[As amended through July 29, 1999]
CONFIDENTIAL
(Date)
[ ]
Dear [ ]:
Boise Cascade Corporation (the 'Company') considers it essential to the
best interests of its stockholders to foster the continuous employment of
key management personnel in the event there is, or is threatened, a change
in control of the Company. In this connection, the Board of Directors of
the Company (the 'Board') recognizes that the possibility of a change in
control may exist and that such possibility, and the uncertainty and
questions which it may raise among management, may result in the departure
or distraction of management personnel to the detriment of the Company and
its stockholders.
The Board has determined that appropriate steps should be taken to
reinforce and encourage the continued attention and dedication of members
of the management, including yourself, to their assigned duties without
distraction Company's in the face of potentially disturbing circumstances
arising from the possibility of a change in control of the Company,
although no such change is now contemplated.
In order to induce you to remain in the employ of the Company in the
face of a change in control of the Company and in consideration of your
agreement set forth in Section 2.B hereof, the Company agrees that you
shall receive the severance benefits set forth in this letter agreement in
the event your employment with the Company is terminated prior or
subsequent to a 'change in control of the Company' (as defined in Section 2
hereof) under the circumstances described below.
1. TERM OF AGREEMENT. This Agreement amends, supersedes, and
restates in its entirety the Agreement between you and the Company dated
____________. This amendment shall be effective on the date hereof and
shall continue in effect through [ ]; provided, however, that
commencing on [ ], and each January 1 thereafter, the term of
this Agreement shall automatically be extended so as to terminate on the
third anniversary of such date, unless, not later than September 30 of the
preceding year, the Company shall have given notice not to extend this
Agreement; provided, however, if a change in control of the Company (as
defined in Section 2 hereof) shall have occurred during the term of this
Agreement, this Agreement shall continue in effect for a period of not less
than twenty-four months beyond the month in which such change in control of
the Company occurred.
2. CHANGE IN CONTROL.
A. No benefits shall be payable hereunder unless there shall
have been a change in control of the Company, as set forth below, and your
employment by the Company shall have been terminated in accordance with
Section 3 below. A 'change in control of the Company' shall be deemed to
have occurred if the event set forth in any one of the following paragraphs
shall have occurred:
(1) Any Person is or becomes the Beneficial Owner, directly
or indirectly, of securities of the Company representing 20% or more of
either the then outstanding shares of common stock of the Company or the
combined voting power of the Company's then outstanding securities;
provided, however, if such Person acquires securities directly from the
Company, such securities shall not be included unless such Person acquires
additional securities which, when added to the securities acquired directly
from the Company, exceed 20% of the Company's then outstanding shares of
common stock or the combined voting power of the Company's then outstanding
securities; and provided further that any acquisition of securities by any
Person in connection with a transaction described in Subsection 2A(3)(i) of
this Agreement shall not be deemed to be a change in control of the
Company; or
(2) The following individuals cease for any reason to
constitute at least 66 2/3% of the number of directors then serving:
individuals who, on the date hereof, constitute the Board and any new
director (other than a director whose initial assumption of office is in
connection with an actual or threatened election contest, including but not
limited to a consent solicitation, relating to the election of directors of
the Company) whose appointment or election by the Board or nomination for
election by the Company's stockholders was approved by a vote of at least
two-thirds (2/3) of the directors then still in office who either were
directors on the date hereof or whose appointment, election or nomination
for election was previously so approved (the 'Continuing Directors'); or
(3) The consummation of a merger or consolidation of the
Company (or any direct or indirect subsidiary of the Company) with any
other corporation other than (i) a merger or consolidation which would
result in both (a) continuing directors continuing to constitute at least
66 2/3% of the number of directors of the combined entity immediately
following consummation of such merger or consolidation and (b) the voting
securities of the Company outstanding immediately prior to such merger or
consolidation continuing to represent (either by remaining outstanding or
by being converted into voting securities of the surviving entity or any
parent thereof) at least 66 2/3% of the combined voting power of the voting
securities of the Company or such surviving entity or any parent thereof
outstanding immediately after such merger or consolidation, or (ii) a
merger or consolidation effected to implement a recapitalization of the
Company (or similar transaction) in which no Person is or becomes the
Beneficial Owner, directly or indirectly, of securities of the Company
representing 20% or more of either the then outstanding shares of common
stock of the Company or the combined voting power of the Company's then
outstanding securities; provided, however, if such Person acquires
securities directly from the Company, such securities shall not be
included unless such Person acquires additional securities which, when
added to the securities acquired directly from the Company, exceed 20% of
the Company's then outstanding shares of common stock or the combined
voting power of the Company's then outstanding securities; and provided
further that any acquisition of securities by any Person in connection
with a transaction described in Subsection 2A(3)(i) of this Agreement
shall not be deemed to be a change in control of the Company; or
(4) The stockholders of the Company approve a plan of
complete liquidation or dissolution of the Company or the consummation of
an agreement for the sale or disposition by the Company of all or
substantially all of the Company's assets, other than a sale or disposition
by the Company of all or substantially all of the Company's assets to an
entity, at least 66 2/3% of the combined voting power of the voting
securities of which are owned by Persons in substantially the same
proportions as their ownership of the Company immediately prior to such
sale.
