AWARD AGREEMENT
UNDER THE
LOUISIANA-PACIFIC CORPORATION
1997 INCENTIVE STOCK AWARD PLAN
NONQUALIFIED STOCK OPTION
Corporation: LOUISIANA-PACIFIC CORPORATION
111 S.W. Fifth Avenue
Portland, Oregon 97204
Participant: ----------------------------
----------------------------
----------------------------
Grant Date: ----------------------------
Option: A Nonqualified Stock Option
Option Shares: ______ Shares
Exercise Price: $______ per Share
Subject to the terms and conditions of the Louisiana-Pacific
Corporation 1997 Incentive Stock Award Plan (the "Plan") and this Agreement,
effective as of the Grant Date, Corporation grants to Participant the Option to
purchase the Option Shares at the Exercise Price.
The provisions of Appendix A attached to this Agreement are
incorporated by reference as part of this Agreement.
LOUISIANA-PACIFIC CORPORATION
By _______________________________________
Its ______________________________________
------------------------------------------
Participant
APPENDIX A
TO
AWARD AGREEMENT FOR NONQUALIFIED STOCK OPTION
This Award Agreement evidences the grant of a Nonqualified
Stock Option (the "Option") to Participant under the Plan.
Capitalized terms are defined in Section 8.
1. OPTION SHARES; ADJUSTMENT
In the event of a declaration of a stock dividend or a stock
split (whether effected as a dividend or otherwise) by Corporation where the
record date for such dividend or stock split is after the Grant Date, the number
of Option Shares and the Exercise Price will automatically be adjusted
proportionately to reflect the effect of such dividend or stock split.
2. TERMS OF THE OPTION
The Option is subject to all applicable provisions of the Plan
and to the following terms and conditions:
2.1 Nonqualified Stock Option. The Option is not intended to
qualify as an incentive stock option meeting the requirements of IRC ss. 422.
2.2 Term. The term of the Option extends ten years from the
Grant Date unless terminated earlier in accordance with this Agreement.
2.3 Exercisability. The Option initially will not be
exercisable and, unless the Option is terminated or canceled earlier or the
exercisability of the Option is accelerated in accordance with this Agreement,
the Option may be exercised from time to time to purchase a whole number of
Option Shares up to the following limits:
(a) Prior to the first anniversary of the Grant Date, the
Option may not be exercised;
(b) During the one-year period beginning on the first
anniversary of the Grant Date, the Option may be exercised to purchase
up to one-third of the total Option Shares;
(c) During the one-year period beginning on the second
anniversary of the Grant Date, the Option may be exercised to purchase
up to two-thirds of the total Option Shares; and
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(d) On and after the third anniversary of the Grant Date, the
Option may be exercised to purchase all the Option Shares.
2.4 Effect of Termination of Employment. The Option may not be
exercised (in whole or in part) unless Participant is continuously Employed by
an Employer from the Grant Date through at least the first anniversary of the
Grant Date. If Participant ceases to be an Employee for any reason on or after
the first anniversary of the Grant Date, the term of the Option will continue
for the applicable Continuation Period. The Option will remain exercisable
during the Continuation Period, if at all, only to the extent the Option had
become exercisable pursuant to Sections 2.3 and 2.10 of this Agreement on or
prior to the Termination Date. The Option, to the extent not previously
exercised, will be canceled automatically at the end of the applicable
Continuation Period.
2.5 Method of Exercise. The Option, or any portion thereof,
may be exercised, to the extent it has become exercisable pursuant to this
Agreement, by delivery of written notice to Corporation stating the number of
Shares, form of payment, and proposed date of closing.
2.6 Other Documents. Upon any exercise of the Option,
Participant must furnish Corporation before the closing of such exercise such
other documents or representations as Corporation may require to assure
compliance with applicable laws and regulations.
2.7 Payment. The Exercise Price for the Shares purchased upon
exercise of the Option must be paid in full in United States dollars at or
before closing by one or a combination of the following:
2.7.1 Payment in cash or certified check or bank draft payable
to the order of Corporation;
2.7.2 Delivery of previously acquired Shares having a Fair
Market Value equal to the Exercise Price; or
2.7.3 By delivery (in a form approved by the Committee) of an
irrevocable direction to a securities broker acceptable to the
Committee:
(a) To sell Shares subject to the Option and to
deliver all or a part of the sales proceeds to Corporation in
payment of all or a part of the Exercise Price and withholding
taxes due; or
(b) To pledge Shares subject to the Option to the
broker as security for a loan and to deliver all or a part of
the loan proceeds to Corporation in payment of all or a part
of the Exercise Price and withholding taxes due.
