Table of Contents

 

 

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 8-K

 

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

December 8, 2010

(Date of earliest event report)

 

 

WEYERHAEUSER COMPANY

(Exact name of registrant as specified in charter)

 

 

 

Washington   1-4825   91-0470860

(State or other jurisdiction of

incorporation or organization)

 

(Commission

File Number)

 

(IRS Employer

Identification Number)

Federal Way, Washington 98063-9777

(Address of principal executive offices)

(zip code)

Registrant’s telephone number, including area code:

(253) 924-2345

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

¨  

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

¨  

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

¨  

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

¨  

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

 


Table of Contents

TABLE OF CONTENTS

 

Item 1.01.   Entry into a Material Definitive Agreement   
Item 5.02.   Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers   
Item 9.01.   Financial Statements and Exhibits   
SIGNATURES   
EXHIBIT 10.1   
EXHIBIT 10.2   
EXHIBIT 10.3   
EXHIBIT 10.4   
EXHIBIT 10.5   


Table of Contents

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON D.C., 20549

 

ITEM 1.01. ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT

On December 8, 2010, the Compensation Committee of the Company’s Board of Directors approved the following agreements with company executive officers, effective as of January 1, 2011:

 

  (a) Weyerhaeuser Company Executive Change in Control Agreement (Tier 1); and

 

  (b) Weyerhaeuser Company Executive Severance Agreement (Tier 1).

Copies of the documents are attached hereto as Exhibits 10.1 and 10.2, to which reference is made for a full statement of their terms and provisions.

 

ITEM 5.02. DEPARTURE OF DIRECTORS OR CERTAIN OFFICERS; ELECTION OF DIRECTORS; APPOINTMENT OF CERTAIN OFFICERS; COMPENSATORY ARRANGEMENTS OF CERTAIN OFFICERS

On December 8, 2010 the Compensation Committee of the Company’s Board of Directors approved the Company’s Deferred Compensation Plan effective as of January 1, 2011. The Company’s Deferred Compensation Plan is a plan in which the Company’s executive officers participate. A copy is attached hereto as Exhibit 10.3.

On December 8, 2010 the Compensation Committee of the Company’s Board of Directors approved the Weyerhaeuser Company Fee Deferral Plan for Directors effective as of January 1, 2011, a copy of which is attached hereto as Exhibit 10.4.

Pursuant to Section 4.1(d) of the Weyerhaeuser Company 2004 Long-Term Incentive Plan, the plan was amended and restated following the September 2010 issuance of additional shares in the special dividend to adjust the maximum number and kind of securities: available for issuance under the plan, issuable as Incentive Stock Options, issuable to a person in any one calendar year, and that may be made subject to the different types of awards available under the plan. The amended and restated plan was approved by the Compensation Committee of the Weyerhaeuser Company Board of Directors on December 8, 2010. The Weyerhaeuser Company 2004 Long-Term Incentive Plan is attached hereto as Exhibit 10.5.

 

ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS

 

(d) Exhibits

 

10.1    Weyerhaeuser Company Executive Change in Control Agreement (Tier 1)
10.2    Weyerhaeuser Company Executive Severance Agreement (Tier 1)
10.3    Weyerhaeuser Company Deferred Compensation Plan
10.4    Weyerhaeuser Company Fee Deferral Plan for Directors
10.5    The Weyerhaeuser Company 2004 Long-Term Incentive Plan as amended and restated


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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

WEYERHAEUSER COMPANY
By  

/ S /    J ERALD W. R ICHARDS        

Its:   Chief Accounting Officer

Date: December 29, 2010

Exhibit 10.1

CIC Tier I US

Form of Weyerhaeuser Company

Executive Change-in-Control Agreement

The following executive officers are covered by the Weyerhaeuser Company Executive Change-in-Control Agreement:

Daniel S. Fulton

Patricia M. Bedient

Lawrence B. Burrows

Srinivasan Chandrasekaran

Miles P. Drake

Thomas F. Gideon

John A. Hooper

Sandy D. McDade

Peter M. Orser


CIC Tier I US

Executive

Change in Control Agreement

(Tier I)

Weyerhaeuser Company

January 1, 2011


CIC Tier I US

Contents

 

 

 

Article 1.    Term of This Agreement    1
Article 2.    Definitions    2
Article 3.    Participation and Continuing Eligibility Under This Agreement    6
Article 4.    Severance Benefits    6
Article 5.    Form and Timing of Severance Benefits    9
Article 6.    The Company’s Payment Obligation    10
Article 7.    Dispute Resolution    10
Article 8.    Outplacement Assistance    11
Article 9.    Section 409A    11
Article 10.    Successors and Assignment    11
Article 11.    Miscellaneous    12

 

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CIC Tier I US

 

Weyerhaeuser Company

                             (Executive)

Executive Change in Control Agreement (Tier I)

THIS EXECUTIVE CHANGE IN CONTROL AGREEMENT (Tier I) is made and entered into by and between Weyerhaeuser Company (hereinafter referred to as the “Company”) and                      (hereinafter referred to as the “Executive”).

WHEREAS, the Board of Directors of the Company has approved the Company entering into change in control agreements with certain key executives of the Company;

WHEREAS, the Executive is a key executive of the Company;

WHEREAS, should the possibility of a Change in Control of the Company arise, the Board believes it is imperative that the Company and the Board should be able to rely on the Executive to continue in his position, and that the Company should be able to receive and rely on the Executive’s advice, if requested, as to the best interests of the Company and its shareholders without concern that the Executive might be distracted by the personal uncertainties and risks created by the possibility of a Change in Control; and

WHEREAS, should the possibility of a Change in Control arise, in addition to his regular duties, the Executive may be called upon to assist in the assessment of such possible Change in Control, advise management and the Board as to whether such Change in Control would be in the best interests of the Company and its shareholders, and to take such other actions as the Board might determine to be appropriate.

NOW THEREFORE, to assure the Company that it will have the continued dedication of the Executive and the availability of his advice and counsel notwithstanding the possibility, threat, or occurrence of a Change in Control of the Company, and to induce the Executive to remain in the employ of the Company, and for other good and valuable consideration, the Company and the Executive agree as follows:

Article 1. Term of This Agreement

Subject to the provisions of Article 10, this Agreement will commence on the Effective Date and shall continue in effect for three (3) full calendar years. However, at any time prior to the end of such three-year (3) period, and at any time prior to the end of any extended term, the Committee may, in its discretion, extend the term of this Agreement for any period of time up to three (3) additional years. Notwithstanding the foregoing, this Agreement is subject to annual review and may be amended or otherwise modified by the Committee in its sole discretion subsequent to such annual review, provided that no Change in Control shall have occurred.

However, in the event a Change in Control occurs during the term of this Agreement, this Agreement will remain in effect for the longer of (i) twenty-four (24) full calendar months beyond the month in which such Change in Control occurred or (ii) until all obligations of the Company to the Executive hereunder have been fulfilled, and until all benefits required hereunder have been paid to the Executive.

 

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Article 2. Definitions

Whenever used in this Agreement, the following terms shall have the meanings set forth below and, when the meaning is intended, the initial letter of the word is capitalized:

 

  (a) Agreement ” means this Executive Change in Control Agreement (Tier I).

 

  (b) Base Salary ” means the salary of record paid to the Executive as annual salary, excluding amounts received under incentive or other bonus plans, whether or not deferred.

 

  (c) Beneficial Owner ” shall have the meaning ascribed to such term in Rule 13d-3 of the General Rules and Regulations under the Exchange Act.

 

  (d) Beneficiary ” means the persons or entities designated or deemed designated by an Executive pursuant to Section 11.2.

 

  (e) Board ” means the Board of Directors of the Company.

 

  (f) Cause ” means the Executive’s:

 

  (i) Willful and continued failure to perform substantially the Executive’s duties with the Company after the Company delivers to the Executive written demand for substantial performance specifically identifying the manner in which the Executive has not substantially performed the Executive’s duties;

 

  (ii) Conviction of a felony; or

 

  (iii) Willfully engaging in illegal conduct or gross misconduct that is materially and demonstrably injurious to the Company.

For purposes of this Section 2(f), no act or omission by the Executive shall be considered “willful” unless it is done or omitted in bad faith or without reasonable belief that the Executive’s action or omission was in the best interests of the Company. Any act or failure to act based on: (A) authority given pursuant to a resolution duly adopted by the Board or (B) advice of counsel for the Company shall be conclusively presumed to be done or omitted to be done by the Executive in good faith and in the best interests of the Company. For purposes of subsections (i) and (iii) above, the Executive shall not be deemed to be terminated for Cause unless and until there shall have been delivered to the Executive a copy of a resolution duly adopted by the affirmative vote of not less than three-quarters (3/4) of the entire membership of the Board at a meeting called and held for such purpose (after reasonable notice is provided to the Executive and the Executive is given an opportunity, together with counsel, to be heard before the Board) finding that in the good faith opinion of the Board, the Executive is guilty of the conduct described in subsection (i) or (iii) above and specifying the particulars thereof in detail.

 

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  (g) Change in Control ” or “ CIC ” of the Company shall be deemed to have occurred as of the first day that any one or more of the following conditions shall have been satisfied:

 

  (i) Any Person, but excluding the Company and any subsidiary of the Company and any employee benefits plan (or related trust) sponsored or maintained by the Company or any subsidiary of the Company (collectively, “Excluded Persons”), directly or indirectly, becomes the Beneficial Owner of securities of the Company representing thirty-five percent (35%) or more of the combined voting power of the Company’s then outstanding securities with respect to the election of directors of the Company and such ownership continues for at least a period of thirty (30) days (with the end of such period being deemed the effective date of the CIC); or

 

  (ii) During any twenty-four (24) consecutive month period, the individuals who, at the beginning of such period, constitute the Board (the “Incumbent Directors”) cease for any reason other than death to constitute at least a majority of the Board; provided, however, that except as set forth in the following sentence, an individual who becomes a member of the Board subsequent to the beginning of the twenty-four (24) month period shall be deemed to have satisfied such twenty-four (24) month requirement (and be an Incumbent Director) if such director was elected by, or on the recommendation of or with the approval of, at least two-thirds (2/3) of the directors who then qualified as Incumbent Directors either actually (because they were directors at the beginning of such period) or by prior operation of the provisions of this Section 2(g)(ii). Notwithstanding the proviso set forth in the preceding sentence, if any such individual initially assumes office as a result of or in connection with either an actual or threatened solicitation with respect to the election of directors (as such terms are used in Rule 14a-12(c) of Regulation 14A promulgated under the Exchange Act) or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board, then such individual shall not be considered an Incumbent Director. For purposes of this Section 2(g)(ii), if at any time individuals who initially assumed office as a result of or in connection with an arrangement or understanding between the Company and any Person (an “Entity Designee”) constitute at least one-half (1/2) of the Board, none of such Entity Designees shall be considered Incumbent Directors from that time forward; or

 

  (iii) There is consummated:

 

  (A) a plan of complete liquidation of the Company; or

 

  (B) a sale or disposition of all or substantially all the Company’s assets in one or a series of related transactions; or

 

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  (C) a merger, consolidation, or reorganization of the Company or the acquisition of outstanding Common Stock and as a result of or in connection with such transaction (1) thirty-five percent (35%) or more of the outstanding Common Stock or the voting securities of the Company outstanding immediately prior thereto or the outstanding shares of common stock or the combined voting power of the outstanding voting securities of the surviving entity are owned, directly or indirectly, by any other corporation or Person other than (x) an Excluded Person or (y) a Person who is, or if such Person beneficially owned five percent (5%) or more of the outstanding Common Stock would be, eligible to report such Person’s beneficial ownership on Schedule 13G pursuant to the rules under Section 13(d) of the Exchange Act or (z) a Person that has entered into an agreement with the Company pursuant to which such Person has agreed not to acquire additional voting securities of the Company (other than pursuant to the terms of such agreement), solicit proxies with respect to the Company’s voting securities or otherwise participate in any contest relating to the election of directors of the Company, or take other actions that could result in a Change in Control of the Company; provided that this exclusion shall apply only so long as such agreement shall remain in effect, or (2) the voting securities of the Company outstanding immediately prior thereto do not immediately after such transaction continue to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) more than sixty percent (60%) of the combined voting power of the voting securities of the Company (or such surviving entity) outstanding immediately after such merger, consolidation, or reorganization.

 

  (h) Code ” means the United States Internal Revenue Code of 1986, as amended.

 

  (i) Committee ” means the Compensation Committee of the Board, or any other committee appointed by the Board to perform the functions of the Compensation Committee.

 

  (j) Company ” means Weyerhaeuser Company, a Washington corporation (including any and all subsidiaries), or any successor thereto as provided in Article 10.

 

  (k) Disability ” shall have the meaning ascribed to it in the Company’s Retirement Plan for Salaried Employees, or in any successor to such plan.

 

  (l) Effective Date ” means January 1, 2011.

 

  (m) Effective Date of Termination ” means the date on which a Qualifying Termination occurs that triggers the payment of Severance Benefits hereunder.

 

  (n) Equity Awards ” means any awards made from time to time to the Executive of options to purchase the Company’s common stock (“Options”), restricted shares of the Company’s common stock, stock appreciation rights (“SARs”), stock units denominated in units of the Company’s common stock, performance shares, dividend equivalents, or other incentive awards payable in shares of the Company’s common stock under the terms of the LTIP.

 

  (o) Exchange Act ” means the United States Securities Exchange Act of 1934, as amended.

 

  (p) Executive ” means a key executive of the Company who has been presented with and signed this Agreement.

 

  (q) Good Reason ” shall mean, without the Executive’s express written consent, the occurrence of any one or more of the following events:

 

  (i) A material reduction in the Executive’s authority, duties, or responsibilities existing immediately prior to the CIC;

 

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CIC Tier I US

 

 

  (ii) Within two (2) years following a Change in Control, and without the Executive’s consent, the Company’s requiring the Executive to be based at a location that is at least fifty (50) miles farther from the Executive’s primary residence immediately prior to a Change in Control than is such residence from the Company’s headquarters immediately prior to a Change in Control, except for required travel on the Company’s business to an extent substantially consistent with the Executive’s business obligations as of the Effective Date;

 

  (iii) A material reduction by the Company of the Executive’s Base Salary as in effect immediately prior to the CIC;

 

  (iv) A material reduction in the benefits coverage in the aggregate provided to the Executive immediately prior to the CIC; provided, however, that reductions in the level of benefits coverage shall not be deemed to be “Good Reason” if the Executive’s overall benefits coverage is substantially consistent with the average level of benefits coverage of other executives who have positions commensurate with the Executive’s position at the acquiring company;

 

  (v) A material reduction in the Executive’s level of participation, including the Executive’s target-level opportunities, in any of the Company’s short- and/or long-term incentive compensation plans in which the Executive participates as of the Effective Date (for this purpose a material reduction shall be deemed to have occurred if the aggregate “incentive opportunities” are reduced by ten percent (10%) or more); or a material increase in the relative difficulty of the measures used to determine the payouts under such plans; provided, however, that reductions in the levels of participation or increase in relative difficulty of payout measures shall not be deemed to be “Good Reason” if the Executive’s reduced level of participation or difficulty of measures in each such program remains substantially consistent with the level of participation or difficulty of the measures of some or all other executives who have positions commensurate with the Executive’s position at the acquiring company; or

 

  (vi) The failure of the Company to obtain a satisfactory agreement from any successor to the Company to assume and agree to perform this Agreement, as contemplated in Article 10.

Under this Agreement, Good Reason shall not be deemed to exist unless a “Change in Control” has occurred within the time frame described in Section 4.2. Moreover, in no event shall the Executive’s resignation be for Good Reason unless (A) an event set forth above shall have occurred and the Executive provides the Company with written notice thereof within thirty (30) days after the Executive has knowledge of the occurrence or existence of such event, which notice specifically identifies the event that the Executive believes constitutes Good Reason, and (B) the Company fails to correct the event so identified in all material respects within thirty (30) days after receipt of such notice.

