting and entitled to vote in the election of such directors. The directors shall be elected in this manner at the annual meeting of the stockholders, except as provided in Section 4 of this Article III. Each director elected shall hold office until a successor is duly elected and qualified or until his or her earlier death, resignation or removal as hereinafter provided. Section 3. Removal and Resignation. No director may be removed at any time without cause; provided, however, that if the holders of any class or series of capital stock are entitled by the provisions of the corporation's certificate of incorporation to elect one or more directors, such director or directors so elected may be removed without cause only by the vote of the holders of a majority of the outstanding shares of that class or series entitled to vote. Any director may resign at any time upon written notice to the corporation. Section 4. Vacancies. Vacancies and newly created directorships resulting from any increase in the total number of directors established by the board pursuant to Section 2 of this Article III may be filled only by (i) the stockholders at an annual or special meeting of the corporation, as provided in Section 2 of this Article III or (ii) the affirmative vote of the majority of the total number of directors then in office, though less than a quorum, or by a sole remaining director. Any director elected to fill a vacancy resulting from an increase in the number of directors shall hold office for a term that shall coincide with the remaining term of the class of directors to which he is elected. A director elected to fill a vacancy not resulting from an increase in the number of directors shall have the same remaining term as that of his predecessor. Each director so chosen shall hold office until a successor is duly elected and qualified or until his or her earlier death, resignation or removal as herein provided. Whenever holders of any class or classes of stock or series thereof are entitled by the provisions of the certificate of incorporation to elect one or more directors, vacancies and newly created directorships of such class or classes or series may only be filled by the affirmative -5-

vote of the majority of the total number of directors elected by such class or classes or series thereof then in office, or by a sole remaining director so elected. Section 5. Nominations. (a) Only persons who are nominated in accordance with the procedures set forth in these by-laws shall be eligible to serve as directors. Nominations of persons for election to the board of directors of the corporation may be made at a meeting of stockholders (i) by or at the direction of the board of directors or (ii) by any stockholder of the corporation who was a stockholder of record at the time of giving of notice provided for in this by-law, who is entitled to vote for the election of directors at the meeting and who shall have complied with the notice procedures set forth below in Section 5(b) of this Article III. (b) In order for a stockholder to nominate a person for election to the board of directors of the corporation at a meeting of stockholders, such stockholder shall have delivered timely notice of such stockholder's intent to make

vote of the majority of the total number of directors elected by such class or classes or series thereof then in office, or by a sole remaining director so elected. Section 5. Nominations. (a) Only persons who are nominated in accordance with the procedures set forth in these by-laws shall be eligible to serve as directors. Nominations of persons for election to the board of directors of the corporation may be made at a meeting of stockholders (i) by or at the direction of the board of directors or (ii) by any stockholder of the corporation who was a stockholder of record at the time of giving of notice provided for in this by-law, who is entitled to vote for the election of directors at the meeting and who shall have complied with the notice procedures set forth below in Section 5(b) of this Article III. (b) In order for a stockholder to nominate a person for election to the board of directors of the corporation at a meeting of stockholders, such stockholder shall have delivered timely notice of such stockholder's intent to make such nomination in writing to the secretary of the corporation. To be timely, a stockholder's notice shall be delivered to or mailed and received at the principal executive offices of the corporation (i) in the case of an annual meeting, not less than sixty (60) nor more than ninety (90) days prior to the first anniversary of the preceding year's annual meeting; provided, however, that in the event that the date of the annual meeting is changed by more than thirty (30) days from such anniversary date, notice by the stockholder to be timely must be so received not later than the close of business on the tenth (10) day following the earlier of the day on which notice of the date of the meeting was mailed or public disclosure of the meeting was made, and (ii) in the case of a special meeting at which directors are to be elected, not later than the close of business on the tenth (10) day following the earlier of the day on which notice of the date of the meeting was mailed or public disclosure of the meeting was made. Such stockholder's notice shall set forth (i) as to each person whom the stockholder proposes to nominate for election as a director at such meeting all information relating to such person that is required to be disclosed in solicitations of proxies for election of directors, or it otherwise required, in each case pursuant to Regulation 14A under the Securities Exchange Act of 1934, as amended (including such person's written consent to being named in the proxy statement as a nominee and to serving as a director if elected; (ii) as to the stockholder giving the notice (A) the name and address, as they appear on the corporation's books, of such stockholder and (B) the class and number of shares of the corporation which are beneficially owned by such stockholder and also which are owned of record by such stockholder; and (iii) as to the beneficial owner, if any, on whose behalf the nomination is made, (A) the name and address of such person and (B) the class and number of shares of the corporation which are beneficially owned by such person. At the request of the board of directors, any person nominated by the board of directors for election as a director shall furnish to the secretary of the corporation that information required to be set forth in a stockholder's notice of nomination which pertains to the nominee. -6-

(c) No person shall be eligible to serve as a director of the corporation unless nominated in accordance with the procedures set forth in this Section 5 of Article III. The chairman of the meeting shall, if the facts warrant, determine that a nomination was not made in accordance with the procedures prescribed by this Section 5 of Article III, and if he should so determine, he shall so declare to the meeting and the defective nomination shall be disregarded. A stockholder seeking to nominate a person to serve as a director must also comply with all applicable requirements of the Securities Exchange Act of 1934, as amended, and the rules and regulations thereunder with respect to the matters set forth in this Section 5 of Article III. Section 6. Annual Meetings. The board of directors shall meet as frequently as the board determines advisable but no less frequently than annually. Section 7. Other Meetings and Notice. Regular meetings of the board of directors may be held without notice at such time and at such place as shall from time to time be determined by resolution of the board. Special meetings of the board of directors may be called by the chairman of the board or, upon the written request of at least a majority of the directors then in office, the secretary of the corporation on at least 24 hours notice to each director, either orally or in writing, by telephone, including a voice messaging system or other system or technology designed to record and communicate messages, facsimile, telegraph or telex, or by electronic mail or

(c) No person shall be eligible to serve as a director of the corporation unless nominated in accordance with the procedures set forth in this Section 5 of Article III. The chairman of the meeting shall, if the facts warrant, determine that a nomination was not made in accordance with the procedures prescribed by this Section 5 of Article III, and if he should so determine, he shall so declare to the meeting and the defective nomination shall be disregarded. A stockholder seeking to nominate a person to serve as a director must also comply with all applicable requirements of the Securities Exchange Act of 1934, as amended, and the rules and regulations thereunder with respect to the matters set forth in this Section 5 of Article III. Section 6. Annual Meetings. The board of directors shall meet as frequently as the board determines advisable but no less frequently than annually. Section 7. Other Meetings and Notice. Regular meetings of the board of directors may be held without notice at such time and at such place as shall from time to time be determined by resolution of the board. Special meetings of the board of directors may be called by the chairman of the board or, upon the written request of at least a majority of the directors then in office, the secretary of the corporation on at least 24 hours notice to each director, either orally or in writing, by telephone, including a voice messaging system or other system or technology designed to record and communicate messages, facsimile, telegraph or telex, or by electronic mail or other electronic means. Section 8. Chairman of the Board, Quorum, Required Vote and Adjournment. The board of directors shall elect, by the affirmative vote of the majority of the total number of directors then in office, a chairman of the board, who shall preside at all meetings of the stockholders and board of directors at which he or she is present. If the chairman of the board is not present at a meeting of the stockholders or the board of directors, the president (if the president is a director and is not also the chairman of the board) shall preside at such meeting, and, if the president is not present at such meeting, a majority of the directors present at such meeting shall elect one of their members to so preside. A majority of the total number of directors then in office shall constitute a quorum for the transaction of business. Unless by express provision of an applicable law, the corporation's certificate of incorporation or these by-laws a different vote is required, the vote of a majority of directors present at a meeting at which a quorum is present 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, until a quorum shall be present. The fact that a director has an interest in a matter to be voted on by the board shall not prevent such director from being counted for purposes of a quorum. Section 9. Committees. The board of directors may, by resolution passed by a majority of the total number of directors then in office, designate one or more committees, each committee to consist of one or more of the directors of the corporation, which to the extent provided in such resolution or these by-laws shall have, and may exercise, the powers of the board of directors in the -7-

management and affairs of the corporation, except as otherwise limited by law. 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 the committee. Such committee or committees shall have such name or names as may be determined from time to time by resolution adopted by the board of directors. Each committee shall keep regular minutes of its meetings and report the same to the board of directors when required. Section 10. Committee Rules. Each committee of the board of directors may fix its own rules of procedure and shall hold its meetings as provided by such rules, except as may otherwise be provided by a resolution of the board of directors designating such committee. Unless otherwise provided in such a resolution, the presence of at least a majority of the members of the committee shall be necessary to constitute a quorum. Unless otherwise provided in such a resolution, in the event that a member and that member's alternate, if alternates are designated by the board of directors as provided in Section 9 of this Article III, of such committee is or are absent or disqualified, 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 place of any such absent or disqualified member.

management and affairs of the corporation, except as otherwise limited by law. 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 the committee. Such committee or committees shall have such name or names as may be determined from time to time by resolution adopted by the board of directors. Each committee shall keep regular minutes of its meetings and report the same to the board of directors when required. Section 10. Committee Rules. Each committee of the board of directors may fix its own rules of procedure and shall hold its meetings as provided by such rules, except as may otherwise be provided by a resolution of the board of directors designating such committee. Unless otherwise provided in such a resolution, the presence of at least a majority of the members of the committee shall be necessary to constitute a quorum. Unless otherwise provided in such a resolution, in the event that a member and that member's alternate, if alternates are designated by the board of directors as provided in Section 9 of this Article III, of such committee is or are absent or disqualified, 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 place of any such absent or disqualified member. Section 11. Communications Equipment. Members of the board of directors or any committee thereof may participate in and act at any meeting of such board or committee through the use of a conference telephone or other communications equipment by means of which all persons participating in the meeting can hear each other, and participation in the meeting pursuant to this Section 11 shall constitute presence in person at the meeting. Section 12. Waiver of Notice and Presumption of Assent. Any member of the board of directors or any committee thereof who is present at a meeting shall be conclusively presumed to have waived notice of such meeting except when such member attends 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. Such member shall be conclusively presumed to have assented to any action taken unless his or her dissent shall be entered in the minutes of the meeting or unless his or her written dissent to such action shall be filed with the person acting as the secretary of the meeting before the adjournment thereof or shall be forward by registered mail to the secretary of the corporation immediately after the adjournment of the meeting. Such right to dissent shall not apply to any member who voted in favor of such action. Section 13. Action by Written Consent. Unless otherwise restricted by the certificate of incorporation, 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 members of the board 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 or committee. -8-

ARTICLE IV OFFICERS Section 1. Number. The officers of the corporation shall be elected by the board of directors and shall consist of a chairman of the board, president, one or more vice-presidents, a chief operating officer, a chief financial officer, an executive vice president, a secretary, a treasurer, and such other officers and assistant officers as may be deemed necessary or desirable by the board of directors. Any number of offices may be held by the same person. In its discretion, the board of directors may choose not to fill any office for any period as it may deem advisable, except that the offices of president and secretary shall be filled as expeditiously as possible. Section 2. Election and Term of Office. The officers of the corporation shall be elected by the board of directors in such manner and for such terms as determined by the board of directors Vacancies may be filled or new offices created and filled at any meeting of the board of directors. Each officer shall hold office until a successor is duly elected and qualified or until his or her earlier death, resignation or removal as hereinafter provided. Section 3. Removal. Any officer or agent elected or appointed by the board of directors may be removed by the board of directors or any committee or superior officer upon whom such power of removal has been conferred by the board of directors, at their discretion, but such removal shall be without prejudice to the contract rights, if

ARTICLE IV OFFICERS Section 1. Number. The officers of the corporation shall be elected by the board of directors and shall consist of a chairman of the board, president, one or more vice-presidents, a chief operating officer, a chief financial officer, an executive vice president, a secretary, a treasurer, and such other officers and assistant officers as may be deemed necessary or desirable by the board of directors. Any number of offices may be held by the same person. In its discretion, the board of directors may choose not to fill any office for any period as it may deem advisable, except that the offices of president and secretary shall be filled as expeditiously as possible. Section 2. Election and Term of Office. The officers of the corporation shall be elected by the board of directors in such manner and for such terms as determined by the board of directors Vacancies may be filled or new offices created and filled at any meeting of the board of directors. Each officer shall hold office until a successor is duly elected and qualified or until his or her earlier death, resignation or removal as hereinafter provided. Section 3. Removal. Any officer or agent elected or appointed by the board of directors may be removed by the board of directors or any committee or superior officer upon whom such power of removal has been conferred by the board of directors, at their discretion, but such removal shall be without prejudice to the contract rights, if any, of the person so removed. Section 4. Vacancies. Any vacancy occurring in any office because of death, resignation, removal, disqualification or otherwise, may be filled by the board of directors. Section 5. Compensation. The compensation of the chief executive officer and the president of the corporation shall be fixed by the board of directors. The compensation of all other officers and employees of the corporation shall be determined by the chief executive officer and/or the president or any other officer or committee of officers specifically designated by the chief executive officer and/or the president to establish such compensation.No officer shall be prevented from receiving such compensation by virtue of his or her also being a director of the corporation. Section 6. Chairman of the Board. The chairman of the board shall be the executive officer of the corporation, and shall have the powers and perform the duties incident to that position. Subject to the powers of the board of directors, he or she shall be in the general and active charge of the entire business and affairs of the corporation, and shall be its chief policy making officer. He or she shall preside at all meetings of the board of directors and stockholders and shall have such other powers and perform such other duties as may be prescribed by the board of directors or provided in these by-laws. The chairman of the board is authorized to execute bonds, mortgages and other contracts, except where required or permitted by law to be otherwise signed and executed and -9-

except where the signing and execution thereof shall be expressly delegated by the board of directors to some other officer or agent of the corporation. Whenever the president is unable to serve, by reason of sickness, absence or otherwise, the chairman of the board shall perform all the duties and responsibilities and exercise all the powers of the president. Section 7. The President. The president of the corporation, subject to the powers of the board of directors, and the chairman of the board, shall have general charge of the business, affairs and property of the corporation, and control over its officers, agents and employees; and shall see that all orders and resolutions of the board of directors and the chief executive officer are carried into effect. The president shall, in the absence or disability of the chairman of the board and chief executive officer, act with all of the powers and be subject to all the restrictions of the chairman of the board and chief executive officer. The president is authorized to execute bonds, mortgages and other contracts, except where required or permitted by law to be otherwise signed and executed and except where the signing and execution thereof shall be expressly delegated by the board of directors to some other officer or agent of the corporation. The president shall have such other powers and perform such other duties as may be prescribed by the chairman of the board or the board of directors or as may be provided in these by-laws.

except where the signing and execution thereof shall be expressly delegated by the board of directors to some other officer or agent of the corporation. Whenever the president is unable to serve, by reason of sickness, absence or otherwise, the chairman of the board shall perform all the duties and responsibilities and exercise all the powers of the president. Section 7. The President. The president of the corporation, subject to the powers of the board of directors, and the chairman of the board, shall have general charge of the business, affairs and property of the corporation, and control over its officers, agents and employees; and shall see that all orders and resolutions of the board of directors and the chief executive officer are carried into effect. The president shall, in the absence or disability of the chairman of the board and chief executive officer, act with all of the powers and be subject to all the restrictions of the chairman of the board and chief executive officer. The president is authorized to execute bonds, mortgages and other contracts, except where required or permitted by law to be otherwise signed and executed and except where the signing and execution thereof shall be expressly delegated by the board of directors to some other officer or agent of the corporation. The president shall have such other powers and perform such other duties as may be prescribed by the chairman of the board or the board of directors or as may be provided in these by-laws. Section 8. Chief Operating Officer. The chief operating officer of the corporation, subject to the powers of the board of directors, shall have general and active management of the business of the corporation; and shall see that all orders and resolutions of the board of directors are carried into effect. The chief operating officer shall have such other powers and perform such other duties as may be prescribed by the chairman of the board and chief executive officer or the board of directors or as may be provided in these by-laws. Section 9. Chief Financial Officer. The chief financial officer of the corporation shall, under the direction of the chairman of the board and chief executive officer, be responsible for all financial and accounting matters and for the direction of the offices of treasurer and controller. The chief financial officer shall have such other powers and perform such other duties as may be prescribed by the chairman of the board, the chief executive officer or the board of directors or as may be provided in these by-laws. Section 10. Vice-presidents. The vice-president, or if there shall be more than one, the vice-presidents in the order determined by the board of directors or the chairman of the board, shall, in the absence or disability of the president, act with all of the powers and be subject to all the restrictions of the president. The vice-presidents shall also perform such other duties and have such other powers as the board of directors, the chairman of the board, the president or these by-laws may, from time to time, prescribe. The vice-presidents may also be designated as executive vice-presidents or senior vice-presidents, as the board of directors may from time to time prescribe. -10-

Section 11. The Secretary and Assistant Secretaries. The secretary shall attend all meetings of the board of directors, all meetings of the committees thereof and all meetings of the stockholders and record all the proceedings of the meetings in a book or books to be kept for that purpose or shall ensure that his or her designee attends each such meeting to act in such capacity. Under the chairman of the board's supervision, the secretary shall give, or cause to be given, all notices required to be given by these by-laws or by law and shall have such powers and perform such duties as the board of directors, the chairman of the board, the president or these by-laws may, from time to time, prescribe. The assistant secretary, or if there be more than one, the assistant secretaries in the order determined by the board of directors, shall, in the absence or disability of the secretary, perform the duties and exercise the powers of the secretary and shall perform such other duties and have such other powers as the board of directors, the chairman of the board, the president, or secretary may, from time to time, prescribe. Section 12. The Treasurer and Assistant Treasurer. The treasurer shall have the custody of the corporate funds and securities; shall keep full and accurate accounts of receipts and disbursements in books belonging to the corporation; shall deposit all monies and other valuable effects in the name and to the credit of the corporation as may be ordered by the chairman of the board, the chief financial officer or the board of directors; shall cause the funds of the corporation to be disbursed when such disbursements have been duly authorized, taking proper vouchers for such disbursements; and shall render to the chairman of the board, the chief financial officer and the