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2.8 Previously Acquired Shares. Delivery of previously
acquired Shares in full or partial payment for the exercise of the Option is
subject to the following conditions:
2.8.1 The Shares tendered must be in good delivery form;
2.8.2 Any Shares remaining after satisfying the payment for
the Option will be reissued in the same manner as the Shares tendered;
2.8.3 No fractional Shares will be issued and whenever payment
of the full Exercise Price with Shares would require delivery of a
fractional Share, Participant must deliver the next lower whole number
of Shares and make a cash payment to Corporation for the balance of the
Exercise Price; and
2.8.4 Shares may be tendered in full or partial payment of the
Exercise Price only in connection with the exercise of the Option with
respect to at least 2,000 Shares.
2.9. Transferability.
2.9.1 General. Except as provided in Section 2.9.2, the Option
is not transferable other than by will or the laws of descent and distribution
and may be exercised during the lifetime of Participant only by Participant or,
in the case Participant becomes legally incompetent, by Participant's guardian
or legal representative. No assignment or transfer of the Option in violation of
the foregoing restriction, whether voluntary, involuntary or by operation of law
or otherwise, except by will or the laws of descent and distribution, will vest
in the assignee or transferee any interest or right whatsoever, but immediately
upon any attempt to assign or transfer the Option, the Option will terminate and
be of no force or effect. Whenever the word "Participant" is used in any
provision of this Agreement under circumstances where the provision should
logically be construed to apply to the executor, administrator, or the person or
persons to whom this Option may be transferred by will or by the laws of descent
and distribution, it will be deemed to include such person or persons.
2.9.2 Permitted Family Transfers. The Option may be
transferred by Participant, without payment of consideration, to Participant's
immediate family members or lineal descendants ("Permitted Family Members"), to
trusts for the benefit of Permitted Family Members, or to family partnerships or
limited liability companies of which Participant and Permitted Family members
are the only partners or members. For purposes of this Section, a transfer of
the Option to a family partnership or limited liability company in exchange for
a partnership or limited liability company interest will be deemed to be a
transfer without payment of consideration.
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2.10 Effect of Change in Control.
2.10.1 Acceleration of Vesting. Upon a Change in Control Date,
the Option, to the extent it had not yet become exercisable, will become fully
exercisable. This acceleration will not extend the date on which the Option
terminates. If, or to the extent, the acceleration of the exercisability of the
Option pursuant to this Section 2.10.1 results in an "excess parachute payment"
within the meaning of Section 280G of the Code, Corporation will reimburse
Participant, on an after-tax basis, for (1) any excise tax imposed by Section
4999(a) of the Code that is directly attributable to the acceleration of the
exercisability of the Option, and (2) any income taxes and excise taxes imposed
on any reimbursement pursuant to this sentence. For purposes of computing any
after-tax reimbursement, Participant will be deemed to pay federal, state, and
local income taxes (for the state and locality of Participant's residence) at
the highest effective combined marginal rates (giving effect to the
deductibility of state and local taxes) for the tax year in which the
reimbursement payment is made. No reimbursement will be due pursuant to this
Section 2.10.1 if, or to the extent, Participant is entitled to payment or
reimbursement for the same amounts under any other agreement with Corporation.
2.10.2 Dissolution. The Option will terminate upon the
effective date of a dissolution or liquidation of Corporation.
2.10.3 Merger. In the event of a merger or consolidation in
which Corporation is not the resulting or surviving corporation (or in which
Corporation is the resulting or surviving corporation but becomes a subsidiary
of another corporation), the Option will automatically be converted into an
option to purchase a number of shares of the stock of the resulting or surviving
corporation (or, in the event Corporation becomes a subsidiary of another
corporation, such other corporation) into which Corporation's Shares are
converted in the transaction with such terms and conditions, both as to number
of shares, option price, and otherwise, as will substantially preserve the
economic rights and benefits of Participant under this Agreement.
3. TAX REIMBURSEMENT
It is a condition of Corporation's obligation to issue
Shares in connection with an exercise of the Option that Participant pay to
Corporation, or make provision satisfactory to Corporation for the payment of,
an amount sufficient to provide for any withholding or similar tax liability
imposed on Corporation in connection with or with respect to any exercise of the
Option.
4. CONDITIONS PRECEDENT
The Option granted pursuant to this Agreement is expressly
subject to the approval of the Plan by Corporation's stockholders pursuant to
Article 15 of the Plan.
Corporation will use its best efforts to obtain approval of
the Plan and this
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Option by any state or federal agency or authority that Corporation determines
has jurisdiction. If Corporation determines that any required approval cannot be
obtained, this Option will terminate on notice to Participant to that effect.
