EXHIBIT 10.2
WEYERHAEUSER COMPANY
2004 LONG-TERM INCENTIVE PLAN
STOCK OPTION AGREEMENT
Pursuant to your Stock Option Grant Notice (the "Grant Notice") and this Stock
Option Agreement, Weyerhaeuser Company has granted you an Option under its 2004
Long-Term Incentive Plan (the "Plan") to purchase the number of shares of the
Company's Common Stock indicated in your Grant Notice (the "Shares") at the
exercise price indicated in your Grant Notice. Capitalized terms not explicitly
defined in this Stock Option Agreement but defined in the Plan have the
definitions given to such terms in the Plan. The Option is granted to you as a
participant in the Plan and is subject to the terms and conditions set out in
the Plan. In addition, the Option has the following terms and conditions:
1. VESTING. The Option will vest and become exercisable in two years. No part of
the Option will be exercisable until the two-year anniversary of the Grant Date.
On the two-year anniversary of the Grant Date, 100% of the Option will vest and
be exercisable.
2. TERM. The Options will expire at the time specified in your Grant Notice.
Following that date, you will no longer be able to exercise the Option. In
addition, the Option may terminate earlier than the fifth anniversary if your
employment with Weyerhaeuser Company ceases for any reason. Transfer of
employment between or among the Company and its subsidiaries is not considered
termination of employment. Options that are not vested before their expiration
date are forfeited and without value.
3. CHANGE IN OPTION TERM AS A RESULT OF TERMINATION OF EMPLOYMENT. If your
employment terminates before the Option has expired, the length of time during
which you have a right to exercise the Option varies depending on the reason for
termination of employment.
(A) TERMINATION AS A RESULT OF DEATH OF THE PARTICIPANT. During your
lifetime, this Option may be exercised only by you. If you die while actively
employed, your Option is automatically 100% vested and your beneficiary or
personal representative may exercise the Option at any time or from time to time
within a maximum of two years after your date of death, or during the remaining
term of the grant if that is a shorter period of time.
(B) TERMINATION OF EMPLOYMENT UPON NORMAL RETIREMENT. 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), your Option will
automatically be 100% vested at your retirement date and you will be able to
exercise the Option for the remaining term of the grant, up to a maximum of five
(5) years.
(C) TERMINATION OF EMPLOYMENT UPON EARLY RETIREMENT OR DISABILITY
RETIREMENT. If you retire before age 62, but not earlier than your 55th birthday
and you also have accrued a total of 10 years of Vesting Service (as defined in
the Weyerhaeuser Company Retirement Plan for Salaried Employees) ("Early
Retirement"), your Option will continue to vest according to the vesting
schedule described above and you will be able to exercise any portion of your
Option that has vested within a maximum of five years from your termination
date, or during the remaining term of the grant if that is a shorter period of
time. In addition, 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"), your Option will continue to vest according to the
schedule described above and you will be able to exercise any portion of your
Option that has vested within a maximum of five years from your termination
date, or during the remaining term of the grant if that is a shorter period of
time.
"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.
(D) TERMINATION OF EMPLOYMENT DUE TO POSITION ELIMINATION OR DISABILITY. If
your employment is terminated as a result of position elimination or Disability,
your Option will continue to vest according to the schedule described above and
you will be able to exercise vested Options within a maximum of three years from
the date of termination, or during the remaining term of the grant if that is a
shorter period of time.
(E) TERMINATION OF EMPLOYMENT FOR REASON OTHER THAN POSITION ELIMINATION,
RETIREMENT, EARLY RETIREMENT OR DISABILITY RETIREMENT. If your employment is
terminated for any reason other than position elimination, Retirement, Early
Retirement or Disability Retirement, any portion of your Option that is not
vested is forfeited and no longer has any value. You will be able to exercise
any portion of your Option that has vested as of the date of your termination
for a maximum of three calendar months from the date of termination, or during
the remaining term of the grant if that is a shorter period of time.
(F) TERMINATION OF EMPLOYMENT FOR CAUSE. The vested portion of the Option
will automatically expire at the time the Company first notifies you of your
Termination for Cause, unless the Committee determines otherwise. If your
employment or service relationship is suspended pending an investigation of
whether you will be terminated for Cause, all your rights under the Option
likewise will be suspended during the period of investigation. If any facts that
would constitute termination for Cause are discovered after your Termination of
Service, any Option you then hold may be immediately terminated by the
Committee.
"Cause" means: (i) willful and continued failure to perform substantially
your duties with the Company after the Company delivers to you written demand
for substantial performance specifically identifying the manner in which you
have not substantially performed your duties; (ii) conviction of a felony; or
(iii) willfully engaging in illegal conduct or gross misconduct that is
materially and demonstrably injurious to the Company.
