Executive
Change in Control Agreement
(Tier I)
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Article 1. Term of the Agreement
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1
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2
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Article 3. Participation and Continuing
Eligibility under this Agreement
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6
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Article 4. Severance Benefits
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6
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Article 5. Form and Timing of Severance
Benefits
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9
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Article 6. Gross-Up Payment
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9
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Article 7. The Company’s Payment
Obligation
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12
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Article 8. Dispute Resolution
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13
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Article 9. Outplacement
Assistance
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13
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14
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Article 11. Successors and
Assignment
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14
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Article 12. Miscellaneous
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Weyerhaeuser
Company
Executive Change in Control Agreement (Tier I)
THIS EXECUTIVE
CHANGE IN CONTROL AGREEMENT (Tier I) is made and entered into by
and between Weyerhaeuser Company (hereinafter referred to as the
“Company”) and the undersigned (hereinafter referred to
as the “Executive”).
WHEREAS, the Board
of Directors of the Company has approved the Company entering into
change in control agreements with certain key executives of the
Company;
WHEREAS, the
Executive is a key executive of the Company;
WHEREAS, should
the possibility of a Change in Control of the Company arise, the
Board believes it is imperative that the Company and the Board
should be able to rely upon the Executive to continue in his
position, and that the Company should be able to receive and rely
upon the Executive’s advice, if requested, as to the best
interests of the Company and its shareholders without concern that
the Executive might be distracted by the personal uncertainties and
risks created by the possibility of a Change in Control;
and
WHEREAS, should
the possibility of a Change in Control arise, in addition to his
regular duties, the Executive may be called upon to assist in the
assessment of such possible Change in Control, advise management
and the Board as to whether such Change in Control would be in the
best interests of the Company and its shareholders, and to take
such other actions as the Board might determine to be
appropriate.
NOW THEREFORE, to
assure the Company that it will have the continued dedication of
the Executive and the availability of his advice and counsel
notwithstanding the possibility, threat, or occurrence of a Change
in Control of the Company, and to induce the Executive to remain in
the employ of the Company, and for other good and valuable
consideration, the Company and the Executive agree as
follows:
Article 1. Term of the
Agreement
Subject to the
provisions of Article 10 hereof, this Agreement will commence
on the Effective Date and shall continue in effect for three
(3) full calendar years. However, at any time prior to the end
of such three-year (3) period and, at any time prior to the
end of any extended term, the Committee may, in its discretion,
extend the term of this Agreement for any period of time up to
three (3) additional years. Notwithstanding the foregoing,
this Agreement is subject to annual review and may be amended or
otherwise modified by the Committee in its sole discretion
subsequent to such annual review provided that no Change in Control
shall have occurred.
However, in the
event a Change in Control occurs during the term of this Agreement,
this Agreement will remain in effect for the longer of:
(i) twenty-four (24) full calendar months beyond the
month in which such Change in Control occurred; (ii) until all
obligations of the Company to the Executive hereunder have been
fulfilled, and until all benefits required hereunder have been paid
to the Executive.
1
Whenever used in
this Agreement, the following terms shall have the meanings set
forth below and, when the meaning is intended, the initial letter
of the word is capitalized:
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(a)
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“Agreement”
means this Executive
Change in Control Agreement (Tier I).
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(b)
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“Base Salary”
means the salary of
record paid to the Executive as annual salary, excluding amounts
received under incentive or other bonus plans, whether or not
deferred.
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(c)
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“Beneficial
Owner” shall have the meaning ascribed to
such term in Rule 13d-3 of the General Rules and Regulations
under the Exchange Act.
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(d)
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“Beneficiary”
means the persons or
entities designated or deemed designated by an Executive pursuant
to Section 12.2.
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(e)
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“Board”
means the Board of
Directors of the Company.
