EXHIBIT 10.1
RETIREMENT
AGREEMENT
THIS RETIREMENT AGREEMENT is made as
of November 20, 2008 (the “ Signing Date ”), by
and among Boise Cascade, L.L.C., a Delaware limited liability
company (the “ Company ”), Boise Cascade
Holdings, L.L.C., a Delaware limited liability company (“
BCH ”), Forest Products Holdings, L.L.C., a Delaware
limited liability company (“ Holdings ”), W.
Thomas Stephens (“ Executive ”), Stephens Family
Limited Partnership (“ Executive FPV 1 ”), Vera
Ellen Stephens Millard Descendants Trust (“ Executive FPV
2 ”), Alice Anne Stephens Descendants Trust (“
Executive FPV 3 ”), and Elizabeth Lee Stephens Mullett
Descendants Trust (“ Executive FPV 4 ” and,
together with each of Executive FPV 1, Executive FPV 2 and
Executive FPV 3, each an “ Executive FPV ” and
collectively, the “ Executive FPVs ”). The
Company, BCH, Holdings and each former and current subsidiary of
Holdings are collectively referred to herein as the “
Boise Entities ” and Executive and Executive FPVs are
collectively referred to herein as the “ Executive
Parties ”.
In December 2004, one or more of the
Executive Parties acquired Series B Common Units of Holdings (the
“ Series B Units ”) and Series C Common Units of
Holdings (the “ Series C Units ”) pursuant to
the terms of that certain Management Equity Agreement, dated as of
November 29, 2004, by and among Holdings, one or more Executive
Parties and certain other persons party thereto from time to time
(the “ Management Equity Agreement ”). In May
2008, Executive’s FPV 1 sold certain of its Series B Units to
Holdings pursuant to the terms of that certain Repurchase Agreement
and Amendment No. 1 to Management Equity Agreement, dated as of May
23, 2008, by and among Holdings, Executive’s FPV 1 and
certain other persons party thereto from time to time (the “
Amendment to MEA ”). The Management Equity Agreement,
as amended by the Amendment to MEA and as the same may be further
amended, modified, supplemented or waived from time to time after
the Signing Date in accordance with its terms, is referred to
herein as the “ MEA ”.
As of the Singing Date,
Executive’s FPV 1 owns 2,058,252.43 Series B Units and
9,383,000 Series C Units and Executive’s FPV 2,
Executive’s FPV 3 and Executive’s FPV 4 each owns
600,000 Series C Units. The rights and obligations of the Executive
Parties with respect to the Series B Units and Series C Units are
governed by each of (i) the MEA and (ii) that certain Operating
Agreement of Holdings, dated as of November 10, 2006, by and among
Holdings and its members (as the same has been and may be amended,
modified, supplemented or waived from time to time after the
Signing Date in accordance with its terms, the “ Operating
Agreement ”).
Executive has, since October 29,
2004, served as Chairman and Chief Executive Officer of one or more
of the Boise Entities. The terms of Executive’s employment
with the Boise Entities were set forth in that certain Employment
Agreement, dated as of October 29, 2004, by and between the Company
and Executive (as the same has been amended by that
certain
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First Amendment to Employment
Agreement, dated as of February 22, 2008, and that certain Second
Amendment to Employment Agreement, dated as of March 12, 2008, in
each case by and between the Company and Executive and as the same
may be amended, modified, supplemented or waived from time to time
after the Signing Date in accordance with its terms, the “
Employment Agreement ”). Executive has informed the
Boise Entities that he intends to retire as Chairman and Chief
Executive Officer of each of the Boise Entities effective as of the
end of the day on November 30, 2008 (the “ Termination
Date ”). In accordance with the MEA, Holdings has certain
rights to repurchase the Series B Units and Series C Units as a
result of such retirement.
The parties desire to enter into
this Retirement Agreement in order to determine the rights and
obligations of the respective parties with respect to the Series B
Units, the Series C Units, the MEA, the Operating Agreement and the
Employment Agreement. This Retirement Agreement, the MEA, the
Operating Agreement, and the Employment Agreement are collectively
referred to herein as the “ Relevant Agreements
.”
In consideration of the mutual
covenants contained herein and other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto hereby agree as
follows:
1.
Treatment of Equity
Securities .