Notwithstanding the foregoing, any event or transaction which
would otherwise constitute a change in control of the Company (a
'Transaction') shall not constitute a change in control of the Company for
purposes of your benefits under this Agreement if, in connection with the
Transaction, you participate as an equity investor in the acquiring entity
or any of its affiliates (the 'Acquiror'). For purposes of the preceding
sentence, you shall not be deemed to have participated as an equity
investor in the Acquiror by virtue of (a) obtaining beneficial ownership of
any equity interest in the Acquiror as a result of the grant to you of an
incentive compensation award under one or more incentive plans of the
Acquiror (including but not limited to the conversion in connection with
the Transaction of incentive compensation awards of the Company into
incentive compensation awards of the Acquiror), on terms and conditions
substantially equivalent to those applicable to other executives of the
Company immediately prior to the Transaction, after taking into account
normal differences attributable to job responsibilities, title, and the
like; (b) obtaining beneficial ownership of any equity interest in the
Acquiror on terms and conditions substantially equivalent to those obtained
in the Transaction by all other stockholders of the Company; or (c) having
obtained an incidental equity ownership in the Acquiror prior to and not in
anticipation of the Transaction.
B. For purposes of this Agreement, a 'potential change in control
of the Company' shall be deemed to have occurred if (1) the Company enters
into an agreement, the consummation of which would result in the occurrence
of a change in control of the Company, (2) the Company or any Person
publicly announces an intention to take or to consider taking actions which
if consummated would constitute a change in control of the Company; (3) any
Person becomes the Beneficial Owner, directly or indirectly, of securities
of the Company representing 9.5% or more of either the then outstanding
shares of common stock of the Company or the combined voting power of the
Company's then outstanding securities; or (4) the Board adopts a resolution
to the effect that a potential change in control of the Company for
purposes of this Agreement has occurred. You agree that, subject to the
terms and conditions of this Agreement, in the event of a potential change
in control of the Company, you will at the option of the Company remain in
the employ of the Company until the earlier of (a) the date which is six
months from the occurrence of the first such potential change in control of
the Company, or (b) the date of a change in control of the Company.
C. For purposes of this Agreement, 'Beneficial Owner' shall have
the meaning set forth in Rule 13d-3 under the Securities Exchange Act of
1934, as amended (the 'Exchange Act').
D. For purposes of this Agreement, 'Person' shall have the meaning
given in Section 3(a)(9) of the Exchange Act, as modified and used in
Sections 13(d) and 14(d) thereof, except that such term shall not include
(1) the Company or any of its subsidiaries, (2) a trustee or other
fiduciary holding securities under an employee benefit plan of the Company
or any of its subsidiaries, (3) an underwriter temporarily holding
securities pursuant to an offering of such securities, or (4) a corporation
owned, directly or indirectly, by the stockholders of the Company in
substantially the same proportions as their ownership of stock of the
Company.
3. TERMINATION AND CHANGE IN CONTROL. If (1) any of the events
described in Section 2 hereof constituting a change in control of the
Company shall have occurred and your employment subsequently terminates
during the term of this Agreement or (2) there has occurred a potential
change in control, your employment subsequently terminates during the term
of this Agreement in contemplation of a change in control, and subsequently
an actual change in control of the Company pursuant to Section 2 occurs,
you shall be entitled to the benefits provided in Sections 4 and 5 hereof
unless in either case such termination is because of your death, by the
Company for Cause or Disability, or by you other than for Good Reason.
