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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






