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This
AMENDED AND RESTATED STOCK OPTION AND DIVIDEND EQUIVALENT AWARD AGREEMENT
(“Agreement”) dated the date set forth in the Acceptance attached hereto amends
and restates in its entirety that certain Stock Option and Dividend Equivalent Award
Agreement dated as of February 2, 2004 (the “Grant Date”), between Plum Creek
Timber Company, Inc., a Delaware corporation (the “Company”), and [Name of
Director] (“Director”), a director of the Company. Terms used herein, unless
otherwise defined herein, shall have the meanings ascribed to them in the Plum Creek
Timber Company, Inc. Amended and Restated Stock Incentive Plan (the “Plan”). To
carry out the purposes of the Plan by affording Director the opportunity to purchase
shares of common stock, par value $.01 per share, of the Company (“Stock”) and
to receive certain other benefits under the Plan, and in consideration of the mutual
agreements and other matters set forth herein and in the Plan, the Company and Director
hereby agree as follows:
A. Stock Option Award.
1.
Grant of Option. The Company hereby grants to Director as of the Grant
Date the right and option (the “Option”) to purchase all or any part
of an aggregate of six thousand (6,000) shares of Stock, on the terms and
conditions set forth herein and in the Plan, which Plan is incorporated herein
by reference as a part of this Agreement. The Option shall not be treated
as an incentive stock option within the meaning of section 422(b) of the
Internal Revenue Code of 1986, as amended (the “Code”).
2.
Purchase Price. The purchase price of any Stock purchased pursuant to the
exercise of the Option shall be $30.91 per share, which was the closing price of
a share of Stock on the Grant Date.
3. Exercise
of Option.
(a) The
Option is fully vested and exercisable and may be exercised, following the
procedure therefore established by the Committee from time to time, at any time
during the period ending on the date which is ten years after the Grant Date.
(b) The
Option is not transferable otherwise than by will or the laws of descent and
distribution, or pursuant to a “qualified domestic relations order” as
defined by the Code, and may be exercised by Director, Director’s guardian
or legal representative or a transferee under a qualified domestic relations
order or Director’s estate or the person who acquires the Option by will
or the laws of descent and distribution or otherwise by reason of the death of
Director. Upon any attempt to transfer, assign, pledge, hypothecate or
otherwise dispose of the Option or of such rights contrary to the provisions
hereof or the Plan, or upon the levy of any attachment or similar process upon
the Option or such rights, the Option and such rights shall immediately become
null and void.
(c) The
purchase price of shares as to which the Option is exercised shall be paid in
full at the time of exercise (i) in cash (including check, bank draft or money
order payable to the order of the Company), (ii) by delivering to the Company
shares of Stock having a fair market value equal to the purchase price, or
(iii) by a combination of cash or Stock. Payment may also be made by delivery
(including by facsimile transmission) to the Company of a properly executed and
irrevocable Notice of Exercise form, coupled with irrevocable instructions to a
broker-dealer to simultaneously sell a sufficient number of the shares as to
which the Option is exercised and deliver directly to the Company that portion
of the sales proceeds representing the exercise price and applicable minimum
withholding taxes (“Cashless Exercise”) or by such other similar
process approved by the Committee.
(d) No
fraction of a share of Stock shall be issued by the Company upon exercise of an
Option or accepted by the Company in payment of the purchase price thereof;
rather, Director shall provide a cash payment for such amount as is necessary
to effect the issuance and acceptance of only whole shares of Stock. Unless and
until a certificate or certificates representing such shares shall have been
issued by the Company to Director, Director (or the person permitted to
exercise the Option in the event of Director’s death) shall not be or have
any of the rights or privileges of a shareholder of the Company with respect to
shares acquirable upon an exercise of the Option.
4. Status
of Stock.
