Exhibit 10A
April 29, 1999
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Dear ----------------------:
This letter amends and replaces the letter agreement dated
-----------------, between you and Willamette Industries, Inc. Upon execution of
this letter agreement (this "Agreement"), the ---------------------, letter
agreement will be entirely superseded.
Willamette Industries, Inc. (which, together with its
Subsidiaries, is referred to as the "Company"), considers the stability of its
key management group to be essential to the best interests of the Company and
its shareholders. The Company recognizes that, as is the case with many publicly
held corporations, the possibility of a Change in Control may arise and that the
attendant uncertainty may result in the departure or distraction of key
management personnel to the detriment of the Company and its shareholders.
Accordingly, the Board of Directors of Willamette Industries,
Inc. ("the "Board") has determined that appropriate steps should be taken to
encourage members of the Company's key management group to continue as employees
notwithstanding the future possibility of a Change in Control of the Company.
The Board also believes it important that, in the event of a
proposal for transfer of control of the Company, you be able to assess the
proposal and advise the Board without being influenced by the uncertainties of
your own situation.
In order to induce you to remain in the employ of the Company,
this Agreement, which has been approved and authorized by the Board, sets forth
the severance compensation which the Company agrees to pay to you in the event
your employment with the Company is terminated subsequent to the occurrence of a
Change in Control of the Company under the circumstances described below.
Capitalized terms not otherwise defined in this Agreement have
the meanings set forth in Section 13.
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1. Agreement to Provide Services; Right to Terminate.
(a) Termination of Employment. Except as otherwise provided in
paragraph 1(b) of this Agreement or in any written employment agreement
between you and the Company, you are an "at will" employee and the
Company or you may terminate your employment at any time. If, and only
if, your employment terminates after a Change in Control of the
Company, the provisions of this Agreement regarding the payment of
severance compensation and benefits will apply. In all other events,
this Agreement does not provide any additional severance compensation
or benefits to you.
(b) Continuation of Services Subsequent to Certain Offers. In
the event a tender offer or exchange offer is made by a Person for more
than 20 percent of the Company's Voting Securities, you agree that you
will not leave the employ of the Company (other than as a result of
Disability) and will render services to the Company in the capacity in
which you then serve until such tender offer or exchange offer has been
abandoned or terminated or a Change in Control has occurred. If, during
the period you are obligated to continue in the employ of the Company
pursuant to this Section 1(b), the Company reduces your compensation,
your obligations under this Section 1(b) will automatically terminate.
(c) Obligations After Change in Control. While employed by the
Company (or its successor) after a Change in Control, you agree to
devote reasonable attention and time to the business and affairs of the
Company and to use your reasonable best efforts to perform your
responsibilities faithfully and efficiently, consistent with your past
practice as an employee of the Company.
2. Term of Agreement. This Agreement commences on the date of
this Agreement and will continue in effect until December 31, 2002; provided,
however, that commencing on January 1, 2003, and each January 1 thereafter, the
term of this Agreement will automatically be extended for one additional year
unless at least 90 days prior to such January 1, the Company or you will have
given notice that this Agreement will not be extended; and provided, further,
that if a Change in Control of the Company occurs while this Agreement is in
effect, this Agreement will automatically be extended for a period of three
calendar years beyond the calendar year in which the Change in Control occurs.
Notwithstanding the preceding sentence, this Agreement will not extend beyond
your normal retirement date under the Company's retirement plan. This Agreement
will terminate if you or the Company terminates your employment prior to a
Change in Control but such termination will be without prejudice to any remedy
the Company may have for breach of your obligations, if any, under Section 1(b).
3. Effect of Termination Following Change in Control. In the
event your employment with the Company is terminated, whether by you or the
Company, within 36 months following the date of occurrence of any event
constituting a Change in Control (recognizing that more than one such event may
occur in which case the 36-month period will run from the date of occurrence of
each such event), you will be entitled to the following respective benefits:
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(a) Disability. During any period that you are unable to
perform your duties under this Agreement as a result of incapacity due
to physical or mental illness, you will continue to receive your full
base salary and benefits at the rate then in effect until the Date of
Termination. In the event you are terminated by reason of Disability,
after the Date of Termination, your benefits will be determined in
accordance with the Company's long-term disability income plan (the
"Disability Income Program"). If the Company's Disability Income
Program is modified or terminated following a Change in Control, the
Company will substitute another plan or program with benefits
applicable to you substantially similar to those provided by the
Disability Income Program prior to its modification or termination.