 

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  (r) LTIP” is the Weyerhaeuser Company 2004 Long-Term Incentive Plan or a successor long-term incentive plan under which Equity Awards may be granted to the Executive from time to time.

 

  (s) Non-Competition and Release Agreement ” is an agreement, in substantially the form attached hereto in Annex A, executed by and between the Executive and the Company as a condition to the Executive’s receipt of the benefits described in Section 4.3.

 

  (t) Person ” shall have the meaning ascribed to such term in Section 3(a)(9) of the Exchange Act and used in Sections 13(d) and 14(d) thereof, including a “group” as defined in Section 13(d).

 

  (u) Qualifying Termination ” means any of the events described in Section 4.2, the occurrence of which triggers the payment of Severance Benefits under Section 4.3.

 

  (v) Retirement ” shall mean early or normal retirement under the Company’s Retirement Plan for Salaried Employees.

 

  (w) Severance Benefits ” means the Severance Benefits associated with a Qualifying Termination, as described in Section 4.3.

Article 3. Participation and Continuing Eligibility Under This Agreement

3.1 Participation. Subject to Section 3.2, as well as the remaining terms of this Agreement, the Executive shall remain eligible to receive benefits hereunder during the term of this Agreement.

3.2 Removal From Coverage. In the event the Executive’s job classification is reduced below the minimum level required for eligibility to continue to be covered by severance protection as determined at the sole discretion of the Committee, the Committee may remove the Executive from coverage under this Agreement. Such removal shall be effective three (3) months after the date the Company notifies the Executive of such removal. Removals occurring within two (2) years after a CIC, shall be null and void for purposes of this Agreement.

Article 4. Severance Benefits

4.1 Right to Severance Benefits. The Executive shall be entitled to receive from the Company Severance Benefits if

 

  (a) the Executive’s employment with the Company shall end for any reason specified in Section 4.2; and

 

  (b) the Executive is not (i) reemployed by the Company or any subsidiary or affiliate of the Company whether in a salaried, hourly, temporary, or full-time capacity, or (ii) retained as a consultant or contractor by the Company or any subsidiary or affiliate of the Company, or (iii) retained as a consultant or contractor by an entity acquiring the Company, unless the reemployment or retention of such Executive has the prior written approval of the Company’s Senior Vice President of Human Resources, of the Company.

 

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CIC Tier I US

 

Receipt of Severance Benefits shall disqualify the Executive from eligibility to receive any other severance benefits from the Company, including, without limitation, those under any Executive Severance Agreement between the Company and the Executive, as such agreement may be amended, supplemented, or otherwise modified from time to time, or, if such agreement is no longer in effect, any successor agreement thereto.

4.2 Qualifying Termination. The occurrence of any one or more of the following events within twenty-four (24) full calendar months following the effective date of a CIC of the Company shall trigger the payment of Severance Benefits to the Executive under this Agreement:

 

  (a) An involuntary termination of the Executive’s employment by the Company, authorized by the Company’s Senior Vice President of Human Resources, for reasons other than for Cause, mandatory Retirement under the Company’s applicable policies, or the Executive’s death, Disability, or voluntary termination of employment (including voluntary Retirement) without Good Reason; or

 

  (b) a voluntary termination by the Executive for Good Reason.

4.3 Description of Severance Benefits. In the event that the Executive becomes entitled to receive Severance Benefits (and further contingent on the proper execution of the Non-Competition and Release Agreement as set forth in Section 4.8), as provided in Sections 4.1 and 4.2, the Company shall pay to the Executive and provide him with the following:

 

  (a) An amount equal to three (3) times the highest rate of the Executive’s annualized Base Salary rate in effect at any time up to and including the Effective Date of Termination.

 

  (b) An amount equal to three (3) times the Executive’s target annual bonus established for the bonus plan year in which the Executive’s Effective Date of Termination occurs (or, if higher, the target annual bonus established for the bonus plan year in which the CIC occurs).

 

  (c) An amount equal to the Executive’s unpaid Base Salary and accrued vacation pay through the Executive’s last day of work.

 

  (d) An amount equal to the Executive’s unpaid actual annual bonus, paid for the plan year in which the Executive’s Effective Date of Termination occurs, multiplied by a fraction, the numerator of which is the number of days completed in the then-existing fiscal year through the Effective Date of Termination and the denominator of which is three hundred sixty-five (365). Any payments hereunder are in lieu of any bonuses otherwise payable under the Company’s applicable annual incentive plans.

 

  (e) A lump sum payment of seventy-five thousand dollars ($75,000) (net of required payroll and income tax withholding) in order to assist the Executive in paying for replacement health and welfare coverage for a reasonable period following the Executive’s Effective Date of Termination.

 

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  (f) Full vesting of the Executive’s benefits under any and all supplemental retirement plans in which the Executive participates. For purposes of determining the amount of an Executive’s benefits in such plans, such benefits shall be calculated under the assumption that the Executive’s employment continued following the Effective Date of Termination for three (3) full years (i.e., three (3) additional years of age and service credits shall be added); provided, however, that for purposes of determining “final average pay” under such programs, the Executive’s actual pay history as of the effective date of termination shall be used. Payout of such amounts shall occur at the time established under such plans.

To the extent that the Executive is subject to a reduction of such benefits due to application of any early retirement provisions, the three (3) additional years of age shall be incorporated in the early retirement reduction calculation so as to offset such reduction. Also, three (3) additional years of age, but not any additional service, shall be used to determine the Executive’s eligibility for early retirement benefits.

 

  (g) Unless otherwise provided in the instrument evidencing the Equity Award or in a written employment or other agreement between the Executive and the Company and subject to the requirements of Section 409A of the Code, to the extent applicable:

(i) Full vesting of any Equity Awards, which shall become immediately exercisable and remain exercisable throughout their entire term;

(ii) Termination or lapsing of any restriction periods and restrictions imposed on such Equity Awards that are not performance based;

(iii) Termination or lapsing of any restriction or other conditions applicable to any such Equity Awards and such Equity Awards shall become free of all restrictions, limitations or conditions and become fully vested and transferable to the full extent of the original grant; and

(iv) Recognition of the target payout opportunities attainable under all outstanding Equity Awards that are performance-based, which Equity Awards shall be deemed to have been fully earned for the entire performance periods and restrictions on such Equity Awards shall lapse and such Equity Awards shall be immediately settled or distributed.

4.4 Termination for Disability. Following a CIC of the Company, if the Executive’s employment is terminated due to Disability, no compensation or benefits shall be payable under this Agreement and the Executive shall instead receive his Base Salary through the Effective Date of Termination, at which point in time the Executive’s benefits shall be determined in accordance with the Company’s disability and other applicable compensation and benefits plans and programs then in effect.

4.5 Termination for Retirement or Death. Following a CIC of the Company, if the Executive’s employment is terminated by reason of his death or voluntary Retirement other than for Good Reason, no compensation or benefits shall be payable under this Agreement and the Executive’s benefits shall instead be determined in accordance with the Company’s retirement and other applicable compensation and benefits plans and programs then in effect.

 

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4.6 Termination for Cause or by the Executive Other Than for Good Reason or Retirement. Following a CIC of the Company, if the Executive’s employment is terminated either (i) by the Company for Cause or (ii) by the Executive (other than for Disability or death) and other than for Good Reason, no compensation or benefits shall be payable under this Agreement and the Executive’s benefits shall instead be determined in accordance with the Company’s applicable compensation and benefits plans and programs then in effect.

4.7 Notice of Termination. Any termination by the Company or by the Executive for Good Reason under this Article 4 shall be communicated by a Notice of Termination, which shall be delivered to the Executive no later than the Effective Date of Termination, unless the Executive is terminated for Cause, in which case no Notice of Termination is required. For purposes of this Agreement, a “Notice of Termination” shall mean a written notice that shall indicate the specific termination provision in this Agreement relied upon, and shall set forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of the Executive’s employment under the provision so indicated.

4.8 Delivery of Non-Competition and Release Agreement. The payment of Severance Benefits is conditioned on the Executive’s timely execution of the Non-Competition and Release Agreement. The Company will deliver the Non-Competition and Release Agreement when it provides a Notice of Termination to the Executive or promptly following the Company’s receipt of a Notice of Termination from the Executive. The Non-Competition and Release Agreement shall be deemed effective upon the expiration of the required waiting periods under applicable state and/or federal laws as more specifically described therein.

To support the enforcement of the Non-Competition and Release Agreement, the parties agree that the minimum value of the Non-Competition and Release Agreement at the time this Agreement was entered into was at least 1.5 times the Executive’s Base Salary that has been built into the severance formula in Section 4.3.

4.9 Removal From Representative Boards. In the event the terminating Executive occupies any board of directors seats solely as a Company representative, as a condition to receiving the severance set forth in Section 4.3 the Executive shall immediately resign such position upon his termination of employment with the Company and in any event by the deadline for returning the Non-Competition and Release Agreement described in Section 4.8, unless specifically requested in writing by the Company otherwise.

Article 5. Form and Timing of Severance Benefits

5.1 Form and Timing of Severance Benefits. The Severance Benefits described in Sections 4.3(a), 4.3(b), 4.3(c) and 4.3(e) shall be paid in cash to the Executive in a single lump sum, subject to the Non-Competition and Release Agreement referred to in Section 4.8, as soon as practicable following the Effective Date of Termination, but in no event beyond thirty (30) days from the later of the Effective Date of Termination and the successful expiration of the waiting periods described in Section 4.8 and in no event later than the payment deadline for short-term deferrals under Treas. Reg. § 1.409A-1(b)(4) (or any successor provision). The Severance Benefit described in Section 4.3(d) shall be paid in cash to the Executive in a single lump sum, subject to the Non-Competition and Release Agreement described in Section 4.8, as soon as practicable following the end of the year in which the Executive’s Effective Date of Termination occurs and in no event later than the payment deadline for short-term deferrals under Treas. Reg. § 1.409A-1(b)(4) (or any successor provision), subject to any deferral election by the Executive under an available deferred compensation plan that is applicable to such amount.

 

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5.2 Withholding of Taxes. The Company shall be entitled to withhold from any amounts payable under this Agreement all taxes as legally shall be required (including, without limitation, any United States federal taxes and any other state, city, or local taxes).

Article 6. The Company’s Payment Obligation

6.1 Payment Obligations Absolute. Except as provided in this Article 6 and Article 7, the Company’s obligation to make the payments and the arrangements provided for hereof shall be absolute and unconditional, and shall not be affected by any circumstances, including, without limitation, any offset, counterclaim, recoupment, defense, or other right that the Company may have against the Executive or anyone else. All amounts payable by the Company hereunder shall be paid without notice or demand. Except as provided in this Article 6 and in Article 7, each and every payment made hereunder by the Company shall be final, and the Company shall not seek to recover all or any part of such payment from the Executive or from whosoever may be entitled thereto, for any reasons whatsoever.

The Executive shall not be obligated to seek other employment in mitigation of the amounts payable or arrangements made under any provision of this Agreement, and the obtaining of any such other employment shall in no event effect any reduction of the Company’s obligations to make the payments and arrangements required to be made under this Agreement.

6.2 Contractual Rights to Benefits. Subject to Article 1 and Sections 3.2 and 6.3, this Agreement establishes and vests in the Executive a contractual right to the benefits to which he may become entitled hereunder. However, nothing herein contained shall require or be deemed to require, or prohibit or be deemed to prohibit, the Company to segregate, earmark, or otherwise set aside any funds or other assets, in trust or otherwise, to provide for any payments to be made or required hereunder.

6.3 Forfeiture of Severance Benefits and Other Payments. Notwithstanding any other provision of this Agreement to the contrary, if it is determined by the Company that the Executive has violated any of the restrictive covenants contained in the Executive’s Non-Competition and Release Agreement, the Executive shall be required to repay to the Company an amount equal to the economic value of all Severance Benefits and other payments already provided to the Executive under this Agreement and the Executive shall forever forfeit the Executive’s rights to any unpaid Severance Benefits and other payments hereunder. Additional forfeiture provisions may apply pursuant to other agreements and policies between the Executive and the Company, and any such forfeiture provisions shall remain in full force and effect.

Article 7. Dispute Resolution

7.1 Claims Procedure. The Executive may file a written claim with the Company’s Senior Vice President of Human Resources, who shall consider such claim and notify the Executive in writing of his or her decision with respect thereto within ninety (90) days (or within such longer period not to exceed one hundred eighty (180) days, as the Senior Vice President of Human Resources determines is necessary to review the claim, provided that the Senior Vice President of Human Resources notifies the Executive in writing of the extension within the original ninety (90) day period). If the claim is denied, in whole or in part, the Executive may appeal such denial to the Committee, provided the Executive does so in writing within sixty (60) days of receiving the determination by the Senior Vice President of Human Resources. The Committee shall consider the appeal and notify the Executive in writing of its decision with respect thereto within sixty (60) days (or within such longer period not to exceed one hundred twenty (120) days as the Committee determines is necessary to review the appeal, provided that the Committee notifies the Executive in writing of the extension within the original sixty (60) day period).

 

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7.2 Finality of Determination. The determination of the Committee with respect to any question arising out of or in connection with the administration, interpretation, and application of this Agreement shall be final, binding, and conclusive on all persons and shall be given the greatest deference permitted by law.

Article 8. Outplacement Assistance

Following a Qualifying Termination (as described in Section 4.2) the Executive shall be reimbursed by the Company for the costs of all outplacement services incurred by the Executive within the two (2) year period after the Effective Date of Termination; provided, however, that the total reimbursement shall be limited to twenty thousand dollars ($20,000) and shall be completed by the end of the calendar year in which such two (2) year period expires.

Article 9. Section 409A

The Severance Benefits and reimbursements payable in cash to the Executive under this Agreement (including, without limitation, the Severance Benefits described in Sections 4.3(a), 4.3(b), 4.3(c), 4.3(d) and 4.3(e) of this Agreement) are intended to comply with the “short term deferral” exception specified in Treas. Reg. § 1.409A-1(b)(4) (or any successor provision), or otherwise be excepted from coverage under Section 409A of the Code (“Section 409A”). Notwithstanding the foregoing, to the extent an exception is not available and the Executive must be treated as a “specified employee” within the meaning of Section 409A, any such amounts due to the Executive on or within the six (6) month period following the Executive’s separation from service (as defined for purposes of Section 409A) will accrue during such six (6) month period to the extent required by Section 409A and will become payable in a lump sum payment on the date six (6) months and one (1) day following the date of the Executive’s separation from service; provided, however, that such payments will be paid earlier, at the times and on the terms set forth in the applicable provisions of this Agreement, if the Company reasonably determines that the imposition of additional tax under Section 409A will not apply to an earlier payment of such payments. In addition, this Agreement will be interpreted, operated, and administered by the Company to the extent deemed reasonably necessary to avoid imposition of any additional tax or income recognition prior to actual payment to the Executive under Section 409A, including any temporary or final Treasury regulations and guidance promulgated thereunder.

Article 10. Successors and Assignment

10.1 Successors to the Company. The Company will require any successor (whether direct or indirect, by purchase, merger, consolidation, or otherwise) of all or substantially all of the business and/or assets of the Company or of any division or subsidiary thereof to expressly assume and agree to perform the Company’s obligations under this Agreement in the same manner and to the same extent that the Company would be required to perform them if no such succession had taken place. Failure of the Company to obtain such assumption and agreement prior to the effective date of any such succession shall be a material breach of this Agreement and shall entitle the Executive to compensation from the Company in the same amount and on the same terms as he would be entitled to hereunder if he had terminated his employment with the Company voluntarily for Good Reason. For the purposes of implementing the foregoing, the date on which any such succession becomes effective shall be deemed the Effective Date of Termination.