Section 11. The Secretary and Assistant Secretaries. The secretary shall attend all meetings of the board of directors, all meetings of the committees thereof and all meetings of the stockholders and record all the proceedings of the meetings in a book or books to be kept for that purpose or shall ensure that his or her designee attends each such meeting to act in such capacity. Under the chairman of the board's supervision, the secretary shall give, or cause to be given, all notices required to be given by these by-laws or by law and shall have such powers and perform such duties as the board of directors, the chairman of the board, the president or these by-laws may, from time to time, prescribe. The assistant secretary, or if there be more than one, the assistant secretaries in the order determined by the board of directors, shall, in the absence or disability of the secretary, perform the duties and exercise the powers of the secretary and shall perform such other duties and have such other powers as the board of directors, the chairman of the board, the president, or secretary may, from time to time, prescribe. Section 12. The Treasurer and Assistant Treasurer. The treasurer shall have the custody of the corporate funds and securities; shall keep full and accurate accounts of receipts and disbursements in books belonging to the corporation; shall deposit all monies and other valuable effects in the name and to the credit of the corporation as may be ordered by the chairman of the board, the chief financial officer or the board of directors; shall cause the funds of the corporation to be disbursed when such disbursements have been duly authorized, taking proper vouchers for such disbursements; and shall render to the chairman of the board, the chief financial officer and the board of directors, at its regular meeting or when the board of directors so requires, an account of the corporation; shall have such powers and perform such duties as the board of directors, the chairman of the board, the chief financial officer or these by-laws may, from time to time, prescribe. If required by the board of directors, the treasurer shall give the corporation a bond (which shall be rendered every six years) in such sums 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 treasurer and for the restoration to the corporation, in case of death, resignation, retirement, or removal from office, of all books, papers, vouchers, money, and other property of whatever kind in the possession or under the control of the treasurer belonging to the corporation. The assistant treasurer, or if there shall be more than one, the assistant treasurers in the order determined by the board of directors shall, in the absence or disability of the treasurer, perform the duties and exercise the powers of the treasurer. The assistant treasurers shall perform such other duties and have such other powers as the board of directors, the chairman of the board, the chief financial officer, treasurer or these by-laws may, from time to time, prescribe. Section 13. Other Officers, Assistant Officers and Agents. Officers, assistant officers and agents, if any, other than those whose duties are provided for in these by-laws, shall have such authority and perform such duties as may from time to time be prescribed by resolution of the board of directors. -11-

Section 14. Absence or Disability of Officers. In the case of the absence or disability of any officer of the corporation and of any person hereby authorized to act in such officer's place during such officer's absence or disability, the board of directors may by resolution delegate the powers and duties of such officer to any other officer or to any director, or to any other person selected by it. ARTICLE V. INDEMNIFICATION OF OFFICERS, DIRECTORS AND OTHERS Each person who was or is made a party or is threatened to be made a party to or is otherwise involved (including involvement as a witness) in any action, suit or proceeding, whether civil, criminal, administrative or investigative (hereinafter a "proceeding"), by reason of the fact that he or she is or was a director or officer of the corporation or, while a director or officer of the corporation, is or was serving at the request of the corporation as a director, officer, employee, fiduciary, or agent of another corporation or of a partnership, joint venture, trust or other enterprise (each, an "indemnitee"), including service with respect to an employee benefit plan, whether the basis of such proceeding is alleged action in an official capacity as a director or officer or in any other capacity while serving as a director or officer, shall be indemnified and held harmless by the corporation to the fullest extent authorized by the Delaware General Corporation Law, as the same exists or may hereafter be amended, against all expense, liability and loss (including attorneys' fees, judgments, fines, ERISA excise taxes or penalties and amounts paid in settlement) reasonably incurred or suffered by such indemnitee in connection

Section 14. Absence or Disability of Officers. In the case of the absence or disability of any officer of the corporation and of any person hereby authorized to act in such officer's place during such officer's absence or disability, the board of directors may by resolution delegate the powers and duties of such officer to any other officer or to any director, or to any other person selected by it. ARTICLE V. INDEMNIFICATION OF OFFICERS, DIRECTORS AND OTHERS Each person who was or is made a party or is threatened to be made a party to or is otherwise involved (including involvement as a witness) in any action, suit or proceeding, whether civil, criminal, administrative or investigative (hereinafter a "proceeding"), by reason of the fact that he or she is or was a director or officer of the corporation or, while a director or officer of the corporation, is or was serving at the request of the corporation as a director, officer, employee, fiduciary, or agent of another corporation or of a partnership, joint venture, trust or other enterprise (each, an "indemnitee"), including service with respect to an employee benefit plan, whether the basis of such proceeding is alleged action in an official capacity as a director or officer or in any other capacity while serving as a director or officer, shall be indemnified and held harmless by the corporation to the fullest extent authorized by the Delaware General Corporation Law, as the same exists or may hereafter be amended, against all expense, liability and loss (including attorneys' fees, judgments, fines, ERISA excise taxes or penalties and amounts paid in settlement) reasonably incurred or suffered by such indemnitee in connection therewith and such indemnification shall continue as to an indemnitee who has ceased to be a director, officer, employee or agent and shall inure to the benefit of the indemnitee's heirs, executors and administrators, on the terms and subject to the conditions set forth in the certificate of incorporation. ARTICLE VI CERTIFICATES OF STOCK Section 1. Form. Every holder of stock in the corporation shall be entitled to have a certificate, signed by, or in the name of the corporation by the chairman of the board, the president or a vice-president and the secretary or an assistant secretary of the corporation, certifying the number of shares owned by such holder in the corporation. If such a certificate is countersigned (1) by a transfer agent or an assistant transfer agent other than the corporation or its employee or (2) by a registrar, other than the corporation or its employee, the signature of any such chairman of the board, president, vice-president, secretary, or assistant secretary may be facsimiles. In case any officer or officers who have signed, or whose facsimile signature or signatures have been used on, any such certificate or certificates shall cease to be such officer or officers of the corporation whether because of death, resignation or otherwise before such certificate or certificates have been delivered -12-

by the corporation, such certificate or certificates may nevertheless be issued and delivered as though the person or persons who signed such certificate or certificates or whose facsimile signature or signatures have been used thereon had not ceased to be such officer or officers of the corporation. All certificates for shares shall be consecutively numbered or otherwise identified. The name of the person to whom the shares represented thereby are issued, with the number of shares and date of issue, shall be entered on the books of the corporation. Shares of stock of the corporation shall only be transferred on the books of the corporation by the holder of record thereof or by such holder's attorney duly authorized in writing, upon surrender to the corporation of the certificate or certificates for such shares endorsed by the appropriate person or persons, with such evidence of the authenticity of such endorsement, transfer, authorization, and other matters as the corporation may reasonably require, and accompanied by all necessary stock transfer stamps. In that event, it shall be the duty of the corporation to issue a new certificate to the person entitled thereto, cancel the old certificate or certificates, and record the transaction on its books. The board of directors may appoint a bank or trust company organized under the laws of the United States or any state thereof to act as its transfer agent or registrar, or both in connection with the transfer of any class or series of securities of the corporation. Section 2. Lost Certificates. The board of directors may direct a new certificate or certificates to be issued in

by the corporation, such certificate or certificates may nevertheless be issued and delivered as though the person or persons who signed such certificate or certificates or whose facsimile signature or signatures have been used thereon had not ceased to be such officer or officers of the corporation. All certificates for shares shall be consecutively numbered or otherwise identified. The name of the person to whom the shares represented thereby are issued, with the number of shares and date of issue, shall be entered on the books of the corporation. Shares of stock of the corporation shall only be transferred on the books of the corporation by the holder of record thereof or by such holder's attorney duly authorized in writing, upon surrender to the corporation of the certificate or certificates for such shares endorsed by the appropriate person or persons, with such evidence of the authenticity of such endorsement, transfer, authorization, and other matters as the corporation may reasonably require, and accompanied by all necessary stock transfer stamps. In that event, it shall be the duty of the corporation to issue a new certificate to the person entitled thereto, cancel the old certificate or certificates, and record the transaction on its books. The board of directors may appoint a bank or trust company organized under the laws of the United States or any state thereof to act as its transfer agent or registrar, or both in connection with the transfer of any class or series of securities of the corporation. Section 2. Lost Certificates. The board of directors may direct a new certificate or certificates to be issued in place of any certificate previously 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 or certificates, the corporation may, in its discretion and as a condition precedent to the issuance thereof, require the owner of such lost, stolen, or destroyed certificate or certificates, or his or her legal representative, to give the corporation a bond sufficient to indemnify the corporation against any claim that may be made against the corporation on account of the loss, theft or destruction of any such certificate or the issuance of such new certificate. Section 3. Fixing a Record Date for Stockholder Meetings. In order that the corporation may determine the stockholders entitled to notice of or to vote 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 (60) nor less than ten (10) 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 the close of business on the next day preceding the day on which notice is first given. 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; provided, however, that the board of directors may fix a new record date for the adjourned meeting. Section 4. Fixing a Record Date for Other Purposes. In order that the corporation may determine the stockholders entitled to receive payment of any dividend or other distribution or -13-

allotment or any rights or the stockholders entitled to exercise any rights in respect of any change, conversion or exchange of stock, or for the purposes 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 not be more than sixty (60) days prior to such action. If no record date has been 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 5. Registered Stockholders. Prior to the surrender to the corporation of the certificate or certificates for a share or shares of stock with a request to record the transfer of such share or shares, the corporation may treat the registered owner as the person entitled to receive dividends, to vote, to receive notifications, and otherwise to exercise all the rights and powers of an owner. The corporation 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. Section 6. Subscriptions for Stock. Unless otherwise provided for in the subscription agreement, subscriptions for shares shall be paid in full at such time, or in such installments and at such time, as shall be determined by the board of directors. Any call made by the board of directors for payment on subscriptions shall be uniform as to

allotment or any rights or the stockholders entitled to exercise any rights in respect of any change, conversion or exchange of stock, or for the purposes 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 not be more than sixty (60) days prior to such action. If no record date has been 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 5. Registered Stockholders. Prior to the surrender to the corporation of the certificate or certificates for a share or shares of stock with a request to record the transfer of such share or shares, the corporation may treat the registered owner as the person entitled to receive dividends, to vote, to receive notifications, and otherwise to exercise all the rights and powers of an owner. The corporation 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. Section 6. Subscriptions for Stock. Unless otherwise provided for in the subscription agreement, subscriptions for shares shall be paid in full at such time, or in such installments and at such time, as shall be determined by the board of directors. Any call made by the board of directors for payment on subscriptions shall be uniform as to all shares of the same class or as to all shares of the same series. In case of default in the payment of any installment or call when such payment is due, the corporation may proceed to collect the amount due in the same manner as any debt due the corporation. ARTICLE VII GENERAL PROVISIONS Section 1. Dividends. Dividends upon the capital stock of the corporation, subject to the provisions of the certificate of incorporation, if any, may be declared by the board of directors at any regular or special meeting, in accordance with applicable law. Dividends may be paid in cash, in property, or in shares of the capital stock, subject to the provisions of the certificate of incorporation. 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 directors from time to time, in their absolute discretion, think proper as a reserve or reserves to meet contingencies, or for equalizing dividends, or for repairing or maintaining any property of the corporation, or any other purpose and the directors may modify or abolish any such reserve in the manner in which it was created. Section 2. Checks, Drafts or Orders. All checks, drafts, or other orders for the payment of money by or to the corporation and all notes and other evidences of indebtedness issued in the name -14-

of the corporation shall be signed by such officer or officers, agent or agents of the corporation, and in such manner, as shall be determined by resolution of the board of directors or a duly authorized committee thereof. Section 3. Contracts. In addition to the powers otherwise granted to officers pursuant to Article IV hereof, the board of directors may authorize any officer or officers, or any agent or agents, of the corporation to enter into any contract or to execute and deliver any instrument in the name of and on behalf of the corporation, and such authority may be general or confined to specific instances. Section 4. Loans. The corporation may lend money to, or guarantee any obligation of, or otherwise assist any officer or other employee of the corporation or of its subsidiaries, including any officer or employee who is a director of the corporation or its subsidiaries, whenever, in the judgment of the directors, such loan, guaranty or assistance may reasonably be expected to benefit the corporation. The loan, guaranty or other assistance may be with or without interest, and may be unsecured, or secured in such manner as the board of directors shall approve, including, without limitation, a pledge of shares of stock of the corporation. Nothing in this section contained shall be deemed to deny, limit or restrict the powers of guaranty or warranty of the corporation at common law or under any statute. Section 5. Fiscal Year. The fiscal year of the corporation shall be fixed by resolution of the board of directors.

of the corporation shall be signed by such officer or officers, agent or agents of the corporation, and in such manner, as shall be determined by resolution of the board of directors or a duly authorized committee thereof. Section 3. Contracts. In addition to the powers otherwise granted to officers pursuant to Article IV hereof, the board of directors may authorize any officer or officers, or any agent or agents, of the corporation to enter into any contract or to execute and deliver any instrument in the name of and on behalf of the corporation, and such authority may be general or confined to specific instances. Section 4. Loans. The corporation may lend money to, or guarantee any obligation of, or otherwise assist any officer or other employee of the corporation or of its subsidiaries, including any officer or employee who is a director of the corporation or its subsidiaries, whenever, in the judgment of the directors, such loan, guaranty or assistance may reasonably be expected to benefit the corporation. The loan, guaranty or other assistance may be with or without interest, and may be unsecured, or secured in such manner as the board of directors shall approve, including, without limitation, a pledge of shares of stock of the corporation. Nothing in this section contained shall be deemed to deny, limit or restrict the powers of guaranty or warranty of the corporation at common law or under any statute. Section 5. Fiscal Year. The fiscal year of the corporation shall be fixed by resolution of the board of directors. Section 6. Corporate Seal. The corporation shall have no seal. Section 7. Voting Securities Owned by Corporation. Voting securities in any other corporation held by the corporation shall be voted by the chairman of the board, the president or a vice-president, unless the board of directors specifically confers authority to vote with respect thereto, which authority may be general or confined to specific instances, upon some other person or officer. Any person authorized to vote securities shall have the power to appoint proxies, with general power of substitution. Section 8. Inspection of Books and Records. Any stockholder of record, in person or by attorney or other agent, shall, upon written demand under oath stating the purpose thereof, have the right during the usual hours for business to inspect for any proper purpose the corporation's stock ledger, a list of it stockholders, and its other books and records, and to make copies or extracts therefrom. A proper purpose shall mean any purpose reasonably related to such person's interest as a stockholder. In every instance where an attorney or other agent shall be the person who seeks the right to inspection, the demand under oath shall be accompanied by a power of attorney or such other writing which authorizes the attorney or other agent to so act on behalf of the stockholder. The demand under oath shall be directed to the corporation at its registered office in the State of -15-

Delaware or at its principal place of business. The corporation shall have a reasonable amount of time to respond to any such request. Section 9. Section Headings. Section headings in these by-laws are for convenience of reference only and shall not be given any substantive effect in limiting or otherwise construing any provision herein. Section 10. Inconsistent Provisions. In the event that any provision of these by-laws is or becomes inconsistent with any provision of the certificate of incorporation, the General Corporation Law of the State of Delaware or any other applicable law, the provision of these by-laws shall not be given any effect to the extent of such inconsistency but shall otherwise be given full force and effect. ARTICLE VIII AMENDMENTS These by-laws may be amended, altered, or repealed and new by-laws adopted at any meeting of the board of directors by the affirmative vote of the majority of the total number of directors then in office. The fact that the power to adopt, amend, alter, or repeal the by-laws has been conferred upon the board of directors shall not divest the stockholders of such powers as set forth in the certificate of incorporation.

Delaware or at its principal place of business. The corporation shall have a reasonable amount of time to respond to any such request. Section 9. Section Headings. Section headings in these by-laws are for convenience of reference only and shall not be given any substantive effect in limiting or otherwise construing any provision herein. Section 10. Inconsistent Provisions. In the event that any provision of these by-laws is or becomes inconsistent with any provision of the certificate of incorporation, the General Corporation Law of the State of Delaware or any other applicable law, the provision of these by-laws shall not be given any effect to the extent of such inconsistency but shall otherwise be given full force and effect. ARTICLE VIII AMENDMENTS These by-laws may be amended, altered, or repealed and new by-laws adopted at any meeting of the board of directors by the affirmative vote of the majority of the total number of directors then in office. The fact that the power to adopt, amend, alter, or repeal the by-laws has been conferred upon the board of directors shall not divest the stockholders of such powers as set forth in the certificate of incorporation. Restated: August 11, 2000 -16-

EXHIBIT 10.2 SECOND AMENDED AND RESTATED 1995 INCENTIVE AND NONQUALIFIED STOCK OPTION PLAN FOR MANAGEMENT EMPLOYEES OF BUCKEYE TECHNOLOGIES INC. BUCKEYE TECHNOLOGIES INC., a Delaware corporation (the "Company"), hereby amends and restates this Incentive and Nonqualified Stock Option Plan for management employees of Buckeye Technologies Inc. and Subsidiaries. The purposes of this Plan are as follows: (1) To further the growth, development and financial success of the Company by providing additional incentives to certain key management employees of the Company and its Subsidiaries who have been or will be given responsibility for the management or administration of the Company's business affairs, by assisting them to become owners of capital stock of the Company and thus to benefit directly from its growth, development and financial success. (2) To enable the Company to obtain and retain the services of the type of managerial employees considered essential to the long range success of the Company by providing and offering them an opportunity to become owners of capital stock of the Company under Options. ARTICLE I. DEFINITIONS 1.1 General. Whenever the following terms are used in this Plan they shall have the meaning specified below unless the context clearly indicates to the contrary. 1.2 Board. "Board" shall mean the Board of Directors of the Company. 1.3 Code. "Code" shall mean the Internal Revenue Code of 1986, as amended. 1.4 Committee. "Committee" shall mean the Compensation Committee of the Board, appointed as provided in Section 6.1.

