J.C. Shepherd - Page 4




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         Long-Term Timber Lease of Family Land                                        
              As described above, by 1957 petitioner and his father each              
         owned a 50-percent interest in the family land.  On January 3,               
         1957, petitioner and his father entered into a long-term timber              
         lease with Hiwassee, granting Hiwassee the right to cut and                  
         remove timber on 9,091 acres (the leased land).2  The term of the            
         lease is for 66 years, expiring on January 1, 2023.                          
              Hiwassee agreed to pay annual rent of $1.75 per acre,                   
         payable for each calendar year by February 1 of that year.  The              
         annual rent is to be adjusted each year by the same percentage as            
         the annual average of the Wholesale Price Index for all                      
         commodities (now the Producer Price Index) (PPI) increases or                
         decreases relative to the Wholesale Price Index for 1955.  The               
         annual rents are adjusted “only for increments of increase or                
         decrease equaling or exceeding five percent (5%) from the 1955               













               2 Bowater, Inc., is the successor in interest to the rights            
          of Hiwassee Land Co. (Hiwassee) under the lease on the subject              
          property.  References to Hiwassee hereinafter also include                  
          references to Bowater, Inc., as successor in interest.                      





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Last modified: May 25, 2011