 

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10.2 Assignment by the Executive. This Agreement shall inure to the benefit of and be enforceable by each Executive’s personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees, and legatees. If the Executive dies while any amount would still be payable to him hereunder had he continued to live, all such amounts, unless otherwise provided herein, shall be paid in accordance with the terms of this Agreement to the Executive’s Beneficiary. If the Executive has not named a Beneficiary, then such amounts shall be paid to the Executive’s devisee, legatee, or other designee, or if there is no such designee, to the Executive’s estate.

Article 11. Miscellaneous

11.1 Employment Status. Except as may be provided under any other agreement between the Executive and the Company, the employment of the Executive by the Company is “at will” and, prior to the effective date of a CIC, may be terminated by either the Executive or the Company at any time, subject to applicable law.

11.2 Beneficiaries. The Executive may designate one or more persons or entities as the primary and contingent Beneficiaries of any Severance Benefits owing to the Executive under this Agreement. Such designation must be in the form of a signed writing acceptable to the Committee and pursuant to such other procedures as the Committee may decide. If no such designation is on file with the Company at the time of the Executive’s death, or if no designated Beneficiaries survive the Executive for more than fourteen (14) days, any Severance Benefits owing to the Executive under this Agreement shall be paid to the Executive’s estate.

11.3 Gender and Number. Except where otherwise indicated by the context, any masculine term used herein also shall include the feminine, the plural shall include the singular, and the singular shall include the plural.

11.4 Severability. In the event any provision of this Agreement shall be held illegal or invalid for any reason, the illegality or invalidity shall not affect the remaining parts of this Agreement, and this Agreement shall be construed and enforced as if the illegal or invalid provision had not been included. Further, the captions of this Agreement are not part of the provisions hereof and shall have no force and effect.

11.5 Modification. Except as provided in Article 1 and Section 3.2, no provision of this Agreement may be modified, waived, or discharged following a CIC unless such modification, waiver, or discharge is agreed to in writing and signed by the Executive and by an authorized member of the Committee, or by the respective parties’ legal representatives and successors.

 

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11.6 Effect of Agreement. This Agreement shall completely supersede and replace any and all portions of any contracts, plans, provisions, or practices pertaining to severance entitlements owing to the Executive from the Company other than the Executive Severance Agreement between the Company and the Executive dated January 1, 2011, and is in lieu of any notice requirement, policy, or practice. Without limiting the generality of the preceding sentence, the Executive’s potential rights to severance pay, benefits, and notice under the Executive Change in Control Agreement (Tier I) dated January 1, 2010 (the “2010 Agreement”) shall be completely replaced and superseded by this Agreement and such 2010 Agreement shall be of no further force and effect. As such, the Severance Benefits described herein shall serve as the Executive’s sole recourse with respect to termination of employment by the Company following a CIC. In addition, Severance Benefits shall not be counted as “compensation,” or any equivalent term, for purposes of determining benefits under other agreements, plans, provisions, or practices owing to the Executive from the Company, except to the extent expressly provided therein. Except as otherwise specifically provided for in this Agreement, the Executive’s rights under all such agreements, plans, provisions, and practices continue to be subject to the respective terms and conditions thereof.

11.7 Applicable Law. To the extent not preempted by the laws of the United States, the laws of the state of Washington shall be the controlling law in all matters relating to this Agreement.

IN WITNESS WHEREOF, the parties have executed this Agreement on the dates appearing below.

 

Weyerhaeuser Company      Executive
By:  

 

     By:   

 

Its:  

 

     Name:   

 

Date:  

 

     Date:   

 

 

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CIC Tier I US

 

ANNEX A

NON-COMPETITION AND RELEASE AGREEMENT

FOR THE EXECUTIVE CHANGE IN CONTROL AGREEMENT (TIER I)

 

1. Parties .

The parties to this Non-Competition and Release Agreement are:                                  (“Executive”) and WEYERHAEUSER COMPANY, a Washington corporation, and all successors thereto (“Company”).

 

2. Date .

The date of this Non-Competition and Release Agreement (this “Release Agreement”) is              , 20      (the “Date of this Agreement”).

 

3. Recitals .

Executive’s employment with Company is ending. Executive is a participant in the Weyerhaeuser Company Executive Change in Control Agreement (Tier I) (“CIC Agreement”) and is eligible for Severance Benefits under the CIC Agreement on condition Executive executes a non-competition and release agreement. This Release Agreement sets forth the terms of Executive’s severance from Company.

 

4. Defined Terms .

When defined terms from the CIC Agreement are used herein, they shall have the same definitions as provided in Article 2 of the CIC Agreement.

 

5. Termination of Employment .

Effective              , 20      , Executive’s employment with Company shall terminate (“Termination Date”). As of the Termination Date, Executive resigns any and all board of director seats Executive occupied as a Company representative.

 

6. Payments .

Upon expiration of the Revocation Period, defined below, without exercise of the right to revoke, Executive shall receive or be entitled to receive the Severance Benefits and other payments to the extent set forth in the CIC Agreement. Such payments shall be subject to all terms and conditions of the CIC Agreement, including, but not limited to, the forfeiture provisions of Section 6.3 thereof.

 

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7. Release .

Executive hereby releases Company, and all successors, subsidiaries, and affiliates of Company, and all officers, directors, employees, agents, and shareholders of Company, and each of them, from any and all claims, liability, demands, rights, damages, costs, attorneys’ fees, and expenses of whatever nature, that exist as of the date of execution of this Release Agreement, whether known or unknown, foreseen or unforeseen, asserted or unasserted, including, but not limited to, all claims arising out of Executive’s employment and/or Executive’s termination from employment, and including all claims arising out of applicable state and federal laws, Title VII of the Civil Rights Act of 1964, the Age Discrimination in Employment Act, the Americans with Disabilities Act, the Employee Retirement Income Security Act of 1974, state and federal Family Leave Acts, and any other applicable tort, contract, or other common law theories.

 

8. Confidentiality Agreement .

8.1 Company’s Confidential Information . During the course of performing Executive’s duties as a Company employee, Executive was exposed to and acquired Company’s Confidential Information. As used herein, “Confidential Information” refers to any and all information of a confidential, proprietary, or trade secret nature that is maintained in confidence by Company for the protection of its business. Confidential Information includes, but is not limited to, Company’s information about or related to (i) any current or planned products; (ii) research and development or investigations related to prospective products; (iii) proprietary software, inventions, and systems; (iv) suppliers or customers; (v) cost information, profits, sales information and accounting and unpublished financial information; (vi) business and marketing plans and methods; and (vii) any other information not generally known to the public that , if misused or disclosed to a competitor, could reasonably be expected to adversely affect Company.

8.2 Nondisclosure of Confidential Information . Executive acknowledges that the Confidential Information is a special, valuable, and unique asset of Company. Executive agrees to keep in confidence and trust all Confidential Information for so long as such information (i) is not generally known to the public or to persons outside Company who could obtain economic value from its use and (ii) is subject to efforts by Company that are reasonable under the circumstances to maintain its secrecy. Executive agrees that Executive shall not directly or indirectly use the Confidential Information for the benefit of Executive or any other person or entity.

 

9. Nonsolicitation .

9.1 Nonsolicitation of Employees . Executive agrees that for a period of two (2) years following the Termination Date, Executive shall not directly or indirectly solicit or attempt to induce any employee of Company, any successor corporation, or a subsidiary of Company to work for Executive or any competing company or competing business organization.

9.2 Nonsolicitation of Customers and Vendors . Executive agrees that for a period of two (2) years following the Termination Date, Executive shall not directly or indirectly solicit or attempt to induce any customer, vendor, or supplier of Company to end its relationship with Company and/or conduct business with Executive or any entity in which Executive has a financial interest.

 

10. Noncompetition .

Executive agrees that for a period of two (2) years following the Termination Date, Executive shall not directly or indirectly, whether as an employee, officer, director, shareholder, agent, or consultant, engage or participate in any business that competes with Company, provided that nothing in this Section 10 shall preclude Executive from (i) performing any services on behalf of an investment banking, commercial banking, auditing, or consulting firm or (ii) investing five percent (5%) or less in the common stock of any publicly traded company, provided such investment does not give Executive the right or ability to control or influence the policy decisions of any competing business.

 

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11. Review and Rescission Rights .

Executive has forty-five (45) days from the Date of this Agreement (the “Review Period”) within which to decide whether to sign this Release Agreement. If Executive signs this Release Agreement, Executive may revoke this Release Agreement if, within seven (7) days after signing (the “Revocation Period”), Executive delivers notice in writing to an Executive Compensation Manager of Company.

This Release Agreement will not become effective, and the Severance Benefits dependent on the execution of this Release Agreement will not become payable, until this Release Agreement is signed, the Revocation Period expires, and Executive has not exercised the right to revoke this Release Agreement.

Executive may sign this Release Agreement prior to the end of the forty-five (45) day Review Period, thereby commencing the seven (7) day Revocation Period. Whether Executive decides to sign before the end of the Review Period is entirely up to Executive.

Executive will receive the same severance payments regardless of when Executive signs this Release Agreement, as long as Executive signs prior to the end of the Review Period and does not revoke this Release Agreement.

Executive acknowledges that Executive’s release of rights is in exchange for Severance Benefits to which Executive otherwise legally would not be entitled.

 

12. Advice of Counsel .

Executive acknowledges that Executive has been advised to consult with an attorney before signing this Release Agreement.

 

13. Disputes .

Any dispute or claim that arises out of or relates to this Release Agreement shall be resolved in accordance with the provisions of Article 7 of the CIC Agreement. Notwithstanding the provisions of this Section 13, any claim by Company for injunctive relief under the provisions of Section 8, 9, or 10 herein, or any subparts thereof, shall not be subject to the terms of this Section 13.

 

14. Governing Law .

To the extent not preempted by the laws of the United States, Washington law governs this Release Agreement, notwithstanding its choice of law rules.

 

15. Entire Agreement .

All of the parties’ agreements, covenants, representations, and warranties, express or implied, oral or written, concerning the subject matter of this Release Agreement are contained in this Release Agreement. All prior and contemporaneous conversations, negotiations, agreements, representations, covenants, and warranties concerning the subject matter of this Release Agreement are merged into this Release Agreement. This is an integrated agreement.

 

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16. Miscellaneous .

The benefits and obligations of this Release Agreement shall inure to the successors and assigns of the parties. The parties acknowledge that the only consideration for this Release Agreement is the consideration expressly described herein, that each party fully understands the meaning and intent of this Release Agreement, that this Release Agreement has been executed voluntarily, and that the terms of this Release Agreement are contractual.

 

17. Severability .

Executive agrees that each provision in this Release Agreement will be treated as a separate and independent clause, and the enforceability of any one clause will in no way impair the enforceability of any of the other clauses in this Release Agreement. Moreover, if one or more of the provisions contained in this Release Agreement, whether for the benefit of Executive or Company, are for any reason held to be excessively broad as to scope, activity, or subject so as to be unenforceable at law, such provision or provisions will be construed by limiting and reducing it or them, so as to be enforceable to the maximum extent compatible with the applicable law as it then appears.

 

18. Section and Paragraph Titles .

Section and paragraph titles in this Release Agreement are used for convenience only and are not intended to and shall not in any way enlarge, define, limit, or extend the rights or obligations of the parties or affect the interpretation of this Release Agreement.

WEYERHAEUSER COMPANY

 

By:  

 

    Date:                     
Title:  

 

   
[NAME OF EXECUTIVE]    
                                                                               Date:                     

 

A-4

Exhibit 10.2

Severance Tier I US

Form of Weyerhaeuser Company

Executive Severance Agreement

The following executive officers are covered by the Weyerhaeuser Company Executive Severance Agreement:

Daniel S. Fulton

Patricia M. Bedient

Lawrence B. Burrows

Srinivasan Chandrasekaran

Miles P. Drake

Thomas F. Gideon

John A. Hooper

Sandy D. McDade

Peter M. Orser

The terms and conditions of the agreement are the same for all participants except that upon termination the severance benefits paid to the Chief Executive Officer are equal to two times the executive’s base salary and bonus. The severance benefits paid to the remaining executive officers are equal to one and a half times their base salary and bonus.


Severance Tier I US

Executive Severance Agreement (Tier I)

Weyerhaeuser Company

January 1, 2011


Severance Tier I US

Contents

 

 

 

Article 1.    Term of This Agreement      1   
Article 2.    Definitions      1   
Article 3.    Participation and Continuing Eligibility under this Agreement      3   
Article 4.    Severance Benefits      3   
Article 5.    Form and Timing of Severance Benefits      5   
Article 6.    The Company’s Payment Obligation      5   
Article 7.    Dispute Resolution      6   
Article 8.    Outplacement Assistance      6   
Article 9.    Successors and Assignment      7   
Article 10.    Section 409A      7   
Article 11.    Miscellaneous      7   

 

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Weyerhaeuser Company

                                                  (Executive)

Severance Agreement (Tier I)

THIS EXECUTIVE SEVERANCE AGREEMENT (Tier I) is made and entered into by and between Weyerhaeuser Company (hereinafter referred to as the “Company”) and                                  (hereinafter referred to as the “Executive”).

WHEREAS, the Board of Directors of the Company has approved the Company entering into severance agreements with certain key executives of the Company;

WHEREAS, the Executive is a key executive of the Company;

NOW THEREFORE, for good and valuable consideration, the Company and the Executive agree as follows:

Article 1. Term of This Agreement

Subject to the provisions of Article 10, this Agreement will commence on the Effective Date and shall continue in effect for three (3) full calendar years. However, at any time prior to the end of such three-year (3) period and, at any time prior to the end of any extended term, the Committee may, in its discretion, extend the term of this Agreement for any period of time up to three (3) additional years. Notwithstanding the foregoing, this Agreement is subject to annual review and may be amended or otherwise modified by the Committee in its sole discretion subsequent to such annual review prior to the Effective Date of Termination.

Article 2. Definitions

Whenever used in this Agreement, the following terms shall have the meanings set forth below and, when the meaning is intended, the initial letter of the word is capitalized:

 

  (a) Agreement ” means this Executive Severance Agreement (Tier I).

 

  (b) Base Salary ” means the salary of record paid to the Executive as annual salary, excluding amounts received under incentive or other bonus plans, whether or not deferred.

 

  (c) Beneficiary ” means the persons or entities designated or deemed designated by an Executive pursuant to Section 11.2.

 

  (d) Board ” means the Board of Directors of the Company.

 

  (e) Cause ” means the Executive’s:

 

  (i) Willful and continued failure to perform substantially the Executive’s duties with the Company after the Company delivers to the Executive written demand for substantial performance specifically identifying the manner in which Executive has not substantially performed the Executive’s duties;

 

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  (ii) Conviction of a felony; or

 

  (iii) Willfully engaging in illegal conduct or gross misconduct which is materially and demonstrably injurious to the Company.

For purposes of this Section 2(e), no act or omission by the Executive shall be considered “willful” unless it is done or omitted in bad faith or without reasonable belief that the Executive’s action or omission was in the best interests of the Company. Any act or failure to act based upon (A) authority given pursuant to a resolution duly adopted by the Board or (B) advice of counsel for the Company shall be conclusively presumed to be done or omitted to be done by the Executive in good faith and in the best interests of the Company. For purposes of subsections (i)-(iii) above, the Executive shall not be deemed to be terminated for Cause unless and until there shall have been delivered to the Executive a copy of a resolution duly adopted by the affirmative vote of not less than three-quarters (3/4) of the entire membership of the Board at a meeting called and held for such purpose (after reasonable notice is provided to the Executive and the Executive is given an opportunity, together with counsel, to be heard before the Board) finding that in the good faith opinion of the Board, the Executive is guilty of the conduct described in subsection (i) or (iii) above and specifying the particulars thereof in detail.

 

  (f) CIC ” of the Company shall have the definition set forth in the CIC Agreement.

