Exhibit (10)(q)(ii)
POTLATCH CORPORATION
PERFORMANCE SHARE
AGREEMENT
2005 STOCK INCENTIVE PLAN
THIS PERFORMANCE SHARE AGREEMENT
made and entered into 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
named in the attached addendum (“Employee”),
W I T N E S S E T H:
WHEREAS, the Corporation maintains
the 2005 Stock Incentive Plan (the “Plan”), which is
incorporated into and form 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 (Performance
Shares),
NOW, THEREFORE, for valuable
consideration, the parties agree as follows:
|
|
1.
|
Definitions . The following terms used in this Agreement
shall have the meanings set forth in this Paragraph.
|
|
|
(a)
|
“
Agreement ” means this Performance Share
Agreement.
|
|
|
(b)
|
“
Board ” means the Board of Directors of the
Corporation.
|
|
|
(c)
|
“
Code ” means the Internal Revenue Code of 1986, as
amended.
|
|
|
(d)
|
“
Common Stock ” means the $1 par value Common Stock of
the Corporation.
|
|
|
(e)
|
“
Committee ” means the committee appointed by the Board
to administer the Plan.
|
|
|
(f)
|
“
Corporation ” means Potlatch Corporation, a Delaware
corporation.
|
|
|
(g)
|
“ Date
of Grant ” means the date on which the Committee
determined to award this target contingent grant of performance
share as specified in the addendum to this Agreement
|
|
|
(h)
|
“
Disability ” means the Employee qualifies for
continuing benefits under the Corporation’s Disability Income
Plan after the first full 24 consecutive months of
disability.
|
|
|
(i)
|
“Performance Share Award ”
means an Award granted pursuant to Section 10 of the
Plan.
|
|
|
(j)
|
“
Plan ” means the Potlatch Corporation 2005 Stock
Incentive Plan, pursuant to which the parties have entered into
this Agreement.
|
|
|
(k)
|
“
Securities Act ” means the Securities Act of 1933, as
amended.
|
|
|
(l)
|
“
Share ” means one share of Common Stock, adjusted in
accordance with Section 16 of the Plan.
|
|
|
(m)
|
“
Subsidiary ” means any corporation in an unbroken
chain of corporations beginning with the Corporation if each of the
corporations 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.
|
2. Award . Subject to the
terms of this Agreement and the addendum attached to this
Agreement, the Employee is hereby awarded a target contingent grant
of performance shares in the number set forth in the attached
addendum to this Agreement. The number of Shares actually payable
to the Employee is contingent on the performance achieved as
specified in the addendum to this Agreement. This award has been
granted pursuant to the Plan, a copy of which the Employee may
obtain upon request to the Corporation.
3. Performance Measure . The
performance measure is a comparison of the percentile ranking of
the Corporation’s total shareholder return (stock price
appreciation plus dividends as calculated pursuant to Paragraph 5
below) as compared to the total shareholder return performance of a
selected peer group of forest products industry companies as
specified in the Performance Schedule contained in the addendum to
this Agreement.
4. Performance Period . The
performance period is the period specified in the addendum to this
Agreement and represents the period during which the total
shareholder return for Potlatch Corporation and the selected peer
group of forest products industry companies is measured.
5. Calculation of Total
Shareholder Return . Total shareholder return for any given
common stock shall be expressed as a percentage and calculated
by:
|
|
(i)
|
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
|
2
|
|
|
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
|
|
|
(ii)
|
adding to the
difference determined under subparagraph (i) above, all cash
dividends actually paid on such share of stock during the
performance period; and
|
|
|
(iii)
|
dividing the
sum determined by subparagraphs (i) and (ii) above by the
beginning average stock price determined pursuant to subparagraph
(i)(a) above.
|
6. Dividend Equivalents .
During the performance period dividend equivalents shall be accrued
and paid out as additional Shares in relation to the calculated
number of performance shares earned at the end of the performance
period. For the purpose of converting dividend equivalents into
Shares, the ending average stock price for Potlatch Shares (as
determined pursuant to Paragraph 5(i)(b) above) shall be
used.
7. Settlement of Awards . The
Corporation shall deliver to the Employee one Share for each
performance share (and dividend equivalents) earned as determined
in accordance with the provisions set forth in the addendum to this
Agreement. The earned performance shares payable to the Employee
(including Shares payable pursuant to Paragraph 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 performance shares
earned as specified in the addendum to this Agreement will be
delivered to the Employee (or, in the case of the Employee’s
death before delivery, to the Employee’s beneficiary) as soon
as practicable after the end of the performance period as set forth
in the addendum to this Agreement.
9. Committee Discretion to Reduce
Award . Notwithstanding any provision in this Agreement to the
contrary, the Committee retains the right, at its sole and absolute
discretion, to reduce or eliminate any award that may become
payable hereunder if the Committee determines that any one or more
of the following conditions have occurred:
|
|
(a)
|
The stockholder
return to the Corporation’s stockholders has been
insufficient;
|
|
|
(b)
|
The stockholder
return to the Corporation’s stockholders has been
negative;
|
|
|
(c)
|
The financial
performance of the Corporation has been inadequate; or
|
|
|
(d)
|
The operational
performance of the Corporation has been inadequate
|
In addition, the Committee may
reduce or eliminate the award granted hereby based on the
Employee’s individual performance.
10. Retirement, Disability, or
Death During Performance Period . If the Employee’s
employment with the Corporation terminates during the performance
period because of the Employee’s retirement under the
Salaried Employees’ Retirement Plan, Disability,
3
or death, the Employee (or, in the case of the
Employee’s death, the Employee’s beneficiary) shall be
entitled to a prorated number of the performance shares earned as
specified in the addendum to this Agreement. The prorated number of
performance shares earned is determined at the end of the
performance period based on the ratio of the number of completed
calendar months the Employee is employed during the performance
period to the total number of months in the performance
period.
11. Termination of Employment
During the Performance Period . Except as provided in
Section 12, if the Employee’s employment with the
Corporation terminates during the performance period for any reason
other than retirement under the Salaried Employees’
Retirement Plan, Disability, or death, the entire target contingent
grant of performance shares granted under this Agreement shall be
automatically terminated as of the date of such termination of
employment.
12. Change of Control . If a
Change in Control occurs before January 1, 2009 and if in
connection with such Change in Control the Corporation terminates
Employee’s employment other than for Cause or Disability or
Employee shall terminate employment for Good Reason within 90 days
after the occurrence of the event giving rise to Good Reason, then
the employee will earn a prorated number of performance shares
based on the ratio of the number of completed calendar months from
the beginning of the performance period to the Date of Termination
compared to the total number of months in the performance period
specified in the addendum to this Agreement. For the purpose of
determining the number of Shares to be awarded, this ratio shall be
applied to the number or Shares specified in the Target Grant of
Performance Shares set forth in the addendum to this Agreement and
no performance measure shall be considered. The prorated
performance shares to be awarded (including Shares payable pursuant
to Paragraph 6 above) will be delivered to the Employee as soon as
practicable following the date of Termination. For this purpose,
the terms, “Change in C