The Option must be exercised within three months after termination of
employment for reasons other than death or Disability and one year after
termination of employment due to Disability to qualify for the beneficial tax
treatment afforded Incentive Stock Options.
IT IS YOUR RESPONSIBILITY TO BE AWARE OF THE DATE THE OPTION TERMINATES.
4. SECURITIES LAW COMPLIANCE. Notwithstanding any other provision of this
Agreement, you may not exercise the Option unless the Shares issuable upon
exercise are registered under the Securities Act or if the Company has
determined that such exercise and issuance would be exempt
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from the registration requirements of the Securities Act. The exercise of the
Option must also comply with other applicable laws and regulations governing the
Option, and you may not exercise the Option if the Company determines that such
exercise would not be in compliance with such laws and regulations.
5. INCENTIVE STOCK OPTION QUALIFICATION. If your Option is designated as an
Incentive Stock Option in your Grant Notice, all or a portion of the Option is
intended to qualify as an Incentive Stock Option under federal income tax law.
However, the Company does not represent or guarantee that the Option qualifies
as such.
If the Option has been designated as an Incentive Stock Option and the aggregate
Fair Market Value (determined as of the grant date) of the shares of Common
Stock subject to the portions of the Option and all other Incentive Stock
Options you hold that first become exercisable during any calendar year exceeds
$100,000, any excess portion will be treated as a Nonqualified Stock Option,
unless the Internal Revenue Service changes the rules and regulations governing
the $100,000 limit for Incentive Stock Options. In addition, a portion of the
Option may be treated as a Nonqualified Stock Option if certain events cause
exercisability of the Option to accelerate.
6. NOTICE OF DISQUALIFYING DISPOSITION. To the extent the Option has been
designated as an Incentive Stock Option, to obtain certain tax benefits afforded
to Incentive Stock Options, you must hold the Shares issued upon the exercise of
the Option for two years after the Grant Date and one year after the date of
exercise. If shares of stock obtained upon exercise of an Incentive Stock Option
are tendered to pay the exercise price for another option less than one year
after the exercise date of the Incentive Stock Option, the tender will be
considered a disqualifying disposition. You may be subject to the alternative
minimum tax at the time of exercise. You should obtain tax advice when
exercising the Option and prior to the disposition of the Shares. By accepting
an Option designated as an Incentive Stock Option, you agree to promptly notify
the Company if you dispose of any of the Shares within one year from the date
you exercise all or part of the Option or within two years from the Grant Date.
7. METHOD OF EXERCISE. You may exercise the Option by giving notice to the
Company or a brokerage firm designated or approved by the Company, in form and
substance satisfactory to the Company, which will state your election to
exercise the Option and the number of Shares for which you are exercising the
Option. The notice must be accompanied by full payment of the exercise price for
the number of Shares you are purchasing. You may make this payment in any
combination of the following: (a) by cash; (b) by check acceptable to the
Company; (c) by tendering (either actually or by attestation) shares of Common
Stock you have owned for at least six months (if such holding period is
necessary to avoid a charge to the Company's earnings); (d) to the extent
permitted by law, by instructing a broker to deliver to the Company the total
payment required in accordance with procedures established by the Company; or
(e) by any other method permitted by the Committee.
8. WITHHOLDING TAXES. As a condition to the exercise of any portion of an
Option, you must make such arrangements as the Company may require for the
satisfaction of any federal, state, local or foreign withholding tax obligations
that may arise in connection with such exercise.
9. OPTION 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
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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.
10. NO RIGHT TO DAMAGES. You will have no right to bring a claim or to receive
damages if you are required to exercise the vested portion of the Option within
three months (one year in the case of Retirement, Disability or death) of the
Termination of Service or if any portion of the Option is cancelled or expires
unexercised. 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.
11. BINDING EFFECT. This 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.
12. LIMITATION ON RIGHTS; NO RIGHT TO FUTURE GRANTS; EXTRAORDINARY ITEM OF
COMPENSATION. By entering into this Agreement and accepting the grant of the
Option 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 of the Option is a one-time benefit that does not create any
contractual or other right to receive future grants of options, or benefits in
lieu of options; (c) that all determinations with respect to any such future
grants, including, but not limited to, the times when options will be granted,
the number of shares subject to each option, the option price, and the time or
times when each option 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 Option is an extraordinary item of compensation that is outside the
scope of your employment contract, if any; (f) that the Option 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
Option ceases upon your Termination of Service for any reason except as may
otherwise be explicitly provided in the Plan or this Agreement or otherwise
permitted by the Committee; (h) that the future value of the Shares underlying
the Option is unknown and cannot be predicted with certainty; and (i) that if
the Shares underlying the Option do not increase in value, the Option will have
no value.
13. EMPLOYEE DATA PRIVACY. By entering 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 Option 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.
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