 

  (g) CIC Agreement ” means the Executive Change in Control Agreement between the Company and the Executive, as such agreement may be amended, supplemented or otherwise modified from time to time, or, if such agreement is no longer in effect, any successor agreement thereto.

 

  (h) Code ” means the United States Internal Revenue Code of 1986, as amended.

 

  (i) Committee ” means the Compensation Committee of the Board, or any other committee appointed by the Board to perform the functions of the Compensation Committee.

 

  (j) Company ” means Weyerhaeuser Company, a Washington corporation (including any and all subsidiaries), or any successor thereto as provided in Article 9.

 

  (k) Disability ” shall have the meaning ascribed to it in the Company’s Retirement Plan for Salaried Employees, or in any successor to such plan.

 

  (l) Effective Date ” means the date this Agreement is executed on behalf of the Company, or such other date as the Board shall designate.

 

  (m) Effective Date of Termination ” means the date on which a Qualifying Termination occurs that triggers the payment of Severance Benefits hereunder.

 

  (n) Executive ” means a key executive of the Company who has been presented with and signed this Agreement.

 

  (o) Non-Competition and Release Agreement ” is an agreement, in substantially the form attached hereto in Annex A, executed by and between the Executive and the Company as a condition to the Executive’s receipt of Severance Benefits.

 

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  (p) Person ” shall have the meaning ascribed to such term in Section 3(a)(9) of the Exchange Act and used in Sections 13(d) and 14(d) thereof, including a “group” as defined in Section 13(d).

 

  (q) Qualifying Termination ” means any of the events described in Section 4.2, the occurrence of which triggers the payment of Severance Benefits under Section 4.3.

 

  (r) Retirement ” shall mean early or normal retirement under the Company’s Retirement Plan for Salaried Employees.

 

  (s) Severance Benefits ” means Severance Benefits described in Section 4.3.

Article 3. Participation and Continuing Eligibility under this Agreement

3.1 Participation. Subject to Section 3.2, as well as the remaining terms of this Agreement, the Executive shall remain eligible to receive benefits hereunder during the term of this Agreement.

3.2 Removal From Coverage. In the event the Executive’s job classification is reduced below the minimum level required for eligibility to continue to be covered by severance protection as determined at the sole discretion of the Committee, the Committee may remove the Executive from coverage under this Agreement. Such removal shall be effective three (3) months after the date the Company notifies the Executive of such removal.

Article 4. Severance Benefits

4.1 Right to Severance Benefits.

 

  (a) Subject to Section 4.1(b), the Executive shall be entitled to receive from the Company Severance Benefits, if the Executive’s employment with the Company shall end for any reason specified in Section 4.2, and the Executive is not (i) reemployed by the Company or any subsidiary or affiliate of the Company whether in a salaried, hourly, temporary or full-time capacity, or (ii) retained as a consultant or contractor by the Company or any subsidiary or affiliate of the Company, or (iii) retained as a consultant or contractor by an entity acquiring assets from the Company, unless the participation by the Executive has the prior written approval of the Company’s Senior Vice President of Human Resources.

 

  (b) If the Executive’s employment with the Company is terminated as a result of the acquisition (either through the sale of assets or the sale of stock) or the outsourcing of the services previously provided internally by Company employees of the unit in which the Executive was employed, and the Executive is employed by the acquiring entity, the Executive is not eligible to receive Severance Benefits hereunder.

The Executive is not eligible to receive both severance benefits under the CIC Agreement and Severance Benefits hereunder. Accordingly, if the Executive receives severance benefits under the CIC Agreement, he shall not receive Severance Benefits hereunder. However, if the Executive suffers a Qualifying Termination, and if the Company has undergone a CIC such that the Executive’s Effective Date of Termination falls within the window period described in Section 4.2 of the CIC Agreement, the Executive’s total Severance Benefits shall equal the amounts described as severance benefits under the CIC Agreement (potentially requiring additional payments to the extent the amounts already paid as Severance Benefits hereunder do not equal the amounts payable as severance benefits under the CIC Agreement).

 

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4.2 Qualifying Termination. An involuntary termination of the Executive’s employment by the Company, authorized by the Company’s Senior Vice President of Human Resources, for reasons other than Cause, mandatory Retirement under the Company’s applicable policies, or the Executive’s death, Disability, or voluntary termination of employment (whether by Retirement or otherwise) at any time other than within twenty-four (24) full calendar months following the effective date of a CIC shall trigger the payment of Severance Benefits to the Executive under this Agreement.

4.3 Description of Severance Benefits. Subject to the conditions of Section 4.6, in the event that the Executive becomes entitled to receive Severance Benefits, as provided in Sections 4.1 and 4.2, the Company shall pay to the Executive and provide him with the following:

 

  (a) An amount equal to one and one-half (1-1/2) times the highest rate of the Executive’s annualized Base Salary rate in effect at any time up to and including the Effective Date of Termination.

 

  (b) An amount equal to one and one-half (1-1/2) the Executive’s target annual bonus established for the bonus plan year in which the Executive’s Effective Date of Termination occurs.

 

  (c) An amount equal to the Executive’s unpaid Base Salary and accrued vacation pay through the last day the Executive worked.

 

  (d) An amount equal to the Executive’s unpaid actual annual bonus, paid for the plan year in which the Executive’s Effective Date of Termination occurs, multiplied by a fraction, the numerator of which is the number of days completed in then-existing fiscal year through the Effective Date of Termination and the denominator of which is three hundred sixty-five (365). Any payments hereunder are in lieu of bonuses otherwise payable under the Company’s applicable annual incentive plans.

 

  (e) A lump sum payment of ten thousand dollars ($10,000) (net of required payroll and income tax withholding) in order to assist the Executive in paying for replacement health and welfare coverage for a reasonable period following the Executive’s Effective Date of Termination.

4.4 Termination for Cause or by the Executive. If the Executive’s employment is terminated either (i) by the Company for Cause or (ii) by the Executive, the Company shall pay the Executive his full Base Salary and accrued vacation through the last day worked, at the rate then in effect, plus all other amounts to which the Executive is entitled under any compensation plans of the Company, at the time such payments are due, and the Company shall have no further obligations to the Executive under this Agreement.

 

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4.5 Notice of Termination. Any termination by the Company under this Article 4 shall be communicated by a Notice of Termination, which shall be delivered to the Executive no later than the Effective Date of Termination, unless the Executive is terminated for Cause, in which case no Notice of Termination is required. For purposes of this Agreement, a “Notice of Termination” shall mean a written notice that shall indicate the specific termination provision in this Agreement relied upon, and shall set forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of the Executive’s employment under the provision so indicated.

4.6 Delivery of Non-Competition and Release Agreement. The payment of Severance Benefits is conditioned on the Executive’s timely execution of the Non-Competition and Release Agreement. The Company will deliver the Non-Competition and Release Agreement when it provides a Notice of Termination to the Executive. The Non-Competition and Release Agreement shall be deemed effective upon the expiration of the required waiting periods under any applicable state and/or federal laws, as more specifically described therein.

To support the enforcement of the Non-Competition and Release Agreement, the parties agree that the minimum value of the Non-Competition and Release Agreement at the time this Agreement was entered into was at least 1.5 times the Executive’s Base Salary which has been built into the severance formula contained in Section 4.3.

4.7 Removal From Representative Boards. In the event the terminating the Executive occupies any board of directors seats solely as a Company representative, as a condition to receiving the severance set forth in Section 4.3, the Executive shall immediately resign such position upon his termination of employment with the Company and in any event by the deadline for returning the Non-Competition and Release Agreement described in Section 4.6, unless specifically requested in writing by the Company otherwise.

Article 5. Form and Timing of Severance Benefits

5.1 Form and Timing of Severance Benefits. The Severance Benefits described in Sections 4.3(a), (b), (c) and (e) shall be paid in cash to the Executive in a single lump sum, subject to the Non-Competition and Release Agreement described in Section 4.6, as soon as practicable following the Effective Date of Termination, but in no event beyond thirty (30) days from the later of the Effective Date of Termination and the successful expiration of the waiting periods described in Section 4.6 and in no event later than the payment deadline for short-term deferrals under Treas. Reg. § 1.409A-1(b)(4) (or any successor provision). The Severance Benefit described in Section 4.3(d) shall be paid in cash to the Executive in a single lump sum, subject to the Non-Competition and Release Agreement described in Section 4.6, as soon as practicable following the end of the year in which the Executive’s Effective Date of Termination occurs and in no event later than the payment deadline for short-term deferrals under Treas. Reg. § 1.409A-1(b)(4) (or any successor provision), subject to any deferral election by the Executive under an available deferred compensation plan that is applicable to such amount.

5.2 Withholding of Taxes. The Company shall be entitled to withhold from any amounts payable under this Agreement all taxes as legally shall be required (including, without limitation, any United States federal taxes and any other state, city, or local taxes).

Article 6. The Company’s Payment Obligation

6.1 Payment Obligations Absolute. Except as provided in this Article 6 and in Article 7, the Company’s obligation to make the payments and the arrangements provided for herein shall be absolute and unconditional, and shall not be affected by any circumstances, including, without limitation, any offset, counterclaim, recoupment, defense, or other right that the Company may have against the Executive or anyone else. All amounts payable by the Company hereunder shall be paid without notice or demand. Except as provided in Section [5.1] [4.1?], this Article 6 and in Article 7, each and every payment made hereunder by the Company shall be final, and the Company shall not seek to recover all or any part of such payment from the Executive or from whosoever may be entitled thereto, for any reasons whatsoever.

 

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Severance Tier I US

 

6.2 Contractual Rights to Benefits. Subject to Sections 3.2 and 6.3, this Agreement establishes and vests in the Executive a contractual right to the benefits to which he may become entitled hereunder. However, nothing herein contained shall require or be deemed to require, or prohibit or be deemed to prohibit, the Company to segregate, earmark, or otherwise set aside any funds or other assets, in trust or otherwise, to provide for any payments to be made or required hereunder.

6.3 Forfeiture of Severance Benefits and Other Payments. Notwithstanding any other provision of this Agreement to the contrary, if it is determined by the Company that the Executive has violated any of the restrictive covenants contained in the Executive’s Non-Competition and Release Agreement, the Executive shall be required to repay to the Company an amount equal to the economic value of all Severance Benefits and other payments already provided to the Executive under this Agreement and the Executive shall forever forfeit the Executive’s rights to any unpaid Severance Benefits and other payments hereunder. Additional forfeiture provisions may apply pursuant to other agreements and policies between the Executive and the Company, and any such forfeiture provisions shall remain in full force and effect.

Article 7. Dispute Resolution

7.1 Claims Procedure. The Executive may file a written claim with the Company’s Senior Vice President of Human Resources, who shall consider such claim and notify the Executive in writing of his decision with respect thereto within ninety (90) days (or within such longer period not to exceed one hundred eighty (180) days, as the Senior Vice President of Human Resources determines is necessary to review the claim, provided that the Senior Vice President of Human Resources notifies the Executive in writing of the extension within the original ninety (90) day period). If the claim is denied, in whole or in part, the Executive may appeal such denial to the Committee, provided the Executive does so in writing within sixty (60) days of receiving the determination by the Senior Vice President of Human Resources. The Committee shall consider the appeal and notify the Executive in writing of its decision with respect thereto within sixty (60) days (or within such longer period not to exceed one hundred twenty (120) days as the Committee determines is necessary to review the appeal, provided that the Committee notifies the Executive in writing of the extension within the original sixty (60) day period).

7.2 Finality of Determination. The determination of the Committee with respect to any question arising out of or in connection with the administration, interpretation, and application of this Agreement shall be final, binding, and conclusive on all persons and shall be given the greatest deference permitted by law.

Article 8. Outplacement Assistance

Following a Qualifying Termination (as described in Section 4.2), the Executive shall be reimbursed by the Company for the costs of all outplacement services obtained by the Executive within the two (2) year period after the Effective Date of Termination; provided, however, that the total reimbursement shall be limited to twenty thousand dollars ($20,000) and shall be completed by the end of the calendar year in which such two (2) year period expires.

 

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Severance Tier I US

 

Article 9. Successors and Assignment

9.1 Successors to the Company. This Agreement shall be binding on the successors of the Company.

9.2 Assignment by the Executive. This Agreement shall inure to the benefit of and be enforceable by each the Executive’s personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees, and legatees. If the Executive dies while any amount would still be payable to him hereunder had he continued to live, all such amounts, unless otherwise provided herein, shall be paid in accordance with the terms of this Agreement to the Executive’s Beneficiary. If the Executive has not named a Beneficiary, then such amounts shall be paid to the Executive’s devisee, legatee, or other designee, or if there is no such designee, to the Executive’s estate.

Article 10. Section 409A

All Severance Benefits and reimbursements payable under this Agreement are intended to comply with the “short term deferral” exception specified in Treas. Reg. § 1.409A-1(b)(4) (or any successor provision), or otherwise be excepted from coverage under Section 409A of the Code (“Section 409A”). Notwithstanding the foregoing sentence, to the extent an exception is not available and the Executive must be treated as a “specified employee” within the meaning of Section 409A, any such amounts payable in cash and due to the Executive on or within the six (6) month period following the Executive’s separation from service (as defined for purposes of Section 409A) will accrue during such six (6) month period and will become payable in a lump sum payment on the date six (6) months and one (1) day following the date of the Executive’s separation from service; provided, however, that such payments will be paid earlier, at the times and on the terms set forth in the applicable provisions of this Agreement, if the Company reasonably determines that the imposition of additional tax under Section 409A will not apply to an earlier payment of such payments. In addition, this Agreement will be interpreted, operated, and administered by the Company to the extent deemed reasonably necessary to avoid imposition of any additional tax or income recognition prior to actual payment to the Executive under Section 409A, including any temporary or final treasury regulations and guidance promulgated thereunder.

Article 11. Miscellaneous

11.1 Employment Status. Except as may be provided under any other agreement between the Executive and the Company, the employment of the Executive by the Company is “at will,” and may be terminated by either the Executive or the Company at any time, subject to applicable law.

11.2 Beneficiaries. The Executive may designate one or more persons or entities as the primary and/or contingent Beneficiaries of any Severance Benefits owing to the Executive under this Agreement. Such designation must be in the form of a signed writing acceptable to the Committee and pursuant to such other procedures as the Committee may decide. If no such designation is on file with the Company at the time of the Executive’s death, or if no designated Beneficiaries survive the Executive for more than fourteen (14) days, any Severance Benefits owing to the Executive under this Agreement shall be paid to the Executive’s estate.

 

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Severance Tier I US

 

11.3 Gender and Number. Except where otherwise indicated by the context, any masculine term used herein also shall include the feminine, the plural shall include the singular, and the singular shall include the plural.

11.4 Severability. In the event any provision of this Agreement shall be held illegal or invalid for any reason, the illegality or invalidity shall not affect the remaining parts of this Agreement, and this Agreement shall be construed and enforced as if the illegal or invalid provision had not been included. Further, the captions of this Agreement are not part of the provisions hereof and shall have no force and effect.

11.5 Modification. Except as provided in Article 1 and Section 3.2, no provision of this Agreement may be modified, waived, or discharged following the Effective Date of Termination unless such modification, waiver, or discharge is agreed to in writing and signed by the Executive and by an authorized member of the Committee, or by the respective parties’ legal representatives and successors.

11.6 Effect of Agreement. This Agreement shall completely supersede and replace any and all portions of any contracts, plans, provisions, or practices pertaining to severance entitlements owing to the Executive from the Company other than the CIC Agreement, and is in lieu of any notice requirement, policy, or practice. Without limiting the generality of the preceding sentence, the Executive’s potential rights to severance pay, benefits, and notice under the Weyerhaeuser Company the Executive Severance Agreement (Tier I) dated January 1, 2010 (the “2010 Agreement”) shall be completely replaced and superseded by this Agreement and the 2010 Agreement shall be of no further force and effect. As such, the Severance Benefits described herein shall serve as the Executive’s sole recourse with respect to termination of employment by the Company other than a termination that entitles the Executive to severance benefits under the terms of the CIC Agreement. In addition, Severance Benefits shall not be counted as “compensation,” or any equivalent term, for purposes of determining benefits under other agreements, plans, provisions, or practices owing to the Executive from the Company, except to the extent expressly provided therein. Except as otherwise specifically provided for in this Agreement, the Executive’s rights under all such agreements, plans, provisions, and practices continue to be subject to the respective terms and conditions thereof.

