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CHARGES RELATED TO PERFORMANCE IMPROVEMENT PLAN AND SALE OF UNIT TO REDUCE MEAD'S QUARTERLY NET EARNINGS

 CHARGES RELATED TO PERFORMANCE IMPROVEMENT PLAN
 AND SALE OF UNIT TO REDUCE MEAD'S QUARTERLY NET EARNINGS
 DAYTON, Ohio, July 2 /PRNewswire/ -- The Mead Corporation (NYSE: MEA) today announced the establishment of a special reserve to cover a company-wide performance improvement program and the signing of an agreement to sell Ampad Corporation, its commercial office products business. Together, these actions will reduce the company's second quarter net earnings by $1.30 per share.
 Mead performed well during the second quarter, compared to the same period in 1991, despite continued soft pricing in the paper business. The company estimates that its second quarter earnings before these special charges will be in the range of 70 cents per share, compared to 32 cents a year ago.
 In addition, the company will restate its first quarter 1992 net earnings to reflect the early adoption of FASB 109, a new accounting standard that requires determination of all tax liabilities at current tax rates. This restatement will increase first quarter net earnings from 30 cents to 86 cents per share after dilution.
 Mead announced it is undertaking a comprehensive performance improvement program that will be implemented throughout the company over the next two to three years. To cover costs associated with this effort, the company has established a special reserve of $95 million, which will reduce second quarter net earnings by $1.00 per share.
 The program is aimed at improving Mead's ability to achieve consistently higher performance. "We're doing this to improve our results," said Steven C. Mason, chairman and chief executive officer. "The company will focus on increasing its operating emphasis on customer satisfaction, achieving productivity gains in each business, and streamlining its corporate and division staff operations."
 Included in the reserve are costs associated with employee severance, retraining, relocation, counseling and outplacement. The company estimates that it will eliminate approximately 1,000 staff and management positions throughout the company, resulting in annualized savings of $60 million. Mead employs more than 21,000 people worldwide.
 "We are committed to taking the steps necessary to capitalize fully on the strengths and business strategies we have put in place during the past several years," Mason said. "We simply won't be satisfied until we perform to our full potential."
 Mead also said it has signed an agreement to sell its commercial office products business, Ampad, to Bain Capital, a Boston-based investment firm. The closing is anticipated to occur by the end of this month.
 Mead did not disclose the terms of the sale, but reported that the transaction will generate approximately $56 million in cash after reflecting tax benefits. The company also indicated the sale will reduce second quarter net earnings by 30 cents per share.
 Ampad Corporation was acquired by Mead in 1986 and integrated with its long-standing school products business. Ampad's sales in 1991 amounted to $107 million. The business earned a small profit in 1991.
 "Channels for the sale of commercial office products changed dramatically, making it difficult to develop synergy between Ampad's product lines and our existing office products and school supplies lines," Mason said. "Selling Ampad allows us to concentrate on manufacturing and selling school, home and office supplies through retail markets, where we have traditionally played a leading role." The cash generated from the transaction will be used to reduce debt. Mead remains the largest manufacturer of school supplies in the U.S.
 In a final comment on earnings, Mason said that a province-wide strike in British Columbia, which shut down Northwood Forest Industries' pulp mill in mid-June, would have a slight negative impact on Mead's second quarter results. The mill is jointly owned by Mead and Noranda Forest Inc.
 Mead Corporation, headquartered in Dayton, Ohio, is a leader in forest products and electronic publishing.
 -0- 7/2/92
 /CONTACT: Sharon Williamson of The Mead Corporation, 513-495-3535/
 (MEA) CO: The Mead Corporation ST: Ohio IN: PAP SU:


KK -- CL005 -- 6014 07/02/92 08:13 EDT
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Date:Jul 2, 1992
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