EXHIBIT 10.2 SECOND AMENDED AND RESTATED 1995 INCENTIVE AND NONQUALIFIED STOCK OPTION PLAN FOR MANAGEMENT EMPLOYEES OF BUCKEYE TECHNOLOGIES INC. BUCKEYE TECHNOLOGIES INC., a Delaware corporation (the "Company"), hereby amends and restates this Incentive and Nonqualified Stock Option Plan for management employees of Buckeye Technologies Inc. and Subsidiaries. The purposes of this Plan are as follows: (1) To further the growth, development and financial success of the Company by providing additional incentives to certain key management employees of the Company and its Subsidiaries who have been or will be given responsibility for the management or administration of the Company's business affairs, by assisting them to become owners of capital stock of the Company and thus to benefit directly from its growth, development and financial success. (2) To enable the Company to obtain and retain the services of the type of managerial employees considered essential to the long range success of the Company by providing and offering them an opportunity to become owners of capital stock of the Company under Options. ARTICLE I. DEFINITIONS 1.1 General. Whenever the following terms are used in this Plan they shall have the meaning specified below unless the context clearly indicates to the contrary. 1.2 Board. "Board" shall mean the Board of Directors of the Company. 1.3 Code. "Code" shall mean the Internal Revenue Code of 1986, as amended. 1.4 Committee. "Committee" shall mean the Compensation Committee of the Board, appointed as provided in Section 6.1. 1.5 Common Stock. "Common Stock" shall mean the common stock, par value $.01 per share, of the Company. 1.6 Company. "Company" shall mean Buckeye Technologies Inc. and those corporations, if any, which are from time to time, its Subsidiaries. 1.7 Director. "Director" shall mean a member of the Board. 1.8 Employee. "Employee" shall mean any employee (as defined in accordance with the regulations and revenue rulings then applicable under Section 3401(c) of the Code) of the 1

Company or any of its Subsidiaries whether such employee is so employed at the time this Plan is adopted or becomes so employed subsequent to the adoption of this Plan. 1.9 Exercise Price. "Exercise Price" shall have the meaning given in Section 4.2. 1.10 Fair Market Value. "Fair market value" of any shares of Common Stock of the Company for purposes of the Plan shall be (a) the last price at which shares of the Company were traded on the New York Stock Exchange on the specified date or, if there were no trades on that day, then on the last day prior to such date during which there were trades, or (b) solely in the case of any Options granted on the date of the initial public

Company or any of its Subsidiaries whether such employee is so employed at the time this Plan is adopted or becomes so employed subsequent to the adoption of this Plan. 1.9 Exercise Price. "Exercise Price" shall have the meaning given in Section 4.2. 1.10 Fair Market Value. "Fair market value" of any shares of Common Stock of the Company for purposes of the Plan shall be (a) the last price at which shares of the Company were traded on the New York Stock Exchange on the specified date or, if there were no trades on that day, then on the last day prior to such date during which there were trades, or (b) solely in the case of any Options granted on the date of the initial public offering of the Common Stock of the Company, the price at which the Common Stock is sold to the public. 1.11 Incentive Stock Option. "Incentive Stock Option" shall mean any portion of an Option which (i) is not specifically designated by the Committee at the time of the grant as a Nonqualified Stock Option, (ii) can be expected at the time of grant to satisfy the requirements for treatment as an incentive stock option under Section 422 of the Code, (iii) continues at all times thereafter to satisfy the requirements for treatment as an incentive stock option under Section 422 of the Code, and (iv) is exercised by either a citizen or resident alien of the United States (as defined in the Code and the regulations thereunder). 1.12 Nonqualified Stock Option. "Nonqualified Stock Option" shall mean any portion of the Option which is not an Incentive Stock Option. 1.13 Option. "Option" shall mean an option granted under the Plan to purchase Common Stock. 1.14 Optionee. "Optionee" shall mean an Employee to whom an Option is granted under the Plan. 1.15 Plan. "Plan" shall mean the 1995 Incentive and Nonqualified Stock Option Plan for Management Employees of the Company and Subsidiaries, as amended or restated from time to time. 1.16 Pronouns. The masculine pronoun shall include the feminine and neuter and the singular shall include the plural, where the context so indicates. 1.17 Stock Option Agreement. "Stock Option Agreement" shall mean a Stock Option Subscription Agreement between the Optionee and the Company. 1.18 Subsidiary. "Subsidiary" shall mean any corporation (other than the Company) in an unbroken chain of corporations beginning with the Company if each of the corporations, or if each group of commonly controlled corporations, other than the last corporation in an unbroken 2

chain then owns stock possessing fifty percent (50%) or more of the total combined voted power of all classes of stock in one of the other corporations in such chain. ARTICLE II. SHARES SUBJECT TO PLAN 2.1 Shares Subject to Plan. The shares of stock subject to Options shall be shares of Common Stock of the Company. The aggregate number of shares of Common Stock which may be issued upon exercise of Options under the Plan shall not exceed four million nine hundred thousand (4,900,000) shares, subject to adjustment as provided in Section 4.6 hereof. 2.2 Unexercised Options. If any Option expires or is canceled without having been fully exercised, the number of shares subject to such Option but as to which such Option was not exercised prior to its expiration or cancellation may again be optioned hereunder, subject to the limitations of Section 2.1. ARTICLE III.

chain then owns stock possessing fifty percent (50%) or more of the total combined voted power of all classes of stock in one of the other corporations in such chain. ARTICLE II. SHARES SUBJECT TO PLAN 2.1 Shares Subject to Plan. The shares of stock subject to Options shall be shares of Common Stock of the Company. The aggregate number of shares of Common Stock which may be issued upon exercise of Options under the Plan shall not exceed four million nine hundred thousand (4,900,000) shares, subject to adjustment as provided in Section 4.6 hereof. 2.2 Unexercised Options. If any Option expires or is canceled without having been fully exercised, the number of shares subject to such Option but as to which such Option was not exercised prior to its expiration or cancellation may again be optioned hereunder, subject to the limitations of Section 2.1. ARTICLE III. GRANTING OF OPTIONS 3.1 Eligibility. Any management Employee of the Company shall be eligible to be granted Options. The determination by the Committee of the status of an employee as a member of management shall be conclusive. 3.2 Granting of Options. The Committee shall from time to time, in its absolute discretion: (i) determine which Employees are key management Employees and select from such Employees (including those to whom Options have been previously granted under the Plan) such of them as in its opinion shall be granted Options; and (ii) determine the number of shares to be subject to such Options granted to such selected management Employees; and (iii) determine the terms and conditions of such Options, consistent with the Plan; and (iv) establish such conditions as to the manner of exercise of such Options as it may deem necessary, including but not limited to requiring Optionees to enter into agreements regarding transferability and other restrictions with respect to shares issuable upon exercise of such Options. 3

3.3 Expiration of Time to Make Grants. No Option may be granted under this Plan after the expiration of ten (10) years from the date the Plan is adopted by the Board or the date the stockholders of the Company approve this Plan, if earlier. ARTICLE IV. TERMS OF OPTIONS 4.1 Option Agreement. Each Option shall be evidenced by a written Stock Option Agreement, which shall be executed by the Optionee and an authorized officer of the Company, and which shall contain such terms and conditions as the Committee shall determine, consistent with the Plan. 4.2 Exercise Price. The purchase price under each Option shall be determined by the Committee at the time the Option is granted, but in no event shall such purchase price be less than one hundred percent (100%) of the Fair Market Value of the shares of Common Stock of the Company on the date of grant. 4.3 Commencement of Exercisability. Subject to the provisions of Section 7.2, Options shall become exercisable at such times and in such installments (which may be cumulative) as the Committee shall provide in the terms of each individual Stock Option Agreement; provided, however, that by a resolution adopted after an Option is granted the Committee may, on such terms and conditions as it may

3.3 Expiration of Time to Make Grants. No Option may be granted under this Plan after the expiration of ten (10) years from the date the Plan is adopted by the Board or the date the stockholders of the Company approve this Plan, if earlier. ARTICLE IV. TERMS OF OPTIONS 4.1 Option Agreement. Each Option shall be evidenced by a written Stock Option Agreement, which shall be executed by the Optionee and an authorized officer of the Company, and which shall contain such terms and conditions as the Committee shall determine, consistent with the Plan. 4.2 Exercise Price. The purchase price under each Option shall be determined by the Committee at the time the Option is granted, but in no event shall such purchase price be less than one hundred percent (100%) of the Fair Market Value of the shares of Common Stock of the Company on the date of grant. 4.3 Commencement of Exercisability. Subject to the provisions of Section 7.2, Options shall become exercisable at such times and in such installments (which may be cumulative) as the Committee shall provide in the terms of each individual Stock Option Agreement; provided, however, that by a resolution adopted after an Option is granted the Committee may, on such terms and conditions as it may determine to be appropriate and subject to Section 7.2, accelerate the time at which such Option or any portion thereof may be exercised. 4.4 Expiration of Options. No Option may be exercised to any extent by anyone after, and every Option shall expire no later than, the expiration of ten (10) years from the date the Option was granted. Subject to the provisions of this Section 4.4, the Committee shall provide, in the terms of each individual Stock Option Agreement, when the Option expires and becomes unexercisable. 4.5 No Right to Continue in Employment. Nothing in this Plan or in any Stock Option Agreement hereunder shall confer upon any Optionee any right to continue in the employ or service of the Company or shall interfere with or restrict in any way the rights of the Company, which are hereby expressly reserved, to discharge any Optionee at any time for any reason whatsoever, with or without good cause. 4.6 Adjustments in Outstanding Options. If the outstanding shares of Common Stock subject to Options are, from time to time, changed into or exchanged for a different number or kind of shares of capital stock or other securities of the Company, or of another corporation, by reason of a reorganization, merger, consolidation, recapitalization, reclassification, stock split-up, stock dividend, combination of shares or otherwise, the Committee shall make an appropriate adjustment in the aggregate number and kind of shares which may be issued pursuant to Section 2.1 hereof and the number and kind of shares as to which all outstanding Options, or 4

portions thereof then unexercised, shall be exercisable. Such adjustment in an outstanding Option shall be made without change in the total price applicable to the Option or the unexercised portion of the Option (except for any change in the aggregate price resulting from rounding-off of share quantities or prices) and with any necessary corresponding adjustment in Exercise Price per share. No fractional shares shall be issued, and any fractional shares resulting from computations pursuant to this Section 4.6 shall be eliminated from the respective Options. Any such adjustment made by the Committee shall be final and binding upon all Optionees, the Company and all other interested persons. ARTICLE V. EXERCISE OF OPTIONS 5.1 Persons Eligible to Exercise. Except with respect to an Option which is specifically made transferable pursuant to Section 7.1, (i) during the lifetime of the Optionee, only the Optionee or the Optionee's guardian or conservator may exercise an Option granted to such Optionee, or any portion thereof, and (ii) after the death of the Optionee, any exercisable portion of an Option may, prior to the time when such portion becomes

portions thereof then unexercised, shall be exercisable. Such adjustment in an outstanding Option shall be made without change in the total price applicable to the Option or the unexercised portion of the Option (except for any change in the aggregate price resulting from rounding-off of share quantities or prices) and with any necessary corresponding adjustment in Exercise Price per share. No fractional shares shall be issued, and any fractional shares resulting from computations pursuant to this Section 4.6 shall be eliminated from the respective Options. Any such adjustment made by the Committee shall be final and binding upon all Optionees, the Company and all other interested persons. ARTICLE V. EXERCISE OF OPTIONS 5.1 Persons Eligible to Exercise. Except with respect to an Option which is specifically made transferable pursuant to Section 7.1, (i) during the lifetime of the Optionee, only the Optionee or the Optionee's guardian or conservator may exercise an Option granted to such Optionee, or any portion thereof, and (ii) after the death of the Optionee, any exercisable portion of an Option may, prior to the time when such portion becomes unexercisable under the terms of Section 4.4 or the Optionee's Stock Option Agreement, be exercised by the Optionee's personal representative or by any person empowered to do so under the deceased Optionee's will or under the then applicable laws of descent and distribution. 5.2 Partial Exercise. At any time prior to the time when any exercisable Option or exercisable portion thereof expires or becomes unexercisable under the terms of Section 4.4 or the Optionee's Stock Option Agreement, such Option or portion thereof may be exercised in whole or in part; provided, however, that the Company shall not be required to issue fractional shares. 5.3 Manner of Exercise. An exercisable Option, or any exercisable portion thereof, may be exercised solely by delivery to the Secretary of the Company or his or her office of all of the following prior to the time when such Option or such portion becomes unexercisable under the terms of Section 4.4 or the Optionee's Stock Option Agreement: (i) Notice in writing signed by the Optionee or other person then entitled to exercise such Option or portion thereof, stating that such Option or portion thereof is exercised; and (ii) Full payment of the Exercise Price (as hereinafter provided) for the shares with respect to which such Option or portion thereof is thereby exercised, together with payment or arrangement for payment of federal income or other tax, if any, required to be withheld by the Company with respect to such shares; and 5

(iii) In the event that the Option or portion thereof shall be exercised pursuant to Section 5.1 by any person or persons other than the Optionee, appropriate proof of the right of such person or persons to exercise the Option or portion thereof; and (iv) Such representations and documents as the Committee deems reasonably necessary or advisable to effect compliance with all applicable provisions of the Securities Act of 1933, as amended, and any other federal, state or foreign securities laws or regulations. The Committee may, in its absolute discretion, also take whatever additional actions it deems appropriate to effect such compliance, including, without limitation, placing legends on share certificates and issuing stock-transfer orders to transfer agents and registrars. The Exercise Price shall be payable in cash, by check, by tendering shares of Common Stock of the Company, or by any combination thereof, as time to time determined by the Committee. Any shares of Common Stock acceptable to the Committee in payment of the Exercise Price may be tendered by either actual delivery of the certificates or by such other procedures as the Committee may establish from time to time and shall be valued at Fair Market Value as of the date of exercise. 5.4 Rights as Stockholders. The holders of Options shall not be, nor have any of the rights or privileges of, stockholders of the Company in respect of any shares purchasable upon the exercise of any part of an Option, unless and until certificates representing such shares have been issued by the Company to such holders. No