Without limiting the foregoing, Corporation will not be required to issue any
Shares upon exercise of all or any portion of the Option until Corporation has
taken all action required to comply with all applicable federal and state
securities laws.
5. SUCCESSORSHIP
Subject to restrictions on transferability set forth in
Section 2.9, this Agreement will be binding upon and benefit the parties, their
successors and assigns.
6. NOTICES
Any notices under this Option must be in writing and will be
effective when actually delivered personally or, if mailed, when deposited as
registered or certified mail directed to the address of Corporation's records or
to such other address as a party may certify by notice to the other party.
7. ARBITRATION
Any dispute or claim that arises out of or that relates to
this Agreement or to the interpretation, breach, or enforcement of this
Agreement, must be resolved by mandatory arbitration in accordance with the then
effective arbitration rules of Arbitration Service of Portland, Inc., and any
judgment upon the award rendered pursuant to such arbitration may be entered in
any court having jurisdiction thereof.
8. DEFINED TERMS
When used in this Agreement, the following terms have the
meaning specified below:
o ACQUIRING PERSON means any person or related person or
related persons which constitute a "group" for purposes of Section
13(d) and Rule 13d-5 under the Securities Exchange Act of 1934 (the
"Exchange Act"), as such Section and Rule are in effect as of the Grant
Date; provided, however, that the term Acquiring Person shall not
include (a) Corporation or any of its Subsidiaries, (b) any employee
benefit plan or related trust of Corporation or any of its
Subsidiaries, (c) any entity holding voting capital stock of
Corporation for or pursuant to the terms of any such employee benefit
plan, or (d) any person or group solely because such person or group
has voting power with respect to capital stock of Corporation arising
from a revocable proxy or consent given in response to a public proxy
or consent solicitation made pursuant to the Exchange Act.
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o APPROVED RETIREMENT means termination of employment with an
Employer after Participant attains age 60, but only if such retirement
is approved by Corporation's Chief Executive Officer, in his sole
discretion.
o CHANGE IN CONTROL of Corporation means:
(a) The acquisition by any Acquiring Person of beneficial
ownership (within the meaning of Rule 13d-3 under the Exchange Act) of
20 percent or more of the combined voting power of the then outstanding
Voting Securities; provided, however, that for purposes of this
paragraph (a) the following acquisitions will not constitute a Change
in Control: (i) any acquisition directly from Corporation, (ii) any
acquisition by Corporation, (iii) any acquisition by any employee
benefit plan (or related trust) sponsored or maintained by Corporation
or any corporation controlled by Corporation, or (iv) any acquisition
by any corporation pursuant to a transaction that complies with clauses
(i), (ii), and (iii) of paragraph (c) of this definition of Change in
Control; or
(b) During any period of 12 consecutive calendar months,
individuals who at the beginning of such period constitute the Board
(the "Incumbent Board") cease for any reason to constitute at least a
majority of the Board; provided, however, that any individual who
becomes a director during the period whose election, or nomination for
election, by Corporation's shareholders was approved by a vote of at
least a majority of the directors then constituting the Incumbent Board
will be considered as though such individual were a member of the
Incumbent Board, but excluding, for this purpose, any such individual
whose initial assumption of office occurs as a result of an actual or
threatened election contest with respect to the election or removal of
directors or other actual or threatened solicitation of proxies or
consents by or on behalf of a Person other than the Board; or
(c) Consummation of a reorganization, merger, or consolidation
or sale or other disposition of all or substantially all of the assets
of Corporation (a "Business Combination") in each case, unless,
following such Business Combination, (i) all or substantially all of
the individuals and entities who were the beneficial owners of the
Voting Securities outstanding immediately prior to such Business
Combination beneficially own, directly or indirectly, more than 50
percent of, respectively, the then outstanding shares of common stock
and the combined voting power of the then outstanding voting securities
entitled to vote generally in the election of directors, as the case
may be, of the corporation resulting from such Business Combination
(including, without limitation, a corporation which as a result of such
transaction owns Corporation or all or substantially all of
Corporation's assets either directly or through one or more
subsidiaries) in substantially the same proportions as their ownership,
immediately prior to such Business Combination, of the Voting
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Securities, (ii) no Person (excluding any employee benefit plan, or
related trust, of Corporation or such corporation resulting from such
Business Combination) beneficially owns, directly or indirectly, 20
percent or more of, respectively, the then outstanding shares of common
stock of the corporation resulting from such Business Combination or
the combined voting power of the then outstanding voting securities of
such corporation except to the extent that such ownership existed prior
to the Business Combination and (iii) at least a majority of the
members of the board of directors of the corporation resulting from
such Business Combination were members of Incumbent Board at the time
of the execution of the initial agreement, or of the action of the
Board, providing for such Business Combination; or
(d) Approval by the shareholders of Corporation of any plan or
proposal for the liquidation or dissolution of Corporation.
