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FORM OF SEVERANCE AGREEMENT

Termination Severance Agreement

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Boise Cascade Corporation

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Exhibit 10.13

 

FORM OF SEVERANCE AGREEMENT

 

 

[CONFIDENTIAL]

[DATE]

[ADDRESSEE]

Dear: [SALUTATION]

Boise Cascade Corporation (the "Company") considers it essential to the

best interests of its stockholders to foster the continuous employment of key

management personnel in the event certain material sale events are threatened or

occur. In this regard, the Board of Directors of the Company (the "Board")

recognizes that the possibility of a sale of assets related to the Company's

forest products businesses may exist and that the uncertainty and questions

which this possibility may raise among management could result in the departure

or distraction of management personnel to the detriment of the Company and its

stockholders.

The Board has determined that appropriate steps should be taken to

reinforce and encourage the continued attention and dedication of members of the

Company's management, including yourself, to their assigned duties without

distraction in the face of the possibility of such a sale.

In order to induce you to remain in the employ of the Company in the face

of such a sale, the Company agrees that you shall receive the severance benefits

set forth in this letter agreement (the "Agreement") if your employment is

terminated under the circumstances described below.

1. Term of Agreement. This Agreement is effective on the date hereof and

shall continue in effect for three years following a Qualifying Sale with

respect to you, provided that this Agreement shall immediately expire if a

Qualifying Sale has not occurred prior to December 31, 2005. The period during

which this Agreement is in effect is referred to herein as the "Term."

2. Qualifying Sale.

A. A "Qualifying Sale" shall be deemed to have occurred if, prior to

December 31, 2005:

(1) All or substantially all of the assets, as determined in the Board's

sole discretion, of the Company's Boise Building Solutions and Boise Paper

Solutions divisions are sold in a single transaction,

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(2) All or substantially all of the assets, as determined in the Board's

sole discretion, of the Company's Boise Building Solutions and Boise Paper

Solutions divisions are sold through a series of related transactions; or

(3) Certain assets of the Company's Boise Building Solutions and Boise

Paper Solutions divisions are sold and the Board determines, in its sole

discretion, that such sale shall be treated as a Qualifying Sale with respect to

you.

3. Qualifying Termination. Except as set forth in Sections 6, 7, and 9.A,

no benefits shall be payable under this Agreement unless there is a Qualifying

Sale and your employment is terminated pursuant to a Qualifying Termination

during the Term. Your termination is a Qualifying Termination if (1) a

Qualifying Sale occurs with respect to you, you accept and commence employment

with an entity purchasing assets ("Purchaser") in connection with a Qualifying

Sale and your employment with Purchaser subsequently terminates during the Term,

unless your termination is because of your death, by Purchaser for Cause or

Disability, or by you other than for Good Reason, or (2) a Qualifying Sale

occurs with respect to you, you are not offered or do not accept and commence

employment with a Purchaser, and your employment with the Company terminates

during the Term, unless your termination is because of your death, by the

Company for Cause or Disability, or by you other than for Good Reason. A

transfer of your employment from the Company to one of its subsidiaries, from a

subsidiary to the Company, or between subsidiaries is not a termination of

employment for purposes of this Agreement. Notwithstanding the foregoing, if, in

connection with a Qualifying Sale, you are offered and do not accept employment

with a Purchaser, and the Board determines, in its discretion, that the terms

and conditions of such employment offer would not have resulted in your having

Good Reason (as defined herein), any termination of your employment with the

Company shall not constitute a Qualifying Termination.

A. Disability. If, as a result of your incapacity due to physical or

mental illness or injury, you are absent from your duties with the Company or

Purchaser on a full-time basis for 6 consecutive months, and within 30 days

after written notice of termination is given you have not returned to the

full-time performance of your duties, your employment may be terminated for

"Disability."