(b) Termination Upon Death. In the event of your death while
an employee of the Company, the Company will pay to your estate your
full base salary through the date of your death at the rate in effect
on the date the Change in Control occurs, together with all benefits,
including death benefits, to which you are then entitled under Plans in
which you are a participant, and the Company will have no further
obligations to you under this Agreement.
(c) Termination for Cause or Without Good Reason. If your
employment is terminated by the Company for Cause, or by you other than
for Good Reason, the Company will pay you your full base salary through
the Date of Termination at the rate in effect on the date the Change in
Control occurs, together with all benefits to which you are then
entitled under Plans in which you are a participant, and the Company
will have no further obligations to you under this Agreement.
(d) Termination Without Cause or With Good Reason. If your
employment with the Company is terminated (other than for Disability or
upon your death) by the Company without Cause or by you for Good
Reason, then the Company will pay to you, upon demand, the following
amounts (the "Severance Payments"):
(i) Your full base salary through the Date of
Termination at the rate in effect on the date the Change in
Control occurs, together with all benefits to which you are
then entitled under the terms of all Plans in which you are a
participant including, without limitation, all amounts due to
you or accrued to your benefit, including benefits designated
as Change in Control Benefits, under the Company's
Supplemental Benefits Plan and 1993 Deferred Compensation Plan
(the "Deferral Plans") which will be paid to you in the
amounts and at the times specified in such Deferral Plans.
(ii) In lieu of any further salary payments to you
for the periods subsequent to the Date of Termination, an
amount of severance pay equal to the Applicable Percentage (as
defined below in this paragraph (ii)) multiplied by the sum of
(A) your annual base salary, at the rate in effect on the date
the Change in Control occurs, plus (B) the average annual
incentive compensation (if any) paid to you or accrued to your
benefit (prior to any deferrals) in respect of the two
--------------------- -4- April 29, 1999
fiscal years of the Company last ended prior to the fiscal
year in which the Change in Control occurs, plus (C) the
average annual matching contributions made by the Company on
your behalf to the Company's Stock Purchase Plan and its 1993
Deferred Compensation Plan in respect of such two fiscal
years. "Applicable Percentage" means 300 percent reduced (if
you are age 62 or older as of the Date of Termination) by 8.33
percent for each full month that your age exceeds 62 as of the
Date of Termination.
(iii) A cash payment (the "Stock Award Cash-Out
Payment") equal to (A) the sum of the differences between the
Change in Control Price and the option price for each share
covered by an Outstanding Option plus (B) the product of the
Change in Control Price and the number of shares covered by
Outstanding Restricted Stock Awards; provided, however, that
payment of the Stock Award Cash-Out Payment is conditioned
upon your surrender to the Company of all rights in the
Outstanding Options and the Outstanding Restricted Stock
Awards.
(iv) Reimbursement in full of all reasonable amounts
paid or incurred by you for outplacement services in
connection with obtaining other employment.
The amount of Severance Payments otherwise payable pursuant to this
Agreement will be reduced by (A) amounts payable to you pursuant to any
Plan providing severance benefits to the Company's salaried employees
generally and (B) amounts payable to you (after any adjustment or
reduction to reflect payments described in clause (A)) as salary
continuation and incentive compensation pursuant to any employment
agreement between you and the Company that is in effect as of the Date
of Termination.
(e) Related Benefits. Unless you die or your employment is
terminated by the Company for Cause or Disability, or by you other than
for Good Reason, the Company will maintain in full force and effect,
for the continued benefit of you and your family, until the earlier of
(i) 36 calendar months after the Date of Termination or (ii) your 65th
birthday, all Benefit Plans in which you were entitled to participate
immediately prior to the Date of Termination, provided that your
continued participation is possible under the general terms and
provisions of such Benefit Plans; provided, however, that if you become
eligible to participate in a benefit plan, program, or arrangement of
another employer which confers upon you benefits substantially similar
to those provided by one or more Benefit Plans, you will cease to
receive benefits under this paragraph 3(e) in respect of such Benefit
Plan or Plans. In the event that your participation in any Benefit Plan
is barred by the provisions of such Benefit Plan, the Company will
arrange to provide you with benefits substantially similar to those
which you are entitled to receive under such Benefit Plan.