o CHANGE IN CONTROL DATE means the first date following the
Grant Date on which a Change in Control has occurred.
o CONTINUATION PERIOD means a period during which the Option
continues to be exercisable after termination of Employment, namely the
period ending on the earlier of the expiration of the original term of
the Option or:
(a) If the termination of Employment is by reason of
Participant's death or Disability, the expiration of one year
following the Termination Date;
(b) If the termination of Employment is by reason of
Participant's Approved Retirement, the expiration of two years
following the Termination Date;
(c) In the case of an involuntary termination of
Participant's Employment by an Employer, the expiration of
five business days following the Termination Date; or
(d) If the termination of Employment is for any other
reason, the expiration of 30 days following the Termination
Date.
o DISABILITY means the condition of being permanently unable
to perform Participant's duties for an Employer by reason of a
medically determinable physical or mental impairment that can be
expected to result in death or that has lasted or can be expected to
last for a continuous period of at least 12 months.
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o EMPLOYEE AND EMPLOYMENT both refer to service by
Participant as a full-time or part-time employee of an Employer, and
include periods of illness or other leaves of absence authorized by an
Employer. A transfer of Participant's Employment from one Employer to
another will not be treated as a termination of Employment.
o EMPLOYER means Corporation or a Subsidiary of Corporation.
o TERMINATION DATE means the date Participant ceases to be an
Employee.
o VOTING SECURITIES means Corporation's issued and
outstanding securities ordinarily having the right to vote at elections
of directors.
o Capitalized terms not otherwise defined in this Agreement
have the meanings given them in the Plan.
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AWARD AGREEMENT
UNDER THE
LOUISIANA-PACIFIC CORPORATION
1997 INCENTIVE STOCK AWARD PLAN
NONQUALIFIED STOCK OPTION
Corporation: LOUISIANA-PACIFIC CORPORATION
111 S.W. Fifth Avenue
Portland, Oregon 97204
Participant: ----------------------------
----------------------------
----------------------------
Grant Date: ----------------------------
Award: Performance Shares
Target Shares: ______ Shares
Performance Period: The four calendar year period ending
December 31, 2000
Subject to the terms and conditions of the Louisiana-Pacific
Corporation 1997 Incentive Stock Award Plan (the "Plan") and this Agreement,
effective as of the Grant Date, Corporation grants to Participant the right to
receive a number of Performance Shares equal to up to 200 percent of the Target
Shares.
The provisions of Appendix A attached to this Agreement are
incorporated by reference as part of this Agreement.
LOUISIANA-PACIFIC CORPORATION
By _______________________________________
Its ______________________________________
------------------------------------------
Participant
APPENDIX A
TO
AWARD AGREEMENT FOR PERFORMANCE SHARES
This Award Agreement evidences the grant of Performance Shares
to Participant under the Plan.
Capitalized terms are defined in Section 9.
1. PERFORMANCE SHARES; ADJUSTMENT
In the event of a declaration of a stock dividend or a stock
split (whether effected as a dividend or otherwise) by Corporation where the
record date for such dividend or stock split is after the Grant Date, the number
of Target Shares will automatically be adjusted proportionately to reflect the
effect of such dividend or stock split. Furthermore, the number of Target Shares
will be increased to reflect reinvestment (using the Fair Market Value of a
Share on the dividend payment date) of cash dividends paid with respect to
Corporation's common stock during the Performance Period.
2. TERMS OF AWARD
This Award is subject to all the provisions of the Plan and to
the following terms and conditions:
2.1 Performance Goals. The number of Performance Shares, if
any, to be issued pursuant to this Award will be based on corporate performance
by Corporation during the Performance Period (or, in the case of an Approved
Retirement prior to the end of the Performance Period, during the Short Period
described in Section 2.5.3(a)) based on a comparison of Corporation's annualized
total stockholder return for the period to the mean annualized total stockholder
return for the Peer Group companies.
2.2 Determination of Payout Percentage. The Committee will
compute the positive or negative difference in percentage points (the "TSR
Difference") by subtracting the Peer Group TSR from Corporation's TSR for
the Performance Period (or, if applicable, the Short Period). The Payout
Percentage will be determined from the following table based on the TSR
Difference.
TSR Difference Payout Percentage
-------------- -----------------
Less than negative 3% 0%
Negative 3% 20%
0% 60%
Positive 3% 100%
Positive 13% and above 200%
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For TSR Differences between the levels represented in the table, the Payout
Percentage will be interpolated on a straight-line basis and rounded to the
nearest whole percent.
