Exhibit 10(r)(ii)
POTLATCH CORPORATION
PERFORMANCE SHARE
AGREEMENT
2005 STOCK INCENTIVE PLAN
THIS PERFORMANCE SHARE AGREEMENT
(this “Agreement”) is made and entered into on the
Grant Date specified in the attached Addendum to this Agreement by
and between POTLATCH CORPORATION , a Delaware corporation
(the “Corporation”), and the employee of the
Corporation or an Affiliate named in the Addendum (the
“Employee”).
W I T N E S S E T H:
WHEREAS, the Corporation maintains
the Potlatch Corporation 2005 Stock Incenitve Plan (the
“Plan”), which is incorporated into and forms a part of
this Agreement, and the Employee has been selected to receive a
contingent grant of Performance Shares under Section 10 of the
Plan;
NOW, THEREFORE, for valuable
consideration, the parties agree as follows:
1. Definitions . In addition
to the terms defined elsewhere in this Agreement, the following
terms used in this Agreement shall have the meanings set forth in
this Section 1. Capitalized terms not defined in this
Agreement shall have the same definitions as in the
Plan.
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(a)
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“
Addendum ” means the attached Addendum.
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(b)
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“
Board ” means the Board of Directors of the
Corporation.
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(c)
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“
Change in Control ” means an event or transaction
described in Section 7(e) of the Plan.
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(d)
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“
Code ” means the Internal Revenue Code of 1986, as
amended.
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(e)
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“
Common Stock ” means the $1 par value Common Stock of
the Corporation.
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(f)
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“
Committee ” means the committee appointed by the Board
to administer the Plan.
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(g)
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“
Disability ” means the condition of the Employee who
is unable to engage in any substantial gainful activity by reason
of any medically 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.
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(h)
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“
Grant Date ” means the effective date of the Award of
the Performance Shares to the Employee, as specified in the
Addendum.
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(i)
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“
Performance Shares ” means an award denominated in
Shares granted pursuant to Section 10 of the Plan.
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(j)
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“
Share ” means one share of Common Stock, adjusted in
accordance with Section 16 of the Plan.
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2. Award . Subject to the
terms of this Agreement and the Addendum, the Employee is hereby
awarded a target contingent grant of Performance Shares in the
number set forth in the attached Addendum (the
“Award”). The number of Shares actually payable to the
Employee is contingent on the performance achieved as specified in
the Addendum. This Award has been granted pursuant to the Plan, a
copy of which is attached and the terms and conditions of which are
incorporated by reference into this Agreement.
3. Performance Measure . The
performance measure is a comparison of the percentile ranking of
the Corporation’s total stockholder return (stock price
appreciation plus dividends as calculated pursuant to
Section 5 below) as compared to the total stockholder return
performance of a selected peer group of forest products industry
companies as specified in the Performance Schedule contained in the
Addendum.
4. Performance Period . The
Performance Period is the period specified in the Addendum (the
“Performance Period”) and represents the period during
which the total stockholder return for the Corporation and the
selected peer group of companies is measured.
5. Calculation Of Total
Stockholder Return . Total stockholder return for any given
common stock shall be expressed as a percentage and calculated
by:
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(i)
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subtracting
(a) the beginning average stock price for one share of stock
(determined by calculating the average closing stock price during
the two calendar months preceding the beginning of the Performance
Period) from (b) the ending average stock price for such share
of stock (determined by calculating the average closing stock price
during the final two calendar months of the Performance Period,
after taking into account the affect of any stock dividends, stock
splits, consolidations, recapitalizations, reorganizations or like
events with respect to such share); and
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(ii)
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adding to the
difference determined under subparagraph (i) above, all cash
dividends actually paid on such share of stock during the
Performance Period; and
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(iii)
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dividing the
sum determined by subparagraphs (i) and (ii) above by the
beginning average stock price determined pursuant to subparagraph
(i)(a) above.
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6. Dividend Equivalents .
During the Performance Period, dividend equivalents shall be
converted into additional Performance Shares based on the closing
price of the Corporation’s Common Stock on the New York Stock
Exchange on the dividend payment date. Such additional Performance
Shares shall vest or be forfeited in the same manner as the
underlying Performance Shares to which they relate.
7. Settlement of Awards . Pursuant to
Section 5 above, the Corporation shall deliver to the Employee
one Share for each earned Performance Share (and, as applicable,
for the accrued dividend equivalents) as determined in accordance
with the provisions set forth in the Addendum. Any earned
Performance Shares payable to the Employee (including Shares
payable pursuant to Section 6 above) shall be paid solely in
Shares. Any fractional Share will be rounded to the closest whole
Share.
8. Time of Payment . Except
as otherwise provided in this Agreement, the Shares issuable for
the earned Performance Shares and accrued dividend equivalents
shall be delivered to the Employee (or, in the case of the
Employee’s death before delivery, to the Employee’s
beneficiary or representative) as soon as practicable after the end
of the Performance Period as set forth in the Addendum.
9. Committee Discretion
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