A. DISABILITY. If, as a result of your incapacity due to physical
or mental illness, you shall have been absent from your duties with the
Company on a full-time basis for six consecutive months, and within thirty
days after written notice of termination is given you shall not have
returned to the full-time performance of your duties, the Company may
terminate your employment for 'Disability.'
B. CAUSE. Termination by the Company of your employment for
'Cause' shall mean termination upon (1) the willful and continued failure
by you to substantially perform your duties with the Company (other than
any such failure resulting from your incapacity due to physical or mental
illness or any such actual or anticipated failure resulting from your
termination for Good Reason), after a demand for substantial performance is
delivered to you by the Board which specifically identifies the manner in
which the Board believes that you have not substantially performed your
duties, or (2) the willful engaging by you in conduct which is demonstrably
and materially injurious to the Company, monetarily or otherwise. For
purposes of this Subsection, no act, or failure to act, on your part shall
be considered 'willful' unless done, or omitted to be done, by you not in
good faith and without reasonable belief that your action or omission was
in the best interest of the Company. Notwithstanding the foregoing, you
shall not be deemed to have been terminated for Cause unless and until
there shall have been delivered to you a copy of a resolution duly adopted
by the affirmative vote of not less than three-quarters of the entire
membership of the Board at a meeting of the Board called and held for the
purpose (after reasonable notice to you and an opportunity for you,
together with your counsel, to be heard before the Board), finding that in
the good faith opinion of the Board you were guilty of conduct set forth
above in clauses (1) or (2) of the first sentence of this Subsection and
specifying the particulars thereof in detail. All decisions by the Company
regarding termination for Cause must be supported by clear and convincing
evidence.
C. GOOD REASON. You shall be entitled to terminate your employment
for Good Reason. For purposes of this Agreement, 'Good Reason' shall,
without your express written consent, mean:
(1) The assignment to you of any duties inconsistent with your
status as an Executive Officer of the Company or an adverse alteration in
the nature or status of your responsibilities from those in effect
immediately prior to a change in control of the Company;
(2) The disposition by the Company of the business of the
Company for which your services are principally provided pursuant to a
partial or complete liquidation of the Company, a sale of assets (including
stock of a subsidiary) of the Company, or otherwise;
(3) A reduction by the Company in your annual base salary as
in effect on the date hereof or as the same may be increased from time to
time, except for across-the-board salary reductions similarly affecting all
executives of the Company and all executives of any Person in control of
the Company;
(4) The Company's requiring you to be based anywhere other
than in the metropolitan area in which you were based immediately prior to
a change in control of the Company, except for required travel on the
Company's business to an extent substantially consistent with your business
travel obligations as such existed immediately prior to the change in
control;
(5) The failure by the Company to continue in effect any
compensation plan in which you were participating immediately prior to the
change in control of the Company, including but not limited to your
participation, if any, in the Company's Key Executive Performance Plan for
Executive Officers (the 'KEPP'), the 1982, 1986, and 1995 Executive Officer
Deferred Compensation Plans, the 1987 and 1995 Key Executive Deferred
Compensation Plans (the 'Deferred Compensation Plans'), the 1984 Key
Executive Stock Option Plan (the '1984 Stock Option Plan'), or any
substitute or additional plans adopted prior to the change in control of
the Company, unless an equitable arrangement (embodied in an ongoing
substitute or alternative plan) has been made with respect to such plan in
connection with the change in control of the Company, or unless the plan
has expired in accordance with its terms in effect immediately prior to the
change in control of the Company; or the failure by the Company to continue
your participation therein on a basis not materially less favorable, both
in terms of the amount of benefits provided and the level of your
participation relative to other participants, as existed immediately prior
to the change in control of the Company;
(6) The failure by the Company to continue to provide you with
benefits substantially similar to those enjoyed by you under any of the
Company's pension, life insurance, medical, health and accident, or
disability plans, including, without limitation, the Company's Split-Dollar
Life Insurance Plan ('Split-Dollar Plan'), and the Supplemental Early
Retirement Plan for Executive Officers ('Early Retirement Plan'), the
Pension Plan for Salaried Employees (the 'Qualified Plan'), the Savings and
Supplemental Retirement Plan (the 'SSRP'), the Supplemental Retirement
Programs (the 'Excess Benefit Plans'), and any other nonqualified pension
agreement between you and the Company, in which you may have been
participating at the time of a change in control of the Company, the taking
of any action by the Company which would directly or indirectly materially
reduce any of such benefits or deprive you of any material fringe benefit
enjoyed by you at the time of the change in control of the Company, or the
failure by the Company to provide you with the number of paid vacation days
to which you are entitled on the basis of years of service with the Company
in accordance with the Company's normal vacation policy in effect at the
time of the change in control of the Company;
(7) The failure of the Company to obtain a satisfactory
agreement from any successor to assume and agree to perform this Agreement,
as contemplated in Section 7 hereof; or
(8) Any purported termination of your employment which is not
effected pursuant to a Notice of Termination satisfying the requirements of
Subsection D below (and, if applicable, Subsection B above). Furthermore,
no such purported termination of your employment shall be effective for
purposes of this Agreement.