B. Cause. Termination of your employment for "Cause" means termination

upon (1) your willful and continued failure to substantially perform your duties

with the Company or Purchaser (other than failure resulting from your incapacity

due to physical or mental illness or injury, or actual or anticipated failure

resulting from your termination for Good Reason), after a demand for substantial

performance is delivered to you by the Board (which term, as the context

requires, shall hereinafter be deemed to include the comparable body of

Purchaser) which specifically identifies the manner in which the Board believes

that you have not substantially performed your duties, or (2) your willful

engagement in conduct which

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is demonstrably and materially injurious to the Company or Purchaser, monetarily

or otherwise. For purposes of this Section 3.B, no act or failure to act on your

part shall be considered "willful" unless done or omitted to be done by you not

in good faith and without reasonable belief that your act or omission was in the

best interest of the Company or Purchaser. Notwithstanding the foregoing, you

shall not be deemed to have been terminated for Cause unless and until:

o a resolution is duly adopted by the affirmative vote of not less

than three-quarters of the entire membership of the Board at a

meeting of the Board called and held for the purpose (after

reasonable notice to you and an opportunity for you, together with

your counsel, to be heard before the Board), finding that in the

good faith opinion of the Board you were guilty of conduct set

forth above in clauses (1) or (2) of this Section 3.B and

specifying the particulars of your conduct in detail, and

o a copy of this resolution is delivered to you.

Any decision by the Board that a termination for Cause is warranted must

be supported by clear and convincing evidence.

C. Good Reason. "Good Reason" means any of the following, if occurring

without your express written consent after a Qualifying Sale:

(1) The assignment to you by Purchaser or the Company of any duties

inconsistent with your responsibilities as an executive officer of the Company

or a significant adverse alteration in your responsibilities from those in

effect immediately prior to the Qualifying Sale;

(2) The disposition after a Qualifying Sale by Purchaser of the business

for which your services are principally provided pursuant to a partial or

complete liquidation, a sale of assets (including stock of a subsidiary), or

otherwise, unless the acquirer of the business also assumes and agrees to fully

perform this Agreement and Purchaser guarantees the obligations of the

subsequent acquirer under this Agreement;

(3) A reduction in your annual base salary as in effect immediately prior

to a Qualifying Sale, except for across-the-board salary reductions similarly

affecting all executives of the Company or Purchaser;

(4) A reduction in your target annual cash incentive as in effect

immediately prior to a Qualifying Sale;

(5) A requirement that you be based anywhere other than in the

metropolitan area in which you were based immediately prior to a Qualifying

Sale, except for required travel on the Company's or Purchaser's business to an

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extent substantially consistent with your business travel obligations as existed

immediately prior to the Qualifying Sale;

(6) The failure by the Company or Purchaser to continue to provide you

with benefits and compensation, including paid time off, welfare benefits,

short- and long-term incentives, pension, life insurance, healthcare, and

disability plans, no less favorable in the aggregate than the benefits and

compensation available to you immediately prior to the Qualifying Sale;

(7) Any purported termination of your employment which is not effected

pursuant to a Board resolution satisfying the requirements of Section 3.B or a

Notice of Termination satisfying the requirements of Section 3.D, as applicable.

Furthermore, no such purported termination of your employment shall be effective

for purposes of this Agreement.

Your right to terminate your employment pursuant to this Section 3.C

shall not be affected by your incapacity due to physical or mental illness or

injury. Your continued employment shall not constitute consent to, or a waiver

of rights with respect to, any event, circumstance, act or failure to act

constituting Good Reason.

D. Notice of Termination. Any purported termination by the Company or

Purchaser or by you shall be communicated by written Notice of Termination to

the other party according to Section 10. A "Notice of Termination" must indicate

the specific termination provision in this Agreement relied upon and set forth

in reasonable detail the facts and circumstances claimed to provide a basis for

termination of your employment under the indicated provision.

