EXHIBIT 10.3
WEYERHAEUSER COMPANY
2004 LONG-TERM INCENTIVE PLAN
PERFORMANCE PLAN AWARD AGREEMENT
Pursuant to your Grant Notice (the "Grant Notice") and this Performance
Plan Award Agreement, Weyerhaeuser Company has granted you under its 2004
Long-Term Incentive Plan (the "Plan") the target number of Performance Plan
Awards ("Awards") indicated in your Grant Notice at the market value indicated
in your Grant Notice. Capitalized terms not explicitly defined in this Grant
Agreement but defined in the Plan have the definitions given to such terms in
the Plan. Awards represent the Company's unfunded and unsecured promise to issue
shares of Company Common Stock to you at a future date based upon satisfaction
of certain performance criteria, and subject to the terms of this Agreement and
the Plan. You have no rights under the Awards other than the rights of a general
unsecured creditor of the Company. In addition, the Awards have the following
terms and conditions:
1. VESTING. You can earn the Awards based on the Company's performance in
achieving cumulative business targets of RONA Spread relative to certain
performance peers over a three-year period commencing on 12/26/2005 and ending
12/28/2008 ("Performance Period"). Awards vest at the end of the Performance
Period subject to the provisions of Section 3, Termination of Employment.
Performance against the targets will be subject to payout calculations as
follows:
PERFORMANCE ACHIEVED PAYMENT
-------------------- -------------------------
Below minimum performance No payment
Minimum (threshold) performance 20% of grant may be paid
Target performance 100% of grant may be paid
Maximum performance 200% of grant may be paid
Payment for performance between thresholds will be determined on a pro-rata
basis.
Awards that have not vested at the end of the Performance Period in
accordance with the preceding paragraph are forfeited and no longer have any
value. No Shares will be issued or issuable with respect to any portion of the
Awards that do not vest at the end of the Performance Period.
2. CONVERSION OF AWARDS AND ISSUANCE OF SHARES. After the Performance period
ends, one share of Company Common Stock shall be issued for each Award that is
vested as of such date (the "Shares"), subject to the terms of the Plan and this
Agreement. Thereafter, the Company will subtract from the vested Shares the
whole number of Shares necessary to satisfy any required Tax Withholding
Obligations as described in Section 9 hereof, and transfer the balance of the
vested Shares to you. No fractional shares of Common Stock shall be issued under
this Agreement.
3. TERMINATION OF EMPLOYMENT. If your employment terminates before the
expiration of the Performance Period as a result of death or if you qualify for
retirement at the time of termination (after reaching age 65 or after reaching
age 62 with ten (10) years or more of Vesting Service as defined in the
Weyerhaeuser Company Retirement Plan for Salaried Employees) ("Normal
Retirement"), or early retirement (after reaching 55 with 10 years or more of
Vesting Service (as defined in the Weyerhaeuser Company Retirement Plan for
Salaried Employees) ("Early Retirement"), or if you do not qualify for Normal
Retirement or Early Retirement, but retire as a result of a Disability, the
onset of which occurred on or after the date you had accrued 10 years of Vesting
Service ("Disability Retirement"), you remain eligible to receive Shares
following the end of the Performance Period. However, the number of Shares you
would otherwise receive will be prorated based on your period of employment with
the Company during the Performance Period, based upon the number of complete
months of service during the Performance Period.
"Disability" means " a medical condition in which a person is either
entitled to total and permanent disability benefits under the Social Security
Act or judged to be totally and permanently disabled by any person or committee
entitled to make such determinations pursuant to the Company's Retirement Plan
for Salaried Employees.
If your employment is terminated for any reason other than death, Normal
Retirement, Early Retirement or Disability Retirement, any of your Awards that
are not vested are forfeited and no longer have any value. No Shares will be
issued or issuable with respect to any portion of the Awards that are forfeited.
4. DIVIDENDS. Except as otherwise specifically provided in this Agreement, you
will not be entitled to any rights of a shareholder with respect to Awards that
have not vested. Notwithstanding the foregoing, if the Company declares and pays
dividends on Common Stock during the time period when unvested Awards are
outstanding, you will be credited with additional amounts for each unvested
Award equal to the dividend that would have been paid with respect to such
unvested Award if it had been an actual share of common Stock, which amount
shall remain subject to restrictions (and as determined by the Administrator may
be reinvested in unvested Awards ) and shall vest concurrently with the vesting
of the unvested Awards upon which such dividend equivalent amounts were paid.
5. NO RIGHTS AS SHAREHOLDER UNTIL VESTING AND ISSUANCE OF SHARES. You shall not
have any voting or any other rights as a shareholder of the Common Stock with
respect to the unvested Awards. Upon vesting of the Awards and issuance of
shares of Common Stock, you will obtain full voting and other rights as a
shareholder of the Company.