(a) Notwithstanding
any other provision of this Agreement, in the absence of an effective
registration statement under the Securities Act of 1933, as amended (the “Act”),
for issuance of the Stock acquirable upon exercise of the Option, or an
available exemption from registration under the Act, issuance of shares of
Stock acquirable upon exercise of the Option will be delayed until registration
of such shares is effective or an exemption from registration under the Act is
available. The Company intends to use its best efforts to ensure that no such
delay will occur. In the event exemption from registration under the Act is
available upon an exercise of the Option, Director (or the person permitted to
exercise the Option in the event of Director’s death or incapacity), if
requested by the Company to do so, will execute and deliver to the Company in
writing an agreement containing such provisions as the Company may require to
assure compliance with applicable securities laws.
(b) Director
agrees that the shares of Stock, which Director may acquire by exercising the
Option, will not be sold or otherwise disposed of in any manner, which would
constitute a violation of any applicable securities laws, whether federal, or
state. Director also agrees (a) that the certificates representing the shares
of Stock purchased under the Option may bear such legend or legends as the
Company deems appropriate in order to assure compliance with applicable
securities laws, (b) that the Company may refuse to register the transfer of
the shares of Stock purchased under the Option on the stock transfer records of
the Company if such proposed transfer would, in the opinion of counsel
satisfactory to the Company, constitute a violation of any applicable
securities law and (c) that the Company may give related instructions to its
transfer agent, if any, to stop registration of the transfer of the shares of
Stock purchased under the Option.
B. Dividend
Equivalents.
1. Grant
of Dividend Equivalents. The Company hereby grants to Director as of the
Grant Date in connection with the grant of the Option six thousand (6,000)
Dividend Equivalents equal in value to dividends paid with respect to the
number of shares of Stock underlying such Option, together with interest earned
thereon, subject to the attainment of the Performance Goals set forth in
paragraph B.4.
2. Non-transferable.
Director may not sell, transfer, pledge or assign Dividend Equivalents.
3. Peer
Group. For purposes of this Agreement, the Company’s peer group (“Peer
Group”) shall be comprised of three components: (a) the industry peer
group companies set forth by the Committee; (b) companies in the S&P 500
Index; and (c) companies in the Xxxxxx Xxxxxxx XXXX Index; provided, that each
of the foregoing Peer Group components shall be subject to equitable adjustment
by the Committee in its sole discretion to the extent that one or more
companies in any component grouping shall cease to maintain separate legal
existence by reason of merger or legal dissolution or otherwise, or shall no
longer be part of the applicable Index. For purposes of determining values
earned for the Dividend Equivalents granted hereby, the components of the Peer
Group will be given the following weightings: industry group 50%; S&P group
25%; and REIT Index group 25%.
4. Performance
Goals.
(a) The
Performance Goals for the Dividend Equivalents granted hereby shall be
comprised of: (i) an absolute measure of Total Shareholder Return equal to
5.5% compounded annually, based upon the Company’s Stock price and
dividends paid (“Threshold Target”); and (ii) a relative measure
of Total Shareholder Return, based upon the Company’s Total
Shareholder Return compared against the Total Shareholder Return of the
companies in the Peer Group.
(b) The
Performance Period for the Dividend Equivalents granted hereby shall
commence on January 1, 2004 and shall end on December 31, 2008.
(c) In
order to be eligible to earn the dividends paid on the stock underlying the
Option during any year (or prior year to the extent not yet earned) of the
Performance Period (the “Dividends”), the compounded Total
Shareholder Return for the Company as of December 31 for such year must
meet or exceed the Threshold Target.
(d) Once
the Threshold Target is met at the end of any given year during the
Performance Period, a percentage of the Dividends for such year, as well
as a percentage of the Dividends for each prior year of the Performance
Period to the extent not yet earned, shall be credited to a Memorandum
Account on Director’s behalf. The percentage of Dividends to be
credited to Director’s Memorandum Account shall be equal to the
specified percentage corresponding to the identified percentile ranking
with respect to each component of the Peer Group achieved by the Company
during such year of the Performance Period, as set forth below:
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