Your right to terminate your employment pursuant to this
Subsection shall not be affected by your incapacity due to physical or
mental illness. Your continued employment shall not constitute consent to,
or a waiver of rights with respect to, any act or failure to act
constituting Good Reason hereunder.
D. NOTICE OF TERMINATION. Any purported termination by the
Company or by you shall be communicated by written Notice of Termination to
the other party hereto in accordance with Section 8 hereof. For purposes
of this Agreement, a 'Notice of Termination' shall mean a notice which
shall indicate the specific termination provision in this Agreement relied
upon and shall set forth in reasonable detail the facts and circumstances
claimed to provide a basis for termination of your employment under the
provision so indicated.
E. DATE OF TERMINATION, ETC. 'Date of Termination' shall mean
(1) if your employment is terminated for Disability, thirty days after
Notice of Termination is given (provided that you shall not have returned
to the performance of your duties on a full-time basis during such thirty-
day period), and (2) if your employment is terminated pursuant to
Subsection B or C above or for any other reason, the date specified in the
Notice of Termination (which, in the case of a termination pursuant to
Subsection B above shall not be less than thirty days, and in the case of a
termination pursuant to Subsection C above shall not be more than sixty
days, respectively, from the date such Notice of Termination is given);
provided that if within thirty days after any Notice of Termination is
given the party receiving such Notice of Termination notifies the other
party that a dispute exists concerning the termination, the Date of
Termination shall be the date on which the dispute is finally determined,
either by mutual written agreement of the parties or by a final judgment,
order or decree of a court of competent jurisdiction (the time for appeal
therefrom having expired and no appeal having been perfected); and provided
further that the Date of Termination shall be extended by a notice of
dispute only if such notice is given in good faith and the party giving
such notice pursues the resolution of such dispute with reasonable
diligence. Notwithstanding the pendency of any such dispute, the Company
will continue to pay you your full compensation in effect when the notice
giving rise to the dispute was given (including, but not limited to, base
salary) and continue you as a participant in all compensation, benefit and
insurance plans in which you were participating when the notice giving rise
to the dispute was given, until the dispute is finally resolved in
accordance with this Section. Amounts paid under this Section are in
addition to all other amounts due under this Agreement and shall not be
offset against or reduce any other amounts due under this Agreement.
4. COMPENSATION UPON TERMINATION OR DURING DISABILITY.
A. During any period that you fail to perform your duties
hereunder as a result of incapacity due to physical or mental illness, you
shall continue to receive your full base salary at the rate then in effect
and all compensation, including under the KEPP, paid during the period
until your employment is terminated pursuant to Section 3.A hereof.
Thereafter, your benefits shall be determined in accordance with the insur-
ance programs then in effect of the Company or subsidiary corporation by
which you are employed, and any qualified retirement plan and any executive
supplemental retirement plan in effect immediately prior to the change in
control of the Company.
B. If your employment shall be terminated for Cause or by you
other than for Good Reason, the Company shall pay you only your full base
salary through the Date of Termination at the rate in effect at the time
Notice of Termination is given, plus all other amounts to which you are
entitled under any compensation plan of the Company at the time such
payments are due, and the Company shall have no further obligations to you
under this Agreement.