(iii) In the event that the Option or portion thereof shall be exercised pursuant to Section 5.1 by any person or persons other than the Optionee, appropriate proof of the right of such person or persons to exercise the Option or portion thereof; and (iv) Such representations and documents as the Committee deems reasonably necessary or advisable to effect compliance with all applicable provisions of the Securities Act of 1933, as amended, and any other federal, state or foreign securities laws or regulations. The Committee may, in its absolute discretion, also take whatever additional actions it deems appropriate to effect such compliance, including, without limitation, placing legends on share certificates and issuing stock-transfer orders to transfer agents and registrars. The Exercise Price shall be payable in cash, by check, by tendering shares of Common Stock of the Company, or by any combination thereof, as time to time determined by the Committee. Any shares of Common Stock acceptable to the Committee in payment of the Exercise Price may be tendered by either actual delivery of the certificates or by such other procedures as the Committee may establish from time to time and shall be valued at Fair Market Value as of the date of exercise. 5.4 Rights as Stockholders. The holders of Options shall not be, nor have any of the rights or privileges of, stockholders of the Company in respect of any shares purchasable upon the exercise of any part of an Option, unless and until certificates representing such shares have been issued by the Company to such holders. No adjustment shall be made for cash dividends for which the record date is prior to the date such stock certificate is issued. ARTICLE VI. ADMINISTRATION 6.1 Stock Option Committee. The Committee shall consist of at least three (3) Directors. Appointment of Committee members by the Board shall be effective upon acceptance of appointment, and Committee members may resign at any time by delivering written notice to the Board. Vacancies in the Committee shall be filled by the Board. Committee members shall be appointed by and shall serve at the pleasure of the Board, and the Board may from time to time remove members from, or add members to, the Committee and shall fill any vacancy on the Committee. No person shall be eligible to serve on the Committee unless such person is then a "nonemployee director" within the meaning of paragraph (b) of Rule 16b-3 which has been adopted by the Securities and Exchange Commission under the Securities Exchange Act of 1934, as such Rule or its equivalent is then in effect. 6.2 Duties and Powers of Committee. It shall be the duty of the Committee to conduct the general administration of the Plan in accordance with its provisions. The Committee shall have the power to interpret the Plan and the Options and to adopt such rules for the administration, interpretation, and application of the Plan as are consistent herewith and to 6

interpret, amend or revoke any such rules. Any such interpretation and rules shall be consistent with the basic purpose of the Plan to grant Options. The Board may, in its absolute discretion, at any time and from time to time, exercise any and all rights and duties of the Committee under the Plan. 6.3 Majority Rule. The Committee shall act by a majority of its members in office and the Committee may act either by vote at a telephonic or other meeting or by a memorandum or other written instrument signed by a majority of the Committee. The Secretary of the Company shall keep minutes of all meetings of the Committee. The Committee shall make such rules of procedure for the conduct of its business as it shall deem advisable. 6.4 Compensation; Professional Assistance; Good Faith Actions. Members of the Committee shall not receive compensation for their services as members in addition to the compensation otherwise payable to them as members of the Board, but all expenses and liabilities they incur in connection with the administration of the Plan shall be borne by the Company. The Committee may employ attorneys, consultants, accountants, appraisers, brokers or other persons. The Committee, the Company and the officers and Directors of the Company shall be entitled to rely upon the advice, opinions or valuations of any such persons. No member of the Committee shall

interpret, amend or revoke any such rules. Any such interpretation and rules shall be consistent with the basic purpose of the Plan to grant Options. The Board may, in its absolute discretion, at any time and from time to time, exercise any and all rights and duties of the Committee under the Plan. 6.3 Majority Rule. The Committee shall act by a majority of its members in office and the Committee may act either by vote at a telephonic or other meeting or by a memorandum or other written instrument signed by a majority of the Committee. The Secretary of the Company shall keep minutes of all meetings of the Committee. The Committee shall make such rules of procedure for the conduct of its business as it shall deem advisable. 6.4 Compensation; Professional Assistance; Good Faith Actions. Members of the Committee shall not receive compensation for their services as members in addition to the compensation otherwise payable to them as members of the Board, but all expenses and liabilities they incur in connection with the administration of the Plan shall be borne by the Company. The Committee may employ attorneys, consultants, accountants, appraisers, brokers or other persons. The Committee, the Company and the officers and Directors of the Company shall be entitled to rely upon the advice, opinions or valuations of any such persons. No member of the Committee shall be personally liable for any action, determination or interpretation made in good faith with respect to the Plan or the Options, and all members of the Committee shall be fully protected by the Company in respect to any such action, determination or interpretation. ARTICLE VII. MISCELLANEOUS PROVISIONS 7.1 Transferability of Options. The Committee may grant Nonqualified Stock Options which are transferable to the extent expressly provided in the Stock Option Agreement. Except as expressly provided therein, no Option or interest or right therein shall be subject to disposition by transfer, alienation, anticipation, pledge, encumbrance, assignment or any other means, whether such disposition be voluntary or involuntary or by operation of law or by judgment, levy, attachment, garnishment or any other legal or equitable proceeding (including bankruptcy), and any attempted disposition thereof shall be null and void and of no effect; provided, however, that nothing in this Section 7.1 shall prevent transfers by will or by the applicable laws of descent and distribution to the extent contemplated hereby. 7.2 Amendment, Suspension or Termination of the Plan. The Plan may be wholly or partially amended or otherwise modified, suspended or terminated at any time or from time to time by the Committee. Notwithstanding the foregoing, without approval of the Company's stockholders given within twelve (12) months before or after the action by the Committee, no action of the Committee or the Board may increase any limit imposed in Section 2.1 on the maximum number of shares which may be issued upon exercise of Options, reduce the minimum option price requirements in Section 4.2 or extend the limit imposed in Section 3.3 on the period during which Options may be granted. Neither the amendment, suspension nor termination of 7

the Plan shall, without the consent of the holder of the Option, alter or impair any rights or obligations under any Option theretofore granted. No Option may be granted during any period of suspension nor after termination of the Plan. 7.3 Effect of Plan Upon Other Options and Compensation Plans. The adoption of the Plan shall not affect any other compensation or incentive plans in effect for the Company. Nothing in this Plan shall be construed to limit the right of the Company (a) to establish any other forms of incentives or compensation for Employees of the Company; or (b) to grant or assume options otherwise than under the Plan in connection with any proper corporate purpose, including, but not by way of limitation, the grant or assumption of options in connection with the acquisition by purchase, lease, merger, consolidation or otherwise, of the business, stock or assets of any corporation, firm or association. 7.4 Application of Proceeds. The proceeds received by the Company from the sale of its shares of Common Stock under the Plan will be used for general corporate purposes. 7.5 Titles. Titles are provided for convenience only and are not to serve as a basis for interpretation or

the Plan shall, without the consent of the holder of the Option, alter or impair any rights or obligations under any Option theretofore granted. No Option may be granted during any period of suspension nor after termination of the Plan. 7.3 Effect of Plan Upon Other Options and Compensation Plans. The adoption of the Plan shall not affect any other compensation or incentive plans in effect for the Company. Nothing in this Plan shall be construed to limit the right of the Company (a) to establish any other forms of incentives or compensation for Employees of the Company; or (b) to grant or assume options otherwise than under the Plan in connection with any proper corporate purpose, including, but not by way of limitation, the grant or assumption of options in connection with the acquisition by purchase, lease, merger, consolidation or otherwise, of the business, stock or assets of any corporation, firm or association. 7.4 Application of Proceeds. The proceeds received by the Company from the sale of its shares of Common Stock under the Plan will be used for general corporate purposes. 7.5 Titles. Titles are provided for convenience only and are not to serve as a basis for interpretation or construction of the Plan. 7.6 Interpretation. Any Options granted under this Plan as Incentive Stock Options are intended to satisfy all requirements of Section 422 of the Code insofar as possible, and the provisions of this Plan and all Stock Option Agreements shall be construed in accordance with that intention. If any provision of this Plan or any Stock Option Agreement shall be inconsistent or in conflict with any applicable requirement for an Incentive Stock Option, then such requirement shall be deemed to override and supersede the inconsistent or conflicting provision; provided, however, the foregoing provision shall not limit the Company from granting to any Optionee Options which are in excess of the amount which may be treated as Incentive Stock Options, and any Options so granted in excess of the limitations in Section 422(d) of the Code shall be treated as Nonqualified Stock Options; provided further, however, if the normal date of exercise of the Option is accelerated because of a sale of the Company or other similar event as provided in any Stock Option Agreement or because of the exercise of the Committee's discretion under Section 4.3, such acceleration shall nevertheless occur even if it shall cause all or a part of the Option to no longer be an Incentive Stock Option. Any required provision for an Incentive Stock Option that is omitted from this Plan or the Stock Option Agreement shall be incorporated herein by reference and shall apply retroactively, if necessary, and shall be deemed a part of this Plan and any Stock Option Agreement entered into under this Plan to the same extent as though expressly set forth herein. The Committee may amend this Plan or amend the terms of any Stock Option Agreement in any manner that may be required in order for the Options granted under this Plan to comply with the applicable requirements for Incentive Stock Options, and, if necessary, any such amendments shall apply retroactively to the adoption of this Plan. 8

7.7 Effective Date. This Plan first became effective on October 27, 1995, the date of its adoption by the Board, and was approved on November 17, 1995 by the vote of the holders of a majority of the outstanding shares of the Company's Common Stock. This Plan was first amended and restated on August 12, 1997 and effective with respect to Options granted on or after the date of its adoption by the Board. Pursuant to Section 7.2, the first amendment and restatement did not require approval by the shareholders of the Company. This Plan was further amended and restated to increase the number of shares subject to the Plan effective on the date of the approval of such increase by the shareholders of Buckeye Technologies Inc. on November 4, 1999. I hereby certify that the foregoing Plan was amended and restated effective on the date of shareholder approval. Executed on this 4th day of November, 1999.
/s/ Sheila Jordan Cunningham --------------------------------------Secretary

Corporate Seal

7.7 Effective Date. This Plan first became effective on October 27, 1995, the date of its adoption by the Board, and was approved on November 17, 1995 by the vote of the holders of a majority of the outstanding shares of the Company's Common Stock. This Plan was first amended and restated on August 12, 1997 and effective with respect to Options granted on or after the date of its adoption by the Board. Pursuant to Section 7.2, the first amendment and restatement did not require approval by the shareholders of the Company. This Plan was further amended and restated to increase the number of shares subject to the Plan effective on the date of the approval of such increase by the shareholders of Buckeye Technologies Inc. on November 4, 1999. I hereby certify that the foregoing Plan was amended and restated effective on the date of shareholder approval. Executed on this 4th day of November, 1999.
/s/ Sheila Jordan Cunningham --------------------------------------Secretary

Corporate Seal 9

Exhibit 12.1 COMPUTATION OF INTEREST COVERAGE RATIO (In Thousands)
1998 1999 20 -------------------------------------EBITDA INTEREST, NET: Interest expense Interest income INTEREST, NET $ 162,397 $ 152,009 $ 18

35,805 (539) $ 35,266 ========= 4.6

38,018 (390) $ 37,628 ========= 4.0

4 $ 4 ====

Interest Coverage Ratio

EXHIBIT 13.1 22 FINANCIAL REVIEW INTRODUCTION Buckeye Technologies Inc. and its subsidiaries (the Company) manufacture value-added cellulose-based specialty products in the United States, Canada, Germany, Ireland and Brazil, and sell these products in worldwide markets. On October 1, 1999, the Company acquired essentially all of the assets of Walkisoft, UPMKymmene's nonwovens business, with manufacturing locations in Steinfurt, Germany and Gaston County, North Carolina. On July 26, 2000, the Company announced its purchase of the cotton cellulose business of Fibra, S.A., located in Americana, Brazil, for approximately $35.0 million. The Company assumed operations of the facility on August 1, 2000.

Exhibit 12.1 COMPUTATION OF INTEREST COVERAGE RATIO (In Thousands)
1998 1999 20 -------------------------------------EBITDA INTEREST, NET: Interest expense Interest income INTEREST, NET $ 162,397 $ 152,009 $ 18

35,805 (539) $ 35,266 ========= 4.6

38,018 (390) $ 37,628 ========= 4.0

4 $ 4 ====

Interest Coverage Ratio

EXHIBIT 13.1 22 FINANCIAL REVIEW INTRODUCTION Buckeye Technologies Inc. and its subsidiaries (the Company) manufacture value-added cellulose-based specialty products in the United States, Canada, Germany, Ireland and Brazil, and sell these products in worldwide markets. On October 1, 1999, the Company acquired essentially all of the assets of Walkisoft, UPMKymmene's nonwovens business, with manufacturing locations in Steinfurt, Germany and Gaston County, North Carolina. On July 26, 2000, the Company announced its purchase of the cotton cellulose business of Fibra, S.A., located in Americana, Brazil, for approximately $35.0 million. The Company assumed operations of the facility on August 1, 2000. RESULTS OF OPERATIONS COMPARISON OF FISCAL YEARS ENDED JUNE 30, 2000 AND JUNE 30, 1999 Net sales for 2000 were $712.8 million, compared to $617.7 million for 1999, an increase of 15.4%. The increase for the year was due to the acquisition of Walkisoft, higher volume and favorable product mix on existing businesses, offset by the lower unit sales prices related to the January 1, 1999 fluff pulp contract price reduction to Procter & Gamble. In 2000, operating income was $136.9 million, compared to $113.0 million for 1999, an increase of 21.2%. The 2000 operating income as a percentage of sales was 19.2%, compared to 18.3% for 1999. The increase was primarily due to the favorable product mix and lower production costs, partially offset by higher research, selling and administrative expenses. Net interest and amortization of debt costs for 2000 were $42.7 million, compared to $38.9 million for 1999, an increase of $3.8 million. The increase was primarily due to higher debt levels as a result of the Walkisoft acquisition and the purchase of certain packaging technology from Stac-Pac Technologies Inc. The Company's effective tax rate for 2000 was 33.7% versus 31.7% in 1999. The increase was primarily the result of higher profits in the Company's foreign operations. COMPARISON OF FISCAL YEARS ENDED JUNE 30, 1999 AND JUNE 30, 1998

EXHIBIT 13.1 22 FINANCIAL REVIEW INTRODUCTION Buckeye Technologies Inc. and its subsidiaries (the Company) manufacture value-added cellulose-based specialty products in the United States, Canada, Germany, Ireland and Brazil, and sell these products in worldwide markets. On October 1, 1999, the Company acquired essentially all of the assets of Walkisoft, UPMKymmene's nonwovens business, with manufacturing locations in Steinfurt, Germany and Gaston County, North Carolina. On July 26, 2000, the Company announced its purchase of the cotton cellulose business of Fibra, S.A., located in Americana, Brazil, for approximately $35.0 million. The Company assumed operations of the facility on August 1, 2000. RESULTS OF OPERATIONS COMPARISON OF FISCAL YEARS ENDED JUNE 30, 2000 AND JUNE 30, 1999 Net sales for 2000 were $712.8 million, compared to $617.7 million for 1999, an increase of 15.4%. The increase for the year was due to the acquisition of Walkisoft, higher volume and favorable product mix on existing businesses, offset by the lower unit sales prices related to the January 1, 1999 fluff pulp contract price reduction to Procter & Gamble. In 2000, operating income was $136.9 million, compared to $113.0 million for 1999, an increase of 21.2%. The 2000 operating income as a percentage of sales was 19.2%, compared to 18.3% for 1999. The increase was primarily due to the favorable product mix and lower production costs, partially offset by higher research, selling and administrative expenses. Net interest and amortization of debt costs for 2000 were $42.7 million, compared to $38.9 million for 1999, an increase of $3.8 million. The increase was primarily due to higher debt levels as a result of the Walkisoft acquisition and the purchase of certain packaging technology from Stac-Pac Technologies Inc. The Company's effective tax rate for 2000 was 33.7% versus 31.7% in 1999. The increase was primarily the result of higher profits in the Company's foreign operations. COMPARISON OF FISCAL YEARS ENDED JUNE 30, 1999 AND JUNE 30, 1998 Net sales for 1999 were $617.7 million, compared to $630.2 million for 1998, a decrease of 2%. The decrease was primarily due to lower sales volume. In 1999, operating income was $113.0 million, compared to $122.4 million for 1998, a decrease of 7.7%. The 1999 operating income as a percentage of sales was 18.3% compared to 19.4% for 1998. The decrease was primarily due to lower cellulose volume and unit sales prices, including a scheduled January 1, 1999 fluff pulp contract price reduction to Procter & Gamble. These negative factors were substantially offset by improved airlaid sales and lower overall costs. Net interest and amortization of debt costs for 1999 were $38.9 million, compared to $36.3 million for 1998, an increase of $2.6 million. This increase was due to higher average interest rates. The Company's effective tax rate for 1999 was 31.7% versus 34.1% in 1998. During the last two quarters of the fiscal year, the Company recognized additional benefit from optimizing its foreign sales corporation. 22

FINANCIAL CONDITION

FINANCIAL CONDITION CASH FLOW Cash provided by operating activities is the major source of funds for the Company, totaling $138.2 million in 2000, $97.8 million in 1999 and $94.0 million in 1998. The increase in cash generated during 2000 was primarily due to higher earnings before noncash charges and changes in working capital. The increase in cash generated during 1999 was primarily due to higher deferred taxes partially offset by lower net income. In 1998, an increase in funding of net operating assets offset an increase in net income, depreciation and amortization. Capital expenditures for property, plant and equipment were $68.6 million in 2000, $51.5 million in 1999 and $66.7 million in 1998. The Company made these expenditures to purchase, modernize and upgrade production equipment and to maintain and acquire facilities. Capital expenditures (including environmental expenditures) for 2001 are expected to be approximately $165.0 million. The increase relates primarily to the construction of a large airlaid nonwovens machine at the Gaston County, North Carolina plant. The Board of Directors has authorized the repurchase of 5,000,000 shares of common stock. Repurchased shares will be held as treasury stock and will be available for general corporate purposes, including the funding of employee benefit and stock-related plans. During the year ended June 30, 2000, 717,900 shares were repurchased at a cost of $11.7 million. Through June 30, 2000, a total of 4,240,000 shares have been repurchased under the current board authority. LEVERAGE/CAPITALIZATION Total debt increased to $532.9 million at June 30, 2000 from $441.2 million at June 30, 1999, an increase of $91.7 million, of which the major components are $85.1 million of debt related to the acquisition of Walkisoft and $10.0 million of debt related to the purchase of the Stac-Pac technology. The total debt to capital ratio was 71.3% at June 30, 2000, compared to 71.4% at June 30, 1999 and 74.6% at June 30, 1998. The interest coverage ratio was 4.4x in 2000, 4.0x in 1999 and 4.6x in 1998. LIQUIDITY The Company believes that its cash flow from operations, together with the borrowings available under its credit facility, will be sufficient to fund capital expenditures (including environmental expenditures), meet operating expenses, fund authorized common stock repurchases, and service all debt requirements for the foreseeable future. Consistent with the Company's stated policy, there are no plans to pay dividends in the foreseeable future. At June 30, 2000, the Company had unused borrowing capacity of $195.0 million on the bank credit facility. MARKET RISK The Company is exposed to market risk from changes in foreign exchange, interest rates and raw material costs. To reduce such risks, the Company selectively uses financial instruments. All hedging transactions are authorized and executed pursuant to clearly defined policies and procedures. Further, the Company does not enter into financial instruments for trading purposes. A discussion of the Company's accounting policies for risk management is included in the Accounting Policies in the Notes to the Consolidated Financial Statements.

