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EXHIBIT 10.11
EMPLOYMENT AGREEMENT
THIS AGREEMENT is made as of the 29th day of October, 2004,
between
Boise Cascade, L.L.C., a Delaware limited liability company (the
"Company"), and
W. Thomas Stephens ("EXECUTIVE").
WHEREAS, the services of Executive and his managerial and
professional
experience are of value to the Company.
WHEREAS the Company desires to employ Executive as its Chief
Executive
Officer upon the terms and conditions set forth herein.
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 agree as follows:
1. EMPLOYMENT. The Company shall employ Executive, and
Executive
hereby accepts employment with the Company, upon the terms and
conditions set
forth in this Agreement for the period beginning on the closing
date of the
acquisition of Boise Cascade Corporation's forest products
business by the
Company (the "Effective Date") and ending as provided in
paragraph 5 hereof (the
"EMPLOYMENT PERIOD").
2. POSITION AND DUTIES.
During the Employment Period, Executive shall serve as the
Chairman and Chief
Executive Officer of the Company and shall have the normal
duties,
responsibilities, functions and authority of such position,
subject to the power
and authority of the Board of Managers of Boise Cascade
Holdings, L.L.C. (the
"Board") to expand or limit such duties, responsibilities,
functions and
authority and to overrule actions of officers of the Company.
During the
Employment Period, Executive shall render such administrative,
financial and
other executive and managerial services to the Company and its
Affiliates which
are consistent with Executive's position as the Board may from
time to time
direct.
(a) During the Employment Period, Executive shall report to the
Board
and shall devote his best efforts and his full business time and
attention
(except for permitted vacation periods and reasonable periods of
illness or
other incapacity) to the business and affairs of the Company and
its Affiliates.
Executive shall perform his duties, responsibilities and
functions to the
Company and its Affiliates hereunder to the best of his
abilities in a diligent,
trustworthy, professional and efficient manner and shall comply
with the
Company's and its Affiliates' policies and procedures in all
material respects.
In performing his duties and exercising his authority under the
Agreement,
Executive shall support and implement the business and strategic
plans approved
from time to time by the Board. During the Employment Period,
Executive shall
not accept other employment, serve as an officer or director of,
or otherwise
perform services for compensation for, any other entity without
the prior
written consent of the Board; PROVIDED that Executive may serve
as an officer or
director of or otherwise participate in purely educational,
welfare, social,
religious and civic organizations so long as such activities do
not interfere
with
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Executive's employment. The Company hereby consents to the
service of Executive
on the boards of directors of Putnam Investments and
Trans-Canada Corporation
and their subsidiaries and affiliates.
(b) For purposes of this Agreement, "AFFILIATES" shall mean
any
corporation or other entity of which is directly or indirectly
controlled by or
under common control with the Company or its subsidiaries.
3. COMPENSATION AND BENEFITS.
(a) During the Employment Period, Executive's base salary shall
be
One Million Dollars ($1,000,000) per annum or such higher rate
as the Board may
determine from time to time (as adjusted from time to time, the
"BASE SALARY"),
which salary shall be payable by the Company in regular
installments in
accordance with the Company's general payroll practices (in
effect from time to
time). Executive and the Company shall review the Base Salary
each year during
the Term hereof, and Executive may receive increases in his Base
Salary from
time to time, based upon his performance, subject to approval of
the
Compensation Committee of the Board (the "Compensation
Committee"). During the
period beginning on the date of this Agreement and ending
December 31, 2004, the
Base Salary shall be pro rated on an annualized basis. In
addition, during the
Employment Period, Executive shall be entitled to participate in
the Company's
employee benefit programs for which other similarly situated
senior executive
employees of the Company are generally eligible, and Executive
shall be entitled
to four weeks of paid vacation each calendar year in accordance
with the
Company's policies.
(b) In addition to Base Salary, Executive will have an
opportunity to
earn a cash bonus each year as determined by the Compensation
Committee or the
Board, with a target annual bonus equal to sixty-five percent
(65%) of
Executive's Base Salary (the "Target Bonus") and a maximum
annual bonus of two
hundred and twenty five percent (225%) of his Target Bonus with
respect to any
calendar year. The Target Bonus will be based on financial and
other objective
targets that the Compensation Committee or the Board reasonably
believes are
reasonably attainable at the time that they are set.
(c) Executive shall also be eligible to participate in and
receive
future grants under any stock option or equity-based program
(including, without
limitation, a long-term incentive plan) offered by the Company
to senior
executives, if any, subject to the discretion of the Board.