2.3 Performance Shares. If Participant remains an Employee
through the end of the Performance Period, Participant will be entitled to
receive a number of Performance Shares (the "Payout Shares") equal to the
product of the Payout Percentage determined pursuant to Section 2.2 multiplied
by the number of Target Shares (and rounded down to a whole number of Shares).
In the event Participant terminates Employment before the end of the Performance
Period, Participant will be entitled to receive the number of Performance
Shares, if any, described in Section 2.5. Any portion of this Award that does
not become Vested pursuant to this Agreement will be canceled and Participant
will not receive any Shares or other payment with respect to such non-Vested
portion of the Award.
2.4 Settlement of Award.
2.4.1 General. Except as provided in Section 2.4.2, this Award
will be settled on a settlement date selected by the Committee as soon as
practicable after the end of the Performance Period by the delivery to
Participant of:
(a) An unrestricted certificate for 50 percent of the Payout
Shares; and
(b) A certificate subject to the restrictions described in
Section 2.7 of this Agreement for the balance of the Payout Shares (the
"Restricted Payout Shares").
2.4.2 Early Settlement. In the event Participant (or
Participant's representative) becomes entitled to receive Performance Shares
pursuant to Section 2.5.2 (on account of death or Disability), Section 2.5.3(a)
(on account of Approved Retirement), or 2.6.1(a) (on account of a Change in
Control), this Award will be settled on a settlement date selected by the
Committee as soon as practical after the Termination Date, the end of the
Retirement Year, or the Change in Control Date, respectively, by the delivery to
Participant of an unrestricted certificate for all the Performance Shares
determined pursuant to those Sections.
2.5 Employment Requirement.
2.5.1 General. Except as otherwise expressly provided in
Sections 2.5.2 and 2.5.3, if Participant ceases to be an Employee for any reason
prior to the end of the Performance Period, this Award will be canceled and
Participant will not receive any Shares or other payment with respect to this
Award.
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2.5.2 Effect of Death or Disability.
(a) In the event Participant dies or terminates Employment by
reason of Disability prior to the end of the Performance Period, Participant or
Participant's representative will be entitled to receive a number of Performance
Shares equal to 100 percent of the number of Target Shares.
(b) In the event Participant dies or terminates Employment by
reason of Disability after the end of the Performance Period but before the end
of the Restriction Period, the Restricted Payout Shares (if any) will
automatically become fully Vested as of the Termination Date.
2.5.3 Effect of Approved Retirement.
(a) In the event Participant terminates Employment by reason
of Approved Retirement prior to the end of the Performance Period, the Committee
will determine the TSR Difference for the Short Period consisting of the portion
of the Performance Period ending on the last day of the Retirement Year. A
Payout Percentage will be determined from the table set forth in Section 2.2
based on that Short Period TSR Difference. Participant will be entitled to
receive a prorated number of Performance Shares (rounded down to a whole number
of Shares) equal to (a) the product of the Payout Percentage multiplied by the
number of Target Shares, multiplied by (b) a fraction with a numerator equal to
the number of whole fiscal years from the beginning of the Performance Period
through the last day of the Retirement year and a denominator equal to the whole
number of fiscal years in the Performance Period.
(b) In the event Participant terminates Employment by reason
of Approved Retirement after the end of the Performance Period but before the
end of the Restriction Period, the Restricted Payout Shares (if any) will
automatically become fully Vested as of the Termination Date.
2.6 Effect of Change in Control.
2.6.1 General.
(a) Upon the occurrence of a Change in Control Date prior to
the end of the Performance Period, Participant will be entitled to a number of
Performance Shares equal to 100 percent of the Target Shares.
(b) Upon the occurrence of a Change in Control Date during the
Restriction Period all Restricted Payout Shares (if any) will automatically
become fully Vested.
2.6.2 Reimbursement. If, or to the extent, (a) the
determination of Participant's Performance Shares pursuant to Section 2.6.1(a)
as a result of a Change in Control or (b) the Vesting of Restricted Payout
Shares in connection with a Change in
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Control pursuant to Section 2.6.1(b) results in an "excess parachute payment"
within the meaning of Section 280G of the Code, Corporation will reimburse
Participant, on an after-tax basis, for (i) any excise tax imposed by Section
4999(a) of the Code that is directly attributable to such determination or
Vesting, and (2) any income taxes and excise taxes imposed on any reimbursement
pursuant to this Section 2.6.2. For purposes of computing any after-tax
reimbursement, Participant will be deemed to pay federal, state, and local
income taxes (for the state and locality of Participant's residence) at the
highest effective combined marginal rates (giving effect to the deductibility of
state and local taxes) for the tax year in which the reimbursement payment is
made. No reimbursement will be due pursuant to this Section 2.6.2 if, or to the
extent, Participant is entitled to payment or reimbursement for the same amounts
under any other agreement with Corporation.