(a)
As a material inducement to each
party to agree to the provisions of this Retirement Agreement,
Holdings acknowledges and agrees that, from and after the
Termination Date, it waives any and all rights arising under
Section 4 of the MEA to purchase or repurchase any Series B Units
or Series C Units as a result of Executive’s retirement and
each Executive Party acknowledges and agrees that from and after
the Signing Date such Executive Party waives any and all rights
arising under Section 4 of the MEA to have purchased or repurchased
any Series B Units or Series C Units. Each party to this Agreement
acknowledges and agrees that, other than Section 4 of the MEA, the
Series B Units and Series C Units remain subject to the rights and
obligations of the Executive Parties with respect thereto under the
Relevant Agreements. Madison Dearborn Capital Partners IV, L.P.
executes and delivers this Agreement for the limited purpose of
agreeing to waive any rights to exercise its right to repurchase
the Series B Units or Series C Units pursuant to Section 4 of the
MEA.
(b)
Each of Holdings, BCH and the Company agrees that if (i) it
purchases or repurchases Series B Units and/or Series C Units from
continuing employees of the Company as part of a buy-back or
repurchase program offered to continuing employees of the Company
generally or (ii) it agrees to exchange cash or other securities
for Series B Units and/or Series C Units of continuing employees of
the Company in connection with an initial public offering of equity
securities of Holdings, BCH or the Company, then Holdings, BCH or
the Company, as applicable, shall offer Executive the right to sell
or exchange, as applicable, Series B Units
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and/or Series C Units on the same
terms and subject to the same conditions as continuing employees of
the Company are offered; provided that (x) for the avoidance
of doubt, in no event shall any rights of Executive pursuant to
clause (i) of this Section 1(b) be triggered by any purchase
or repurchase of Series B Units and/or Series C Units from any
employees of a Boise Entity in connection with their termination of
employment from a Boise Entity and (y) notwithstanding anything to
the contrary in this Section 1(b) , the obligations of
Holdings, BCH and the Company shall be subject to any restrictions
or prohibitions in the debt financing agreements of any Boise
Entity that would limit or prohibit the ability of Holdings, BCH or
the Company to fulfill its obligations under this Section
1(b) without breach of such debt financing
agreement.
(c)
Each Executive Party acknowledges
and agrees that, from and after the Signing Date, no Executive
Party has any right, title, or interest (i) to or in any equity
securities of any Boise Entity, (ii) to or in any rights to acquire
any equity securities of any Boise Entity, or (iii) in respect of
any equity securities of any Boise Entity, other than the Series B
Units and Series C Units referenced in the recitals to this
Retirement Agreement as being owned by the Executive Parties.
Holdings acknowledges and agrees that its records reflect that the
Executive Parties own the Series B Units and Series C Units
referenced in the recitals to this Retirement Agreement as being
owned by the Executive Parties and that, as owners of such Series B
Units and Series C Units, will retain the rights and be subject to
the obligations for holders of such Series B Units and Series C
Units under the Relevant Agreements, as amended by Section
1(a) and Section 3 of this Agreement.
2.
Retirement Pay
.
(a)
On the first regular payroll date
for the Company after the Termination Date, in exchange for the
general release of all claims as set forth in Section 4 and
the other promises, covenants and agreements by the Executive
Parties set forth herein, the Company shall pay to Executive in the
same manner that the Company has previously paid compensation to
Executive (e.g., by check or direct deposit) an aggregate
amount equal to the sum of (i) his accrued but unpaid base salary
through the Termination Date, plus (ii) $850,000 (which the parties
acknowledge and agree shall represent a payment to Executive of his
incentive bonus for calendar year 2008) (such sum, the “
Retirement Pay ”).
(b)
Executive acknowledges and agrees
that his rights to participate in any employee benefit plan
(including health benefit plan), program, policy or arrangement of
any of the Boise Entities terminate as of the Termination Date.
Without limiting the generality of the foregoing, effective as of
the Termination Date, the Boise Entities shall cease to pay the
premium on the term-life insurance policy in the name of Executive;
provided that Executive may elect at any time after the
Termination Date to continue such insurance policy and the Company
shall, at Executive’s expense, provide assistance reasonably
requested by Executive in the assignment of such insurance policy
to him. Notwithstanding anything to the contrary in this Section
2(b) ,
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Executive and his covered dependants
shall be entitled to participate in the health benefit plans of the
Company during the one-year period from and after the Termination
Date and, during such period of participation, Executive shall pay
the same portion of the costs related to his participation as other
senior executives of the Company of approximately the same age are
paying for their participation in the Company’s health plans.