(d) The Company shall reimburse Executive for all reasonable
business
expenses incurred by him in the course of performing his duties
and
responsibilities under this Agreement (including, without
limitation, reasonable
expenses incurred by Executive prior to the Effective Date for
the benefit of
the Company, including trip cancellation costs) which are
consistent with the
Company's policies in effect from time to time with respect to
travel,
entertainment and other business expenses, subject to the
Company's requirements
with respect to reporting and documentation of such expenses.
During the
foregoing period, Executive shall be indemnified by the Company
as provided in
paragraph 23 pursuant to the applicable provisions of its
articles,
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bylaws, and the laws of Delaware, and the Company shall furnish
director and
officer liability insurance to the Executive at the Company's
sole cost.
(e) The Company shall also reimburse Executive for all
reasonable
moving and relocation expenses (including relocation from
Vancouver, BC and
movement of household goods from Denver). To the extent that
Executive does not
sell his real property and boat located in Vancouver prior to
the Effective
Date, the Company shall purchase such property, including
condominium, attached
boat dock and boat, for its appraised fair market value
(determined in good
faith and expected to be valued between $1,500,000 to
$2,000,000), unless
Executive rejects the proposed purchase price and elects to
retain ownership, in
which case the Company shall have no further obligations
regarding such
property. If the Company purchases such property located in
Vancouver pursuant
to the preceding sentence, Executive may, at his election, lease
such property
from the Company at fair market value until such date that the
Company sells
such property to a bona fide third party purchaser. If Executive
is terminated
by the Company without Cause prior to the expiration of this
Agreement, the
Company will purchase for cash Executive's condominium located
in Boise for its
appraised fair market value.
(f) The Company shall at its expense maintain a term life
insurance
policy or policies on the life of Executive with a face amount
of Two Million
Dollars ($2,000,000), payable to such beneficiaries as Executive
may designate.
Executive agrees to cooperate in any medical or other
examination, supply any
information and execute and deliver any applications or other
instruments in
writing as may be reasonably necessary to obtain such insurance.
Executive
hereby represents that he has no reason to believe that his life
is not
insurable at rates now prevailing for healthy men of his age.
Executive may, at
his expense, purchase additional insurance at the time the
Company purchases
said policy or policies. In the event Executive terminates
employment for any
reason, Executive shall have the right, at his expense, to begin
paying the
premiums required to continue such insurance coverage from and
after the date of
his termination.
(g) All amounts payable to Executive as compensation hereunder
shall
be subject to all required and customary withholding by the
Company as provided
in paragraph 20 herein.
(h) On or as soon as reasonably practicable following the
Effective
Date, Executive will receive a one-time consulting payment for
services
performed from July 26, 2004 through the Effective Date (the
"Consulting
Period") in an amount equal to the product of One Million Six
Hundred Fifty
Thousand Dollars ($1,650,000) multiplied by a fraction, the
numerator of which
is the number of days from July 26, 2004 through the Effective
Date and the
denominator of which is Three Hundred Sixty Five (365).
4. BOARD MEMBERSHIP. With respect to all regular elections of
the
Board of Managers of Boise Cascade Holdings, L.L.C. during the
Employment
Period, the Company shall nominate, and use its reasonable
efforts to cause the
election of, Executive to serve as Chairman of the Board. Upon
the termination
or expiration of the Employment Period, Executive shall resign
as Chairman and
as a member of the Board and all other governing bodies of the
Company and its
Affiliates, as the case may be.
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5. TERM.
(a) The Employment Period shall end three years after the
Effective
Date and shall automatically be renewed on the same terms and
conditions set
forth herein as modified from time to time by the parties hereto
for additional
one-year periods beginning on the second anniversary of the
Effective Date,
unless the Company or Executive gives the other party written
notice of the
election not to renew the Employment Period at least 60 days
prior to any such
renewal date; provided that (i) the Employment Period shall
terminate prior to
such date immediately upon Executive's resignation (with or
without Good Reason,
as defined below), death or Disability and (ii) the Employment
Period may be
terminated by the Company at any time prior to such date for
Cause (as defined
below) or without Cause. Except as otherwise provided herein,
any termination of
the Employment Period by the Company shall be effective as
specified in a
written notice from the Company to Executive.
(b) If the Employment Period is terminated by the Company or
its
successors in interest without Cause other than under the
circumstances
described in Section 5(d) or upon Executive's resignation with
Good Reason,
Executive shall be entitled to continue to receive:
(i) his full Base Salary through Executive's date of
termination,
(ii) a lump sum equal to two times the sum of Executive's
annual Base Salary and annual Target Bonus (disregarding any
reductions in
Base Salary or Target Bonus which constitute good reason),
(iii) the value of any unused and accrued time off, less any
advanced time off, in accordance with the time off policy
applicable to
Executive immediately prior to Executive's date of
termination,
(iv) continued coverage under Executive's term life
insurance
policy referred to in Section 3(f) with the Company paying
directly or
reimbursing Executive for the entire premium for a twenty-four
(24) month
period (the "SEVERANCE PERIOD"), and
(v) participation at active employee cost during the
Severance
Period under life (other than life insurance available only to
executive
officers), disability, accident and healthcare insurance plans,
programs or
arrangements and financial counseling services in which
Executive
participated immediately prior to his date of termination. The
cost to
Executive for such continued coverage will be the same paid for
such
coverage by actively employed executive officers during the
Severance
Period.