2.7 Restricted Payout Shares. A certificate for the Restricted
Payout Shares (if any) will be issued in Participant's name but will be retained
by Corporation. During the Restriction Period, the Restricted Payout Shares may
not be sold, assigned, or encumbered. If Participant dies or terminates
Employment by reason of Disability or Approved Retirement before the expiration
of the Restriction Period, the Restricted Payout Shares will be governed by
Sections 2.5.2 and 2.5.3. If a Change in Control Date occurs during the
Restriction Period, the Restricted Payout Shares will be governed by Section
2.6.1(b). If Participant terminates Employment for any other reason prior to the
expiration of the Restriction Period, all the Restricted Payout Shares will be
forfeited and the certificate for such Restricted Payout Shares will be
canceled. If Participant remains an Employee through the Restriction Period, the
restrictions of this Section 2.7 will lapse upon the expiration of the
Restriction Period and an unrestricted certificate for the Restricted Payout
Shares will be issued to Participant. During the Restriction Period, dividends
paid with respect to the Restricted Payout Stock will be reinvested (using the
Fair Market Value of a Share on the dividend payment date) in additional
Restricted Payout Shares and Participant will be entitled to exercise all voting
rights with respect to the Restricted Payout Shares.
2.8 Other Documents. Participant will be required to furnish
Corporation such other documents or representations as Corporation may require
to assure compliance with applicable laws and regulations as a condition of
Corporation's obligation to issue any performance Shares.
2.9 Adjustment of Payout Percentage. Pursuant to authority
granted under the Plan, the Committee may, in its discretion, reduce (even to
zero) the Payout Percentage if, in the Committee's judgment, the Payout
Percentage determined in accordance with Section 2.2 of this Agreement is not
appropriate given actual performance by Corporation over the Performance Period
(or, if applicable, the Short Period).
2.10. Transferability.
2.10.1 General. Except as provided in Section 2.10.2, the
Award is not transferable other than by will or the laws of descent and
distribution. No assignment or transfer of the Award in violation of the
foregoing restriction, whether voluntary, involuntary
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or by operation of law or otherwise, except by will or the laws of descent and
distribution, will vest in the assignee or transferee any interest or right
whatsoever, but immediately upon any attempt to assign or transfer the Award,
the Award will terminate and be of no force or effect. Whenever the word
"Participant" is used in any provision of this Agreement under circumstances
where the provision should logically be construed to apply to the executor,
administrator, or the person or persons to whom this Award may be transferred by
will or by the laws of descent and distribution, it will be deemed to include
such person or persons.
2.10.2 Permitted Family Transfers. The Award may be
transferred by Participant, without payment of consideration, to Participant's
immediate family members or lineal descendants ("Permitted Family Members"), to
trusts for the benefit of Permitted Family Members, or to family partnerships or
limited liability companies of which Participant and Permitted Family Members
are the only partners or members. For purposes of this Section, a transfer of
the Award to a family partnership or limited liability company in exchange for a
partnership or limited liability company interest will be deemed to be a
transfer without payment of consideration.
3. RIGHTS AS STOCKHOLDER
Prior to the issuance of Performance Shares in settlement of
this Award, Participant will have no rights as a stockholder of Corporation with
respect to this Award or the Target Shares. Participant's rights with respect to
Restricted Payout Shares during the Restriction Period will be as set forth in
Section 2.7 of this Agreement.
4. WITHHOLDING TAXES
Corporation will have the right to require Participant to
remit to Corporation, or to withhold from other amounts payable to Participant,
as compensation or otherwise, or from Payout Shares to be delivered to
Participant in settlement of this Award (or Restricted Payout Shares to be
delivered to Participant at the expiration of the Restriction Period), an amount
sufficient to satisfy all federal, state and local withholding tax requirements
with respect to the Award or the Payout Shares. Participant may, by written
notice to Committee which complies with any applicable timing restrictions
imposed pursuant to Rule 16b-3 under the Exchange Act, elect to have withholding
taxes satisfied by withholding Vested Shares. To the extent required by Rule
16b-3, such election will be subject to approval by the Committee.
5. CONDITIONS PRECEDENT
This Award is expressly subject to the approval of the Plan by
Corporation's stockholders pursuant to Article 15 of the Plan.