C. If your employment shall be terminated by the Company or any
subsidiary corporation by which you are employed other than for Cause or
Disability, or by you for Good Reason, then you shall be entitled to the
benefits provided below:
(1) The Company shall pay you, not later than the fifth day
following the Date of Termination, your full base salary through the Date
of Termination at the rate in effect at the time Notice of Termination is
given without regard to any reduction in base salary that would constitute
Good Reason, plus all other amounts to which you are entitled under any
compensation plan of the Company at the time such payments are due;
(2) The Company shall pay to you, not later than the fifth
day following the Date of Termination, a lump sum severance payment equal
to (a) three times the sum of (i) your annual base salary at the rate in
effect at the time Notice of Termination is given without regard to any
reduction in base salary that would constitute Good Reason, plus (ii) your
target bonus payout under the Company's Key Executive Performance Plan for
Executive Officers (the 'KEPP') (or any substitute plan) for the year in
which occurs the Date of Termination or change in control of the Company,
whichever is greater, less (b) the dollar amount, if any, which you are
paid upon termination of employment, without regard to the provisions of
this Agreement, under the Company's Severance Pay Policy for Executive
Officers as in effect immediately prior to the Date of Termination;
(3) The Company shall pay to you, not later than the fifth
day following the Date of Termination, a lump sum amount equal to the
greater of the value of your unused and accrued vacation entitlement in
accordance with the Company's Vacation Policy as in effect immediately
prior to the change in control of the Company or as in effect on Date of
Termination;
(4) The Company shall pay to you, not later than the fifth
day following the Date of Termination, a lump sum amount equal to the sum
of (a) any unpaid bonus (excluding deferred awards, plus interest, credited
to your account, which shall be payable under the KEPP in accordance with
its terms) pursuant to the KEPP (or any substitute plan) allocable to you
in respect of the Plan year preceding that in which the Date of Termination
occurs, and (b) a KEPP award (or award under a substitute plan) for the
year in which the Date of Termination occurs, equal to the greater of
(i) 30% of your base salary for such year (determined without regard to any
reduction in your base salary constituting Good Reason), prorated through
the month in which the Date of Termination occurs, or (ii) the actual KEPP
award (or award under such substitute plan) as determined by actual year-
to-date earnings per share through the last day of the month prior to the
month in which the Date of Termination occurs in accordance with the KEPP
award criteria (or criteria under such substitute plan) in which you are
participating as of the Date of Termination, prorated through the month in
which the Date of Termination occurs; and
(5) The Company shall also pay to you all legal fees and
expenses incurred by you as a result of such termination (including all
such fees and expenses, if any, incurred in contesting or disputing any
such termination or in seeking to obtain or enforce any right or benefit
provided by this Agreement).
D. If your employment shall be terminated (1) by the Company or
subsidiary corporation by which you are employed other than for Cause or
Disability or (2) by you for Good Reason, then for a twelve-month period
following such termination, the Company shall maintain, in full force and
effect for your continued benefit, either (a) all life, disability,
accident and health insurance plans or arrangements, and financial
counseling services in which you may have been participating immediately
prior to the change in control of the Company or (b) at your election, such
plans or arrangements in which you were participating immediately prior to
the Date of Termination, provided your continued participation (or a
particular type of coverage) is possible under the general terms and
provisions of such plans and arrangements. In the event your participation
(or a particular type of coverage) under any such plan or arrangement is
barred, the Company shall arrange to provide you with benefits, at
substantially the same cost to you, which are substantially similar to
those which you are entitled to receive under such plans and arrangements.
Notwithstanding the foregoing, the Company shall continue to pay such
amounts as may be required to maintain any insurance you may have had in
force pursuant to the Split-Dollar Plan until the later of your sixty-fifth
birthday or ten years after the insurance policy is issued, after which the
Company will release to you its interest in each such policy.