4. Additional Payment.
(a) Gross-Up. In the event any portion of the Total Payments
will be subject to the Excise Tax, the Company will pay you an
additional amount (the "Gross-Up
--------------------- -5- April 29, 1999
Payment") equal to (1) the Excise Tax imposed on you with respect to
the portion of the Total Payments that constitutes an "excess parachute
payment" (as that term is described in Section 280G(b)(1) of the
Code)," plus (2) all federal, state, and local income taxes and Excise
Tax imposed on you with respect to the Gross-Up Payment.
(b) Determining Amount of Excise Tax. For purposes of
determining whether any portion of the Total Payments will be subject
to the Excise Tax and the amount of any Excise Tax:
(i) The entire amount of the Total Payments will be
treated as an Excess Parachute Payment unless and to the
extent, in the written opinion of Outside Tax Counsel, the
Total Payments, in whole or in part, are not subject to the
Excise Tax;
(ii) The value of any non-cash benefits or any
deferred payments that are part of the Total Payments will be
determined by the Company's independent accountants in
accordance with the requirements of Sections 280G(d)(3) and
280G(d)(4) of the Code and any regulations promulgated under
those sections.
(c) Determining Amount of Gross-Up Payment. For purposes of
determining the amount of the Gross-Up Payment:
(i) You will be deemed to pay federal income taxes at
the highest marginal rate of federal income taxation
applicable to individuals (including any applicable surtaxes
and taking into account any applicable loss or reduction of
deductions or exemptions) for the calendar year in which the
Gross-Up Payment is to be made; and
(ii) You will be deemed to pay state and local income
taxes at the highest marginal rates of taxation applicable to
individuals (including any applicable surtaxes and taking into
account any applicable loss or reduction of deductions or
exemptions) in the state and locality of your residence at the
date the Gross-Up Payment will be made.
(d) Subsequent Adjustment - Repayment. In the event that the
amount of Excise Tax you are required to pay is subsequently determined
to be less than the amount taken into account under this Agreement, you
agree that promptly after the amount of such reduction in Excise Tax is
finally determined, you will repay to the Company, without interest,
the amount of such reduction, plus the net federal income tax benefit,
if any, you actually will receive (in the opinion of Outside Tax
Counsel) as a result of making the repayment described in this Section
4(d).
(e) Subsequent Adjustment - Additional Payment. In the event
that the amount of Excise Tax you are required to pay is subsequently
determined to exceed the amount taken into account under this
Agreement, the Company will make an additional
--------------------- -6- April 29, 1999
Gross-Up Payment in the manner set forth in this Section 4 in respect
of such additional Excise Tax, plus any interest, additions to tax, or
penalties payable by you with respect to the additional Excise Tax,
promptly after the time that the amount can be reasonably determined.
5. No Mitigation; No Setoff. You will not be required to
mitigate the amount of any payment provided for in this Agreement by seeking
other employment or otherwise, nor, except as expressly set forth in this
Agreement, will the amount of any payment provided for in this Agreement be
reduced by any compensation earned by you as the result of employment by another
employer after the Date of Termination, or otherwise. Except as otherwise
expressly provided in Section 13(f) of this Agreement relating to payments made
to you pending resolution of a dispute regarding termination of your employment,
the Company's obligation to make the payments to you provided for in this
Agreement will not be affected by any setoff, counterclaim, recoupment, or other
defense or claim which the Company may have against you.
6. Notice. For the purposes of this Agreement, notices and all
other communications provided for in the Agreement must be in writing and will
be deemed to have been duly given when delivered or mailed by United States
certified or registered mail, return receipt requested, postage prepaid, if to
the Company, addressed to it at 3800 ▇▇▇▇▇ Fargo Tower, ▇▇▇▇ ▇.▇. ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Chief Executive Officer, and if to you,
addressed to you at the address set forth on the first page of this Agreement,
or to such other address as either party may have furnished to the other in
writing in accordance with this Agreement, except that notices of change of
address will be effective only upon receipt.