24 FINANCIAL REVIEW (CONTINUED) INTEREST RATES The fair value of the Company's long-term public debt is based on an average of the bid and offer prices at yearend. The fair value of the credit facility approximates its carrying value due to its variable interest rate. The carrying value of other long-term debt approximates fair value based on the Company's current incremental

24 FINANCIAL REVIEW (CONTINUED) INTEREST RATES The fair value of the Company's long-term public debt is based on an average of the bid and offer prices at yearend. The fair value of the credit facility approximates its carrying value due to its variable interest rate. The carrying value of other long-term debt approximates fair value based on the Company's current incremental borrowing rates for similar types of borrowing instruments. The carrying value and fair value of long-term debt at June 30, 2000 were $532.9 million and $520.4 million, respectively, and at June 30, 1999 were $441.2 million and $434.6 million, respectively. Market risk is estimated as the potential change in fair value resulting from a hypothetical 10% decrease in interest rates and amounts to $4.7 million at June 30, 2000 and $16.3 million at June 30, 1999. The Company had $28.4 million of variable rate long-term debt outstanding at June 30, 2000. At this borrowing level, a hypothetical 10% increase in interest rates would have a $0.2 million unfavorable impact on the Company's pretax earnings and cash flows. The primary interest rate exposures on floating rate debt are with respect to U.S. prime rates and European interbank rates. FOREIGN CURRENCY EXCHANGE RATES Foreign currency exposures arising from transactions include firm commitments and anticipated transactions denominated in a currency other than an entity's functional currency. The Company and its subsidiaries generally enter into transactions denominated in their respective functional currencies. Therefore foreign currency exposures arising from transactions are not material to the Company. The Company's primary foreign currency exposure arises from foreign-denominated revenues and profits and their translation into U.S. dollars. The primary currencies to which the Company is exposed include the Canadian dollar and the euro. The Company generally views as long-term its investments in foreign subsidiaries with a functional currency other than the U.S. dollar. As a result, the Company does not generally hedge these net investments. However, the Company uses capital structuring techniques to manage its net investment in foreign currencies as considered necessary. The net investment in foreign subsidiaries translated into U.S. dollars using the year-end exchange rates is $176.2 million and $158.2 million at June 30, 2000 and 1999, respectively. The potential loss in value of the Company's net investment in foreign subsidiaries resulting from a hypothetical 10% adverse change in quoted foreign currency exchange rates at June 30, 2000 amounts to $16.0 million and $14.4 million at June 30, 1999. This change would be reflected in the equity section of the Company's balance sheet. COST OF RAW MATERIALS Amounts paid by the Company for wood and cotton fiber represent the largest component of the Company's variable costs of production. The cost of these materials is subject to market fluctuations caused by factors beyond the Company's control, including weather conditions. Significant increases in the cost of wood or cotton fiber, to the extent not reflected in prices for the Company's products, could materially and adversely affect the Company's business, results of operations and financial condition. FORWARD-LOOKING INFORMATION The above risk management discussion and the estimated amounts generated from the sensitivity analyses are forward-looking statements of market risk, assuming that certain adverse market conditions occur. Actual results in the future may differ materially from those projected results due to actual developments in the global financial markets. The analysis methods used by the Company to assess and mitigate risks discussed above should not be considered projections of future events or losses.

CONTINGENCIES The Company's operations are subject to extensive general and industry-specific federal, state, local and foreign environmental laws and regulations. The Company devotes significant resources to maintaining compliance with

CONTINGENCIES The Company's operations are subject to extensive general and industry-specific federal, state, local and foreign environmental laws and regulations. The Company devotes significant resources to maintaining compliance with such requirements. The Company expects that, due to the nature of its operations, it will be subject to increasingly stringent environmental requirements (including standards applicable to wastewater discharges and air emissions) and will continue to incur substantial costs to comply with such requirements. Given the uncertainties associated with predicting the scope of future requirements, there can be no assurance that the Company will not in the future incur material environmental compliance costs or liabilities. For additional information on environmental matters, see Note 14 to the Consolidated Financial Statements. See Note 10 to the Consolidated Financial Statements for information related to the Pulp Supply Agreement with the Procter & Gamble Company. SUBSEQUENT EVENT On July 26, 2000, the Company announced its purchase of the cotton cellulose business of Fibra, S.A. (Fibra), located in Americana, Brazil, for approximately $35.0 million. The Company assumed operation of the facility on August 1, 2000. Fibra and the Company concurrently entered into a contract under which this plant will continue to supply cotton cellulose for Fibra's staple rayon operations in Brazil. The acquisition has been funded using borrowings from the Company's bank credit facility. FORWARD-LOOKING STATEMENTS Except for the historical information contained herein, the matters discussed in this annual report are forwardlooking statements that involve risks and uncertainties, including, but not limited to, economic, competitive, governmental and technological factors affecting the Company's operations, markets, products, services and prices and other factors. The Company undertakes no obligation to publicly release the result of any revisions to these forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.

26 CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share data) NET SALES Cost of goods sold Gross margin Selling, research and administrative expenses OPERATING INCOME Other income (expense): Interest income Interest expense and amortization of debt costs Other Year Ended June 30 2000 1999 -----------------------------------$ 712,757 $ 617,707 $ 63 521,124 459,115 46 -----------------------------------191,633 158,592 16 54,725 45,568 4 -----------------------------------136,908 113,024 12 741 390 (43,485) (39,263) (3 (5,047) (3,821) ( -----------------------------------(47,791) (42,694) (3 -----------------------------------89,117 70,330 8 30,000 22,312 2 -----------------------------------$ 59,117 $ 48,018 $ 5 ==================================== $ 1.68 $ 1.34 $ ==================================== $ 1.65 $ 1.32 $ ==================================== 35,091 35,756 3 838 745 ------------------------------------

Income before income taxes Income taxes NET INCOME

BASIC EARNINGS PER SHARE DILUTED EARNINGS PER SHARE

Weighted average shares for basic earnings per share Effect of dilutive stock options

26 CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share data) NET SALES Cost of goods sold Gross margin Selling, research and administrative expenses OPERATING INCOME Other income (expense): Interest income Interest expense and amortization of debt costs Other Year Ended June 30 2000 1999 -----------------------------------$ 712,757 $ 617,707 $ 63 521,124 459,115 46 -----------------------------------191,633 158,592 16 54,725 45,568 4 -----------------------------------136,908 113,024 12 741 390 (43,485) (39,263) (3 (5,047) (3,821) ( -----------------------------------(47,791) (42,694) (3 -----------------------------------89,117 70,330 8 30,000 22,312 2 -----------------------------------$ 59,117 $ 48,018 $ 5 ==================================== $ 1.68 $ 1.34 $ ==================================== $ 1.65 $ 1.32 $ ==================================== 35,091 35,756 3 838 745 -----------------------------------35,929 36,501 3 ====================================

Income before income taxes Income taxes NET INCOME

BASIC EARNINGS PER SHARE DILUTED EARNINGS PER SHARE

Weighted average shares for basic earnings per share Effect of dilutive stock options Adjusted weighted average shares for diluted earnings per share

See accompanying notes.

CONSOLIDATED BALANCE SHEETS
(In thousands, except share data) ASSETS CURRENT ASSETS: Cash and cash equivalents Accounts receivable - trade, net of allowance for doubtful accounts of $1,219 and $1,042 at June 30, 2000 and 1999, respectively Accounts receivable - other Inventories Deferred income taxes Prepaid expenses and other TOTAL CURRENT ASSETS Property, plant and equipment, net Goodwill, net Intellectual property and other, net TOTAL ASSETS LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES: Trade accounts payable Accrued expenses Current portion of long-term debt TOTAL CURRENT LIABILITIES Long-term debt Accrued postretirement benefits Deferred income taxes June 30 2000 --------------------

$

12,257

$

108,652 7 3,247 107,238 10 5,911 7,645 -------------------244,950 19 520,402 41 122,399 12 42,970 1 -------------------$ 930,721 $ 74 ====================

36,397 $ 2 71,549 4 26,892 -------------------134,838 6 505,983 17,531 56,691 44 1 4

$

CONSOLIDATED BALANCE SHEETS
(In thousands, except share data) ASSETS CURRENT ASSETS: Cash and cash equivalents Accounts receivable - trade, net of allowance for doubtful accounts of $1,219 and $1,042 at June 30, 2000 and 1999, respectively Accounts receivable - other Inventories Deferred income taxes Prepaid expenses and other TOTAL CURRENT ASSETS Property, plant and equipment, net Goodwill, net Intellectual property and other, net TOTAL ASSETS LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES: Trade accounts payable Accrued expenses Current portion of long-term debt TOTAL CURRENT LIABILITIES Long-term debt Accrued postretirement benefits Deferred income taxes Other liabilities Commitments and contingencies (Notes 6, 10, 13 and 14) STOCKHOLDERS' EQUITY: Preferred stock, $.01 par value; 10,000,000 shares authorized; none issued or outstanding Common stock, $.01 par value; 100,000,000 shares authorized; 43,142,770 shares issued and 34,750,614 and 35,379,736 shares outstanding at June 30, 2000 and 1999, respectively Additional paid-in capital Deferred stock compensation Accumulated other comprehensive income Retained earnings Treasury shares, 8,392,156 and 7,763,034 shares at June 30, 2000 and 1999, respectively TOTAL STOCKHOLDERS' EQUITY TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY June 30 2000 --------------------

$

12,257

$

108,652 7 3,247 107,238 10 5,911 7,645 -------------------244,950 19 520,402 41 122,399 12 42,970 1 -------------------$ 930,721 $ 74 ====================

36,397 $ 2 71,549 4 26,892 -------------------134,838 6 505,983 17,531 56,691 1,699 44 1 4

$

--

431 65,306 (626) (34,376) 298,114

6 ( (2 23

(114,870) (10 -------------------213,979 17 ==================== $ 930,721 $ 74 ====================

See accompanying notes.

28 CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
Accumulated Additional Deferred other Common paid-in stock comprehensive Retained stock capital compensation income earnings ------------------------------------------------------------------$ 431 $ 65,928 $(2,200) $ (4,673) $135,719 ----55,260

(In thousands, except share data) BALANCE AT JULY 1, 1997 Comprehensive income: Net income Other comprehensive income: Foreign currency translation adjustment Comprehensive income

--

--

--

(12,387)

--

28 CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
Accumulated Additional Deferred other Common paid-in stock comprehensive Retained stock capital compensation income earnings ------------------------------------------------------------------$ 431 $ 65,928 $(2,200) $ (4,673) $135,719 ----55,260

(In thousands, except share data) BALANCE AT JULY 1, 1997 Comprehensive income: Net income Other comprehensive income: Foreign currency translation adjustment Comprehensive income Purchase of 911,200 shares Issuance of 215,550 shares of common stock Compensation charge for stock options Deferred stock compensation Amortization of deferred stock compensation BALANCE AT JUNE 30, 1998 Comprehensive income: Net income Other comprehensive income: Foreign currency translation adjustment Comprehensive income Purchase of 1,431,900 shares Issuance of 58,090 shares of common stock Termination of stock options Amortization of deferred stock compensation BALANCE AT JUNE 30, 1999 Comprehensive income: Net income Other comprehensive income: Foreign currency translation adjustment Comprehensive income Purchase of 717,900 shares Compensation charge for stock options Issuance of 88,778 shares of common stock Termination of stock options Amortization of deferred stock compensation BALANCE AT JUNE 30, 2000

--

--

--

(12,387)

--

-----

-(1,209) 70 1,010

---(1,010)

-----

-----

--805 --------------------------------------------------------------------431 65,799 (2,405) (17,060) 190,979 ----48,018

--

--

--

(4,582)

--

----

-(157) (165)

--165

----

----

--772 --------------------------------------------------------------------431 65,477 (1,468) (21,642) 238,997 ----59,117

--

--

--

(12,734)

--

-----

-107 (180) (98)

---98

-----

-----

--744 --------------------------------------------------------------------$ 431 $ 65,306 $ (626) $(34,376) $298,114 ===================================================================

See accompanying notes.

CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands) OPERATING ACTIVITIES Net income Adjustments to reconcile net income to net cash provided by operating activities: Depreciation Amortization Year Ended June 30 2000 1999 ------------------------------------$ 59,117 $ 48,018 $

42,305 6,141

37,673 5,186

CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands) OPERATING ACTIVITIES Net income Adjustments to reconcile net income to net cash provided by operating activities: Depreciation Amortization Deferred income taxes Other Changes in operating assets and liabilities: Accounts receivable Inventories Prepaid expenses and other assets Accounts payable and other current liabilities NET CASH PROVIDED BY OPERATING ACTIVITIES INVESTING ACTIVITIES Acquisitions of businesses Purchases of property, plant and equipment Other NET CASH USED IN INVESTING ACTIVITIES FINANCING ACTIVITIES Proceeds from sale of equity interests Purchase of treasury shares Net payments under revolving line of credit Proceeds from long-term debt Payments for debt issuance costs Principal payments on long-term debt and other NET CASH USED IN FINANCING ACTIVITIES EFFECT OF FOREIGN CURRENCY RATE FLUCTUATIONS INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR CASH AND CASH EQUIVALENTS AT END OF YEAR Year Ended June 30 2000 1999 ------------------------------------$ 59,117 $ 48,018 $

42,305 6,141 9,857 5,661

37,673 5,186 10,990 4,233

(21,962) 7,036 1,561 (5,117) 859 (2,493) 34,833 (7,695) ------------------------------------138,372 97,831 (29,501) -(68,561) (51,549) (13,734) 2,523 ------------------------------------(111,796) (49,026) 702 450 (11,715) (23,151) (2,804) (15,192) ----(163) (11,934) ------------------------------------(13,980) (49,827) (742) (47) ------------------------------------11,854 (1,069) 403 1,472 ------------------------------------$ 12,257 $ 403 $ =====================================

See accompanying notes

30 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (In thousands, except share data) 1. ACCOUNTING POLICIES BUSINESS DESCRIPTION AND BASIS OF PRESENTATION The financial statements are consolidated financial statements of Buckeye Technologies Inc. and its subsidiaries (the Company). All significant intercompany accounts and transactions have been eliminated in consolidation. The Company manufactures and distributes value-added cellulose-based specialty products used in numerous applications including disposable diapers, personal hygiene products, engine air and oil filters, food casings, rayon filament, acetate plastics, thickeners and papers. CASH AND CASH EQUIVALENTS The Company considers cash equivalents to be temporary cash investments with a maturity of three months or less when purchased.

30 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (In thousands, except share data) 1. ACCOUNTING POLICIES BUSINESS DESCRIPTION AND BASIS OF PRESENTATION The financial statements are consolidated financial statements of Buckeye Technologies Inc. and its subsidiaries (the Company). All significant intercompany accounts and transactions have been eliminated in consolidation. The Company manufactures and distributes value-added cellulose-based specialty products used in numerous applications including disposable diapers, personal hygiene products, engine air and oil filters, food casings, rayon filament, acetate plastics, thickeners and papers. CASH AND CASH EQUIVALENTS The Company considers cash equivalents to be temporary cash investments with a maturity of three months or less when purchased. INVENTORIES Inventories are stated at the lower of cost (determined on average cost or first-in, first-out methods) or market. PROPERTY, PLANT AND EQUIPMENT Property, plant and equipment is stated at cost. The cost of major renewals and improvements is capitalized. Depreciation is computed by the straight-line method over the following estimated useful lives: buildings - 30 to 40 years; machinery and equipment - 5 to 16 years. The Company accrues the cost of periodic planned maintenance shutdowns, based on its best estimate of incremental spending and the fixed overhead cost, over the period between shutdowns. IMPAIRMENT OF LONG-LIVED ASSETS The Company reviews the appropriateness of the carrying value of its long-lived assets, including goodwill, whenever events or changes in circumstances indicate that the historical cost carrying value of an asset may no longer be appropriate. The Company assesses recoverability of the carrying value of the asset by estimating the future net cash flows expected to result from the asset including eventual disposition. If the future net cash flows are less than the carrying value of the asset, an impairment loss is recorded equal to the difference between the asset's carrying value and fair value. INTANGIBLE ASSETS Goodwill is amortized by the straight-line method over 30 to 40 years. Goodwill is net of accumulated amortization of $14,004 and $10,416 at June 30, 2000 and 1999, respectively. Deferred debt costs are amortized by the interest method over the life of the related debt and are net of accumulated amortization of $4,594 and $3,283 at June 30, 2000 and 1999, respectively. Intellectual property, primarily resulting from current year acquisitions, is amortized by the straight-line method over 5 to 20 years and is net of accumulated amortization of $1,273 and $127 at June 30, 2000 and 1999, respectively. INCOME TAXES The Company has provided for income taxes under the liability method. Accordingly, deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. No provision is made for U.S. income taxes applicable to undistributed earnings of foreign subsidiaries that are indefinitely reinvested in foreign operations.