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(f)
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“Cause”
means
Executive’s:
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(i)
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Willful and continued failure to
perform substantially Executive’s duties with the Company
after the Company delivers to Executive written demand for
substantial performance specifically identifying the manner in
which Executive has not substantially performed Executive’s
duties;
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(ii)
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Conviction of a felony;
or
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(iii)
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Willfully engaging in illegal
conduct or gross misconduct which is materially and demonstrably
injurious to the Company.
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For purposes of
this Section 2(f), no act or omission by Executive shall be
considered “willful” unless it is done or omitted in
bad faith or without reasonable belief that Executive’s
action or omission was in the best interests of the Company. Any
act or failure to act based upon: (i) authority given pursuant
to a resolution duly adopted by the Board, or (ii) advice of
counsel for the Company, shall be conclusively presumed to be done
or omitted to be done by Executive in good faith and in the best
interests of the Company. For purposes of subsections (i) and
(iii) above, Executive shall not be deemed to be terminated for
Cause unless and until there shall have been delivered to Executive
a copy of a resolution duly adopted by the affirmative vote of not
less than three quarters (3/4) of the entire membership to the
Board at a meeting called and held for such purpose (after
reasonable notice is provided to Executive and Executive is given
an opportunity, together with counsel, to be heard before the
Board) finding that in the good faith opinion of the Board
Executive is guilty of the conduct described in subsection
(i) or (iii) above and specifying the particulars thereof
in detail.
2
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(g)
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“Change in
Control” or “CIC” of the
Company shall be deemed to have occurred as of the first day that
any one or more of the following conditions shall have been
satisfied:
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(i) Any
Person, but excluding the Company and any subsidiary of the Company
and any employee benefit plan (or related trust) sponsored or
maintained by the Company or any subsidiary of the Company
(collectively, “Excluded Persons”), directly or
indirectly, becomes the Beneficial Owner of securities of the
Company representing 20% or more of the combined voting power of
the Company’s then outstanding securities with respect to the
election of directors of the Company and such ownership continues
for at least a period of 30 days (with the end of such period
being deemed the effective date of the CIC); or
(ii) During any 24-consecutive month
period, the individuals who, at the beginning of such period,
constitute the Board (the “Incumbent Directors”) cease
for any reason other than death to constitute at least a majority
of the Board, provided, however, that except as set forth in the
following sentence, an individual who becomes a member of the Board
subsequent to the beginning of the 24-month period shall be deemed
to have satisfied such 24-month requirement (and be an Incumbent
Director) if such director was elected by, or on the recommendation
of or with the approval of, at least two-thirds of the directors
who then qualified as Incumbent Directors either actually (because
they were directors at the beginning of such period) or by prior
operation of the provisions of this Section 2.4(b).
Notwithstanding the proviso set forth in the preceding sentence, if
any such individual initially assumes office as a result of or in
connection with either an actual or threatened solicitation with
respect to the election of directors (as such terms are used in
Rule 14a-12(c) of Regulation 14A promulgated under the
Exchange Act) or other actual or threatened solicitation of proxies
or consents by or on behalf of a Person other than the Board, then
such individual shall not be considered an Incumbent Director. For
purposes of this Section 2.4(b), if at any time individuals
who initially assumed office as a result of or in connection with
an arrangement or understanding between the Company and any Person
(an “Entity Designee”) constitute at least one-half of
the Board, none of such Entity Designees shall be considered
Incumbent Directors from that time forward; or
(iii) There is consummated:
(a) a plan
of complete liquidation of the Company; or
(b) a sale
or disposition of all or substantially all the Company’s
assets in one or a series of related transactions; or
(c) a
merger, consolidation, or reorganization of the Company or the
acquisition of outstanding Common Stock and as a result of or in
connection with such transaction (A) 35% or more of the
outstanding Common Stock or the voting securities of the Company
outstanding immediately prior thereto or the outstanding shares of
common stock or the combined voting power of the outstanding voting
securities of the surviving entity are owned, directly or
indirectly, by any other corporation or Person other than
(x) an Excluded Person
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or (y) a
Person who is, or if such Person beneficially owned 5% or more of
the outstanding Common Stock would be, eligible to report such
Person’s beneficial ownership on Schedule 13G pursuant
to the rules under Section 13(d) of the Exchange Act or (z) a
Person that has entered into an agreement with the Company pursuant
to which such Person has agreed not to acquire additional voting
securities of the Company (other than pursuant to the terms of such
agreement), solicit proxies with respect to the Company’s
voting securities or otherwise participate in any contest relating
to the election of directors of the Company, or take other actions
that could result in a Change in Control of the Company; provided
that this exclusion shall apply only so long as such agreement
shall remain in effect, or (B) the voting securities of the
Company outstanding immediately prior thereto do not immediately
after such transaction continue to represent (either by remaining
outstanding or by being converted into voting securities of the
surviving entity) more than sixty percent (60%) of the combined
voting power of the voting securities of the Company (or such
surviving entity) outstanding immediately after such merger,
consolidation, or reorganization.