E. If your employment shall be terminated (1) by the Company or
subsidiary corporation by which you are employed other than for Cause or
Disability or (2) by you for Good Reason, then in addition to the aggregate
retirement benefits to which you are entitled under the Company's Qualified
Plan, the Company's Excess Benefit Plans, any other nonqualified pension
agreement or arrangement, or any successor plans thereto, the Company shall
pay you amounts equal to (a), (b), (c), or (d), whichever is applicable:
(a) If you have satisfied the service, but not the age,
requirements of the Early Retirement Plan, as in effect immediately prior
to the change in control of the Company, you shall receive a monthly
benefit, commencing on your fifty-fifth birthday equal to the benefit to
which you would have been entitled under the Early Retirement Plan, as in
effect immediately prior to the change in control of the Company, had you
satisfied the age and service requirements as of the Date of Termination;
or
(b) If you have satisfied the age, but not the service,
requirement of the Early Retirement Plan, as in effect immediately prior to
the change in control of the Company, you shall receive a monthly benefit,
commencing as of the Date of Termination equal to the benefit to which you
would have been entitled under the Early Retirement Plan, as in effect
immediately prior to the change in control of the Company, had you
satisfied the age and service requirements as of the Date of Termination;
or
(c) If you have satisfied neither the age nor the service
requirements of the Early Retirement Plan, as in effect immediately prior
to the change in control of the Company, you shall receive a monthly
benefit, commencing on your fifty-fifth birthday equal to the benefit to
which you would have been entitled under the Early Retirement Plan, as in
effect immediately prior to the change in control of the Company, had you
satisfied the age and service requirements as of the Date of Termination;
or
(d) If you have satisfied both the age and the service
requirements of the Early Retirement Plan, as in effect immediately before
the change in control of the Company, you shall receive the benefits to
which you are entitled under the Early Retirement Plan.
The benefits under this paragraph E shall be paid in the same manner as,
and shall otherwise possess the same rights and privileges as were
available with respect to, benefits under the terms of the Early Retirement
Plan as in effect immediately prior to the change in control of the
Company.
F. If your employment shall be terminated (1) by the Company or
subsidiary corporation by which you are employed other than for Cause or
Disability or (2) by you for Good Reason, then you shall not be required to
mitigate the amount of any payment provided for in this Section 4 by
seeking other employment or otherwise, nor shall the amount of any payment
or benefit provided for in this Section 4 (except as otherwise provided in
the immediately succeeding sentence) be reduced by any compensation earned
by you as the result of employment by another employer or by retirement
benefits after the Date of Termination, or otherwise. Benefits otherwise
receivable by you pursuant to Section 4.D shall be reduced to the extent
comparable benefits are actually received by you during the twelve-month
period following your termination, and any such benefits actually received
by you shall be reported to the Company.
5. PROTECTIVE LIMITATION.
A. Notwithstanding any provision hereof to the contrary, in the
event you (1) would receive payments under this Agreement or under any
other plan, program, or policy sponsored by the Company (the 'Total
Payments'); and (2) which Total Payments relate to a change in control of
the Company and which are determined by the Company to be subject to excise
tax under Section 4999 of the Code (the 'Excise Tax'); then (3) the Company
shall pay to you an additional amount (the 'Gross-up Payment') such that
the net amount retained by you, after deduction of any Excise Tax on the
Total Payments and any federal, state and local income and employment
taxes, and Excise Tax upon the Gross-up Payment, shall be equal to the
Total Payments.
B. For purposes of determining whether any of the Total Payments
will be subject to the Excise Tax and the amount of such Excise Tax,
(1) all of the Total Payments shall be treated as 'parachute payments'
(within the meaning of Section 280G(b)(2) of the Code) unless, in the
Company's opinion, such payments or benefits (in whole or in part) do not
constitute parachute payments, including by reason of Section 280G(b)(4)(A)
of the Code, and (2) all 'excess parachute payments' within the meaning of
Section 280G(b)(1) of the Code shall be treated as subject to the Excise
Tax unless, in the Company's opinion, such excess parachute payments (in
whole or in part) represent reasonable compensation for services actually
rendered (within the meaning of Section 280G(b)(4)(B) of the Code) in
excess of the base amount allocable to such reasonable compensation, or are
otherwise not subject to the Excise Tax. For purposes of determining the
amount of the Gross-up Payment, you will be deemed to pay federal income
tax at the highest marginal rate of federal income taxation in the calendar
year in which the Gross-up Payment is to be made and state and local income
taxes at the highest marginal rate of taxation in the state and locality of
your residence on the Date of Termination, net of the maximum reduction in
federal income taxes which could be obtained from deduction of such state
and local taxes.