7. Successors; Binding Agreement.
(a) Successors and Assigns. This Agreement will inure to the
benefit of, and be binding upon, any corporate or other successor or
assignee of the Company which acquires, directly or indirectly, by
merger, consolidation or purchase, or otherwise, all or substantially
all of the business or assets of the Company. The Company agrees to
require any such successor, by an agreement in form and substance
reasonably satisfactory to you, expressly to assume and agree to
perform this Agreement in the same manner and to the same extent as the
Company would be required to perform if no such succession had taken
place.
(b) Personal Representatives. This Agreement will inure to the
benefit of and be enforceable by your personal or legal
representatives, executors, administrators, successors, heirs,
distributees, devisees, and legatees and any amounts payable to you in
accordance with the terms of this Agreement after your death will be
paid to your estate.
8. Time of Payment; Estimated Payment. The Severance Payments
and any applicable Gross-Up Payment provided for in this Agreement will be made
to you not later than the 15th business day following the Date of Termination;
provided, however, that if the amounts of such payments cannot be finally
determined on or before such day, the Company will pay to you on such day an
estimate, as determined in good faith by the Company, of the minimum
--------------------- -7- April 29, 1999
amount of such payments, and will pay the remainder of such payments (together
with interest at the rate of 6 percent per annum) as soon as the amount of such
payments can be determined. In the event that the amount of the estimated
payments exceeds the amount subsequently determined to have been due, such
excess will constitute a loan by the Company to you, payable on the fifth day
after demand by the Company (together with interest at the rate of 6 percent per
annum).
9. Miscellaneous. No provision of this Agreement may be
modified, waived, or discharged unless such modification, waiver, or discharge
is specifically approved by the Board and agreed to in a writing signed by you
and the Chief Executive Officer or the Executive Vice President-Chief Financial
Officer of the Company. No waiver by either party to this Agreement at any time
of any breach by the other party of, or of compliance with, any condition or
provision of this Agreement to be performed by such other party will 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 of this Agreement have
been made by either party which are not expressly set forth in this Agreement.
The validity, interpretation, construction, and performance of this Agreement
will be governed by the laws of the state of Oregon. All obligations of the
Company to make payments or to provide benefits will be subject to all
applicable payroll taxes, withholding, and reporting requirements. Any amounts
not paid when due pursuant to any provision of this Agreement will bear interest
at the rate of 6 percent per annum.
10. Legal Fees and Expenses. The Company will pay or reimburse
any reasonable legal fees and expenses you may incur in connection with any
legal advice or legal action to enforce your rights under, or to defend the
validity of, this Agreement (including all such fees and expenses, if any,
incurred in contesting or disputing your termination or in seeking to obtain or
enforce any right or benefit under this Agreement). The Company will pay or
reimburse such legal fees and expenses on a regular, periodic basis upon
presentation by you of a statement or statements prepared by your counsel in
accordance with its usual practices.
11. Validity. The invalidity or unenforceability of any
provision of this Agreement will not affect the validity or enforceability of
any other provision of this Agreement, which will remain in full force and
effect.
12. Payments During Controversy. Notwithstanding the pendency
of any dispute or controversy, 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 installments of incentive
compensation) and continue you as a participant in all 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 the procedure described in
Section 13(f) in connection with the definition of Date of Termination. You will
be entitled to seek specific performance of your right to be paid until the Date
of Termination during the pendency of any dispute or controversy arising under
or in connection with this Agreement.
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13. Definitions of Certain Terms. For the purposes of this
Agreement, the terms defined below and used in this Agreement will have the
following meanings:
(a) Benefit Plan. "Benefit Plan" means any plan, policy, or
program of the Company (whether or not on an insured basis) providing
medical, dental, health, disability income, life insurance or other
death benefits, or similar types of benefits to employees of the
Company. Benefit Plan does not include any plan or arrangement
providing for vacation or severance pay, retirement benefits, bonuses
or incentive compensation of any kind, or current or deferred salary or
similar compensation.
(b) Cause. Termination of your employment by the Company for
"Cause" means termination because, and only because, you committed an
act of fraud, embezzlement, or theft constituting a felony, or an act
intentionally against the interest of the Company which causes the
Company material injury, or you have repeatedly failed, after written
notice, to perform your responsibilities under this Agreement.
Notwithstanding the foregoing, you will not be deemed to have been
terminated for Cause unless and until there has 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 constituting Cause as defined above
and specifying the particulars for such finding in detail.
