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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
