Exhibit (10)(c)

 

POTLATCH CORPORATION

 

2000 STOCK INCENTIVE PLAN

 

1. PURPOSE.

 

This Potlatch Corporation 2000 Stock Incentive Plan is intended to provide incentive to employees and directors of Potlatch Corporation (the “Corporation”) and its eligible subsidiaries, to encourage proprietary interest in the Corporation and to encourage employees and directors to remain in the service of the Corporation or its subsidiaries.

 

2. DEFINITIONS.

 

(a) “Award” means any award of an Option, Restricted Stock or an Other Share-Based Award under the Plan.

 

(b) “Board” means the Board of Directors of the Corporation.

 

(c) “Code” means the Internal Revenue Code of 1986, as amended.

 

(d) “Committee” means the Committee appointed by the Board in accordance with Section 4.

 

(e) “Common Stock” means the $1 par value common stock of the Corporation.

 

(f) “Corporation” means Potlatch Corporation, a Delaware corporation.

 

(g) “Director” means a director of the Corporation.

 

(h) “Disability” means the condition of an Employee who is unable to engage in any substantial gainful activity by reason of any medically

 

 

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determinable physical or mental impairment which can be expected to result in death or which has lasted or can be expected to last for a continuous period of at least 12 months.

 

(i) “Employee” means an individual (who may be an officer or a Director) employed by the Corporation or a Subsidiary (within the meaning of the Code section 3401 and the regulations thereunder).

 

(j) “Exercise Price” means the price per Share of Common Stock at which an option may be exercised.

 

(k) “Fair Market Value” of a Share as of a specified date means the closing price at which Shares are traded at the close of business on such date as reported in the New York Stock Exchange composite transactions published in the Western Edition of the Wall Street Journal, or if no trading of Shares is reported for that day, on the next preceding day on which trading was reported.

 

(l) “Incentive Stock Option” means an Option described in Code section 422(b).

 

(m) “Misconduct” means that a Participant has engaged in unfair competition with the Corporation or a Subsidiary, induced any customer of the Corporation or a Subsidiary to breach any contract with the Corporation or a Subsidiary, made any unauthorized disclosure of any of the secrets or confidential information of the Corporation or a Subsidiary, committed an act of embezzlement, fraud or theft with respect to the property of the Corporation or a Subsidiary, or engaged in conduct which is not in good faith and which directly results in material loss, damage or injury to the business, reputation or employees of the Corporation or a Subsidiary.

 

(n) “Nonqualified Stock Option” means an Option not described in Code section 422(b) or 423(b).

 

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(o) “Option” means a stock option granted pursuant to Section 7 or Section 10. “Option Agreement” means the agreement between the Corporation and the Participant which contains the terms and conditions pertaining to such Option.

 

(p) “Other Share-Based Award” means an Award granted pursuant to Section 9. “Other Share-Based Award Agreement” means the agreement between the Corporation and the recipient of an Other Share-Based Award which contains the terms and conditions pertaining to the Other Share-Based Award.

 

(q) “Outside Director” means a Director who is not an Employee.

 

(r) “Participant” means an Employee who has received an Award or an Outside Director who has received an Option.

 

(s) “Plan” means this Potlatch Corporation 2000 Stock Incentive Plan.

 

(t) “Purchase Price” means the Exercise Price times the number of whole Shares with respect to which an Option is exercised.

 

(u) “Restricted Stock” means Shares granted pursuant to Section 8. “Restricted Stock Agreement” means the agreement between the Corporation and the recipient of Restricted Stock which contains the terms, conditions and restrictions pertaining to the Restricted Stock.

 

(v) “Share” means one share of Common Stock, adjusted in accordance with Section 13 (if applicable).

 

(w) “Stock Right” means a bookkeeping entry representing a right to the equivalent of one Share.

 

(x) “Subsidiary” means any corporation in an unbroken chain of corporations beginning with the Corporation if each of the corporations

 

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other than the last corporation in the unbroken chain owns stock possessing 50% or more of the total combined voting power of all classes of stock in one of the other corporations in such chain.

 

3. EFFECTIVE DATE.

 

This Plan was adopted by the Board on December 2, 1999, to be effective immediately, subject to approval by the Corporation’s stockholders.