C. The payments provided in Subsection 5(A) shall be made not
later than the fifth day following the Date of Termination; provided,
however, if the amount of such payment cannot be finally determined on or
before such day, the Company shall pay to you on such day an estimate, as
determined in good faith by the Company of the minimum amount of such
payments to which you are clearly entitled and shall pay the remainder of
such payments (together with interest on the unpaid remainder (or on all
such payments to the extent the Company fails to make such payments when
due) at 120% of the rate provided in Section 1274(b)(2)(B) of the Code) as
soon as the amount thereof can be determined but in no event later than the
thirtieth (30th) day after the Date of Termination. In the event that the
amount of the estimated payments exceeds the amount subsequently determined
to have been due, such excess shall constitute a loan by the Company to
you, payable on the fifth (5th) business day after demand by the Company
(together with interest at 120% of the rate provided in
Section 1274(b)(2)(B) of the Code). At the time that payments are made
under this Agreement, the Company shall provide you with a written
statement setting forth the manner in which such payments were calculated
and the basis for such calculations including, without limitation, any
opinions or other advice the Company has received from Tax Counsel, its
auditor, or other advisors or consultants (and any such opinions or advice
which are in writing shall be attached to the statement).
D. In the event that the Excise Tax is finally determined to be
less than the amount taken into account hereunder in calculating the Gross-
up Payment, you shall repay to the Company, within five (5) business days
following the time that the amount of such reduction in Excise Tax is
finally determined, the portion of the Gross-up Payment attributable to
such reduction (plus that portion of the Gross-up Payment attributable to
the Excise Tax and federal, state, and local income and employment taxes
imposed on the Gross-up Payment being repaid by you, to the extent that
such repayment results in a reduction in the Excise Tax and a dollar-for-
dollar reduction in your taxable income and wages for purposes of federal,
state, and local income and employment taxes) plus interest on the amount
of such repayment at 120% of the rate provided in Section 1274(b)(2)(B) of
the Code. In the event that the Excise Tax is determined, for any reason,
to exceed the amount taken into account hereunder in calculating the Gross-
up Payment, the Company shall make an additional Gross-up Payment in
respect of such excess (plus any interest, penalties, or additions payable
by you with respect to such excess and such portion) within five (5)
business days following the time that the amount of such excess is finally
determined. You and the Company shall reasonably cooperate with the other
in connection with any administrative or judicial proceedings concerning
the existence or amount of liability for Excise Tax with respect to the
Total Payments.
6. DEFERRED COMPENSATION AND BENEFITS TRUST. The Company has
established a Deferred Compensation and Benefits Trust, and shall comply
with the terms of that Trust. Upon the occurrence of any potential change
in control of the Company, the Company shall transfer to the Trust an
amount of cash, marketable securities, or other property acceptable to the
trustee(s) equal in value to 105% of the amount necessary, on an actuarial
basis and calculated in accordance with the terms of the Trust, to pay the
Company's obligations under this Agreement (the 'Funding Amount'). The
cash, marketable securities, and other property so transferred shall be
held, managed, and disbursed by the trustee(s) subject to and in accordance
with the terms of the Trust. In addition, from time to time, the Company
shall make any and all additional transfers of cash, marketable securities,
or other property acceptable to the trustee(s) as may be necessary in order
to maintain the Funding Amount with respect to this Agreement. The
determination of the amount required to be transferred by the Company to
the Trust shall include any amounts that could in any circumstances be
payable in the future under Sections 4 and 5 hereof, calculated in
accordance with the following rules: (A) Upon a potential change in
control of the Company, the Company will calculate the amount required to
be transferred to the Trust based on the assumption that your employment,
if not previously terminated, will be terminated by the Company other than
for Cause or Disability on the second anniversary of the potential change
in control of the Company; and (B) Upon any subsequent recalculation, your
employment will be deemed to have been terminated by the Company other than
for Cause or Disability on the later of the date of actual termination or
the date of such recalculation.
For this purpose, the term Deferred Compensation and Benefits
Trust shall mean an irrevocable trust or trusts established or to be
established by the Company with an independent trustee or trustees for the
benefit of persons entitled to receive payments or benefits hereunder, the
assets of which nevertheless will be subject to claims of the Company's
creditors in the event of bankruptcy or insolvency and with respect to
which the Company shall have received a ruling from the Internal Revenue
Service that the trust is a 'grantor trust' for federal income tax
purposes.
The Deferred Compensation and Benefits Trust shall contain the
following additional provisions:
(a) If a change in control of the Company does not occur within
one year after the potential change in control of the Company, the Company
may reclaim the assets transferred to the trustee or trustees subject to
the requirement that it be again funded upon the occurrence of another
potential change in control of the Company.
(b) Upon a change in control of the Company, the assets of the
Deferred Compensation and Benefits Trust shall be used to pay benefits
under this Agreement, except to the extent such benefits are paid by the
Company, and the Company and any successor shall continue to be liable for
the ultimate payment of those benefits.