(c) Change in Control. A "Change in Control" of the Company
means:
(i) The acquisition by any Person (or by any group of
Persons that would constitute a "group" for purposes of
Section 13(d) and Rule 13d-5, as in effect on the date of this
Agreement, under the Exchange Act) of beneficial ownership
(within the meaning of Rule 13d-3 promulgated under the
Exchange Act), other than a Person or group that acquires such
beneficial ownership solely because such Person or group has
voting power with respect to Voting Securities arising from a
revocable proxy or consent given in response to a public proxy
or consent solicitation made pursuant to the Exchange Act (as
in effect from time to time), of 20 percent or more of the
combined voting power of the then outstanding Voting
Securities; provided, however, that for purposes of this
paragraph (i), the following acquisitions will not constitute
a Change in Control: (A) any acquisition directly from the
Company; (B) any acquisition by the Company or a Subsidiary,
(C) any acquisition by any employee benefit plan (or related
trust) sponsored or maintained by the Company or any
corporation controlled by the Company, (D) any acquisition by
any corporation pursuant to a transaction which complies with
clauses (A), (B), and (C) of paragraph (iii) below, or (E) any
acquisition by any Person who is a party to an agreement (a
"New Stand-Together Agreement") similar to the former
Shareholder Stand-Together Agreement dated as of January 21,
1985 (the "Former Stand-Together Agreement"), which New
Stand-Together Agreement (1) provides for
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unified action by Persons who have, or whose families have,
historically held substantial amounts of the Company Shares in
the event of a threatened change of control and (2) which has
as parties at least ten shareholders of the Company who were
parties to the Former Stand-Together Agreement, but only while
such Person remains a party to such New Stand-Together
Agreement; or
(ii) Individuals who, as of the date of this
Agreement, constitute the Board (the "Incumbent Board") cease
for any reason to constitute at least a majority of the Board;
provided, however, that any individual becoming a director
subsequent to the date of this Agreement whose election, or
nomination for election by the Company's shareholders, was
approved by a vote of at least two-thirds of the directors
then comprising 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
(iii) Consummation of a reorganization, merger, or
consolidation or sale or other disposition of all or
substantially all of the assets of the Company (a "Business
Combination") in each case, unless, following such Business
Combination, (A) 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 (66 2/3 percent if the Company is not the
continuing or surviving corporation resulting from such
Business Combination) 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 that as a result
of such transaction owns the Company or all or substantially
all of the Company'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, (B) no Person
(excluding any employee benefit plan (or related trust) of the
Company 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 (C) at least a majority of the members of the
board of directors of the corporation resulting from such
Business Combination were members of the Incumbent Board at
the earlier of the time of the execution of the initial
agreement with respect to such Business Combination, or of the
action of the Board providing for such Business Combination;
or
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(iv) Approval by the shareholders of the Company of
any plan or proposal for the liquidation or dissolution of the
Company.
A Change in Control "occurs" on the date the Change in Control first
occurs; provided, however, that if (A) your employment is terminated by
the Company after an offer described in the first sentence of Section
1(b) of this Agreement is made, (B) it is reasonably demonstrated that
your termination was at the request of a third party who is seeking to
effect a Change in Control or otherwise occurred as a result of an
anticipated Change in Control, and (C) a Change in Control in fact
occurs within 120 days after your termination, then for purposes of
determining your right to any severance compensation and benefits under
this Agreement, your termination shall be deemed to have occurred after
a Change in Control.
(d) Change in Control Price. "Change in Control Price" means
the greater of (i) the highest sale price for the Company Shares as
traded on the New York Stock Exchange for the date of the Change in
Control (of, if the Company Shares are not traded on such date, on the
next preceding date on which the Company Shares were traded) or (ii)
the total market value of the highest amount of consideration to be
received for each Company Share by any shareholder of the Company in
connection with the Change in Control.
(e) Company Shares. "Company Shares" means the shares of the
Company's common stock, $.50 par value.