Furthermore, after such participation concludes, as long as
Executive timely elects and pays for COBRA continuation coverage,
Executive and his covered dependants shall be entitled to COBRA
benefits to the extent provided by applicable law.
(c)
Notwithstanding the foregoing, the
Retirement Pay and all other payments and benefits paid to
Executive hereunder shall be subject to (and reduced for)
withholding taxes, any normal payroll deductions and any other
amounts required by law to be withheld. For the avoidance of doubt,
and without limiting the provisions of Section 4 hereof, the
parties agree that the Retirement Pay nor any other payment or
benefit under this Agreement shall be deemed compensation for
purposes of any employee benefit plan, program, policy or
arrangement maintained or hereafter established by any Boise
Entity. Notwithstanding anything in this Retirement Agreement to
the contrary, none of the Boise Entities shall have any obligation
to pay any amounts payable under this Section 2 after such
time as Executive has materially breached any provision of any of
the Relevant Agreements (a “ Relevant Breach ”)
and to the extent that a Relevant Breach occurs after any amount
has been paid to Executive pursuant to this Section 2 ,
Executive shall (as a non-exclusive remedy of the Boise Entities
for such Relevant Breach) repay all amounts previously paid to
Executive pursuant to this Section 2 .
3.
Survival of Existing
Agreements . Except as
expressly modified by the terms and conditions of this Retirement
Agreement, the terms and conditions of each of the Relevant
Agreements shall survive the execution and delivery of this
Retirement Agreement and shall remain in full force and effect;
provided that, effective as of the Termination Date,
Sections 1, 2, 3, 4 and 5 of the Employment Agreement are of no
further force or effect and the rights of the parties to cause the
repurchase of the Series B Units and Series C Units pursuant to
Section 4 of the MEA are terminated in full; provided
further that, effective as of the Termination Date, notwithstanding
anything to the contrary in the Employment Agreement,
Executive’s non-compete obligations under Section 8(a) of the
Employment Agreement shall terminate as of the one-year anniversary
of the Termination Date. Without limiting the generality of the
foregoing sentence, each Executive Party acknowledges and agrees
for the benefit of the Boise Released Persons (as hereinafter
defined), and each Boise Entity acknowledges and agrees for the
benefit of the Executive Parties, that the Executive Parties are
party to, bound by and subject to the Operating Agreement and,
after giving effect to the amendments thereto effected by the
immediately foregoing sentence, the MEA (including Sections 5(c)
and 7 thereof) and the Employment Agreement (including Sections 6,
7, 8, 9 and 23 thereof).
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4.
Releases by Executive
Parties .
(a)
Effective as of the Termination
Date, each of the Executive Parties (for himself, herself or itself
and his, her or its successors, assigns and executors) forever
waives, releases, and discharges each of the Boise Entities and
each of their respective Affiliates and each of their respective
past, present and future predecessors, successors, assignees,
parent companies, members (including each of the Members (as
defined in the Operating Agreement) and its Affiliates (including
the Investor and its Affiliates)), subsidiaries, Affiliates,
officers, directors, managers, partners, employees, agents and
attorneys, past and present (collectively, the “ Boise
Released Persons ”) from any and all claims, suits,
demands, causes of action, contracts, covenants, obligations,
debts, costs, expenses, attorneys’ fees, liabilities of
whatever kind or nature in law or equity, by statute or otherwise
whether now known or unknown, vested or contingent, suspected or
unsuspected, and whether or not concealed or hidden, which have
existed or may have existed, or which do exist, through the
Termination Date of any kind (“ Claims ”), which
relate in any way to Executive’s employment with or service
as a director, officer or manager of any of the Boise Entities or
any other Boise Released Person or the termination of such
employment, directorship or officership (including in any case as
may exist under or relate to the Family Medical Leave Act, Title
VII or the Civil Rights Act of 1964, as amended; the Civil Rights
Act of 1991; the Americans with Disabilities Act of 1990; the Age
Discrimination in Employment Act of 1967, as amended or any other
local, state, or federal law, order, regulation, ordinance, or
common law), any rights to severance pay, any bonus or other
payment from any Boise Released Person after the Termination Date
(whether pursuant to the Employment Agreement or otherwise), the
determination of the Boise Released Persons not to repurchase any
of the Series B Units and/or Series C Units (including that such
units may have less value in the future) or in any way to the
operation or business activities or decisions of the Boise Released
Persons. In no event shall the Claims being waived, released or