 

4. ADMINISTRATION.

 

The Plan shall be administered by a committee (the “Committee”) appointed by the Board, consisting of not less than two disinterested members. The term “disinterested members” as applied to Directors shall include only Directors who are not active Employees of the Corporation or of any of its Subsidiaries, who are not eligible to receive discretionary Awards under Sections 7, 8 and 9 of this Plan or under any other stock incentive plan of the Corporation and who have not received such discretionary Awards for at least one year preceding appointment as a member of the Committee. The Board may from time to time remove members from, or add members to, the Committee. Vacancies on the Committee shall be filled by the Board. The Board shall appoint one of the members of the Committee as Chairman.

 

If any member of the Committee does not qualify as an “outside director” for purposes of section 162(m) of the Code, Awards under the Plan for the chief executive officer and the four most highly compensated officers of the Corporation (other than the chief executive officer) shall be administered by a subcommittee consisting of each Committee member who qualifies as an “outside director.” If fewer than two Committee members qualify as “outside directors,” the Board shall appoint one or

 

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more other members to such subcommittee who do qualify as “outside directors” so that it will at all times consist of at least two members who qualify as “outside directors” for purposes of section 162(m) of the Code.

 

The Committee shall hold meetings at such times and places as it may determine. Acts of a majority of the Committee at which a quorum is present, or acts reduced to or approved in writing by a majority of the Committee, shall be the valid acts of the Committee. The Committee shall from time to time at its discretion make determinations with respect to Employees who shall be granted Awards, the number of Shares or Share equivalents to be subject to each Award, the vesting of Awards, the designation of Options as Incentive Stock Options or Nonqualified Stock Options and other conditions of Awards to Employees.

 

The interpretation and construction by the Committee of any provisions of the Plan or of any Award shall be final. No member of the Committee shall be liable for any action or determination made in good faith with respect to the Plan or any Award.

 

5. ELIGIBILITY.

 

Participants shall be such key Employees (who may be officers, whether or not they are Directors) of the Corporation or of its Subsidiaries as the Committee shall select, but subject to the terms and conditions set forth below. In addition, all Outside Directors shall be Participants solely for purposes of the nondiscretionary Awards described in Section 10.

 

(a) Ten Percent Stockholders.

 

An Employee who owns more than 10% of the total combined voting power of all classes of outstanding stock of the Corporation, its parent or any

 

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of its Subsidiaries is not eligible to receive an Incentive Stock Option pursuant to this Plan. For purposes of this Section 5(a) the stock ownership of an Employee shall be determined pursuant to section 424(d) of the Code.

 

(b) Number of Awards.

 

A Participant may receive more than one Award, including Awards of the same type, but only on the terms and subject to the restrictions set forth in the Plan. The maximum aggregate number of Shares or Share equivalents that may be subject to Awards to a Participant in any calendar year is 100,000 shares.

 

6. STOCK.

 

The stock subject to Options, Restricted Stock, or Other Share-Based Awards granted under the Plan shall be Shares of the Corporation’s authorized but unissued or reacquired Common Stock. The aggregate number of Options, Restricted Stock or Other Share-Based Awards issued under this Plan shall not exceed 1,400,000 Shares. In the event that any outstanding Option under the Plan for any reason expires or is terminated or any Restricted Stock or Other Share-Based Award is forfeited, the Shares allocable to the unexercised portion of such Option or the forfeited Restricted Stock or Other Share-Based Award may again be subjected to Options, Restricted Stock or Other Share-Based Awards under the Plan, provided that under the terms of the Award the Participant received no benefits of ownership during the period the Award was outstanding. However, if one Award is granted in tandem with another, so that the exercise of one causes the other to expire, then the number of Shares subject to the expired Award shall not be restored to the pool available for Awards.

 

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The limitations established by this Section 6 shall be subject to adjustment as provided in Section 13.

 

7. TERMS AND CONDITIONS OF EMPLOYEE OPTIONS.

 

Options granted to Employees pursuant to the Plan shall be evidenced by written Option Agreements in such form as the Committee shall determine, subject to the following terms and conditions:

 

(a) Number of Shares.

 

Each Option shall state the number of Shares to which it pertains and shall provide for the adjustment of such number in accordance with Section 13.

 

(b) Exercise Price.

 

Each Option shall state the Exercise Price, determined by the Committee, which shall not be less than the Fair Market Value of a Share on the date of grant.

 

(c) Medium and Time of Payment.