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(h)
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“Code”
means the United States
Internal Revenue Code of 1986, as amended.
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(i)
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“Committee”
means the Compensation
Committee of the Board, or any other committee appointed by the
Board to perform the functions of the Compensation
Committee.
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(j)
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“Company”
means Weyerhaeuser
Company, a Washington corporation (including any and all
subsidiaries), or any successor thereto as provided in
Article 11.
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(k)
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“Disability”
shall have the meaning
ascribed to it in the Company’s Retirement Plan for Salaried
Employees, or in any successor to such plan.
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(l)
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“Effective
Date” means the date this Agreement is
executed on behalf of the Company, or such other date as the Board
shall designate.
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(m)
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“Effective Date of
Termination” means the date on which a
Qualifying Termination occurs which triggers the payment of
Severance Benefits hereunder.
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(n)
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“Exchange
Act” means the United States Securities
Exchange Act of 1934, as amended.
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(o)
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“Executive”
means a key executive of
the Company who has been presented with and signed this
Agreement.
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(p)
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“Good Reason”
shall mean, without the
Executive’s express written consent, the occurrence of any
one or more of the following events:
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(i)
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A
material reduction in (or assignment of duties inconsistent with)
the Executive’s reporting responsibilities existing
immediately prior to the CIC;
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(ii)
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Within two (2) years following
a Change in Control, and without the Executive’s consent, the
Company’s requiring the Executive to be based at a location
which is at least fifty (50) miles farther from the
Executive’s primary residence
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immediately prior to a Change in
Control than is such residence from the Company’s
headquarters, immediately prior to a Change in Control, except for
required travel on the Company’s business to an extent
substantially consistent with the Executive’s business
obligations as of the Effective Date;
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(iii)
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A
reduction by the Company of the Executive’s Base Salary as in
effect immediately prior to the CIC;
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( iv ) A material reduction in
the benefit coverage in the aggregate provided to the Executive
immediately prior to the CIC ; provided, however, that
reductions in the level of benefits coverage shall not be deemed to
be “Good Reason” if the Executive’s overall
benefits coverage is substantially consistent with the average
level of benefits coverage of other executives who have positions
commensurate with the Executive’s position at the acquiring
company;
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(v)
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A
material reduction in the Executive’s level of participation,
including the Executive’s target-level opportunities, in any
of the Company’s short- and/or long-term incentive
compensation plans in which the Executive participates as of the
Effective Date (for this purpose a material reduction shall be
deemed to have occurred if the aggregate “incentive
opportunities” are reduced by ten percent (10%) or more); or
a material increase in the relative difficulty of the measures used
to determine the payouts under such plans (as reasonably determined
by the Executive) provided, however, that reductions in the levels
of participation shall not be deemed to be “Good
Reason” if the Executive’s reduced level of
participation in each such program remains substantially consistent
with the level of participation or difficulty of the measures of
some or all other executives who have positions commensurate with
the Executive’s position at the acquiring company;
or
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(vi)
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The
failure of the Company to obtain a satisfactory agreement from any
successor to the Company to assume and agree to perform this
Agreement, as contemplated in Article 10.