discharged pursuant to this Section 4 be deemed to include
(i) any claim for breach of this Retirement Agreement by a Boise
Entity, (ii) Executive’s rights under the employee benefit
plans (other than, for the avoidance of doubt, any severance pay or
similar plan (with it being understood and agreed that the
Retirement Pay shall be the only post-termination pay owed to any
Executive Party)) of any Boise Entity which have accrued as of the
Termination Date, (iii) any claim by Executive for coverage under
any directors’ and officers’ insurance policy of any
Boise Entity or for indemnification or advancement under the
constitutive documents of any Boise Entity or Section 23 of the
Employment Agreement, in each case with respect claims made while
Executive served as a director, manager or officer of any Boise
Entity, (iv) subject to compliance with the expense reimbursement
policies of the Boise Entities, reimbursement of out-of-pocket
business expenses incurred prior to the Termination Date or (v)
Executive’s rights under applicable law and Company policies
to accrued and unused vacation and sick leave (if any) for the year
that includes the Termination Date; provided that nothing in
this sentence shall limit the rights of any Boise Entity to modify
or cancel the terms of any such employee benefit plan or any
constitutive document or insurance policy, in each case as long as
such changes do not exclusively relate to Executive.
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(b)
Each Executive Party represents and
warrants to the Boise Released Persons that such Executive Party
has not filed any lawsuits, charges, complaints, petitions or
accusatory pleadings against any Boise Released Person with any
governmental agency or in any court or with any other dispute
resolution panel, based upon, arising out of or related in any way
to any Claim waived, released or discharged under this Section
4 . Each Executive Party acknowledges and agrees that such
Executive Party owns all right, title and interest in and to each
of the Claims released hereunder and has not assigned, in whole or
in part, any of the Claims released under this Section 4
.
(c)
In executing this Retirement
Agreement and agreeing to the provisions of this Section 4 ,
each Executive Party acknowledges that it is intended that the
releases, waivers and discharges in this Section 4 shall be
effective as a bar and complete defense to each and every one of
the Claims hereinabove mentioned or implied. Each Executive Party
expressly consents that the releases, waivers and discharges in
this Section 4 shall be given full force and effect
according to each and all of its express terms and provisions,
including those relating to unknown and unsuspected Claims
(notwithstanding any state statute that expressly limits the
effectiveness of a general release of unknown, unsuspected and
unanticipated Claims), if any, as well as those relating to any
other Claims hereinabove mentioned or implied. Each Executive Party
acknowledges and agrees that this release, waiver, and discharge is
an essential and material term of this Retirement Agreement and,
without such release, waiver and discharge, the Boise Releasing
Parties (as hereinafter defined) would not have made the agreements
and covenants herein made. Each Executive Party further agrees that
in the event that he, she or it brings a Claim against any Boise
Released Person, or in the event any Executive Party seeks to
recover against any Boise Entity in any Claim brought by a
governmental agency on Executive’s behalf, this Retirement
Agreement (including the provisions of this Section 4 )
shall serve as a bar and a complete defense to such Claims and such
Executive Party shall indemnify and hold harmless the Boise
Released Persons from any loss, liability or expense suffered by
each such Boise Released Person from or with respect to such Claim
(including reasonable legal fees incurred in barring or defending
against such Claim, in seeking to have such Claim dismissed and/or
in filing a counterclaim for breach of this Retirement Agreement by
such Executive Party).
(d)
It is specifically understood and
agreed that the compensation and benefits provided in this
Retirement Agreement and the other consideration being provided to
the Executive Parties (including the waiver of the rights to
exercise the repurchase of Series B Units and Series C Units) are
being paid or provided in full and final settlement of any
potential Claims, and that such payment and the providing of such
compensation, benefits and other consideration does not constitute
and shall not be construed as any admission or evidence of fault or
liability on the part of any of the Boise Released
Persons.
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5.
Releases by Boise Releasing
Parties .
(a)
Effective as of the Termination
Date, each of Holdings, BCH and the Company (collectively, the
“ Boise Releasing Parties ”), on behalf of
itself and each of its wholly-owned subsidiaries as of the Signing
Date (collectively with the Boise Releasing Parties, the “
Boise Releasing Persons ”), forever waives, releases,
and d