11.7 Applicable Law. To the extent not preempted by the laws of the United States, the laws of the state of Washington shall be the controlling law in all matters relating to this Agreement.

IN WITNESS WHEREOF, the parties have executed this Agreement on the dates appearing below.

 

Weyerhaeuser Company     Executive
By:  

 

    By:  

 

Its:  

 

    Name:  

 

Date:  

 

    Date:  

 

 

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Severance Tier I US

 

ANNEX A

NON-COMPETITION AND RELEASE AGREEMENT

FOR THE EXECUTIVE SEVERANCE AGREEMENT (TIER I)

 

1. Parties .

The parties to this Non-Competition and Release Agreement are NAME (“the Executive”), and WEYERHAEUSER COMPANY, a Washington corporation, and all successors thereto (“Company”).

 

2. Date .

The date of this Non-Competition and Release Agreement (this “Release Agreement”) is MONTH DAY, YEAR (DATE DELIVERED TO EXECUTIVE) (the “Date of this Agreement”).

 

3. Recitals .

Executive’s employment with Company is ending. Executive is a participant in the Weyerhaeuser Company Executive Severance Agreement (Tier I) (“Severance Agreement”) and is eligible for Severance Benefits under the Severance Agreement on condition Executive executes a non-competition and release agreement. This Release Agreement sets forth the terms of Executive’s severance from Company.

 

4. Defined Terms .

When defined terms from the Severance Agreement are used herein, they shall have the same definitions as provided in Article 2 of the Severance Agreement.

 

5. Termination of Employment .

Effective MONTH DAY, YEAR, Executive’s employment with Company shall terminate (“Termination Date”). Executive shall resign all positions with Company, whether as an officer, employee, or agent, in each case effective on the Termination Date.

 

6. Payments .

Upon expiration of the Revocation Period, defined below, without exercise of the right to revoke, Executive shall receive or be entitled to receive the Severance Benefits and other payments to the extent set forth in the Severance Agreement, including, but not limited to, the forfeiture provisions of Section 6.3 thereof.

 

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Severance Tier I US

 

7. Release .

Executive hereby releases Company, and all successors, subsidiaries, and affiliates of Company, and all officers, directors, employees, agents, and shareholders of Company, and each of them, from any and all claims, liability, demands, rights, damages, costs, attorneys’ fees, and expenses of whatever nature that exist as of the date of execution of this Release Agreement, whether known or unknown, foreseen or unforeseen, asserted or unasserted, including, but not limited to, all claims arising out of Executive’s employment and/or Executive’s termination from employment, and including all claims arising out of applicable state and federal laws, Title VII of the Civil Rights Act of 1964, the Age Discrimination in Employment Act, the Americans with Disabilities Act, the Employee Retirement Income Security Act of 1974, state and federal Family Leave Acts, and any other applicable tort, contract, or other common law theories; provided, however, that this release shall not extend to any compensatory payments or other benefits due to Executive following the expiration of the Revocation Period pursuant to the terms and conditions of any applicable benefit plans, programs and agreements maintained by Company for the benefit of Executive or to which Company and Executive are parties.

 

8. Confidentiality Agreement .

8.1 Company’s Confidential Information . During the course of performing Executive’s duties as a Company employee, Executive was exposed to and acquired Company’s Confidential Information. As used herein, “Confidential Information” refers to any and all information of a confidential, proprietary, or trade secret nature that is maintained in confidence by Company for the protection of its business. Confidential Information includes, but is not limited to, Company’s information about or related to (i) any current or planned products, (ii) research and development or investigations related to prospective products, (iii) proprietary software and systems, (iv) suppliers or customers, (v) cost information, profits, sales information, and accounting and unpublished financial information, (vi) business and marketing plans and methods, and (vii) any other information not generally known to the public that, if misused or disclosed to a competitor, could reasonably be expected to adversely affect the Company.

8.2 Nondisclosure of Confidential Information . Executive acknowledges that the Confidential Information is a special, valuable, and unique asset of Company. Executive agrees to keep in confidence and trust all Confidential Information for so long as such information (i) is not generally known to the public or to persons outside Company who could obtain economic value from its use and (ii) is subject to efforts by Company that are reasonable under the circumstances to maintain its secrecy. Executive agrees that Executive will not directly or indirectly use the Confidential Information for the benefit of Executive or any other person or entity.

 

9. Nonsolicitation .

9.1 Nonsolicitation of Employees . Executive agrees that for a period of two (2) years following the Termination Date, Executive shall not directly or indirectly solicit or attempt to induce any employee of Company, any successor corporation, or a subsidiary of Company to work for Executive or any competing company or competing business organization.

9.2 Nonsolicitation of Customers and Vendors . Executive agrees that for a period of two (2) years following the Termination Date, Executive shall not directly or indirectly solicit or attempt to induce any customer, vendor, or supplier of Company to end its relationship with Company and/or conduct business with Executive or any entity in which Executive has a financial interest.

 

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Severance Tier I US

 

10. Non-competition .

Executive agrees that for a period of one (1) year following the Termination Date, Executive shall not directly or indirectly, whether as an employee, officer, director, shareholder, agent, or consultant, engage or participate in any business that competes with Company, provided that nothing in this Section 10 shall preclude Executive from (i) performing any services on behalf of an investment banking, commercial banking, auditing, or consulting firm or (ii) investing five percent (5%) or less in the common stock of any publicly traded company, provided such investment does not give Executive the right or ability to control or influence the policy decisions of any competing business.

 

11. Review and Rescission Rights .

Executive has forty-five (45) days from the Date of this Agreement (the “Review Period”) within which to decide whether to sign this Release Agreement. If Executive signs this Release Agreement, Executive may revoke this Release Agreement if, within seven (7) days after signing (the “Revocation Period”), Executive delivers notice in writing to an Executive Compensation Manager of Company.

This Release Agreement will not become effective, and the Severance Benefits dependent on the execution of this Release Agreement will not become payable, until this Release Agreement is signed, the Revocation Period expires, and Executive has not exercised the right to revoke this Release Agreement.

Executive may sign this Release Agreement prior to the end of the forty-five (45) day Review Period, thereby commencing the seven (7) day Revocation Period. Whether Executive decides to sign before the end of the Review Period is entirely up to Executive.

Executive will receive the same severance payments regardless of when Executive signs this Release Agreement, as long as Executive signs prior to the end of the Review Period and does not revoke this Release Agreement.

Executive acknowledges that Executive’s release of rights is in exchange for Severance Benefits to which Executive otherwise legally would not be entitled.

 

12. Advice of Counsel .

Executive acknowledges that Executive has been advised to consult with an attorney before signing this Release Agreement.

 

13. Disputes.

Any dispute or claim that arises out of or relates to this Release Agreement shall be resolved in accordance with the provisions of Article 7 of the Severance Agreement. Notwithstanding the provisions of this Section 13, any claim by Company for injunctive relief under the provisions of Section 8, 9, or 10 herein, or any subparts thereof, shall not be subject to the terms of this Section 13.

 

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Severance Tier I US

 

14. Governing Law .

To the extent not preempted by the laws of the United States, Washington law governs this Release Agreement, notwithstanding its choice of law rules.

 

15. Entire Agreement .

All of the parties’ agreements, covenants, representations, and warranties, express or implied, oral or written, concerning the subject matter of this Release Agreement are contained in this Release Agreement. All prior and contemporaneous conversations, negotiations, agreements, representations, covenants, and warranties concerning the subject matter of this Release Agreement are merged into this Release Agreement. This is an integrated agreement.

 

16. Miscellaneous .

The benefits and obligations of this Release Agreement shall inure to the successors and assigns of the parties. The parties acknowledge that the only consideration for this Release Agreement is the consideration expressly described herein, that each party fully understands the meaning and intent of this Release Agreement, that this Release Agreement has been executed voluntarily, and that the terms of this Release Agreement are contractual.

 

17. Severability .

Executive agrees that each provision in this Release Agreement will be treated as a separate and independent clause, and the enforceability of any one clause will in no way impair the enforceability of any of the other clauses in this Release Agreement. Moreover, if one or more of the provisions contained in this Release Agreement, whether for the benefit of Executive or Company, are for any reason held to be excessively broad as to scope, activity, or subject so as to be unenforceable at law, such provision or provisions will be construed by limiting and reducing it or them, so as to be enforceable to the maximum extent compatible with the applicable law as it then appears.

 

18. Section and Paragraph Titles .

Section and paragraph titles in this Release Agreement are used for convenience only and are not intended to and shall not in any way enlarge, define, limit, or extend the rights or obligations of the parties or affect the interpretation of this Release Agreement.

 

WEYERHAEUSER COMPANY    
By:  

 

    Date:                     
Title:  

 

   
[NAME OF EXECUTIVE]    

 

    Date:                     

 

A-4

Exhibit 10.3

Form of Weyerhaeuser Company

2011 Deferred Compensation Plan

The following executive officers are covered by the Weyerhaeuser Company 2011 Deferred Compensation Plan:

Daniel S. Fulton

Patricia M. Bedient

Lawrence B. Burrows

Srinivasan Chandrasekaran

Miles P. Drake

Thomas F. Gideon

John A. Hooper

Sandy D. McDade

Peter M. Orser


WEYERHAEUSER COMPANY

2011 DEFERRED COMPENSATION PLAN


TABLE OF CONTENTS

 

1.   Purpose      1   
2.   Effective Date and Other Bonus Award Plans      1   
  (a)    Effective Date      1   
  (b)    Other Award Plans      1   
3.   Applicable Law      2   
4.   Definitions      2   
5.   Eligibility      6   
6.   Deferrals      6   
  (a)    Deferral Amounts      6   
  (b)    Election Procedure      6   
7.   Accounts      7   
  (a)    Base Salary Deferrals      7   
  (b)    Cash Award Deferrals      8   
  (c)    Stock Equivalent Deferrals      8   
  (d)    Mandatory Deferrals      9   
8.   Payments      11   
  (a)    Base Salary Deferrals and Cash Award Deferrals      11   
  (b)    Stock Equivalent Deferrals      12   
  (c)    Mandatory Deferrals      14   
9.   General Payment Provisions      15   
  (a)    Cash Payment; Default Payment      15   
  (b)    No Acceleration      15   
  (c)    Unforeseeable Emergency      15   
  (d)    Segregation of Funds      17   
  (e)    Death Benefits      17   
  (f)    Withholding Payment      18   
  (g)    Incompetency      18   
10.   Administration and Amendment of the Plan      18   
  (a)    Powers of the Administrator      18   
  (b)    Expenses of the Plan      19   
  (c)    Amendment and Termination      19   
  (d)    Participants’ Rights      19   
11.   Claims Procedure      20   
  (a)    Filing a Claim      20   

 

W EYERHAEUSER C OMPANY

2011 D EFERRED C OMPENSATION P LAN

  -i-  


 

  (b)    Claim Review      20   
  (c)    Appealing a Claim Denial      21   
  (d)    Decision on Appeal      21   
  (e)    Filing Suit      23   
  (f)    Claims Involving Applications for Unforeseeable Emergency Distributions      23   
  (g)    Disability Claims      23   
12.   Miscellaneous      23   
  (a)    Rights Unsecured      23   
  (b)    Construction of Plan      24   
  (c)    Alienation Prohibited      24   
  (d)    Taxes      25   
  (e)    No Guaranty of Tax Consequences      25   
  (f)    Participant’s Cooperation      25   
  (g)    Successors and Assigns      25   
  (h)    Applicable Law and Venue      26   
  (i)    Notice      26   
Schedule A - Award Plans   

 

W EYERHAEUSER C OMPANY

2011 D EFERRED C OMPENSATION P LAN

  -ii-  


WEYERHAEUSER COMPANY

2011 DEFERRED COMPENSATION PLAN

 

1. Purpose . The purpose of this Weyerhaeuser Company 2011 Deferred Compensation Plan (the “Plan”) is to:

 

  (a) give recognition, in addition to base salaries, to Participants who contribute significantly to the business success of the Company, thereby further ensuring that the Company will continue to benefit from a strong and able management;

 

  (b) permit Participants to defer receipt of any part or all of certain base salaries and incentive awards;

 

  (c) permit and encourage Stock Equivalent Participants to receive deferred Awards in Stock Equivalents, the growth in value of which should reflect better performance by the Company during the period of deferral; and

 

  (d) encourage Participants to remain in the service of the Company.

 

2. Effective Date and Other Bonus Award Plans .

 

  (a) Effective Date . The Plan is effective as of November 1, 2010. The Plan applies to Base Salary and Awards earned in 2011 and subsequent years that are subject to deferral elections made on or after November 1, 2010 and to Mandatory Deferrals of Awards earned during performance periods beginning in 2011 and subsequent years.

 

  (b) Other Award Plans . All amounts deferred pursuant to the provisions of other bonus award plans and deferred compensation plans and not the Plan shall be paid in accordance with the provisions of such other plans. All references to the “Comprehensive Incentive Compensation Plan” in any other benefit plan, program or policy maintained by the Company for active employees on or after January 1, 2007 shall be deemed to refer to the “2011 Deferred Compensation Plan” (or, with respect to periods prior to the Effective Date of this Plan, the “Deferred Compensation Plan”).

 

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2011 D EFERRED C OMPENSATION P LAN

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3. Applicable Law . The Company intends that the Plan will constitute, and will be construed and administered as, an unfunded plan of deferred compensation for a select group of management or highly compensated employees within the meaning of ERISA and the Code. In addition, the Plan is intended to comply with Section 409A and any official guidance issued thereunder. Notwithstanding any other provision of the Plan, the Plan shall be interpreted, operated and administered in a manner consistent with this intention to the extent the Administrator deems necessary to comply with the requirements of Section 409A and any official guidance issued thereunder and to avoid the imposition of any penalty thereunder. In addition, notwithstanding anything in Paragraph 10(d) to the contrary, the Plan shall be deemed to be amended, and any deferrals and distributions hereunder shall be deemed to be modified, to the extent necessary to comply with such requirements of Section 409A.

 

4. Definitions .

 

  (a) “Administrator” means the President of Weyerhaeuser Company or his or her delegate.

 

  (b) “Award” means the amount of incentive bonus granted to a Participant for an Award Year as determined under the terms of an Award Plan. For purposes of the Plan, Award includes Mandatory Deferrals unless expressly stated otherwise herein.

 

  (c) “Award Plan” means each incentive compensation plan listed in Schedule A hereto.

 

  (d) “Award Year” means the fiscal or calendar year in which the service is performed for which a Participant earns an Award. For an Award involving a multiyear performance period, Award Year means the applicable performance period.

 

W EYERHAEUSER C OMPANY

2011 D EFERRED C OMPENSATION P LAN

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  (e) “Base Salary” means a Participant’s annual rate of pay for the applicable calendar year, excluding all other pay elements (such as bonus payments and relocation allowances).

 

  (f) “Base Salary Deferral” means the portion of Base Salary deferred under the Plan, with interest.

 

  (g) “Cash Award Deferral” means the portion of an Award deferred under the Plan in the form of cash, with interest, excluding Mandatory Deferrals.

 

  (h) “Cause” means, for purposes of the five-year minimum deferral period specified in Paragraph 7(d), any of the following events: (i) willful and continued failure to perform substantially the Participant’s duties with the Company after the Company delivers to the Participant written demand for substantial performance specifically identifying the manner in which the Participant has not substantially performed the Participant’s duties; (ii) conviction of a felony; and (iii) willfully engaging in illegal conduct or gross misconduct that is materially and demonstrably injurious to the Company.