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Under this
Agreement, Good Reason shall not be deemed to exist unless a
“Change in Control” has occurred within the time frame
described in Section 4.2.
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(q)
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“Non-Competition and Release
Agreement” is an agreement, in substantially
the form attached hereto in Annex A, executed by and between
Executive and the Company as a condition to Executive’s
receipt of the benefits described in Section 4.3.
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(r)
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“Person”
shall have the meaning
ascribed to such term in Section 3(a)(9) of the Exchange Act
and used in Sections 13(d) and 14(d) thereof, including a
“group” as defined in Section 13(d).
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(s)
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“Qualifying
Termination” means any of the events described in
Section 4.2, the occurrence of which triggers the payment of
Severance Benefits under Section 4.3.
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(t)
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“Retirement”
shall mean early or
normal retirement under the Company’s Retirement Plan for
Salaried Employees.
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(u)
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“Severance
Benefits” means the Severance Benefits
associated with a Qualifying Termination, as described in
Section 4.3.
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Article 3. Participation and Continuing
Eligibility under this Agreement
3.1
Participation. Subject to Section 3.2 , as well as the
remaining terms of this Agreement, Executive shall remain eligible
to receive benefits hereunder during the term of the
Agreement.
3.2 Removal
from Coverage. In the event Executive’s job
classification is reduced below the minimum level required for
eligibility to continue to be covered by severance protection as
determined at the sole discretion of the Committee, the Committee
may remove the Executive from coverage under this Agreement. Such
removal shall be effective three (3) months after the date the
Company notifies the Executive of such removal. Removals occurring
within six (6) months prior to a CIC, or within two
(2) years after a CIC, shall be null and void for purposes of
this Agreement.
Article 4. Severance
Benefits
4.1 Right to
Severance Benefits. The Executive shall be entitled to receive
from the Company Severance Benefits if
(a) the
Executive’s employment with the Company shall end for any
reason specified in Section 4.2; and
(b) the
Executive is not (i) reemployed by the Company or any
subsidiary or affiliate of the Company whether in a salaried,
hourly, temporary or full-time capacity or, (ii) retained as a
consultant or contractor by the Company or any subsidiary or
affiliate of the Company, or (iii) retained as a consultant or
contractor by an entity acquiring the Company, unless the
reemployment or retention of such Executive has the prior written
approval of the Senior Vice President, Human Resources, of the
Company.
Receipt of
Severance Benefits shall disqualify the Executive from eligibility
to receive any other severance benefits from the Company,
including, without limitation, those under any Executive Severance
Agreement between the Company and the Executive, as such agreement
may be amended, supplemented or otherwise modified from time to
time, or, if such agreement is no longer in effect, any successor
agreement thereto.
4.2 Qualifying
Termination. The occurrence of any one or more of the following
events within the six (6) full calendar month period prior to
the effective date of a CIC, or within twenty-four (24) full
calendar months following the effective date of a CIC of the
Company shall trigger the payment of Severance Benefits to the
Executive under this Agreement:
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(a)
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An
involuntary termination of the Executive’s employment by the
Company, authorized by the Company’s Senior Vice President of
Human Resources, for
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reasons other
than for Cause, mandatory retirement under the Company’s
applicable policies or the Executive’s death Disability or
voluntary termination of employment without Good Reason, or a
voluntary termination by the Executive for Good Reason;
or
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(b)
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The
Company or any successor company fails to assume this Agreement in
accordance with the provisions of Section 11.1.
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4.3
Description of Severance Benefits. In the event that the
Executive becomes entitled to receive Severance Benefits (and
further contingent upon the proper execution of the Non-Competition
and Release Agreement as set
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