E. Date of Termination. "Date of Termination" means:

(1) if your employment is terminated for Disability, 30 days after the

Notice of Termination is given (provided that you have not returned to the

performance of your duties on a full-time basis during that 30-day period);

(2) if your employment is terminated for Cause, for Good Reason, or for

any other reason other than Disability, the date specified in the Notice of

Termination (which, in the case of a termination for Cause shall not be less

than 30 days from the date the Notice of Termination is given, and in the case

of a termination for Good Reason shall not be more than 60 days from the date

the Notice of Termination is given); or

(3) if a dispute exists regarding the termination, the date on which the

dispute is finally determined, either by mutual written agreement of the parties

or by a final judgment, order or decree of a court of competent jurisdiction

(the time for appeal having expired and no appeal having been perfected), or, if

earlier, the last day of the Term. This subsection (3) shall apply only if (i)

the party

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receiving the Notice of Termination notifies the other party within 30 days that

a dispute exists; (ii) the notice of dispute is made in good faith; and (iii)

the party giving the notice of dispute pursues resolution of the dispute with

reasonable diligence. While any dispute is pending under this subsection (3),

the Company or Purchaser will continue to pay you your full compensation in

effect when the Notice of Termination giving rise to the dispute was given

(including, but not limited to, base salary) and continue you as a participant

in all compensation, benefit and insurance plans and programs in which you were

participating when the Notice of Termination giving rise to the dispute was

given, until the dispute is finally resolved, or if earlier, the last day of the

term of this Agreement. Amounts paid under this subsection (3) are in addition

to all other amounts due under this Agreement and shall not be offset against or

reduce any other amounts due under this Agreement.

4. Compensation During Disability or Upon Termination for Cause or Other

than for Good Reason.

A. During any period that you fail to perform your duties as a result of

incapacity due to physical or mental illness or injury, you shall continue to

receive your full base salary at the rate then in effect and all compensation

paid during the period until your employment is terminated for Disability

pursuant to Section 3.A. Thereafter, your benefits shall be determined in

accordance with the insurance programs then in effect of the Company, Purchaser

or subsidiary corporation by which you are employed, and any qualified and

nonqualified retirement plan(s) in which you are a participant.

B. If your employment is terminated for Cause or by you other than for

Good Reason, the Company or Purchaser shall pay you only your full base salary

through the Date of Termination at the rate in effect at the time Notice of

Termination is given, plus all other amounts to which you are entitled under any

compensation plan at the time those payments are due, and the Company or

Purchaser shall have no further obligations to you under this Agreement.

5. Compensation upon a Qualifying Termination. If your employment is

terminated pursuant to a Qualifying Termination, then you shall be entitled to

the payments and benefits provided in this Section 5.

A. Not later than the 5th day following the date the release required

pursuant to Section 8.D becomes effective, the Company or Purchaser (as

applicable) will pay you the following amounts:

(1) Your full base salary through the Date of Termination at the rate in

effect at the time Notice of Termination is given without regard to any

reduction in base salary that would constitute Good Reason (whether or not any

reduction is asserted as Good Reason), plus all other amounts to which you are

entitled under any compensation plan in which you then participate at the time

those payments are due (in each case, to the extent not already paid);

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(2) A lump sum severance payment equal to 2 times the sum of (a) your

annual base salary at the rate in effect at the time Notice of Termination is

given without regard to any reduction in base salary that would constitute Good

Reason (whether or not any reduction is asserted as Good Reason) ("Base

Salary"), plus (b) your target annual incentive for either (1) the year in which

the Date of Termination occurs or (2) the year in which the Qualifying Sale

occurs, whichever is greater, without regard to any reduction in the target

incentive that would constitute Good Reason (whether or not any reduction is

asserted as Good Reason) ("Target Bonus"); and

(3) To the extent not already paid, a lump sum amount equal to the

greater of the value of your unused and accrued time off, less any advanced time

off, in accordance with the time off policy applicable to you immediately prior

to a Qualifying Sale or as in effect on the Date of Termination, whichever is

more favorable to you.

B. The Company or Purchaser (as applicable) shall, at its sole

discretion, comply with either

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