6. SECURITIES LAW COMPLIANCE. Notwithstanding any other provision of this
Agreement, you may not sell the Shares acquired upon vesting of the Awards
unless such Shares are registered under the Securities Act of 1933, as amended
(the "Securities Act"), or, if such Shares are not then so registered, such sale
would be exempt from the registration requirements of the Securities Act. The
sale of such Shares must also comply with other applicable laws and regulations
governing the Shares and you may not sell the Shares if the Company determines
that such sale would not be in material compliance with such laws and
regulations.
7. NON-TRANSFERABILITY OF AWARDS. Notwithstanding any other provision of this
Agreement, you may not sell, pledge, assign, hypothecate, transfer or dispose of
your Awards in any manner prior to the distribution to you of shares of Company
common stock in respect of such Awards. Awards shall not be subject to
execution, attachment or other process.
8. INDEPENDENT TAX ADVICE. You acknowledge that determining the actual tax
consequences of receiving or disposing of the Awards and Shares may be
complicated. These tax consequences will depend, in part, on your specific
situation and also may depend on the resolution of currently uncertain tax law
and other variables not within the control of the Company. You are aware that
you should consult a competent and independent tax advisor for a full
understanding of the specific tax consequences to you of receiving or disposing
of Awards and Shares. Prior to executing this Agreement, you either have
consulted with a competent tax advisor independent of the Company to obtain tax
advice concerning the receipt, vesting or disposition of the Awards or Shares in
light of your specific situation or have had the opportunity to consult with
such a tax advisor but chose not to do so.
9. TAXES AND WITHHOLDING. You are ultimately liable and responsible for all
taxes owed in connection with the Awards, including federal, state, local, FICA,
or foreign taxes of any kind required by law, regardless of any action the
Company takes with respect to any tax withholding obligations that arise in
connection with the Awards. The Company makes no representation or undertaking
regarding the treatment of any tax withholding in connection with the Grant or
vesting of the Award or the subsequent sale of Shares issuable pursuant to the
Awards. The Company does not commit and is under no obligation to structure the
Awards to reduce or eliminate your tax liability.
When an event occurs in connection with the Awards (e.g., vesting) that the
company determines results in any domestic or foreign tax withholding
obligation, whether national, federal, state or local, including any social tax
obligation (the "Tax Withholding Obligation"), TO
THE EXTENT REQUIRED BY LAW, the Company shall retain without notice from Shares
issuable under the Awards or from salary or other amounts payable to you, whole
Shares or cash having a value sufficient to satisfy your Tax Withholding
Obligation.
The Company may refuse to issue any Shares to you until your Tax
Withholding Obligation is satisfied.
10. GRANT NOT AN EMPLOYMENT OR SERVICE CONTRACT. Nothing in the Plan or any
Award granted under the Plan will be deemed to constitute an employment contract
or confer or be deemed to confer any right for you to continue in the employ of,
or to continue any other relationship with, the Company or any Related Company
or limit in any way the right of the Company or any Related Company to terminate
your employment or other relationship at any time, with or without cause.
11. NO RIGHT TO DAMAGES. You will have no right to bring a claim or to receive
damages if any portion of the Grant is forfeited. The loss of existing or
potential profit in Awards will not constitute an element of damages in the
event of your termination of service for any reason even if the termination is
in violation of an obligation of the Company or a Related Company to you.
12. BINDING EFFECT. This Grant Agreement will inure to the benefit of the
successors and assigns of the Company and be binding upon you and your heirs,
executors, administrators, successors and assigns.
13. LIMITATION ON RIGHTS; NO RIGHT TO FUTURE GRANTS; EXTRAORDINARY ITEM OF
COMPENSATION. By entering into this Grant Agreement and accepting the Grant
evidenced hereby, you acknowledge: (a) that the Plan is discretionary in nature
and may be suspended or terminated by the Company at any time; (b) that the
Grant is a one-time benefit that does not create any contractual or other right
to receive future grants of performance plan awards; (c) that all determinations
with respect to any such future grants, including, but not limited to, the times
when grants will be made, the number of performance plan awards subject to each
grant, the xxxxx xxxxx, and the time or times when each grant will be
exercisable, will be at the sole discretion of the Company; (d) that your
participation in the Plan is voluntary; (e) that the value of the Grant is an
extraordinary item of compensation that is outside the scope of your employment
contract, if any; (f) that the Grant is not part of normal or expected
compensation for purposes of calculating any severance, resignation, redundancy,
end of service payments, bonuses, long-service awards, pension or retirement
benefits or similar payments; (g) that the vesting of the Grant ceases upon your
termination of employment for any reason and any unvested Awards will be
forfeited; and (h) that the future value of the Shares underlying the Grant is
unknown and cannot be predicted with certainty.
14. EMPLOYEE DATA PRIVACY. By entering into this Agreement, you (a) authorize
the Company and your employer, if different, and any agent of the Company
administering the Plan or providing Plan recordkeeping services, to disclose to
the Company or any of its affiliates any information and data the Company
requests in order to facilitate the grant of the Award and the administration of
the Plan; (b) waive any data privacy rights you may have with respect to such
information; and (c) authorize the Company and its agents to store and transmit
such information in electronic form.
15. The plan and this Agreement shall be interpreted and administered to be in
compliance with Internal Revenue Code Section 409A.