 

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

 

  (j) “Committee” means the Compensation Committee of the Board of Directors of Weyerhaeuser Company.

 

  (k) “Company” means Weyerhaeuser Company and includes, where indicated by the context, each of its majority-owned U.S. subsidiaries and affiliates who participate in the Plan as of the Effective Date or with the approval of the Administrator.

 

  (l) “Disability” means a medical condition in which a Participant is either entitled to total and permanent disability benefits under the Social Security Act or judged to be totally and permanently disabled by the Administrator.

 

  (m) “Effective Date” has the meaning set forth in Paragraph 2(a).

 

W EYERHAEUSER C OMPANY

2011 D EFERRED C OMPENSATION P LAN

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  (n) “Eligible Employee” means any Employee who is eligible under the terms of Paragraph 5.

 

  (o) “Employee” means any person who is classified by the Company as actively employed by the Company and who is compensated on a salaried basis (exempt or non-exempt) as reflected on the Company’s payroll records but excluding any such person who is reclassified by a court, governmental agency or the Company as a common law employee of the Company.

 

  (p) “ERISA” means the Employee Retirement Income Security Act of 1974, as amended.

 

  (q) “Mandatory Deferrals” mean, with respect to the WRECO Management Short-Term Incentive Plan, any Holdback Amounts within the meaning of such plan and, with respect to the WAM Incentive Compensation Plan, the fixed percentage of a Participant’s Award specified in the Participant’s offer letter or similar agreement subject to mandatory deferral prior to age 62 and irrevocable prior to the beginning of the calendar year to which such Mandatory Deferral relates.

 

  (r) “Participant” generally means an Eligible Employee who has deferred Base Salary or an Award under the Plan, but under no circumstances shall any member of the Committee be deemed to be a Participant hereunder. However, Eligible Employees of Weyerhaeuser International, Inc. or Weyerhaeuser Services Limited who are performing services primarily for WAM shall participate in the Plan only to the extent of their Mandatory Deferrals with respect to the WAM Incentive Compensation Plan and not with respect to any voluntary deferrals under the Plan.

 

  (s) “Plan” has the meaning set forth in Paragraph 1.

 

  (t) “Price per share” means the closing price of the common stock of the Company on the New York Stock Exchange on the Trading Day in question.

 

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2011 D EFERRED C OMPENSATION P LAN

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  (u) “Retirement” means a Separation from Service with the Company constituting a “Retirement” as defined in the Weyerhaeuser Company Retirement Plan for Salaried Employees.

 

  (v) “Section 409A” means Code Section 409A and regulations and other guidance promulgated thereunder.

 

  (w) “Separation from Service” has the meaning set forth under Section 409A and generally includes a Participant’s termination of employment with Weyerhaeuser Company and all of its majority-owned subsidiaries.

 

  (x) “Specified Employee” means a Participant who, as of the date of the Participant’s termination of employment for any reason, is a key employee of the Company. A Participant is a key employee if the Participant meets the requirements of Code Section 416(i)(1)(A)(i), (ii) or (iii) (applied in accordance with the regulations thereunder and disregarding Code Section 416(i)(5)) at any time during the 12-month period ending on a Specified Employee identification date of December 31. If a Participant is a key employee as of such December 31, the Participant shall be treated as a Specified Employee for the entire 12-month period beginning on the next following April 1.

 

  (y) “Stock Equivalent” means a deferred unit of an account that is equivalent in value to one share of common stock of the Company.

 

  (z) “Stock Equivalent Deferral” means the portion of the Award deferred under the Plan in the form of Stock Equivalents, increased or decreased by a reference to the market price and dividend history of shares of common stock of the Company.

 

  (aa) “Stock Equivalent Participant” means an Employee designated by the Administrator as eligible for a Stock Equivalent Deferral.

 

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2011 D EFERRED C OMPENSATION P LAN

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  (bb) “Trading Day” means a day that the New York Stock Exchange is open for business.

 

  (cc) “Unforeseeable Emergency” means a severe financial hardship to the Participant resulting from a sudden or unexpected illness or accident of the Participant, the Participant’s spouse or dependent (as defined in Code Section 152(a)), loss of the Participant’s property due to casualty, or other similar extraordinary and unforeseeable circumstances arising as a result of events beyond the control of the Participant, all as determined in accordance with Section 409A.

 

  (dd) “WAM” means Weyerhaeuser Asset Management LLC.

 

  (ee) “WRECO” means Weyerhaeuser Real Estate Company.

 

5. Eligibility . Each Eligible Employee is eligible to participate under the Plan as of the date determined by the Administrator.

 

6. Deferrals .

 

  (a) Deferral Amounts . A Participant may elect to defer receipt of (i) a percentage (which is no less than 10% and no more than 50%) of his or her Base Salary otherwise payable during a calendar year or (ii) a percentage (which is no less than 10% and no more than 100%) of an eligible Award. For purposes of an election under this subparagraph by an Eligible Employee of WRECO, an eligible Award does not include any Mandatory Deferral amount.

 

  (b) Election Procedure .

 

  (i) General . A Participant shall notify the Administrator in writing during an election period (at such time and pursuant to such procedures as determined and communicated by the Administrator) prior to the beginning of each applicable calendar year or Award Year. In accordance with the foregoing, an election made with respect to the Awards under the WRECO Management Long-Term Incentive Plan shall be made during the election period prior to the beginning of the first calendar year of the applicable performance period under such plan. The election for a Stock Equivalent Participant who has elected to defer an Award shall include a choice between Cash Award Deferrals or Stock Equivalent Deferrals. The election shall specify the timing and form of payments to the extent provided in this Paragraph and Paragraph 8, and the election shall be irrevocable according to its terms but in any case cannot be revoked later than the day immediately prior to the applicable calendar year or Award Year.

 

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  (ii) Newly Eligible Employees . Upon initial eligibility for the Plan, an Employee may begin participation by submitting the election referred to in subparagraph (i) above to the Administrator within 30 days of the date the Employee became eligible to participate in the Plan. Such election shall only be effective for the deferral of compensation paid for services to be performed after the election. If no deferral election is submitted within this 30-day period, the Employee shall next be eligible to participate beginning January 1st of the next following calendar year or Award Year and must submit a deferral election in accordance with subparagraph (i) above. This subparagraph shall not apply to any Employee who, though newly eligible to participate in the Plan, was previously eligible to participate in the Plan or any comparable arrangement under Section 409A, at any time during the 24-month period ending on the date the Employee again became eligible to participate in the Plan, other than participation in the form of the accrual of earnings.

 

7. Accounts .

 

  (a) Base Salary Deferrals . All amounts deferred under the Base Salary Deferral shall be credited to the Participant’s account on the day they would otherwise have been paid in cash. Interest shall thereafter accrue on Base Salary Deferrals at a rate to be designated from time to time by the Committee through the payment date. Interest shall be compounded monthly.

 

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  (b) Cash Award Deferrals . All amounts deferred as a Cash Award Deferral shall be credited to the Participant’s account as of the end of the Award Year with respect to which the deferred Award was made. Interest shall accrue on the Cash Award Deferrals at a rate to be designated from time to time by the Committee commencing with the first day of the calendar year following the Award Year and through the payment date. Interest shall be compounded monthly.

 

  (c) Stock Equivalent Deferrals .

 

  (i) General . All amounts deferred as a Stock Equivalent Deferral shall be credited to the Stock Equivalent Participant’s account promptly following the determination of deferred units in accordance with subparagraph (iii) below. The minimum deferral period for Stock Equivalent Deferrals is five years. The minimum deferral period shall begin on January 1 of the year following the Award Year.

 

  (ii) Premiums . Stock Equivalent Participants’ accounts shall be credited with a premium based on an Award deferred in the form of Stock Equivalents. The premium shall be calculated by multiplying the amount of an Award deferred in the form of Stock Equivalents by a multiple to be determined by the Committee on an annual basis. The premium shall be credited to each such Participant’s account as Stock Equivalents and credited at the same time as the related deferred Award. The premium, including any appreciation and dividend equivalents thereon, shall be forfeited if such Participant’s employment with the Company terminates prior to completing the minimum five-year deferral period unless such termination (A) is due to death, Disability or Retirement or (B) is a “Qualifying Termination” following a “Change in Control” (as such terms are defined in the Executive Change in Control Agreement (Tier I) or Top Management Change in Control Plan (Tier II), each as in effect on the date of the Participant’s termination, and limited to Participants who are covered by such Agreement or Plan).

 

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  (iii) Number of Deferred Units . To determine the number of deferred units or fractions thereof credited to a Stock Equivalent Participant’s account, the amount of Stock Equivalent Deferrals and any premium shall be divided by the median closing price per share of Company stock for the last 11 Trading Days of January in the year following the Award Year. In the event, at any time or from time to time, of a stock dividend, stock split, reverse stock split, combination or exchange of shares, recapitalization, merger, consolidation, or other change in the Company’s structure, the Committee shall make proportional adjustments in the number of Stock Equivalent units credited to a Stock Equivalent Participant’s accounts. Any such adjustments made by the Committee shall be conclusive and binding for all purposes of the Plan.

 

  (iv) Dividend Equivalents . Each Stock Equivalent unit credited to a Stock Equivalent Participant’s account shall also be credited with an amount equivalent to each dividend declared on common shares of the Company. The amount of such dividend equivalents shall be divided by the closing price per share of common stock on the payable date for such dividend to determine the number of additional deferred units or fractions thereof credited to such Participant’s account, which shall be credited to such account as of the payable date.

 

  (d) Mandatory Deferrals .

 

  (i) General . All amounts deferred as Mandatory Deferrals shall be credited to the Participant’s account as of the end of the Award Year with respect to which the deferred Award was made. Interest shall accrue on the Mandatory Deferrals at a rate to be designated from time to time by the Committee commencing with the first day following the Award Year and through the payment date. Interest shall be compounded monthly; provided, however, that with respect to Mandatory Deferrals under the WAM Incentive Compensation Plan, interest shall accrue at an annual rate equal to the prior year’s rate of return in the Weyerhaeuser Company Master Retirement Trust for the Company’s tax-qualified defined benefit pension plans but in no event greater than 15% or less than the rate determined under Paragraph 7(b).

 

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  (ii) Minimum Deferral Period . The minimum deferral period for Mandatory Deferrals under the WRECO Management Short-Term Incentive Plan is two years. The minimum deferral period for Mandatory Deferrals under the WAM Incentive Compensation Plan is the earlier of attainment of age 62 or five years. The minimum deferral periods described in this subparagraph shall begin January 1st of the year following the Award Year. The Mandatory Deferrals under the WRECO Management Short-Term Incentive Plan, including any interest thereon, shall be forfeited if a Participant’s employment with WRECO terminates prior to completing the two-year minimum deferral period for any reason other than death, disability (within the meaning of such plan), Retirement or job elimination. The Mandatory Deferrals under the WAM Incentive Compensation Plan, including any interest thereon, shall be forfeited if a Participant’s employment with WAM terminates prior to the earlier of attaining age 62 or completing the five-year minimum deferral period for any reason other than the Participant’s death, disability (as determined by the Administrator), or involuntary termination without Cause.

 

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8. Payments .

 

  (a) Base Salary Deferrals and Cash Award Deferrals .

 

  (i) Timing of Payment . Payment of Base Salary Deferrals and Cash Award Deferrals shall commence in the calendar year immediately following the year of a Separation from Service (generally in January of such calendar year), unless a Participant elects at the time of his or her deferral election to defer the commencement date for an additional one to five years. In no event shall payment on account of a Participant’s Separation from Service be made earlier than six months after the date of such Separation from Service if the Participant is then a Specified Employee, in which case payment shall occur on the earliest date permitted by this subparagraph and Section 409A and interest shall continue to accrue pursuant to Paragraph 7(a) until the payment date.

 

  (ii) Form of Payment . At the time of electing a Base Salary Deferral or a Cash Award Deferral, a Participant may elect payment in the form of a lump sum or in annual installments payable over a period of up to 20 years. If the Participant elects to have payment made in annual installments, the installments shall be paid in each calendar year during the installment period, generally in January (except that the first installment may be delayed in the case of a Specified Employee as provided in subparagraph (i) above). The amount of each installment payment shall be computed by multiplying a fraction, the numerator of which is one and the denominator of which is the number of years remaining in the payment period, by the remaining installments plus accrued interest (e.g., 1/10th is paid in the first year of a 10-year payment period; 1/9th of the remaining balance in the second year; 1/8th of the remaining balance in the third year, etc., over the 10 years).

 

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  (iii) Death of Participant . The above provisions are inapplicable in the case of the Participant’s death, in which case the provisions of Paragraph 9(e) shall apply.

 

  (b) Stock Equivalent Deferrals .

 

  (i) Timing of Payment . Payment of amounts deferred as Stock Equivalent Deferrals shall commence in the calendar year immediately following the year of a Separation from Service (generally in February of such calendar year) unless a Stock Equivalent Participant elects at the time of his or her deferral election to defer the commencement date for an additional one to five years, in all cases subject to the minimum five-year deferral period for Stock Equivalent Deferrals. In no event shall payment on account of a Stock Equivalent Participant’s Separation from Service be made earlier than six months after the date of such Separation from Service if the Stock Equivalent Participant is then a Specified Employee, in which case payment shall occur on the earliest date permitted by this subparagraph and Section 409A and, to the extent such six-month delay has not expired by the valuation date set forth in Paragraph 8(b)(ii), such account shall be transferred to the Plan’s interest-bearing account described in Paragraph 7(a) at the time payment would have otherwise been made but for such six-month delay and interest shall accrue thereafter, compounded monthly, until paid. The value of the account at transfer shall be the price per share of the Common Stock of the Company as of the close of the Trading Day on the transfer date.

 

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  (ii) Form of Payment . At the time of electing Stock Equivalent Deferrals, a Stock Equivalent Participant may elect payment in the form of a lump sum or in annual installments payable over a period of up to 20 years. If the Participant elects to have payment made in annual installments, the installments generally shall be paid in each calendar year during the installment period, generally in February (except that the first installment may be delayed in the case of a Specified Employee as provided in subparagraph (i) above). If installment payments must be delayed due to application of the minimum five-year deferral period for Stock Equivalent Deferrals, there shall be no change to the number of installments elected by the Participant, but payment of such installments shall not commence until the calendar year following the end of the minimum deferral period, generally in February. The amount of each annual installment payment shall be computed by multiplying a fraction, the numerator of which is one and the denominator of which is the number of installments remaining, by the remaining portion of units credited to the Stock Equivalent Participant’s account to determine the number of units for which payment is to be made. The number of units shall be multiplied by the median closing price per share of Company stock for the last 11 Trading Days of January of the payment date to determine the amount of cash to be paid.

 

  (iii) Death of Participant . The above provisions are inapplicable in the case of the Stock Equivalent Participant’s death, in which case the provisions of Paragraph 9(e) shall apply but the minimum five-year deferral period shall not apply.

 

  (iv) Automatic Account Transfer . Subject to the forfeiture provision of Paragraph 7(c)(ii), upon the date of a Stock Equivalent Participant’s Separation from Service for reasons other than due to death, Disability or Retirement, his or her account shall be automatically transferred to the Plan’s interest-bearing account described in Paragraph 7(a) and interest shall accrue thereafter, compounded monthly, until paid. The value of the account at transfer shall be the price per share of the common stock of the Company as of the close of the Trading Day on the transfer date. No dividend equivalents shall accrue thereafter. Notwithstanding the transfer of a Participant’s account pursuant to this provision, payment of such account shall continue to be subject to the minimum five-year deferral period in accordance with this Paragraph 8(b).

