Executive
Change in Control
Agreement
(Tier I)
Weyerhaeuser Company and
Weyerhaeuser Company
Limited
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Article 1. Term of the Agreement
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1
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1
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Article 3. Participation and Continuing
Eligibility under this Agreement
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5
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Article 4. Severance Benefits
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5
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Article 5. Form and Timing of Severance
Benefits
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8
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Article 6. The Company’s Payment
Obligation
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9
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9
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Article 8. Outplacement
Assistance
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10
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Article 9. Successors and
Assignment
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10
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Article 10. Miscellaneous
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10
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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 among Weyerhaeuser Company, Weyerhaeuser Company Limited
(hereinafter collectively referred to as the “Company”,
or separately referred to as “Weyerhaeuser” and
“WYL”) and
(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, WYL 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
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Executive
hereunder have been fulfilled, and until all benefits required
hereunder have been paid to the Executive.
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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“Beneficiary”
means the persons or
entities designated or deemed designated by a Executive pursuant to
Section 10.2 hereof.
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(d)
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“Board”
means the Board of
Directors of the Company.
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(e)
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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 an indictable offense;
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(e), 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.
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(f)
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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 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
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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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(g)
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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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(h)
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“Company”
means Weyerhaeuser
Company, a corporation incorporated under the laws of the state of
Washington (including any and all subsidiaries), or any successor
thereto as provided in Article 9 hereof.
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(i)
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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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(j)
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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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(k)
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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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(
l) “Executive” means Craig D. Neeser.
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(m)
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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 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
t
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