Corporation will use its best efforts to obtain approval of
the Plan and this Award by any state or federal agency or authority that
Corporation determines has jurisdiction. If Corporation determines that any
required approval cannot be obtained, this
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Award will terminate on notice to Participant to that effect. Without limiting
the foregoing, Corporation will not be required to issue any certificates for
Payout Shares, or any portion thereof, until Corporation has taken all action
required to comply with all applicable federal and state securities laws.
6. SUCCESSORSHIP
Subject to restrictions on transferability set forth in
Section 2.10, this Agreement will be binding upon and benefit the parties, their
successors and assigns.
7. NOTICES
Any notices under this Agreement must be in writing and will
be effective when actually delivered personally or, if mailed, when deposited as
registered or certified mail directed to the address of Corporation's records or
to such other address as a party may certify by notice to the other party.
8. ARBITRATION
Any dispute or claim that arises out of or that relates to
this Agreement or to the interpretation, breach, or enforcement of this
Agreement, shall be resolved by mandatory arbitration in accordance with the
then effective arbitration rules of Arbitration Service of Portland, Inc., and
any judgment upon the award rendered pursuant to such arbitration may be entered
in any court having jurisdiction thereof.
9. DEFINED TERMS
When used in this Agreement, the following terms have the
meaning specified below:
o ACQUIRING PERSON means any person or related person or
related persons which constitute a "group" for purposes of Section
13(d) and Rule 13d-5 under the Securities Exchange Act of 1934 (the
"Exchange Act"), as such Section and Rule are in effect as of the Grant
Date; provided, however, that the term Acquiring Person shall not
include (a) Corporation or any of its Subsidiaries, (b) any employee
benefit plan or related trust of Corporation or any of its
Subsidiaries, (c) any entity holding voting capital stock of
Corporation for or pursuant to the terms of any such employee benefit
plan, or (d) any person or group solely because such person or group
has voting power with respect to capital stock of Corporation arising
from a revocable proxy or consent given in response to a public proxy
or consent solicitation made pursuant to the Exchange Act.
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o APPROVED RETIREMENT means termination of Employment with an
Employer after Participant attains age 60, but only if such retirement
is approved by Corporation's Chief Executive Officer, in his sole
discretion.
o CHANGE IN CONTROL of Corporation means:
(a) The acquisition by any Acquiring Person of beneficial
ownership (within the meaning of Rule 13d-3 under the Exchange Act) of
20 percent or more of the combined voting power of the then outstanding
Voting Securities; provided, however, that for purposes of this
paragraph (a) the following acquisitions will not constitute a Change
in Control: (i) any acquisition directly from Corporation, (ii) any
acquisition by Corporation, (iii) any acquisition by any employee
benefit plan (or related trust) sponsored or maintained by Corporation
or any corporation controlled by Corporation, or (iv) any acquisition
by any corporation pursuant to a transaction that complies with clauses
(i), (ii), and (iii) of paragraph (c) of this definition of Change in
Control; or
(b) During any period of 12 consecutive calendar months,
individuals who at the beginning of such period constitute the Board
(the "Incumbent Board") cease for any reason to constitute at least a
majority of the Board; provided, however, that any individual who
becomes a director during the period whose election, or nomination for
election, by Corporation's stockholders was approved by a vote of at
least a majority of the directors then constituting the Incumbent Board
will be considered as though such individual were a member of the
Incumbent Board, but excluding, for this purpose, any such individual
whose initial assumption of office occurs as a result of an actual or
threatened election contest with respect to the election or removal of
directors or other actual or threatened solicitation of proxies or
consents by or on behalf of a Person other than the Board; or
(c) Consummation of a reorganization, merger, or consolidation
or sale or other disposition of all or substantially all of the assets
of Corporation (a "Business Combination") in each case, unless,
following such Business Combination, (i) all or substantially all of
the individuals and entities who were the beneficial owners of the
Voting Securities outstanding immediately prior to such Business
Combination beneficially own, directly or indirectly, more than 50
percent of, respectively, the then outstanding shares of common stock
and the combined voting power of the then outstanding voting securities
entitled to vote generally in the election of directors, as the case
may be, of the corporation resulting from such Business Combination
(including, without limitation, a corporation which as a result of such
transaction owns Corporation or all or substantially all of
Corporation's assets either directly or through one or more
subsidiaries) in substantially the same proportions as their ownership,
immediately prior to such Business Combination, of the Voting
Securities, (ii) no Person (excluding any employee benefit plan, or
related trust, of Corporation or such corporation resulting from such
Business
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Combination) beneficially owns, directly or indirectly, 20 percent or
more of, respectively, the then outstanding shares of common stock of
the corporation resulting from such Business Combination or the
combined voting power of the then outstanding voting securities of such
corporation except to the extent that such ownership existed prior to
the Business Combination and (iii) at least a majority of the members
of the board of directors of the corporation resulting from such
Business Combination were members of Incumbent Board at the time of the
execution of the initial agreement, or of the action of the Board,
providing for such Business Combination; or
(d) Approval by the stockholders of Corporation of any plan or
proposal for the liquidation or dissolution of Corporation.