Executive shall not be entitled to any other salary,
compensation or benefits
after termination of the Employment Period, except as
specifically provided for
in this agreement or as otherwise expressly required by
applicable law.
Executive shall have no duty or obligation to seek other
employment during the
Severance Period or otherwise mitigate damages hereunder.
Amounts paid pursuant
to this paragraph shall be in lieu of all other severance
payments that would
otherwise have been payable pursuant to the Company's severance
plans, programs
or policies.
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(c) If the Employment Period is terminated by the Company for
Cause or
is terminated pursuant to clause (a)(i) above (other than
termination with Good
Reason), Executive shall only be entitled to receive his Base
Salary through the
date of termination, the value of any unused and accrued time
off, less any
advanced time off, in accordance with the time off policy
applicable to
Executive immediately prior to Executive's date of termination
and shall not be
entitled to any other salary, compensation or benefits from the
Company or its
Affiliates thereafter, except as expressly required under
applicable law.
(d) If the Employment Period expires due to the Company electing
not
to renew the Agreement, Executive shall be entitled to receive
(i) his base
Salary through the date of expiration, (ii) the value of any
unused and accrued
time off, less any advanced time off, in accordance with the
time off policy
applicable to Executive immediately prior to Executive's date of
termination and
(iii) severance in accordance with the Company's general
severance policy
(subject to the execution by Executive of a separation and
release agreement in
a form mutually acceptable to Executive and the Company and the
observation of
any applicable waiting or revocation periods that are necessary
for the release
to become fully effective and irrevocable under state and
federal laws).
(e) Except as otherwise expressly provided herein, all of
Executive's
rights to salary, bonuses, employee benefits and other
compensation hereunder
which would have accrued or become payable after the termination
or expiration
of the Employment Period shall cease upon such termination or
expiration, other
than those expressly required under applicable law (such as
COBRA). The Company
may offset any amounts Executive owes it or its Affiliates
against any amounts
it or its Affiliates owes Executive hereunder. Notwithstanding
anything to the
contrary, payment of amounts under Section 5 of this Agreement
are conditioned
upon the execution by Executive of a separation and release
agreement in a form
mutually acceptable to Executive and the Company and the
observation of any
applicable waiting or revocation periods that are necessary for
the release to
become fully effective and irrevocable under state and federal
laws.
(f) For purposes of this Agreement, "Cause" shall mean with
respect to
Executive one or more of the following: Executive's theft or
embezzlement, or
attempted theft or embezzlement, of money or property of the
Company or its
Affiliates, perpetration or attempted perpetration of fraud, or
participation in
a fraud or attempted fraud, on the Company or its Affiliates or
unauthorized
appropriation of, or attempt to misappropriate, any tangible or
intangible
assets or property of the Company or its Affiliates, (ii) any
act or acts of
disloyalty, misconduct or moral turpitude by Executive injurious
to the
interest, property, operations, business or reputation of the
Company or its
Affiliates or conviction of Executive (or a plea of guilty or
nolo contendre) of
a felony which results in injury to the Company or its
Affiliates or (iii)
Executive's failure or inability (other than by reason of his
Disability) to
carry out effectively his duties and obligations to the Company
or its
Affiliates or to participate effectively and actively in the
management of the
Company or its Affiliates, as determined in the reasonable
judgment of the
Board; provided, however, that the Company shall provide
specific written notice
of such alleged failure or inability and provide Executive with
15 days to cure
such alleged failure or inability.
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The Board shall give Executive written notice of the Board's
concern
over Executive's action or inaction constituting alleged Cause
and Executive
shall have 15 days to cure the alleged Cause and to prepare for
a meeting with
the Board, at which time Executive may present any information
and any other
factors relevant to the Board's determination of Cause, after
which a majority
of the Board (disregarding Executive's membership on the Board)
must ratify the
finding of "Cause" for it to be effective.
(g) For purposes of this Agreement, "DISABILITY" shall mean
Executive's inability to perform the essential duties,
responsibilities and
functions of his position with the Company and its Affiliates
for six (6)
consecutive months as a result of any mental or physical
disability or
incapacity even with reasonable accommodatio
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