 

The Purchase Price shall be payable in full in United States dollars upon the exercise of the Option; provided that with the consent of the Committee and in accordance with its rules and regulations, the Purchase Price may be paid by the surrender of Shares in good form for transfer, owned by the person exercising the Option and having a Fair Market Value on the date of exercise equal to the Purchase Price, or in any combination of cash and Shares, so long as the total of the cash and the Fair Market Value of the Shares surrendered equals the Purchase Price. No Share shall be issued until full payment has been made.

 

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(d) Term and Exercise of Options; Nontransferability of Options.

 

Each Option shall state the time or times when it becomes exercisable. No Option shall be exercisable after the expiration of 10 years from the date it is granted. During the lifetime of the Participant, the Option shall be exercisable only by the Participant and shall not be assignable or transferable. In the event of the Participant’s death, no Option shall be transferable by the Participant other than by will or the laws of descent and distribution.

 

Subject to the foregoing, beginning six months after the date of grant the Participant shall have the right to exercise the Option (or to call the related stock appreciation right as described in Section 7 (i)) in whole or in part:

 

(i) Upon consummation of a reorganization, merger or consolidation involving the Corporation (a “Business Combination”), in each case, unless, following such Business Combination, (A) all or substantially all of the individuals and entities who were the beneficial owners, respectively, of the then outstanding shares of Common Stock (the “Outstanding Common Stock”) and then outstanding voting securities of the Corporation entitled to vote generally in the election of Directors (the “Outstanding Voting Securities”) immediately prior to such Business Combination beneficially own, directly or indirectly, more than 50% of, respectively, the then outstanding shares of common stock and the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors of the corporation resulting from such Business Combination (including, without limitation, a corporation which as a result of such transaction owns the Corporation either directly or through one or more

 

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subsidiaries), (B) no Person (as defined in subparagraph (iii) below) (excluding any corporation resulting from such Business Combination or any employee benefit plan (or related trust) sponsored or maintained by the Corporation or such other corporation resulting from such Business Combination) beneficially owns, directly or indirectly, 20% or more of, respectively, the then outstanding shares of common stock of the corporation resulting from such Business Combination or the combined voting power of the then outstanding voting securities of such corporation except to the extent that such ownership is based on the beneficial ownership, directly or indirectly, of Outstanding Common Stock or Outstanding Voting Securities immediately prior to the Business Combination and (C) at least a majority of the members of the board of directors of the corporation resulting from such Business Combination were members of the Board at the time of the execution of the initial agreement, or of the action of the Board, providing for such Business Combination; provided, however, if the Corporation and the other party to the Business Combination agree that the transaction is to be treated as a pooling of interests for financial reporting purposes, and if the transaction in fact is so treated, then the right to exercise the Option (or to call the related stock appreciation right) shall not be accelerated upon consummation of the Business Combination to the extent that the Corporation’s independent accountants and the other party’s independent accountants separately determine in good faith that the acceleration would preclude the use of pooling of interests accounting; or

 

(ii) On the date that individuals who, as of December 2, 1999 constitute the Board (the “Incumbent Board”) cease for any reason to

 

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constitute at least a majority of the Board; provided, however, that any individual becoming a Director subsequent to December 2, 1999 whose election, or nomination for election by the Corporation’s stockholders, was approved by a vote of at least a majority of the Directors then comprising the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of Directors, an actual or threatened solicitation of proxies or consents or any other actual or threatened action by, or on behalf of any Person other than the Board; or

 

(iii) Upon the acquisition after December 2, 1999 by any individual, entity or group (within the meaning of Section 13(d) (3) or 14 (d) (2) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) (a “Person”) of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 20% or more of either (A) the then Outstanding Common Stock or (B) the combined voting power of the Outstanding Voting Securities; provided, however, that the following acquisitions shall not be deemed to be covered by this subsection (iii): (x) any acquisition of Outstanding Common Stock or Outstanding Voting Securities by the Corporation, (y) any acquisition of Outstanding Common Stock or Outstanding Voting Securities by any employee benefit plan (or related trust) sponsored or maintained by the Corporation or (z) any acquisition of Outstanding Common Stock or Outstanding Voting Securities by any corporation pursuant to a transaction which complies with clauses (A), (B) and (C) of subsection (i) of this Section 7(d); or

 

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(iv) Upon the consummation of the sale of all or substantially all of the assets of the Corporation or approval by the stockholders of the Corporation of a complete liquidation or dissolution of the Corporation.

 

(e) Termination of Employment Except Death.