(f) Date of Termination. "Date of Termination" means (i) if
your employment is terminated by the Company for Disability, 30 days
after Notice of Termination is given (provided that you have not
returned to the performance of your duties on a full-time basis during
such 30-day period), and (ii) if your employment is terminated for any
other reason, the date on which a Notice of Termination is given;
provided that if within 30 days after any Notice of Termination is
given the party receiving the Notice of Termination notifies the other
party that a dispute exists concerning the termination, the Date of
Termination will 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 from such judgment, order, or decree having
expired and no appeal having been perfected). In such event, your
employment will nonetheless be terminated but you will continue to
receive the payments described in Section 12 through the Date of
Termination and the term of this Agreement will extend through the Date
of Termination.
If the dispute is resolved substantially in favor of the
Company's position, you will repay the amount paid to you as base
salary (without interest) and the Company may set your obligation to
repay off against any amounts owing to you or to be paid on your
behalf. You will not be obligated to repay or reimburse the Company for
any non-cash benefits you received during such period. If the dispute
is resolved without either party prevailing or if you prevail, you will
have no obligation to repay any such amounts.
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(g) Disability or Disabled. "Disability" or "Disabled" mean
inability to engage in any substantial gainful activity by reason of
any medically determinable physical or mental impairment. You will be
considered Disabled for purposes of this Agreement only:
(i) Upon the Board's acceptance of a notice of
Disability from you accompanied by evidence, satisfactory to
the Board, that you are Disabled; or
(ii) 30 days after written notice to you of the
Board's determination (after notice to you and an opportunity
to be heard before the Board) that you are Disabled.
(h) Exchange Act. "Exchange Act" means the Securities Exchange
Act of 1934, as amended, as in effect on the date of this Agreement.
(i) Excise Tax. "Excise Tax" means a tax imposed by Section
4999(a) of the Code, or any successor provision, with respect to
"excess parachute payments" as described in Section 280(G)(b) of the
Code.
(j) Good Reason. Termination by you of your employment for
"Good Reason" means termination based on any of the following:
(i) A change in your status or position(s) with the
Company, which, in your reasonable judgment, represents a
demotion from your status or position(s) as in effect
immediately prior to the Change in Control, or a change in
your duties or responsibilities which, in your reasonable
judgment, is inconsistent with such status or position(s), or
any removal of you from, or any failure to reappoint or
reelect you to, such position(s), except in connection with
the termination of your employment for Cause or Disability or
as a result of your death or termination by you other than for
Good Reason.
(ii) A reduction by the Company in your base salary
as in effect immediately prior to the Change in Control.
(iii) The failure by the Company to continue in
effect any Plan in which you are participating at the time of
the Change in Control (or Plans providing you with at least
substantially similar benefits) other than as a result of the
normal expiration of any such Plan in accordance with its
terms as in effect at the time of the Change in Control, or
the taking of any action, or the failure to act, by the
Company which would adversely affect your continued
participation in any of such Plans on at least as favorable a
basis to you as is the case on the date of the Change in
Control or which would materially reduce your benefits in the
future under any of such Plans or deprive you of any material
benefit enjoyed by you at the time of the Change in Control.
--------------------- -12- April 29, 1999
(iv) The failure by the Company to provide and credit
you with the number of paid vacation days to which you are
then entitled in accordance with the Company's normal vacation
policy or actual practice as in effect immediately prior to
the Change in Control.
(v) The Company's requiring you to be based anywhere
other than where your office is located immediately prior to
the Change in Control except for required travel on the
Company's business to an extent substantially consistent with
the business travel obligations which you undertook on behalf
of the Company prior to the Change in Control.
(vi) The failure by the Company to obtain from any
successor the assent to this Agreement contemplated by Section
7(a) of this Agreement.
(vii) Any purported termination by the Company of
your employment which is not effected pursuant to a Notice of
Termination satisfying the requirements of this Agreement; and
for purposes of this Agreement, no such purported termination
will be effective.
(viii) Any refusal by the Company to continue to
allow you to attend to matters or engage in activities not
directly related to the business of the Company which, prior
to the Change in Control, you were permitted by the Board to
attend to or engage in.
(k) Gross-Up Payment. "Gross-Up Payment" means a payment
described in Section 4 of this Agreement with respect to an Excise Tax.
(l) Notice of Termination. "Notice of Termination" means a
written notice communicated by the Company to you or by you to the
Company of termination of your employment with the Company. For
purposes of this Agreement, Notice of Termination of your employment
given by the Company must indicate the specific termination provision
in this Agreement relied upon, and must set forth in reasonable detail
the facts and circumstances claimed to provide a basis for termination
of your employment under the provision so indicated.