o CHANGE IN CONTROL DATE means the first date following the
Grant Date on which a Change in Control has occurred.
o DISABILITY means the condition of being permanently unable
to perform Participant's duties for an Employer by reason of a
medically determinable physical or mental impairment that can be
expected to result in death or that has lasted or can be expected to
last for a continuous period of at least 12 months.
o EMPLOYEE AND EMPLOYMENT both refer to service by
Participant as a full-time or part-time employee of an Employer, and
include periods of illness or other leaves of absence authorized by an
Employer. A transfer of Participant's Employment from one Employer to
another will not be treated as a termination of Employment.
o EMPLOYER means Corporation or a Subsidiary of Corporation.
o PAYOUT PERCENTAGE means the percentage determined as
provided in Section 2.2 used to determine the number of Performance
Shares to be issued to Participant pursuant to this Award.
o PEER GROUP means the following forest products companies:
Boise Cascade, Georgia-Pacific, Potlatch, Weyerhaeuser, and Willamette
Industries. In the event that during the Performance Period any of the
foregoing companies (1) is subject to a Change in Control, or (2)
becomes a debtor in a voluntary or involuntary bankruptcy case, such
company automatically will be excluded from the Peer Group for the
entire Performance Period.
o PEER GROUP TSR means the mean annualized total stockholder
return (computed in the same manner as described in the definition of
TSR or Total Stockholder Return) for the members of the Peer Group.
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o PERFORMANCE PERIOD means the period described on the cover
page to this Agreement.
o PERFORMANCE SHARES means the number of Shares issuable to
Participant pursuant to this Award as provided in Section 2.3.
o RESTRICTION PERIOD means the two-year period following the
expiration of the Performance Period during which the restrictions
described in Section 2.7 are applicable.
o RETIREMENT YEAR means the fiscal year during which
Participant terminates Employment by reason of an Approved Retirement.
o SHORT PERIOD means, in the event of an Approved Retirement,
the portion of the Performance Period through the end of the Retirement
Year determined as provided in Section 2.5.3.
o TSR OR TOTAL STOCKHOLDER RETURN means, for the Performance
Period or, if applicable, the Short Period, an amount (expressed as a
percentage) equal to 1 less than:
(a) the ratio of the Closing Investment to the Base
Investment;
(b) raised to an exponential power with an exponent equal to 1
divided by the number of years in the Performance Period (or the Short
Period).
For purposes of the forgoing calculation:
(i) BASE PRICE means the mean daily stock price
(based on reported closing stock trading prices for each day
on the principal exchange or market on which the Shares trade)
of the Shares for the last fiscal quarter of the fiscal year
preceding the Performance Period.
(ii) BASE INVESTMENT means $100.
(iii) CLOSING PRICE means the mean daily stock price
(computed in the same manner as described above for Base
Price) of the Shares for each trading day of the last fiscal
quarter of the Performance Period (or, for an Approved
Retirement, the last fiscal quarter of the Short Period).
(iv) CLOSING INVESTMENT means the product of the
Closing Price and a number of Shares equal to:
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(A) The Base Investment divided by the Base
Price;
(B) Increased, as of the ex-dividend date of
each dividend or distribution paid during the
Performance Period (or Short Period), by a number (or
fractional number) of Shares equal to the dollar
amount or, in the case of a non-cash distribution,
the market value (as of the date of distribution) of
each such dividend or distribution divided by the
closing stock trading price of the Shares on the
ex-dividend date;
(C) With all closing prices and dividend or
distribution amounts adjusted to reflect any stock
dividends or stock splits or similar changes
in capitalization.
o TSR DIFFERENCE means the positive or negative difference
computed by subtracting the Peer Group TSR for a period from
Corporation's TSR for that period.
o TARGET SHARES means the number of Shares set forth on the
cover page to this Agreement that is used to determine the number of
Performance Shares to be issued to Participant under this Award.
o TERMINATION DATE means the date Participant ceases to be an
Employee.
o VOTING SECURITIES means Corporation's issued and outstanding
securities ordinarily having the right to vote at elections of
directors.
o Capitalized terms not otherwise defined in this Agreement
have the meanings given them in the Plan.
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