(c) The Deferred Compensation and Benefits Trust will be
terminated upon the exhaustion of the trust assets or upon payment of all
the Company's obligations.
(d) The Deferred Compensation and Benefits Trust shall contain
other appropriate terms and conditions consistent with the purposes sought
to be accomplished by it. Prior to a change in control of the Company, the
Deferred Compensation and Benefits Trust may be amended from time to time
by the Company, but no such amendment may substantially alter any of the
provisions set out in the preceding paragraphs.
7. SUCCESSORS; BINDING AGREEMENT.
A. The Company will require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company to expressly
assume and agree to perform this Agreement in the same manner and to the
same extent that the Company would be required to perform it if no such
succession had taken place. Failure of the Company to obtain such
assumption and agreement prior to the effectiveness of any such succession
shall be a breach of this Agreement and shall entitle you to compensation
from the Company in the same amount and on the same terms as you would be
entitled hereunder if you terminate your employment for Good Reason, except
that for purposes of implementing the foregoing, the date on which any such
succession becomes effective shall be deemed the Date of Termination. As
used in this Agreement, 'Company' shall mean the Company as hereinbefore
defined and any successor to its business and/or assets as aforesaid which
assumes and agrees to perform this Agreement by operation of law, or
otherwise.
B. This Agreement shall inure to the benefit of and be
enforceable by your personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees and legatees. If
you should die while any amount would still be payable to you hereunder if
you had continued to live, all such amounts, unless otherwise provided
herein, shall be paid in accordance with the terms of this Agreement to
your devisee, legatee or other designee or if there is no such designee, to
your estate.
C. Any dispute between you and the Company regarding this
Agreement may be resolved either by binding arbitration or by judicial
proceedings at your sole election, and the Company agrees to be bound by
your election in that regard.
8. NOTICE. For the purposes of this Agreement, notices and all
other communications provided for in the Agreement shall be in writing and
shall be deemed to have been duly given when delivered or mailed by United
States registered mail, return receipt requested, postage prepaid,
addressed to the respective addresses set forth on the first page of this
Agreement, provided that all notices to the Company shall be directed to
the attention of the Board with a copy to the Secretary of the Company, or
to such other address as either party may have furnished to the other in
writing in accordance herewith, except that notice of change of address
shall be effective only upon receipt.
9. MISCELLANEOUS. No provision of this Agreement may be modified,
waived or discharged unless such waiver, modification or discharge is
agreed to in writing and signed by you and such officer as may be
designated by the Board. No waiver by either party hereto at any time of
any breach by the other party hereto of, or compliance with, any condition
or provision of this Agreement to be performed by such other party shall be
deemed a waiver of similar or dissimilar provisions or conditions at the
same or at any prior or subsequent time. No agreements or representations,
oral or otherwise, express or implied, with respect to the subject matter
hereof have been made by either party which are not expressly set forth in
this Agreement. All references to sections of the Exchange Act or the Code
shall be deemed also to refer to any successor provisions to such sections.
If the obligations of the Company under Sections 4 and 5 arise prior to the
expiration of the term of this Agreement, such obligations shall survive
the expiration of the term.
10. VALIDITY. The invalidity or unenforceability of any provision of
this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement, which shall remain in full force and effect.
11. COUNTERPARTS. This Agreement may be executed in several
counterparts, each of which shall be deemed to be an original but all of
which together will constitute one and the same instrument.
12. NO GUARANTY OF EMPLOYMENT. Neither this contract nor any action
taken hereunder shall be construed as giving you a right to be retained as
an employee or an executive officer of the Company.
13. GOVERNING LAW. This Agreement shall be governed by and construed
in accordance with Delaware law.
14. OTHER BENEFITS. Any payments due to you as provided herein are in
addition to, and not in lieu of, any amounts to which you may be entitled
under any other employee benefit plan, program or policy of the Company.
If this letter correctly sets forth our agreement on the subject matter
hereof, kindly sign and return to the Company the enclosed copy of this
letter which will then constitute our agreement on this subject.
Sincerely,
BOISE CASCADE CORPORATION
By ___________________________
J. W. Holleran
Senior Vice President and General Counsel
Agreed to this [ ] day of [ ],
______________________________
[Name of Officer]
Enclosure
Change in Control Agreement - Boise Cascade Corp.
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