RISK MANAGEMENT The Company selectively uses interest rate swap contracts and foreign currency forward and option contracts to offset the effects of interest and exchange rate risk. The differentials to be received or paid under interest rate contracts are recognized in income over the life of the contracts as adjustments to interest expense. Gains or losses on termination of interest rate contracts are recognized as other income or expense when terminated in conjunction

with the retirement of associated debt. The foreign currency forward and option contracts that are designated as effective hedges are deferred and included in income as part of the underlying transactions. CREDIT RISK The Company has established credit limits for each customer. The Company requires the customer to provide a letter of credit for export sales in high-risk countries. Credit limits are monitored routinely. ENVIRONMENTAL COSTS Liabilities are recorded when environmental assessments are probable and the cost can be reasonably estimated. Generally, the timing of these accruals coincides with the earlier of completion of a feasibility study or the Company's commitment to a plan of action based on the then-known facts. REVENUE RECOGNITION Revenues are recognized when title to the goods passes to the customer. Net sales are composed of sales reduced by sales allowances and distribution costs. FOREIGN CURRENCY TRANSLATION Company management has determined that the local currency of its German, Canadian and Irish subsidiaries is the functional currency, and accordingly Deutsche mark, Canadian dollar and Irish punt denominated balance sheet accounts are translated into United States dollars at the rate of exchange in effect at fiscal year end. Income and expense activity for the period is translated at the weighted average exchange rate during the period. Translation adjustments are included as a separate component of stockholders' equity. USE OF ESTIMATES The preparation of the consolidated financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ from the estimates and assumptions used. EARNINGS PER SHARE Basic earnings per share has been computed based on the average number of common shares outstanding. Diluted earnings per share reflects the increase in average common shares outstanding that would result from the assumed exercise of outstanding stock options calculated using the treasury stock method. STOCK-BASED COMPENSATION The Company accounts for stock-based compensation using the intrinsic value method prescribed in Accounting Principles Board Opinion No. 25, Accounting for Stock Issued to Employees (APB No. 25) and related interpretations as permitted by Financial Accounting Standards Board Statement No. 123, Accounting for Stock-Based Compensation (SFAS No. 123). COMPREHENSIVE INCOME

with the retirement of associated debt. The foreign currency forward and option contracts that are designated as effective hedges are deferred and included in income as part of the underlying transactions. CREDIT RISK The Company has established credit limits for each customer. The Company requires the customer to provide a letter of credit for export sales in high-risk countries. Credit limits are monitored routinely. ENVIRONMENTAL COSTS Liabilities are recorded when environmental assessments are probable and the cost can be reasonably estimated. Generally, the timing of these accruals coincides with the earlier of completion of a feasibility study or the Company's commitment to a plan of action based on the then-known facts. REVENUE RECOGNITION Revenues are recognized when title to the goods passes to the customer. Net sales are composed of sales reduced by sales allowances and distribution costs. FOREIGN CURRENCY TRANSLATION Company management has determined that the local currency of its German, Canadian and Irish subsidiaries is the functional currency, and accordingly Deutsche mark, Canadian dollar and Irish punt denominated balance sheet accounts are translated into United States dollars at the rate of exchange in effect at fiscal year end. Income and expense activity for the period is translated at the weighted average exchange rate during the period. Translation adjustments are included as a separate component of stockholders' equity. USE OF ESTIMATES The preparation of the consolidated financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ from the estimates and assumptions used. EARNINGS PER SHARE Basic earnings per share has been computed based on the average number of common shares outstanding. Diluted earnings per share reflects the increase in average common shares outstanding that would result from the assumed exercise of outstanding stock options calculated using the treasury stock method. STOCK-BASED COMPENSATION The Company accounts for stock-based compensation using the intrinsic value method prescribed in Accounting Principles Board Opinion No. 25, Accounting for Stock Issued to Employees (APB No. 25) and related interpretations as permitted by Financial Accounting Standards Board Statement No. 123, Accounting for Stock-Based Compensation (SFAS No. 123). COMPREHENSIVE INCOME Comprehensive income for the Company consists of net income and foreign currency translation adjustments and is presented in the Consolidated Statements of Stockholders' Equity. RECENTLY ISSUED ACCOUNTING STANDARDS During 1998, the Financial Accounting Standards Board issued Statement No. 133, Accounting for Derivative Instruments and Hedging Activities (SFAS No. 133). This statement requires companies to record derivative instruments on the balance sheet as assets or liabilities, measured at fair value. Gains or losses resulting from changes in the values of a derivative would be accounted for depending on the use of the derivative and whether

it qualifies for hedge accounting. SFAS No. 133, as amended, is effective for the Company's fiscal year 2001.

32 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) Because of the Company's minimal historical use of derivatives, management anticipates that the adoption of SFAS No. 133 will not have a significant effect on earnings or the financial position of the Company. 2. BUSINESS COMBINATION On October 1, 1999, the Company acquired essentially all of the assets of Walkisoft, UPM-Kymmene's nonwovens business, for $29,501 in cash and $83,963 ($88,000 in notes payable, net of $4,037 discount) in debt payable to UPM-Kymmene. The acquisition of Walkisoft adds manufacturing facilities in Steinfurt, Germany and Gaston County, North Carolina, as well as engineering, research and development operations in Finland. The acquisition was accounted for using the purchase method of accounting. The allocation of the purchase price is based on the respective fair value of assets and liabilities at the date of acquisition.
PURCHASE PRICE ALLOCATION Working capital, net of cash Property, plant and equipment Intangible assets

9,266 92,223 11,975 -------$113,464 ========

$

The consolidated operating results of Walkisoft have been included in the consolidated statements of income from the date of acquisition. The following unaudited pro forma results of operations assume that the acquisition occurred at the beginning of the periods presented. PRO FORMA RESULTS OF OPERATIONS
Year Ended June 30 2000 1999 --------------------------$ 730,248 $ 676,714 58,113 40,311 --------------------------$ 1.66 $ 1.13 $ 1.62 $ 1.10 ---------------------------

Net sales Net income Basic earnings per share Diluted earnings per share

The pro forma financial information is presented for information purposes only and is not necessarily indicative of the operating results that would have occurred had the business combination been consummated as of the above dates, nor is it necessarily indicative of future operating results. 3. INVENTORIES Components of inventories
June 30 2000 1999 --------------------------$ 26,527 $ 28,619 59,255 56,927 21,456 19,038 --------------------------$ 107,238 $ 104,584 ===========================

Raw materials Finished goods Storeroom and other supplies

4. PROPERTY, PLANT AND EQUIPMENT

32 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) Because of the Company's minimal historical use of derivatives, management anticipates that the adoption of SFAS No. 133 will not have a significant effect on earnings or the financial position of the Company. 2. BUSINESS COMBINATION On October 1, 1999, the Company acquired essentially all of the assets of Walkisoft, UPM-Kymmene's nonwovens business, for $29,501 in cash and $83,963 ($88,000 in notes payable, net of $4,037 discount) in debt payable to UPM-Kymmene. The acquisition of Walkisoft adds manufacturing facilities in Steinfurt, Germany and Gaston County, North Carolina, as well as engineering, research and development operations in Finland. The acquisition was accounted for using the purchase method of accounting. The allocation of the purchase price is based on the respective fair value of assets and liabilities at the date of acquisition.
PURCHASE PRICE ALLOCATION Working capital, net of cash Property, plant and equipment Intangible assets

$

9,266 92,223 11,975 -------$113,464 ========

The consolidated operating results of Walkisoft have been included in the consolidated statements of income from the date of acquisition. The following unaudited pro forma results of operations assume that the acquisition occurred at the beginning of the periods presented. PRO FORMA RESULTS OF OPERATIONS
Year Ended June 30 2000 1999 --------------------------$ 730,248 $ 676,714 58,113 40,311 --------------------------$ 1.66 $ 1.13 $ 1.62 $ 1.10 ---------------------------

Net sales Net income Basic earnings per share Diluted earnings per share

The pro forma financial information is presented for information purposes only and is not necessarily indicative of the operating results that would have occurred had the business combination been consummated as of the above dates, nor is it necessarily indicative of future operating results. 3. INVENTORIES Components of inventories
June 30 2000 1999 --------------------------$ 26,527 $ 28,619 59,255 56,927 21,456 19,038 --------------------------$ 107,238 $ 104,584 ===========================

Raw materials Finished goods Storeroom and other supplies

4. PROPERTY, PLANT AND EQUIPMENT Components of property, plant and equipment

Land and land improvements Buildings Machinery and equipment Construction in progress

Accumulated depreciation

June 30 2000 1999 --------------------------$ 13,915 $ 9,478 95,423 79,575 555,218 465,310 53,090 15,392 --------------------------717,646 569,755 (197,244) (157,524) --------------------------$ 520,402 $ 412,231 ===========================

5. ACCRUED EXPENSES Components of accrued expenses
June 30 2000 1999 --------------------------$ 15,687 $ 12,461 4,792 4,347 8,711 4,822 5,435 4,991 9,533 6,013 2,923 2,737 7,965 3,101 16,503 6,655 --------------------------$ 71,549 $ 45,127 ===========================

Retirement plans Vacation pay Maintenance accrual Sales program accrual Interest Property taxes Employee compensation Other

6. DEBT Components of long-term debt
June 30 2000 1999 --------------------------Senior Subordinated Notes due: 2005 2008 2010 Credit Facility Notes payable Other $ 149,637 $ 149,587 99,567 99,533 149,242 149,197 28,384 31,847 85,134 -20,911 11,050 --------------------------532,875 441,214 26,892 ---------------------------$ 505,983 $ 441,214 ===========================

Less current portion

The Company completed a public offering of $150,000 principal amount of 8 1/2% unsecured Senior Subordinated Notes due December 15, 2005 (the 2005 Notes) during November 1995. The 2005 Notes are redeemable at the option of the Company, in whole or in part, at any time on or after December 15, 2000, at redemption prices varying from 104.25% of principal amount to 100.00% of principal amount on or after December 15, 2003, in each case together with accrued and unpaid interest to the date of redemption. The Company completed a public offering of $100,000 principal amount of 9 1/4% unsecured Senior Subordinated Notes due September 15, 2008 (the 2008 Notes) during July 1996. The 2008 Notes are

6. DEBT Components of long-term debt
June 30 2000 1999 --------------------------Senior Subordinated Notes due: 2005 2008 2010 Credit Facility Notes payable Other $ 149,637 $ 149,587 99,567 99,533 149,242 149,197 28,384 31,847 85,134 -20,911 11,050 --------------------------532,875 441,214 26,892 ---------------------------$ 505,983 $ 441,214 ===========================

Less current portion

The Company completed a public offering of $150,000 principal amount of 8 1/2% unsecured Senior Subordinated Notes due December 15, 2005 (the 2005 Notes) during November 1995. The 2005 Notes are redeemable at the option of the Company, in whole or in part, at any time on or after December 15, 2000, at redemption prices varying from 104.25% of principal amount to 100.00% of principal amount on or after December 15, 2003, in each case together with accrued and unpaid interest to the date of redemption. The Company completed a public offering of $100,000 principal amount of 9 1/4% unsecured Senior Subordinated Notes due September 15, 2008 (the 2008 Notes) during July 1996. The 2008 Notes are redeemable at the option of the Company, in whole or in part, at any time on or after September 15, 2001, at redemption prices varying from 104.625% of principal amount to 100.00% of principal amount on or after September 15, 2004, in each case together with accrued and unpaid interest to the date of redemption. The Company completed a private placement of $150,000 principal amount of 8% unsecured Senior Subordinated Notes due October 15, 2010 during June 1998. In fiscal 1999, the Company exchanged these outstanding notes for public notes (the 2010 Notes) with the same terms. The 2010 Notes are redeemable at the option of the Company, in whole or in part, at any time on or after October 15, 2003, at redemption prices varying from 104.00% of principal amount to 100.00% of principal amount on or after October 15, 2006, in each case together with accrued and unpaid interest to the date of redemption. The Company has an unsecured credit facility (the Credit Facility), providing for borrowings up to $225,000. The Credit Facility matures May 28, 2002, and on May 28, 2001, borrowing availability reduces to $150,000. The interest rates applicable to borrowings under the Credit Facility are the agent's prime rate or a LIBOR-based rate ranging from LIBOR plus 0.450% to 1.125%. Borrowings at June 30, 2000 were at an average rate of 6.75%. Letters of credit issued through the Credit Facility of $1,659 are outstanding at June 30, 2000. The amount available for borrowing under the Credit Facility is $194,957 at June 30, 2000. The Senior Subordinated Notes are subordinate to the Credit Facility. In connection with the purchase of the nonwoven assets of UPM-Kymmene as of October 1, 1999, the Company entered into four separate promissory notes with the seller. The notes are secured by the stock of certain subsidiaries formed to operate Walkisoft. The principal amount of each note is $22,000 and each bears interest at a rate of 5%. The total principal amount outstanding at June 30, 2000 is $88,000 less the unamortized discount of $2,866, which is based on an imputed interest rate of 7.1%. One note in the principal amount of $22,000 plus accrued interest on all outstanding notes is due on each of the first four anniversaries of the closing date. On March 1, 2000, the Company purchased certain technology from Stac-Pac Technologies Inc. In connection

34 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) with the purchase, the Company entered into two separate unsecured promissory notes with Stac-Pac Technologies Inc. The principal amount of each note is $5,000 and each bears interest at a rate of 7%. The principal amount of the first note plus accrued interest on both notes is due on March 1, 2001, and the principal amount of the second note plus accrued interest is due on March 1, 2002. The Company has an unsecured term facility, which provides for borrowing up to $15,000 and matures on May 28, 2002. The outstanding balance under this facility was $10,911 at June 30, 2000, at an interest rate of 7.1%. Aggregate maturities of long-term debt are as follows: 2001-$26,892; 2002-$65,774; 2003-$21,093; 2004$20,670; 2005-$149,637 and thereafter $248,809. Terms of long-term debt agreements require compliance with certain covenants including minimum net worth, interest coverage ratios and limitations on restricted payments and levels of indebtedness. At June 30, 2000, the amount available for the payment of dividends and/or the acquisition of treasury stock was $48,062 under the most restrictive of these agreements. The Company has a revolving credit line of approximately $5,900 with a financial institution at a rate of interest of 4.65% at June 30, 2000. There was no outstanding balance under this revolving line of credit at June 30, 2000. Letters of credit issued through the revolving line of credit of $2,108 are outstanding at June 30, 2000. The revolving line of credit expires April 30, 2001. Total interest paid by the Company for the years ended June 30, 2000, 1999 and 1998 was $37,819, $36,883 and $37,143, respectively. 7. STOCKHOLDERS' EQUITY The Board of Directors has authorized the repurchase of 5,000,000 shares of common stock. Repurchased shares will be held as treasury stock and will be available for general corporate purposes, including the funding of employee benefit and stock-related plans. During the year ended June 30, 2000, 717,900 shares were repurchased, and a total of 4,240,000 shares have been repurchased through June 30, 2000. The Company's stock option plans provide for the granting of either incentive or nonqualified stock options to employees and nonemployee directors. Options are subject to terms and conditions determined by the Compensation Committee of the Board of Directors, and generally are exercisable in increments of 20% per year beginning one year from date of grant and expire 10 years from date of grant. OPTION PLAN ACTIVITY
Average Average Exercise Fair Options Price Value -------------------------------------------Outstanding at July 1, 1997 Granted at market Granted below market Granted above market Exercised Terminated Outstanding at June 30, 1998 Granted at market Exercised Terminated Outstanding at June 30, 1999 Granted at market Exercised Terminated Outstanding at 2,284,800 $ 8.83 1,598,792 18.25 $ 8.77 100,000 7.60 13.16 11,208 19.63 8.17 (199,600) 8.80 (159,600) 10.78 -------------------------------------------3,635,600 12.88 240,000 13.88 7.16 (49,700) 9.07 (40,000) 13.74 -------------------------------------------3,785,900 12.99 885,000 16.19 8.86 (76,150) 9.22 (84,800) 16.93 --------------------------------------------

June 30, 2000 Options Exercisable at June 30: 1998 1999 2000

4,509,950 13.61 --------------------------------------------

884,600 9.16 -------------------------------------------1,647,235 11.34 -------------------------------------------2,404,551 12.17 --------------------------------------------

There were 1,659,400, 859,600 and 1,059,600 shares reserved for grants of options at June 30, 2000, 1999 and 1998, respectively. The following summary provides information about stock options outstanding and exercisable at June 30, 2000:
Outstanding Exercisable ---------------------------------------------------------------------------Average Average Average Exercise Remaining Exercise Exercise Price Options Price Life (Years) Options Price ----------------------------------------------------------------------------------------------------$ 7.50-$10.50 1,680,950 $ 8.24 5.7 1,316,550 $ 8.29 $12.50-$18.00 2,617,792 16.42 7.8 1,016,793 16.51 $18.50-$23.00 211,208 21.45 8.2 71,208 21.88 ----------------------------------------------------------------------------------------------------Total 4,509,950 $ 13.61 7.0 2,404,551 $12.17 =====================================================================================================

As allowed under the Financial Accounting Standards Board Statement No. 123, Accounting for Stock-Based Compensation (SFAS No. 123), the Company applies the provisions of Accounting Principles Board Opinion No. 25 and related interpretations. The following pro forma information has been prepared as if the Company had accounted for its employee stock options using the fair value based method of accounting established by SFAS No. 123:
Year Ended June 30 2000 1999 1998 ------------------------------------Net income: As reported Pro forma Basic earnings per share: As reported Pro forma Diluted earnings per share: As reported Pro forma $59,117 54,658 $48,018 43,874 $55,260 51,482

$

1.68 1.56

$

1.34 1.23

$

1.49 1.39

$

1.65 $ 1.32 $ 1.45 1.52 1.21 1.37 -------------------------------------

The Company has estimated the fair value of each option grant using the Black-Scholes option pricing model. The fair value was estimated with the following weighted average assumptions: expected life of the stock options of eight years; volatility of the expected market price of common stock of .37 for 2000 and 1999, and .29 for 1998; a risk-free interest rate range of 6.0% to 6.2% for 2000, 4.8% to 5.2% for 1999 and 5.5% to 6.2% for 1998; and no dividends. Option pricing models, such as the Black-Scholes model, require the input of highly subjective assumptions, including the expected stock price volatility that are subject to change from time to time. Pro forma amounts reflect total compensation expense from the awards made in 1996 through 2000. Since compensation expense from stock options is recognized over the future years' vesting period, and additional awards generally are made every one to two years, pro forma amounts may not be representative of future years' amounts.