 

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  (v) Election at 60th Birthday . At any time after a Stock Equivalent Participant’s 60th birthday, such Participant (or his or her beneficiary or beneficiaries) may irrevocably elect to establish and fix a firm price for some or all Stock Equivalents currently credited to such portion of his or her account to the extent such Stock Equivalents have satisfied the minimum five-year deferral period. The firm price shall then be the price per share of the common stock of the Company as of the close of the Trading Day on the date of the delivery of such election to the Plan’s record keeper if delivered before the close of the New York Stock Exchange, or the next following Trading Day if delivered after the closing of the New York Stock Exchange. Interest at the rate described in Paragraph 7(b) shall thereafter be earned and compounded monthly. An election under this Paragraph shall not accelerate actual payment of the Stock Equivalent Participant’s account.

 

  (c) Mandatory Deferrals . Subject to the applicable forfeiture provisions set forth in Paragraph 7(d)(ii), payment of Mandatory Deferrals with respect to the WRECO Management Short-Term Incentive Plan shall be made in a lump sum in the calendar year (generally in January of such calendar year) immediately following the year in which occurs the earlier of (A) the end of the two-year minimum deferral period described in Paragraph 7(d)(ii) and (B) the Participant’s Separation from Service due to death, disability (within the meaning of such plan) or job elimination. Subject to the applicable forfeiture provisions set forth in Paragraph 7(d)(ii), payment of Mandatory Deferrals with respect to the WAM Incentive Compensation Plan shall be made in a lump sum in the calendar year (generally in January of such calendar year) immediately following the year in which occurs the earliest of a Participant’s (A) attainment of age 62, (B) completion of five years of service following the Award Year or (C) Separation from Service due to death, disability (as determined by the Administrator), or involuntary termination without Cause. In no event shall payment on account of a Participant’s Separation from Service be made earlier than six months after the date of such Separation from Service if the Participant is then a Specified Employee, in which case payment shall occur on the earliest date permitted by this subparagraph and Section 409A.

 

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9. General Payment Provisions .

 

  (a) Cash Payment; Default Payment . All payments under the Plan shall be made in cash. If the Participant fails to make a valid election of a payment option, the payment shall be made in a single lump sum payment in the calendar year immediately following the year of the Participant’s Separation from Service (generally in January or February of such year, as applicable), except to the extent a six-month delay is required under Paragraph 8 with respect to a Participant who is a Specified Employee and subject to the applicable minimum deferral periods for Stock Equivalent Deferrals and Mandatory Deferrals.

 

  (b) No Acceleration . The acceleration of the time or schedule of any payment due under the Plan is generally prohibited. Certain distributions under the Plan may be accelerated, however, to the extent expressly permitted under Section 409A.

 

  (c) Unforeseeable Emergency . Payment of a Participant’s accounts, other than with respect to Mandatory Deferrals, and Stock Equivalent Deferrals still subject to the five-year minimum deferral period, may be made to the Participant in the event of an Unforeseeable Emergency, subject to the following provisions:

 

  (i) A Participant may, while he or she remains an active Employee, make application to the Committee to receive a payment in a lump sum of all or a portion of his or her vested accounts because of an Unforeseeable Emergency;

 

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  (ii) A payment because of an Unforeseeable Emergency shall not exceed the amount required to satisfy the Unforeseeable Emergency plus amounts necessary to pay taxes reasonably anticipated as a result of such payment, after taking into account the extent to which the Unforeseeable Emergency may be relieved through reimbursement or compensation by insurance or otherwise or by liquidation of the Participant’s assets (to the extent the liquidation of such assets would not itself cause severe financial hardship);

 

  (iii) The Participant’s request for a payment on account of an Unforeseeable Emergency must be made in writing to the Committee, supported by such evidence as the Committee may require and specify (A) the nature of the financial hardship, (B) the total amount requested to be paid from the Participant’s vested accounts and (C) the total amount of the actual expense incurred or to be incurred on account of the Unforeseeable Emergency;

 

  (iv) Payment on account of an Unforeseeable Emergency shall be made within 60 days following the receipt of the Participant’s request. After 60 days, the Participant’s request shall be deemed denied;

 

  (v) Payment shall be made from the Participant’s vested accounts in the following order: (A) first, from amounts attributable to Base Salary Deferrals and Cash Awards Deferrals, and (B) next, from amounts attributable to Stock Equivalent Deferrals that have satisfied the five-year minimum deferral period. With respect to each of these two categories, payment shall be made pro rata from all subaccounts within the category; and

 

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  (vi) If payment is made to a Participant from amounts attributable to Stock Equivalent Deferrals that have satisfied the five-year minimum deferral period, such Stock Equivalent Deferrals shall be valued based on the price per share of the common stock of the Company as of the close of the Trading Day that next precedes the date on which the Committee approves such Participant’s application for payment.

A payment due to an Unforeseeable Emergency shall not affect any deferral election previously made by the Participant.

 

  (d) Segregation of Funds . The Company shall be under no obligation to segregate any deferred funds, and each Participant should realize that such unsegregated funds are subject to the claims of the Company’s general creditors.

 

  (e) Death Benefits .

 

  (i) Payment Following Death of Participant . Notwithstanding anything in the foregoing provisions of the Plan to the contrary, in the event of the death of the Participant before the complete distribution of his or her account, the entire account shall be paid to the Participant’s beneficiary in the calendar year immediately following the year of the Participant’s death (generally in January and/or February of such year, as applicable). For this purpose, the Participant’s “account” refers to all of the Participant’s accounts under the Plan.

 

  (ii) Beneficiaries . A Participant may appoint a beneficiary or beneficiaries to receive payments of the Participant’s account upon the Participant’s death. The beneficiary appointment shall be made in a form to be supplied by the Administrator and may be revoked or superseded at any time by the Participant’s written direction. In the absence of a proper appointment of a beneficiary, or if the appointed beneficiary or beneficiaries fail to survive the Participant, the Participant’s beneficiary shall be the Participant’s estate.

 

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  (f) Withholding Payment . If the Administrator has any doubt as to the location of the Participant or the proper beneficiary hereunder, the Administrator shall have the right to direct the Company to withhold payment until the matter is finally adjudicated. Moreover, the Administrator may direct the Company to withhold payment if the Administrator reasonably anticipates that the payment will violate then current federal securities laws or other applicable law, provided that the payment shall be made at the earliest date at which the Administrator reasonably anticipates that the making of the payment will not cause such violation. Any payment made by the Company in good faith and in accordance with the terms of the Plan and the directions of the Administrator shall fully discharge any liability of the Company or the Plan with respect to such payment. This provision shall be applied in a manner which is consistent with Section 409A.

 

  (g) Incompetency . If the Administrator determines that a benefit under the Plan is to be paid to a minor, a person declared incompetent or a person incapable of handling the disposition of that person’s property, then, until a claim for such benefit has been made by a duly appointed guardian or other legal representative, the Administrator may provide for such payment or any part thereof to be made to any other person or institution then contributing toward or providing for the care and maintenance of such person, or, solely in the case of a minor, to a custodian under the Uniform Gifts to Minors Act or similar statute. Any such payment shall be a payment for the account of the Participant or his or her beneficiary, as applicable, and fully discharge any liability of the Company or the Plan with respect to such payment.

 

10. Administration and Amendment of the Plan .

 

  (a) Powers of the Administrator . Full power and authority to construe and interpret the Plan and make all decisions regarding eligibility and benefits shall be vested in the Administrator, except as otherwise provided in Paragraph 9(c). Subject to Paragraph 11, decisions hereunder by the Administrator or any other authorized individual or entity shall be final, conclusive and binding on all parties, including Employees, Participants and the Company.

 

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  (b) Expenses of the Plan . The expenses of administering the Plan shall be borne by the Company.

 

  (c) Amendment and Termination . The Committee in its sole discretion may (i) amend, suspend or terminate the Plan and (ii) supplement or replace the Plan with or by other deferred compensation plans; provided, however , that no amendment to the provisions providing for the payment of compensation in the form of stock of the Company shall be effective unless approved by the shareholders of the Company to the extent such approval is required by applicable law. Notwithstanding the foregoing sentence, the Administrator in its sole discretion may also amend the Plan to the extent the Administrator determines necessary or advisable to (x) implement legally required changes or (y) incorporate administrative changes that will not result in a substantial adverse financial effect on the Company.

 

  (d) Participants’ Rights . No amendment, suspension or termination of the Plan shall affect any Award already granted or any deferral already made, and in the event of any such change, any deferred compensation credited to a Participant’s account shall be paid as provided herein. No Participant shall have any right or interest in the Plan or its continuance or in his or her continued participation in the Plan, other than in the deferred compensation credited to his or her account. The Plan shall not be subject to any mistake of fact claim.

 

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11. Claims Procedure .

 

  (a) Filing a Claim . A Participant or a beneficiary (the “Claimant”), or the authorized representative of either, who believes that the Participant or beneficiary has been denied benefits to which he or she is entitled under the Plan may file a written claim for such benefits with the Administrator. Any claim must be in writing and must contain the reason for making the claim, the facts supporting the claim, the amount claimed and the Claimant’s name and his or her (or his or her authorized representative’s) address.

 

  (b) Claim Review . Claims shall be decided by the Administrator, who will generally make his or her decision with respect to a claim and notify the Claimant (or his or her authorized representative) in writing of such decision within 90 days after receiving the claim. The Administrator may extend this 90-day period for an additional 90 days if he or she determines that special circumstances require additional time to process the claim. The Administrator shall notify the Claimant (or his or her authorized representative) in writing of any such extension within 90 days of receiving the claim. The notice will include the reasons why the extension is necessary and the date by which the Administrator expects to render his or her decision on the claim.

If the Participant’s claim is partially or completely denied, the written notice to the Claimant (or his or her authorized representative) shall include:

 

  (i) The specific reason or reasons for the denial;

 

  (ii) Reference to the specific Plan provisions on which the denial is based;

 

  (iii) A description of any additional material or information necessary for the Claimant to perfect the claim and an explanation of why such material or information is necessary; and

 

  (iv) A description of the Plan’s claim appeal procedure (and the time limits applicable thereto), including a statement of the Claimant’s right to bring a civil action under Section 502(a) of ERISA following an adverse determination on appeal.

 

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If a Claimant submits a claim in accordance with the procedure described above and does not hear from the Administrator within 90 days, the Claimant may consider the claim denied.

 

  (c) Appealing a Claim Denial . If a claim is partially or completely denied, the Claimant has the right to appeal the denial. To appeal a claim denial, the Claimant (or his or her authorized representative) must file a written request for appeal with the Administrator within 60 days after receiving written notice of the claim denial. This written request for appeal should include:

 

  (i) A statement of the grounds on which the appeal is based;

 

  (ii) Reference to the specific Plan provisions that support the claim;

 

  (iii) The reasons or arguments why the Claimant believes the claim should be granted and the evidence supporting each reason or argument; and

 

  (iv) Any other comments, documents, records or information relating to the claim that the Claimant wishes to submit.

The Claimant (or his or her authorized representative) will be provided, upon request and free of charge, reasonable access to, and copies of, all documents, records and other information relevant (within the meaning of 29 C.F.R. § 2560.503-1(m)(8)) to his or her claim.

 

  (d) Decision on Appeal . Appeals shall be decided by the Administrator, which will generally render its decision with respect to an appeal and notify the Claimant (or his or her authorized representative) in writing of such decision within 60 days after receiving the appeal. The Administrator may extend this 60-day period for an additional 60 days if it determines that special circumstances require additional time to process the appeal. The Administrator shall notify the Claimant (or his or her authorized representative) in writing of any such extension within 60 days of receiving the appeal. The notice will include the reasons why the extension is necessary and the date by which the Administrator expects to render its decision on the appeal. In reaching its decision, the Administrator will take into account all of the comments, documents, records and other information that the Claimant (or his or her authorized representative) submitted, without regard to whether such information was submitted or considered by the Administrator in its initial denial of the claim.

 

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If a claim is partially or completely denied on appeal, the written notice of claim denial shall include the following:

 

  (i) The specific reason or reasons for the denial;

 

  (ii) Reference to the specific Plan provisions on which the denial is based;

 

  (iii) A statement that the Claimant (or his or her authorized representative) is entitled to receive, upon request and free of charge, reasonable access to, and copies of, all documents, records and other information relevant (within the meaning of 29 C.F.R. § 2560.503-1(m)(8)) to the claim; and

 

  (iv) A statement of the Claimant’s right to bring an action under Section 502(a) of ERISA.

If a Claimant files an appeal in accordance with the procedure described above and does not hear from the Administrator within 60 days, the Claimant may consider the appeal denied.

 

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  (e) Filing Suit . A Participant or his or her beneficiary must comply with the claim and appeal procedures described in this Paragraph 11 before seeking any other legal recourse (including filing a lawsuit) regarding claims for benefits. If a Claimant wishes to file a court action after exhausting the procedures set forth in this Paragraph 11, the Claimant (or his or her authorized representative) must file such action in a court of competent jurisdiction within one year after the date on which the Claimant (or his or her authorized representative) received the written denial of the appeal. Court actions may not be commenced after this one-year period. Any judicial review of the Administrator’s decision on a claim shall be limited to whether, in the particular instance, the Administrator abused its discretion. In no event will such judicial review be on a de novo basis, because the Administrator has discretionary authority to determine eligibility for (and the amount of) benefits under the Plan and to construe and interpret the terms and provisions of the Plan.

 

  (f) Claims Involving Applications for Unforeseeable Emergency Distributions. Notwithstanding the foregoing, any claim or appeal involving an application for a distribution due to an Unforeseeable Emergency shall be decided by the Committee. With respect to any such claim or appeal, all references to the Administrator in the foregoing provisions shall be deemed to refer instead to the Committee.

 

  (g) Disability Claims . Notwithstanding the foregoing, in the event any claim requires a medical determination as to whether or not a Participant is disabled, such determination shall be made in accordance with the Department of Labor regulations under ERISA section 503 applicable to disability claims. Any such claim shall be decided by the Weyerhaeuser Company Administrative Committee (or its delegate) and any appeal with respect to such claim shall be decided by the President of Weyerhaeuser Company.

 

12. Miscellaneous.

 

  (a) Rights Unsecured . The right of a Participant or his or her beneficiary to receive a payment hereunder will be an unsecured claim against the general assets of the Company, and neither the Participant nor his or her beneficiary will have any rights in or against any amount credited to his or her Account or any other specific assets of the Company. The Plan at all times shall be considered entirely unfunded for tax purposes. Any funds set aside by the Company for the purpose of meeting its obligations under the Plan, including any amounts held by a trustee, will continue for all purposes to be part of the general assets of the Company and will be available to the Company’s general creditors in the event of the Company’s bankruptcy or insolvency. The Company’s obligation under the Plan will be that of an unfunded and unsecured promise to pay benefits in the future.

 

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2011 D EFERRED C OMPENSATION P LAN

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  (b) Construction of Plan . Nothing in the Plan shall be construed to give any Employee (or any other person) any right to receive Awards or any other type of compensation from the Company. No Participant or beneficiary shall have any right to receive a payment under the Plan except in accordance with the terms of the Plan. Establishment and maintenance of the Plan shall not be construed to give any Eligible Employee (or any other person) the right to be retained as an Employee or as a member of the Board of Directors of Weyerhaeuser Company. Nothing contained in the Plan shall constitute a guarantee by the Company or any other person or entity that the assets of the Company will be sufficient to pay any benefits under the Plan. If any provision of the Plan is held to be invalid or illegal for any reason, such invalidity or illegality shall not affect the remaining parts of the Plan, but the Plan shall be construed as if the invalid or illegal provision had never been included in the Plan. Unless some other meaning or intent is apparent from the context, the plural includes the singular and vice versa; and masculine, feminine and neuter words are used interchangeably. Any headings used herein are included for ease of reference only, and are not to be construed so as to alter the terms hereof.