(m) Other Agreement. "Other Agreement" means a plan,
arrangement, or agreement pursuant to which an Other Payment is made.
(n) Other Payment. "Other Payment" means any payment or
benefit payable to you in connection with a Change in Control of the
Company pursuant to any plan, arrangement, or agreement (other than
this Agreement) with the Company, a person whose actions result in such
Change in Control, or any person affiliated with the Company or such
person.
--------------------- -13- April 29, 1999
(o) Outside Tax Counsel. "Outside Tax Counsel" means Miller,
Nash, Wiener, Hager & ▇▇▇▇▇▇▇ LLP, or in the event such counsel are
unavailable by reason of conflict or for any other reason, another law
firm in Portland, Oregon, selected by you that is reasonably
satisfactory to the Company. The Company will not unreasonably withhold
its approval of counsel selected by you as Outside Tax Counsel.
(p) Outstanding Options. "Outstanding Options" means all
options to purchase Company Shares granted to you under any plan or
program of the Company that (i) are outstanding (and have not been
exercised) as of the date of a Change in Control and (ii) are not
exercised by you between the date on which the Change in Control occurs
and the date the Stock Award Cash-Out Payment is made to you. For
purposes of this Agreement, Outstanding Options include all options
granted to you whether or not such options have vested or become
exercisable as of the date of the Change in Control. Furthermore,
options outstanding as of the date of a Change in Control (that are not
subsequently exercised by you) will continue to be treated as
Outstanding Options for purposes of this Agreement even if such
options, by their terms, would otherwise terminate between the date of
the Change in Control and the final settlement date of your Severance
Benefits.
(q) Outstanding Restricted Stock Awards. "Outstanding
Restricted Stock Awards" means all awards or grants to you of
restricted stock made under the Company's Long Term Incentive
Compensation Plan or under any similar plan or agreement that are
outstanding and have not, by their terms, become fully vested and
transferable as of the date of a Change in Control and are not sold or
otherwise transferred by you after such date and before the Stock Award
Cash-Out Payment is made to you.
(r) Person. "Person" means and includes any individual,
corporation, limited liability company, partnership, trust, group,
association, or other "person," as such term is used in Section
13(d)(3) or 14(d) of the Exchange Act.
(s) Plan. "Plan" means any compensation plan such as a plan,
program, policy, or arrangement providing for incentive or deferred
compensation, stock options, other stock or stock-related grants or
awards, any employee benefit plan such as a thrift, investment,
savings, pension, profit sharing, 401(k), medical, disability,
long-term care, accident, life insurance, cafeteria, or relocation plan
or any other plan, program, policy, or arrangement of the Company
providing similar types of benefits to employees of the Company.
(t) Severance Payments. "Severance Payments" means the
payments to be paid to you as described in Section 3(d) of this
Agreement.
(u) Stock Award Cash-Out Payment. "Stock Award Cash-Out
Payment" means a payment as described in Section 3(d)(iii) of this
Agreement with respect to the Outstanding Options and the Outstanding
Restricted Stock Awards.
--------------------- -14- April 29, 1999
(v) Subsidiary. "Subsidiary" means a corporation of which more
than 50 percent of the outstanding voting stock is owned, directly or
indirectly, by the Company, by one or more other Subsidiaries, or by
the Company and one or more other Subsidiaries. For the purposes of
this definition, "voting stock" means stock which ordinarily has voting
power for the election of directors, whether at all times or only so
long as no senior class of stock has such voting power by reason of any
contingency.
(w) Total Payments. "Total Payments" means all payments or
benefits payable to you in connection with a Change in Control of the
Company, including Severance Payments under this Agreement and Other
Payments.
(x) Voting Securities. "Voting Securities" means all issued
and outstanding securities ordinarily having the right to vote at
elections of the Company's directors, including without limitation the
Company Shares.
If you accept and agree to the terms of this Agreement, kindly
sign and return to the Company the enclosed copy of this Agreement, which will
then constitute our agreement on this subject.
Sincerely,
WILLAMETTE INDUSTRIES, INC.
By ----------------------------------
Agreed to this ----- day
of -------------------, 1999.
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