There were 1,659,400, 859,600 and 1,059,600 shares reserved for grants of options at June 30, 2000, 1999 and 1998, respectively. The following summary provides information about stock options outstanding and exercisable at June 30, 2000:
Outstanding Exercisable ---------------------------------------------------------------------------Average Average Average Exercise Remaining Exercise Exercise Price Options Price Life (Years) Options Price ----------------------------------------------------------------------------------------------------$ 7.50-$10.50 1,680,950 $ 8.24 5.7 1,316,550 $ 8.29 $12.50-$18.00 2,617,792 16.42 7.8 1,016,793 16.51 $18.50-$23.00 211,208 21.45 8.2 71,208 21.88 ----------------------------------------------------------------------------------------------------Total 4,509,950 $ 13.61 7.0 2,404,551 $12.17 =====================================================================================================

As allowed under the Financial Accounting Standards Board Statement No. 123, Accounting for Stock-Based Compensation (SFAS No. 123), the Company applies the provisions of Accounting Principles Board Opinion No. 25 and related interpretations. The following pro forma information has been prepared as if the Company had accounted for its employee stock options using the fair value based method of accounting established by SFAS No. 123:
Year Ended June 30 2000 1999 1998 ------------------------------------Net income: As reported Pro forma Basic earnings per share: As reported Pro forma Diluted earnings per share: As reported Pro forma $59,117 54,658 $48,018 43,874 $55,260 51,482

$

1.68 1.56

$

1.34 1.23

$

1.49 1.39

$

1.65 $ 1.32 $ 1.45 1.52 1.21 1.37 -------------------------------------

The Company has estimated the fair value of each option grant using the Black-Scholes option pricing model. The fair value was estimated with the following weighted average assumptions: expected life of the stock options of eight years; volatility of the expected market price of common stock of .37 for 2000 and 1999, and .29 for 1998; a risk-free interest rate range of 6.0% to 6.2% for 2000, 4.8% to 5.2% for 1999 and 5.5% to 6.2% for 1998; and no dividends. Option pricing models, such as the Black-Scholes model, require the input of highly subjective assumptions, including the expected stock price volatility that are subject to change from time to time. Pro forma amounts reflect total compensation expense from the awards made in 1996 through 2000. Since compensation expense from stock options is recognized over the future years' vesting period, and additional awards generally are made every one to two years, pro forma amounts may not be representative of future years' amounts. In August 1997, the Board of Directors authorized a restricted stock plan and set aside 800,000 of the Company's treasury shares to fund this plan. At June 30, 2000, 36,169 restricted shares had been awarded. Stock options that could potentially dilute basic earnings per share in the future, which were not included in the fully diluted computation because they would have been antidilutive, were 1,486,322, 1,575,003 and 63,589 for the years ended June 30, 2000, 1999 and 1998, respectively.

36 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

36 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 8. INCOME TAXES Provision for income taxes
Year ended June 30 2000 1999 1998 -----------------------------Current: Federal Foreign State and other $16,487 $11,120 $23,740 3,167 170 241 489 32 848 -----------------------------20,143 11,322 24,829 4,148 7,944 4,250 5,564 2,452 (561) 145 594 79 -----------------------------9,857 10,990 3,768 -----------------------------$30,000 $22,312 $28,597 ==============================

Deferred: Federal Foreign State and other

The provision for income taxes differs from the amount computed by applying the statutory federal income tax rate of 35% to income before income taxes due to the following: Rate analysis
Year Ended June 30 2000 1999 1998 ------------------------------$31,191 $24,616 $29,350 411 469 644 (4,969) (4,444) (3,244)

Expected tax expense State taxes Foreign sales corporation Effect of foreign operations Nondeductible items Other

2,892 1,680 1,988 644 529 547 (169) (538) (688) ------------------------------$30,000 $22,312 $28,597 ===============================

Significant components of the Company's deferred tax assets (liabilities) are as follows: Deferred tax assets (liabilities)
June 30 2000 1999 ---------------------Deferred tax liabilities: Depreciation Other $(72,123) $(55,735) (4,063) (3,377) ---------------------(76,186) (59,112) 6,535 5,852 2,037 1,165 5,969 4,373 5,213 2,953 -1,434 5,652 2,267 ---------------------25,406 18,044

Deferred tax assets: Postretirement benefits Inventory costs Net operating loss Nondeductible reserves AMT carryforward Other

25,406 18,044 ---------------------$(50,780) $(41,068) ======================

The Company paid income taxes of $14,304, $10,937 and $26,455 during the years ended June 30, 2000, 1999 and 1998, respectively. For the year ended June 30, 2000, income before income taxes consisted of $71,826 of domestic income and $17,291 of foreign income. For the year ended June 30, 1999, income before income taxes consisted of $66,920 of domestic income and $3,410 of foreign income. At June 30, 2000, the Company has foreign net operating loss carryforwards of approximately $33,142, which have no expiration date. 9. EMPLOYEE BENEFIT PLANS The Company has defined contribution retirement plans covering U.S. employees. The Company contributes 1% of the employee's gross compensation plus 1/2% for each year of service up to a maximum of 11% of the employee's gross compensation. The plan also provides for additional contributions by the Company contingent upon the Company's results of operations. Contribution expense for the retirement plans for the years ended June 30, 2000, 1999 and 1998 was $8,551, $9,111 and $8,096, respectively.

The Company also provides medical, dental and life insurance postretirement plans covering certain U.S. employees who meet specified age and service requirements. Certain employees who met specified age and service requirements on March 15, 1993 are covered by their previous employer and are not covered by these plans. The Company's current policy is to fund the cost of these benefits as payments to participants are required. The components of net periodic benefit costs are as follows: Effect on operations
Year Ended June 30 2000 1999 1998 ---------------------------Service cost for benefits earned Interest cost on benefit obligation Amortization of net loss from earlier periods Amortization of unrecognized prior service cost Total cost $ 849 979 -$ 841 869 1 $ 779 795 7

(600) (600) (650) ---------------------------$1,228 $1,111 $ 931 ============================

The following table provides a reconciliation of the changes in the plans' benefit obligations over the two-year period ending June 30, 2000, and a statement of the plans' funded status as of June 30, 2000 and 1999:
June 30 2000 1999 --------------------Change in benefit obligation: Obligation at beginning of year Service cost Interest cost Amendment Participant contributions Actuarial loss (gain) Benefits paid $13,186 $ 11,136 849 841 979 869 -448 38 6 437 (104) (22) (10) ---------------------

The Company also provides medical, dental and life insurance postretirement plans covering certain U.S. employees who meet specified age and service requirements. Certain employees who met specified age and service requirements on March 15, 1993 are covered by their previous employer and are not covered by these plans. The Company's current policy is to fund the cost of these benefits as payments to participants are required. The components of net periodic benefit costs are as follows: Effect on operations
Year Ended June 30 2000 1999 1998 ---------------------------Service cost for benefits earned Interest cost on benefit obligation Amortization of net loss from earlier periods Amortization of unrecognized prior service cost Total cost $ 849 979 -$ 841 869 1 $ 779 795 7

(600) (600) (650) ---------------------------$1,228 $1,111 $ 931 ============================

The following table provides a reconciliation of the changes in the plans' benefit obligations over the two-year period ending June 30, 2000, and a statement of the plans' funded status as of June 30, 2000 and 1999:
June 30 2000 1999 --------------------Change in benefit obligation: Obligation at beginning of year Service cost Interest cost Amendment Participant contributions Actuarial loss (gain) Benefits paid Underfunded status at end of year Unrecognized prior service cost Unrecognized loss Other Net amount recognized in the consolidated balance sheet $13,186 $ 11,136 849 841 979 869 -448 38 6 437 (104) (22) (10) --------------------15,467 13,186 2,957 3,557 (1,469) (1,034) 576 561 --------------------$17,531 $ 16,270 =====================

The weighted average annual assumed rate of increase in the per capita cost of covered benefits (i.e. health care cost trend rate) for the medical plans is 7.5% for 2001 and is assumed to decrease gradually to 5.0% in 2006 and remain level thereafter. Due to the benefit cost limitations in the plan, the health care cost trend rate assumption does not have a significant effect on the amounts reported. The weighted average discount rate used in determining the accumulated postretirement benefit obligation was 7.25% at June 30, 2000 and 7% at June 30, 1999. 10. SIGNIFICANT CUSTOMER Gross sales to Procter & Gamble Company and its affiliates (P&G) for the years ended June 30, 2000, 1999 and 1998 were 31%, 35% and 31%, respectively, of total gross sales.

The Company and P&G are parties to the Pulp Supply Agreement (the "Supply Agreement"), which provides that P&G will purchase, under a take-or-pay agreement, a specified tonnage of fluff pulp annually at the higher of the formula price or market price in calendar years 1999 and 2000, and at market price in calendar years 2001 and 2002. Currently, the formula price paid by P&G under the Supply Agreement exceeds the market price for fluff pulp. The specified tonnage decreases in calendar 2001 and further decreases in calendar 2002. The impact of the scheduled contract changes at January 1, 2001 may result in an adverse effect on the Company's business, results of operations, and financial condition if present market conditions deteriorate. 11. SEGMENT INFORMATION The Company operates in one segment consisting of the manufacturing and marketing of value-added cellulosebased specialty products. All of the Company's products involve similar production processes, are sold to similar classes of customers and markets, are distributed using the same methods, and operate in similar regulatory environments.

38 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) The Company's identifiable products are chemical cellulose, customized paper cellulose and absorbent products. Chemical cellulose is used to impart purity, strength and viscosity in the manufacture of diversified products such as food casings, rayon filament and acetate plastics, as well as thickeners for food, cosmetics and pharmaceuticals. Customized paper cellulose is used to provide porosity, color permanence and tear resistance in automotive air and oil filters, premium letterhead, currency paper and personal stationery. Absorbent products are used to increase absorbency and fluid transport in products such as disposable diapers, feminine hygiene products, adult incontinence products and household wipes and mops. The following provides relative gross sales to unaffiliated customers by product:
Year Ended June 30 2000 1999 1998 ---------------------31% 35% 39% 18% 22% 22% 51% 43% 39% ---------------------100% 100% 100% ======================

Chemical cellulose Customized paper cellulose Absorbent products

The Company has manufacturing operations in the United States, Canada, Germany and Ireland. The following provides a summary of net sales to unaffiliated customers, based on point of origin, and long-lived assets by geographic areas:
Year Ended June 30 2000 1999 1998 ---------------------------------Net sales: United States Germany Other Total net sales Long-lived assets: United States Canada Germany Other Total long-lived assets $532,116 $504,219 $539,132 91,355 41,894 44,792 89,286 71,594 46,286 ---------------------------------$712,757 $617,707 $630,210 ================================== $433,967 $354,835 $343,475 121,665 121,532 124,473 67,791 13,235 14,617 52,539 51,664 53,932 ---------------------------------$675,962 $541,266 $536,497 ==================================

38 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) The Company's identifiable products are chemical cellulose, customized paper cellulose and absorbent products. Chemical cellulose is used to impart purity, strength and viscosity in the manufacture of diversified products such as food casings, rayon filament and acetate plastics, as well as thickeners for food, cosmetics and pharmaceuticals. Customized paper cellulose is used to provide porosity, color permanence and tear resistance in automotive air and oil filters, premium letterhead, currency paper and personal stationery. Absorbent products are used to increase absorbency and fluid transport in products such as disposable diapers, feminine hygiene products, adult incontinence products and household wipes and mops. The following provides relative gross sales to unaffiliated customers by product:
Year Ended June 30 2000 1999 1998 ---------------------31% 35% 39% 18% 22% 22% 51% 43% 39% ---------------------100% 100% 100% ======================

Chemical cellulose Customized paper cellulose Absorbent products

The Company has manufacturing operations in the United States, Canada, Germany and Ireland. The following provides a summary of net sales to unaffiliated customers, based on point of origin, and long-lived assets by geographic areas:
Year Ended June 30 2000 1999 1998 ---------------------------------Net sales: United States Germany Other Total net sales Long-lived assets: United States Canada Germany Other Total long-lived assets $532,116 $504,219 $539,132 91,355 41,894 44,792 89,286 71,594 46,286 ---------------------------------$712,757 $617,707 $630,210 ================================== $433,967 $354,835 $343,475 121,665 121,532 124,473 67,791 13,235 14,617 52,539 51,664 53,932 ---------------------------------$675,962 $541,266 $536,497 ==================================

For the year ended June 30, 2000, the Company's gross sales by destination were concentrated in the following geographic markets: Europe - 37%, North America - 36%, Asia - 15%, South America - 7% and Other - 5%. 12. RESEARCH AND DEVELOPMENT EXPENSES Research and development costs of $13,059, $10,924 and $10,732 were charged to expense as incurred for the years ended June 30, 2000, 1999 and 1998, respectively. 13. COMMITMENTS At June 30, 2000, under two separate agreements expiring by December 31, 2010, the Company is required to purchase, at market prices, certain timber from specified tracts of land that is available for harvest. At June 30, 2000, estimated annual purchase obligations were as follows: 2001 - $21,000; 2002 - $22,000; 2003 $22,000; 2004 - $21,000; 2005 - $22,000 and thereafter - $129,000. Purchases under these agreements for the years ended June 30, 2000, 1999 and 1998 were $25,541, $21,629 and $16,522, respectively.

The Company has committed to the construction of a large airlaid nonwovens machine at the Gaston County, North Carolina plant. The total cost of this project will approach $100,000. 14. CONTINGENCIES The Company's operations are subject to extensive general and industry-specific federal, state, local and foreign environmental laws and regulations. The Company devotes significant resources to maintaining compliance with these laws and regulations. The Company expects that, due to the nature of its operations, it will be subject to increasingly stringent environmental requirements (including standards applicable to wastewater discharges and air emissions) and will continue to incur substantial costs to comply with these requirements. Because it is difficult to predict the scope of future requirements, there can be no assurance that the Company will not in the future incur material environmental compliance costs or liabilities.

The Foley Plant discharges treated wastewater into the Fenholloway River. Under the terms of an agreement with the Florida Department of Environmental Protection ("FDEP"), approved by the U.S. Environmental Protection Agency ("EPA") in 1995, the Company agreed to a comprehensive plan to attain Class III ("fishable/swimmable") status for the Fenholloway River under applicable Florida law (the "Fenholloway Agreement"). The Fenholloway Agreement requires the Company, among other things, to (i) make process changes within the Foley Plant to reduce the coloration of its wastewater discharge, (ii) restore certain wetlands areas, (iii) relocate the wastewater discharge point into the Fenholloway River to a point closer to the mouth of the river, and (iv) provide oxygen enrichment to the treated wastewater prior to discharge at the new location. The Company has already made significant expenditures to make certain in-plant process changes required by the Fenholloway Agreement, and the Company estimates, based on 1997 projections, it will incur additional capital expenditures of approximately $40 million through fiscal 2005 to comply with the remaining obligations under the Fenholloway Agreement. The EPA has objected to several provisions of the renewal permit for the Foley effluent discharge. The Company and the FDEP, which is the delegated permitting authority, requested a public hearing on the objections. The EPA requested additional environmental studies to identify possible alternatives to the relocation of the discharge point to determine if more cost effective technologies are available to address both Class III water quality standards for the Fenholloway River and anticipated EPA "cluster rules" applicable to wastewater discharges from dissolving kraft pulp mills, like the Foley Plant. The Company completed the process changes within the Foley Plant as required by the Fenholloway Agreement. The other requirements of the Fenholloway Agreement have been deferred until the EPA objections to the renewal permit are satisfactorily resolved. Consequently, a portion of the estimated $40 million in capital expenditures may be delayed beyond fiscal 2005, and the total capital expenditures for the Foley Plant may increase if prices increase or the Company is required by the "cluster rules" to implement other technologies. While the EPA has not yet proposed wastewater standards under the "cluster rules" applicable to dissolving kraft pulp mills like the Foley Plant, the EPA has issued air emission standards applicable to the Foley Plant. The Company is reviewing these air emission standards and presently does not believe that such expenditures required by them are likely to have a material adverse effect on the Company's business, results of operations or financial condition. The Company is involved in certain legal actions and claims arising in the ordinary course of business. It is the opinion of management that such litigation and claims will be resolved without a materially adverse effect on the Company's financial position or results of operations. 15. FAIR VALUES OF FINANCIAL INSTRUMENTS For certain of the Company's financial instruments, including cash and cash equivalents, accounts receivable and accounts payable, the carrying amounts approximate fair value due to their short maturities. The fair value of the Company's long-term public debt is based on an average of the bid and offer prices at year-end. The fair value of the credit facility approximates its carrying value due to its variable interest rate. The carrying value of other longterm debt approximates fair value based on the Company's current incremental borrowing rates for similar types of borrowing instruments. The carrying value and fair value of long-term debt at June 30, 2000 were $532,875 and $520,374, respectively and at June 30, 1999 were $441,214 and $434,647, respectively.

The Foley Plant discharges treated wastewater into the Fenholloway River. Under the terms of an agreement with the Florida Department of Environmental Protection ("FDEP"), approved by the U.S. Environmental Protection Agency ("EPA") in 1995, the Company agreed to a comprehensive plan to attain Class III ("fishable/swimmable") status for the Fenholloway River under applicable Florida law (the "Fenholloway Agreement"). The Fenholloway Agreement requires the Company, among other things, to (i) make process changes within the Foley Plant to reduce the coloration of its wastewater discharge, (ii) restore certain wetlands areas, (iii) relocate the wastewater discharge point into the Fenholloway River to a point closer to the mouth of the river, and (iv) provide oxygen enrichment to the treated wastewater prior to discharge at the new location. The Company has already made significant expenditures to make certain in-plant process changes required by the Fenholloway Agreement, and the Company estimates, based on 1997 projections, it will incur additional capital expenditures of approximately $40 million through fiscal 2005 to comply with the remaining obligations under the Fenholloway Agreement. The EPA has objected to several provisions of the renewal permit for the Foley effluent discharge. The Company and the FDEP, which is the delegated permitting authority, requested a public hearing on the objections. The EPA requested additional environmental studies to identify possible alternatives to the relocation of the discharge point to determine if more cost effective technologies are available to address both Class III water quality standards for the Fenholloway River and anticipated EPA "cluster rules" applicable to wastewater discharges from dissolving kraft pulp mills, like the Foley Plant. The Company completed the process changes within the Foley Plant as required by the Fenholloway Agreement. The other requirements of the Fenholloway Agreement have been deferred until the EPA objections to the renewal permit are satisfactorily resolved. Consequently, a portion of the estimated $40 million in capital expenditures may be delayed beyond fiscal 2005, and the total capital expenditures for the Foley Plant may increase if prices increase or the Company is required by the "cluster rules" to implement other technologies. While the EPA has not yet proposed wastewater standards under the "cluster rules" applicable to dissolving kraft pulp mills like the Foley Plant, the EPA has issued air emission standards applicable to the Foley Plant. The Company is reviewing these air emission standards and presently does not believe that such expenditures required by them are likely to have a material adverse effect on the Company's business, results of operations or financial condition. The Company is involved in certain legal actions and claims arising in the ordinary course of business. It is the opinion of management that such litigation and claims will be resolved without a materially adverse effect on the Company's financial position or results of operations. 15. FAIR VALUES OF FINANCIAL INSTRUMENTS For certain of the Company's financial instruments, including cash and cash equivalents, accounts receivable and accounts payable, the carrying amounts approximate fair value due to their short maturities. The fair value of the Company's long-term public debt is based on an average of the bid and offer prices at year-end. The fair value of the credit facility approximates its carrying value due to its variable interest rate. The carrying value of other longterm debt approximates fair value based on the Company's current incremental borrowing rates for similar types of borrowing instruments. The carrying value and fair value of long-term debt at June 30, 2000 were $532,875 and $520,374, respectively and at June 30, 1999 were $441,214 and $434,647, respectively.

40 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 16. QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)
First Second Third Fourth Quarter Quarter Quarter Quarter ----------------------------------------------Year ended June 30, 2000 Net sales Gross margin Operating income Net income Earnings per share: $153,400 42,220 29,990 13,355 $183,702 47,636 34,066 14,238 $188,388 49,636 35,315 14,894 $187,267 52,141 37,537 16,630

40 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 16. QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)
First Second Third Fourth Quarter Quarter Quarter Quarter ----------------------------------------------Year ended June 30, 2000 Net sales Gross margin Operating income Net income Earnings per share: Basic Diluted Year ended June 30, 1999 Net sales Gross margin Operating income Net income Earnings per share: Basic Diluted $153,400 42,220 29,990 13,355 $183,702 47,636 34,066 14,238 $188,388 49,636 35,315 14,894 $187,267 52,141 37,537 16,630

0.38 0.40 0.43 0.48 0.37 0.40 0.42 0.46 ----------------------------------------------$156,177 42,354 30,526 13,383 $147,274 38,005 27,600 10,874 $155,880 38,883 27,803 11,488 $158,376 39,350 27,095 12,273

0.37 0.30 0.32 0.35 0.36 0.30 0.32 0.34 -----------------------------------------------

The Company's effective tax rate for the fourth quarter of fiscal 2000 was 35.3% compared to 33.0% for the nine months ended March 31, 2000. The increase was primarily the result of increased profits in the Company's foreign operations, which are taxed at higher rates. The Company's effective tax rate for the fourth quarter of fiscal 1999 was 24.0% compared to 34.0% for the nine months ended March 31, 1999. The decrease was primarily the result of the recognition of additional benefit from the Company's optimization of its foreign sales corporation. 17. SUBSEQUENT EVENT On July 26, 2000, the Company announced its purchase of the cotton cellulose business of Fibra, S.A. (Fibra), located in Americana, Brazil, for approximately $35,000. The Company will assume operation of the facility on August 1, 2000. Fibra and the Company concurrently entered into a contract under which this plant will continue to supply cotton cellulose for Fibra's staple rayon operations in Brazil. The acquisition has been funded using borrowings from the Company's bank credit facility.

REPORT OF INDEPENDENT AUDITORS To the Board of Directors and Stockholders of Buckeye Technologies Inc. We have audited the accompanying consolidated balance sheets of Buckeye Technologies Inc. as of June 30, 2000 and 1999 and the related consolidated statements of income, stockholders' equity and cash flows for each of the three years in the period ended June 30, 2000. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

REPORT OF INDEPENDENT AUDITORS To the Board of Directors and Stockholders of Buckeye Technologies Inc. We have audited the accompanying consolidated balance sheets of Buckeye Technologies Inc. as of June 30, 2000 and 1999 and the related consolidated statements of income, stockholders' equity and cash flows for each of the three years in the period ended June 30, 2000. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of Buckeye Technologies Inc. at June 30, 2000 and 1999, and the consolidated results of its operations and its cash flows for each of the three years in the period ended June 30, 2000, in conformity with accounting principles generally accepted in the United States.
/s/ Ernst & Young LLP --------------------Memphis, Tennessee July 31, 2000

42 SELECTED FINANCIAL DATA
(In thousands, except per share data) Operating data: Net sales Operating income Income before extraordinary loss Net income Basic earnings per share: Income before extraordinary loss Net income Diluted earnings per share: Income before extraordinary loss Net income Balance sheet data: Total assets Long-term debt less current portion Other data:(d) Company EBITDA Year Ended June 30 2000(a) 1999 1998 1997(b) 1996 --------------------------------------------------------$712,757 136,908 59,117 59,117 1.68 1.68 1.65 1.65 $617,707 113,024 48,018 48,018 1.34 1.34 1.32 1.32 $630,210 122,411 55,260 55,260 1.49 1.49 1.45 1.45 $558,933 109,392 53,274 53,274 1.40 1.40 1.38 1.38 $470, 108, 47, 43, 1 1 1 1

$930,721 505,983

$747,882 441,214

$751,536 456,332

$737,464 474,631

$452, 217,

$180,323 $152,009 $162,397 $143,024 $134, ---------------------------------------------------------

(a) Includes the operations of Walkisoft from October 1, 1999, its date of acquisition. (b) Includes the operations of Alpha Cellulose Holdings, Inc. from September 1, 1996 and Merfin International Inc. from May 28, 1997, their respective dates of acquisition. (c) An extraordinary loss of $3,949, net of tax benefit, was recognized on the early retirement of debt. A minority interest charge ceased on November 28, 1995. This data includes the operations of the specialty cellulose business of Peter Temming A.G. from May 1, 1996, the date of acquisition.

42 SELECTED FINANCIAL DATA
(In thousands, except per share data) Operating data: Net sales Operating income Income before extraordinary loss Net income Basic earnings per share: Income before extraordinary loss Net income Diluted earnings per share: Income before extraordinary loss Net income Balance sheet data: Total assets Long-term debt less current portion Other data:(d) Company EBITDA Year Ended June 30 2000(a) 1999 1998 1997(b) 1996 --------------------------------------------------------$712,757 136,908 59,117 59,117 1.68 1.68 1.65 1.65 $617,707 113,024 48,018 48,018 1.34 1.34 1.32 1.32 $630,210 122,411 55,260 55,260 1.49 1.49 1.45 1.45 $558,933 109,392 53,274 53,274 1.40 1.40 1.38 1.38 $470, 108, 47, 43, 1 1 1 1

$930,721 505,983

$747,882 441,214

$751,536 456,332

$737,464 474,631

$452, 217,

$180,323 $152,009 $162,397 $143,024 $134, ---------------------------------------------------------

(a) Includes the operations of Walkisoft from October 1, 1999, its date of acquisition. (b) Includes the operations of Alpha Cellulose Holdings, Inc. from September 1, 1996 and Merfin International Inc. from May 28, 1997, their respective dates of acquisition. (c) An extraordinary loss of $3,949, net of tax benefit, was recognized on the early retirement of debt. A minority interest charge ceased on November 28, 1995. This data includes the operations of the specialty cellulose business of Peter Temming A.G. from May 1, 1996, the date of acquisition. (d) Company EBITDA represents earnings before interest, taxes, depreciation, amortization, depletion, minority interest, extraordinary loss, secondary offering costs and other noncash charges. This data should not be considered in isolation and is not intended to be a substitute for income statement or cash flow statement data as a measure of the Company's profitability (see Consolidated Financial Statements).

44 STOCKHOLDER INFORMATION COMMON STOCK PRICE RANGE
Year Ended June 30 2000 1999 High Low High Low ----------------------------------------------$17 7/8 $14 3/8 $25 3/8 $14 16 15/16 14 7/16 21 1/8 11 3/4 20 14 1/4 15 7/16 12 1/8 23 1/2 17 5/8 17 12 3/4 -----------------------------------------------

First quarter (ended September 30) Second quarter (ended December 31) Third quarter (ended March 31) Fourth quarter (ended June 30)

The Company has no plans to pay dividends in the foreseeable future. STOCK LISTING AND SHAREHOLDERS Buckeye Technologies Inc. is traded on the New York Stock Exchange under the symbol BKI. There were approximately 6,000 shareholders on September 1, 2000, based on the number of record holders of the Company's common stock and an estimate of the number of individual participants represented by security position listings.

44 STOCKHOLDER INFORMATION COMMON STOCK PRICE RANGE
Year Ended June 30 2000 1999 High Low High Low ----------------------------------------------$17 7/8 $14 3/8 $25 3/8 $14 16 15/16 14 7/16 21 1/8 11 3/4 20 14 1/4 15 7/16 12 1/8 23 1/2 17 5/8 17 12 3/4 -----------------------------------------------

First quarter (ended September 30) Second quarter (ended December 31) Third quarter (ended March 31) Fourth quarter (ended June 30)

The Company has no plans to pay dividends in the foreseeable future. STOCK LISTING AND SHAREHOLDERS Buckeye Technologies Inc. is traded on the New York Stock Exchange under the symbol BKI. There were approximately 6,000 shareholders on September 1, 2000, based on the number of record holders of the Company's common stock and an estimate of the number of individual participants represented by security position listings.

Exhibit 21.1 SUBSIDIARIES OF THE REGISTRANT
SUBSIDIARY ---------Buckeye Florida Corporation Buckeye Foley Corporation Buckeye Florida, Limited Partnership Buckeye S. A. Buckeye (Barbados) Ltd. BKI Holding Corporation BKI Finance Corporation BKI Asset Management Corporation Buckeye Lumberton Inc. Buckeye Mt. Holly LLC Buckeye Canada Inc. Buckeye Technologies Ireland Ltd. Merfin Systems Inc. BKI International Inc. Buckeye France SARL Buckeye Iberia S.A. Buckeye Italia S.t.l. Buckeye (U.K.) Limited Buckeye Finland OY Buckeye Holdings GmbH Buckeye Technologies GmbH Buckeye Steinfurt GmbH JURISDICTION OF INCORPORATION ----------------------------Delaware Delaware Delaware Switzerland Barbados Delaware Tennessee Delaware North Carolina Delaware Canada Ireland Delaware Delaware France Spain Italy United Kingdom Finland Germany Germany Germany

Exhibit 23.0 Consent of Independent Auditors We consent to the incorporation by reference in this Annual Report (Form 10-K) of Buckeye Technologies Inc. of our report dated July 31, 2000, included in the 2000 Annual Report to Shareholders of Buckeye Technologies

Exhibit 21.1 SUBSIDIARIES OF THE REGISTRANT
SUBSIDIARY ---------Buckeye Florida Corporation Buckeye Foley Corporation Buckeye Florida, Limited Partnership Buckeye S. A. Buckeye (Barbados) Ltd. BKI Holding Corporation BKI Finance Corporation BKI Asset Management Corporation Buckeye Lumberton Inc. Buckeye Mt. Holly LLC Buckeye Canada Inc. Buckeye Technologies Ireland Ltd. Merfin Systems Inc. BKI International Inc. Buckeye France SARL Buckeye Iberia S.A. Buckeye Italia S.t.l. Buckeye (U.K.) Limited Buckeye Finland OY Buckeye Holdings GmbH Buckeye Technologies GmbH Buckeye Steinfurt GmbH JURISDICTION OF INCORPORATION ----------------------------Delaware Delaware Delaware Switzerland Barbados Delaware Tennessee Delaware North Carolina Delaware Canada Ireland Delaware Delaware France Spain Italy United Kingdom Finland Germany Germany Germany

Exhibit 23.0 Consent of Independent Auditors We consent to the incorporation by reference in this Annual Report (Form 10-K) of Buckeye Technologies Inc. of our report dated July 31, 2000, included in the 2000 Annual Report to Shareholders of Buckeye Technologies Inc. Our audits also included the financial statement schedule of Buckeye Technologies Inc. listed in Item 14(a)(2). This schedule is the responsibility of the Company's management. Our responsibility is to express an opinion based on our audits. In our opinion, the financial statement schedule referred to above, when considered in relation to the basic financial statements taken as a whole, presents fairly in all material respects the information set forth therein. We also consent to the incorporation by reference in the Registration Statements (Form S-8, Numbers 3380865, 33-80867, 33-33621, 33-61373, and 33-61371) pertaining to the Buckeye Retirement Plus Savings Plan, the Buckeye Retirement Plan, the Alpha Cellulose Cash Option Thrift Plan, the Restricted Stock Plan, and the Merfin Systems 401(K) Profit Sharing Plan, of our reports dated July 31, 2000, with respect to the consolidated financial statements and schedule of Buckeye Technologies Inc. included or incorporated by reference in this Annual Report (Form 10-K) for the year ended June 30, 2000. Memphis, Tennessee September 22, 2000

ARTICLE 5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE FINANCIAL STATEMENTS OF BUCKEYE TECHNOLOGIES FOR THE TWELVE MONTHS ENDED JUNE 30, 2000 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. MULTIPLIER: 1,000

Exhibit 23.0 Consent of Independent Auditors We consent to the incorporation by reference in this Annual Report (Form 10-K) of Buckeye Technologies Inc. of our report dated July 31, 2000, included in the 2000 Annual Report to Shareholders of Buckeye Technologies Inc. Our audits also included the financial statement schedule of Buckeye Technologies Inc. listed in Item 14(a)(2). This schedule is the responsibility of the Company's management. Our responsibility is to express an opinion based on our audits. In our opinion, the financial statement schedule referred to above, when considered in relation to the basic financial statements taken as a whole, presents fairly in all material respects the information set forth therein. We also consent to the incorporation by reference in the Registration Statements (Form S-8, Numbers 3380865, 33-80867, 33-33621, 33-61373, and 33-61371) pertaining to the Buckeye Retirement Plus Savings Plan, the Buckeye Retirement Plan, the Alpha Cellulose Cash Option Thrift Plan, the Restricted Stock Plan, and the Merfin Systems 401(K) Profit Sharing Plan, of our reports dated July 31, 2000, with respect to the consolidated financial statements and schedule of Buckeye Technologies Inc. included or incorporated by reference in this Annual Report (Form 10-K) for the year ended June 30, 2000. Memphis, Tennessee September 22, 2000

ARTICLE 5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE FINANCIAL STATEMENTS OF BUCKEYE TECHNOLOGIES FOR THE TWELVE MONTHS ENDED JUNE 30, 2000 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. MULTIPLIER: 1,000

PERIOD TYPE FISCAL YEAR END PERIOD END CASH SECURITIES RECEIVABLES ALLOWANCES INVENTORY CURRENT ASSETS PP&E DEPRECIATION TOTAL ASSETS CURRENT LIABILITIES BONDS PREFERRED MANDATORY PREFERRED COMMON OTHER SE TOTAL LIABILITY AND EQUITY SALES TOTAL REVENUES CGS TOTAL COSTS OTHER EXPENSES LOSS PROVISION INTEREST EXPENSE INCOME PRETAX INCOME TAX INCOME CONTINUING DISCONTINUED EXTRAORDINARY CHANGES NET INCOME

YEAR JUN 30 2000 JUN 30 2000 12,257 0 113,118 1,219 107,238 244,950 717,646 197,244 930,721 134,838 505,983 0 0 431 213,548 930,721 712,757 712,757 521,124 575,849 5,047 0 42,744 89,117 30,000 59,117 0 0 0 59,117

ARTICLE 5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE FINANCIAL STATEMENTS OF BUCKEYE TECHNOLOGIES FOR THE TWELVE MONTHS ENDED JUNE 30, 2000 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. MULTIPLIER: 1,000

PERIOD TYPE FISCAL YEAR END PERIOD END CASH SECURITIES RECEIVABLES ALLOWANCES INVENTORY CURRENT ASSETS PP&E DEPRECIATION TOTAL ASSETS CURRENT LIABILITIES BONDS PREFERRED MANDATORY PREFERRED COMMON OTHER SE TOTAL LIABILITY AND EQUITY SALES TOTAL REVENUES CGS TOTAL COSTS OTHER EXPENSES LOSS PROVISION INTEREST EXPENSE INCOME PRETAX INCOME TAX INCOME CONTINUING DISCONTINUED EXTRAORDINARY CHANGES NET INCOME EPS BASIC EPS DILUTED

YEAR JUN 30 2000 JUN 30 2000 12,257 0 113,118 1,219 107,238 244,950 717,646 197,244 930,721 134,838 505,983 0 0 431 213,548 930,721 712,757 712,757 521,124 575,849 5,047 0 42,744 89,117 30,000 59,117 0 0 0 59,117 1.68 1.65