 

  (c) Alienation Prohibited . Amounts credited to a Participant’s accounts are not subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance, charge, garnishment, execution or levy of any kind, either voluntary or involuntary, and any attempt to anticipate, alienate, sell, transfer, assign, pledge, encumber, charge or otherwise dispose of any right to any benefit hereunder will be null and void and not binding on the Plan or the Company.

 

W EYERHAEUSER C OMPANY

2011 D EFERRED C OMPENSATION P LAN

  -24-  


 

  (d) Taxes . The Company or any other payor may withhold from a benefit payment under the Plan or from any other compensation payable by the Company to the Participant any federal, state or local taxes required by law to be withheld with respect to a deferral, payment or accrual under the Plan, and will report such payments and other Plan-related information to the appropriate governmental agencies as required under applicable law.

 

  (e) No Guaranty of Tax Consequences . None of the Company, the Administrator, the Committee or any other person guaranties any particular federal or state income, payroll, personal property or other tax consequence will occur because of participation in the Plan. A Participant should consult with professional tax advisors regarding all questions relative to the tax consequences arising from participation in the Plan.

 

  (f) Participant’s Cooperation . A Participant shall cooperate with the Company by furnishing any and all information requested in order to facilitate the administration of the Plan or the payment of benefits hereunder. If the Participant refuses to cooperate, the Company shall have no further obligation to the Participant under the Plan.

 

  (g) Successors and Assigns . The terms and conditions of the Plan, as amended and in effect from time to time, will be binding on the Company’s successors and assigns, including, without limitation, any entity into which the Company may be merged or with which the Company may be consolidated.

 

W EYERHAEUSER C OMPANY

2011 D EFERRED C OMPENSATION P LAN

  -25-  


 

  (h) Applicable Law and Venue . The Plan and all determinations made and actions taken pursuant hereto, to the extent not otherwise governed by the laws of the United States, will be governed by the laws of the State of Washington without giving effect to the choice or conflicts of law provisions thereof. If the Company or any Participant or beneficiary initiates litigation related to the Plan, the venue for such action will be King County, Washington.

 

  (i) Notice . Any notice required to be furnished by a Participant shall be deemed to be provided if sent in accordance with information and instructions communicated to Participants from time to time.

*      *      *      *       *

IN WITNESS WHEREOF, Weyerhaeuser Company has caused this Plan to be duly executed on the date set forth below.

 

    WEYERHAEUSER COMPANY
Date:                          By:  

 

    Title:  

 

 

W EYERHAEUSER C OMPANY

2011 D EFERRED C OMPENSATION P LAN

  -26-  


Weyerhaeuser Company

2011 Deferred Compensation Plan

Schedule A

Award Plans

Weyerhaeuser Company Annual Incentive Plan

WRECO Management Long-Term Incentive Plan

WRECO Management Short-Term Incentive Plan

Weyerhaeuser Company Residential Wood Products Sales Incentive Plan

Weyerhaeuser Asset Management Incentive Compensation Plan

 

W EYERHAEUSER C OMPANY

2011 D EFERRED C OMPENSATION P LAN

  -1-  

Exhibit 10.4

2011 Fee Deferral Plan for Directors

of

Weyerhaeuser Company

 

1. Name and Purpose . The name of this plan is the “2011 Fee Deferral Plan for Directors of Weyerhaeuser Company” (the “Plan”). Its purpose is to provide non-employee Directors of the Company with increased flexibility in timing the receipt of Fees earned as a Director and to assist the Company in attracting and retaining qualified individuals to serve as Directors.

 

2. Definitions . Whenever used in the Plan, the following terms shall have the meanings set forth below:

 

  (a) “Board” means the Board of Directors of the Company, provided that no member of the Board shall participate in or cast a vote with respect to any matter which specifically relates to that individual, as opposed to relating to the Directors as a group. The Compensation Committee of the Board (“Committee”) makes recommendations to the Board, when appropriate, with respect to matters arising under the Plan.

 

  (b) “Commencement Date” means (i) a Director’s Separation from Service or (ii) a date that is one to five years following a Director’s Separation from Service, as elected by the Director.

 

  (c) “Common Shares” means the shares of common stock, $1.25 par value, of the Company.

 

  (d) “Company” means Weyerhaeuser Company.

 

  (e) “Deferral Period” means that period of time from the end of the date on which Fees would have been paid but for deferral under the Plan until the time when such Fees are paid.

 

  (f) “Deferred Fees” means any Voluntarily Deferred Fees and Designated Stock Equivalents that have been deferred pursuant to the Plan, together with any earnings or other appreciation thereon. All Deferred Fees are subject to the restrictions on transfer set forth in Subparagraph 7(d).

 

  (g) “Designated Stock Equivalents” means Fees deferred pursuant to Subparagraph 4(d).

 

  (h) “Director” for purposes of the Plan means a person serving on the Board who is not an Employee of the Company or any of its subsidiaries.

 

  (i) “Effective Date” has the meaning set forth in Paragraph 10.

 

  (j) “Employee” means a person who is classified by the Company as actively employed by the Company and who is compensated on a salaried basis as reflected on the Company’s or any of its subsidiaries’ payroll records.

 

1


 

  (k) “Fees” mean the fees payable to a Director by the Company as an annual “retainer” upon his or her election or reelection to the Board and fees payable for attending meetings, but not fees payable for extended travel at the request of the Board or a Committee of the Board or reimbursement for expenses.

 

  (l) “Interest Rate Deferral” has the meaning set forth in Subparagraph 4(b)(i).

 

  (m) “Plan Year” means the calendar year in which the Fees are earned.

 

  (n) “Section 409A” means Section 409A of the Internal Revenue Code of 1986, as amended, and regulations and other guidance promulgated thereunder.

 

  (o) “Separation from Service” means the failure to be reelected to, or the resignation or retirement from, the Board as a Director for any reason, provided, that if the Director continues to provide services for the Company or a subsidiary or affiliate in any capacity, the Director shall have a Separation from Service only if the Director has a “separation from service” within the meaning of Section 409A.

 

  (p) “Specified Employee” means a Director who, as of the date of the Director’s Separation from Service for any reason, is a key employee of the Company. The Director is a key employee if the Director meets the requirements of Code Section 416(i)(1)(A)(i), (ii) or (iii) (applied in accordance with the regulations thereunder and disregarding Code Section 416(i)(5)) at any time during the twelve-month period ending on a Specified Employee identification date as determined under Code section 409A. If the Director is a key employee as of December 31, the Director shall be treated as a Specified Employee for the entire twelve-month period beginning on the next following April 1.

 

  (q) “Stock Equivalent” means a deferred unit of account which is equivalent in value to one Common Share of the Company.

 

  (r) “Stock Equivalent Deferral” means Fees deferred as Stock Equivalents pursuant to Subparagraph 4(b)(ii) or 4(d).

 

  (s) “Trading Day” means a day that the New York Stock Exchange is open for business.

 

  (t) “Voluntarily Deferred Fees” means Fees that are deferred pursuant to Subparagraph 4(b).

 

3. Participation in the Plan . Any individual who is a Director may participate in the Plan.

 

4. Payment or Deferral of Fees . Payment of Fees shall be made as follows:

 

  (a) Immediate Payment . Except for Fees deferred pursuant to subparagraphs (b) and (d) below, payment of Fees to a Director shall be made in cash and in full as soon as practicable following the time when the Fees are earned; provided that the annual “retainer” is deemed earned immediately following the Company’s annual meeting of shareholders or other shareholder meeting at which Directors are elected, or in the case of newly appointed Directors, immediately following such appointment.

 

2


 

  (b) Voluntarily Deferred Fees . Except as provided in subparagraph (d) below for Designated Stock Equivalents, a Director may elect to defer receipt of a percentage of all of his or her Fees earned in any Plan Year. The procedure for election is set forth in subparagraph (c) below. Two forms of Voluntarily Deferred Fees are provided for.

 

  (i) “Interest Rate Deferral” - This form of deferral provides for the payment of the amount to be deferred with interest, commencing with the Commencement Date elected by the Director, in the form of a lump sum or annual installments over up to 20 years, as elected by the Director. Details as to the amount and timing of payments are set forth in Paragraph 5.

 

  (ii) “Stock Equivalent Deferral” - This form of deferral provides for the payment of the amount to be deferred, increased or decreased by reference to the market price and dividend history of Common Shares, commencing with the Commencement Date elected by the Director, in the form of a lump sum or annual installments over up to 20 years, as elected by the Director. Details as to the amount and timing of payments are set forth in Paragraph 6.

 

  (c) Election Procedure . A Director shall notify the Company in writing on or prior to the December 31 preceding each Plan Year of his or her election to defer the receipt of a percentage or all of any Fees to be earned starting in the Plan Year about to commence; provided, however, that a Director who is newly elected or appointed to the Board after the commencement of a Plan Year may notify the Company of such deferral election at any time prior to the effective date of his or her election or appointment provided that the requirements of Treas. Reg. § 1.409A-2(a)(7) (or any successor provision) are satisfied. Any Fees or part thereof which the Director has not elected to defer shall be paid as provided in subparagraph (a) above. Each notice to defer shall:

 

  (i) state the percentage of the Fees to be deferred;

 

  (ii) designate the percentage of the total amount to be deferred as an Interest Rate Deferral and the percentage of the total amount to be deferred as a Stock Equivalent Deferral; and

 

  (iii) state the Commencement Date for payment of the Voluntarily Deferred Fees and the number of years (from one to 20) elected for payment.

An election to defer Fees is irrevocable. If a Director fails to make a payment election for any Plan Year, any Voluntarily Deferred Fees for such Plan Year pursuant to this Subparagraph 4(c) shall be payable in a single lump sum payment following the Director’s Separation from Service as if the Director had elected Separation from Service as the Commencement Date.

 

3


 

  (d) Fees Designated as Stock Equivalents . In the event that the Board designates that any Fee to be paid to a Director shall be paid in Stock Equivalents, then such fees (referred to herein as “Designated Stock Equivalents”) shall be treated as Stock Equivalents under the Plan. The following provisions apply with regard to Designated Stock Equivalents:

 

  (i) A Director shall notify the Company in writing on or prior to the December 31 preceding each Plan Year of his or her payment election for Designated Stock Equivalents to be earned in the following Plan Year; provided, however, that a Director who is newly elected or appointed to the Board after the commencement of a Plan Year may notify the Company of such payment election at any time prior to the effective date of his or her election or appointment provided that the requirements of Treas. Reg. § 1.409A-2(a)(7) (or any successor provision) are satisfied. Each such payment election regarding the Designated Stock Equivalents shall state the Commencement Date for the payment of the Designated Stock Equivalents and the number of years (from one to 20) elected for payment.

 

  (ii) An election regarding payment of the Designated Stock Equivalents shall be irrevocable. Should a Director fail to make such payment election for any Plan Year, any Designated Stock Equivalents for such Plan Year shall be payable in a single lump sum payment following the Director’s Separation from Service as if the Director had elected Separation from Service as the Commencement Date;

 

  (iii) A Director shall be entitled to receive payments as provided in Subparagraph 6(c)(i), but shall not be entitled to the election provided in Subparagraph 6(d).

 

  (iv) The provisions of the Plan, including those relating to Voluntarily Deferred Fees, shall apply to Designated Stock Equivalents to the extent they are not inconsistent with this subparagraph (d).

 

5. Interest Rate Deferral .

 

  (a) Accounts . Any Voluntarily Deferred Fees designated as Interest Rate Deferrals shall be credited to a Director’s account as of the day it would otherwise have been paid in cash and shall thereafter accrue interest at a rate to be designated from time to time by the Board, with such interest to be compounded monthly.

 

  (b) Payments . A Director shall be entitled to receive cash payments with respect to Fees deferred under the Interest Rate Deferral option together with interest accrued to the date of payment in each year of the applicable period as elected under Subparagraph 4(c); provided, however, that in the event payments commence based on a Director’s Separation from Service, no payment shall be made earlier than six months after the date of such Separation from Service if the Director is then a Specified Employee, in which case any suspended payment shall occur on the earliest date permitted by this Subparagraph and Section 409A. The amount of cash to be paid each year with respect to the amount of Interest Rate Deferrals from any Plan Year shall be computed by multiplying a fraction, the numerator of which is one and the denominator of which is the number of years remaining in the applicable payment period for such Interest Rate Deferrals, by the remaining portion of such Interest Rate Deferrals plus accrued interest on such Deferred Fees (e.g., 1/10th is paid in the first year of a ten-year payment period; 1/9th of the remaining balance in the second year, 1/8th of the remaining balance in the third year, etc., over the ten years).

 

4


6. Stock Equivalent Deferral .

 

  (a) Accounts . Any Voluntarily Deferred Fees designated as Stock Equivalents shall be divided by the median price per share of Company stock for the last 11 Trading Days of January in the Plan Year during which it would otherwise have been paid in cash to determine the number of deferred Stock Equivalents or fractions thereof credited to a Director’s account. Any Stock Equivalent Deferrals shall be promptly credited to a Director’s account.

 

  (b) Dividend Equivalents . All such deferred Stock Equivalents shall be credited with an amount equivalent to each dividend declared on Common Shares. The amount of such dividend equivalents shall be divided by the price per share of common stock of the Company on the payable date for such dividend to determine the number of additional deferred Stock Equivalents or fractions thereof to be credited to a Director’s account.

 

  (c) Payments .

 

  (v) A Director shall be entitled to receive cash payments with respect to any Stock Equivalent Deferrals credited to his or her account. Payments of such Deferred Fees shall be made following the Commencement Date elected by a Director; provided, however, no payment shall be made earlier than six months after the date of a Director’s Separation from Service if the Director is then a Specified Employee, in which case any suspended payment shall occur on the earliest date permitted by this Subparagraph and Section 409A.

 

  (vi) In the event a Director has elected payment of such Stock Equivalent Deferrals over a number of years rather than as a lump sum, the amount to be paid each year shall be computed by multiplying a fraction, the numerator of which is one and the denominator of which is the number of years remaining in the elected payment period, by the remaining portion of Stock Equivalents credited to the Director’s account, to determine the number of Stock Equivalents for which payment is to be made. The number of Stock Equivalents shall be multiplied by the median price per share of Common Shares for the last 11 Trading Days of January of the year of payment.

 

  (d) Change in Deferral Election . With regard to Voluntarily Deferred Fees credited as Stock Equivalents to a Director’s account deferred from any Plan Year (including increments thereto), notwithstanding any provision in subparagraph 6(c) to the contrary, at any time after the later of (A) the Director’s fifty-second birthday or (B) six months after the Stock Equivalents were credited to the Director’s account, the Director (or the Director’s beneficiary in the event of the death of the Director) may irrevocably elect to establish and fix a firm price for Stock Equivalents currently credited to such portion of his or her account. The firm price shall then be the price per share of the common stock of the Company as of any Trading Day concurrent with the delivery of such election to the Plan’s recordkeeper if delivered before the close of the New York Stock Exchange, or at a price per share of the common stock of the Company on the next following Trading Day, if delivered after the close of the New York Stock Exchange. Interest shall be earned from the date the last dividend equivalent was credited under subparagraph (b) above at the rate applicable from time to time under Subparagraph 5(a). Such interest shall be compounded monthly. Such election shall not accelerate actual payment under the Stock Equivalent deferral option.

 

5


 

  (e) Change in Common Shares . In the event, at any time or from time to time, of a stock dividend, stock split, reverse stock split, combination or exchange of shares, recapitalization, merger, consolidation, or other change in the Company’s structure, the Committee shall make proportional adjustments in the number of Stock Equivalents credited to a Director’s account. Any such adjustments made by the Committee shall be conclusive and binding for all purposes of the Plan.

 

  (f) Price per Share . The term “price per share” shall refer to the closing price of the common stock of the Company on the New York Stock Exchange on the Trading Day in question.

 

7. General Provisions Related to Interest Rate Deferrals and Stock Equivalents Deferrals .

 

  (a) Date of Payments . Payments of deferred amounts shall be made annually prior to March 15 based on the election made by a Director. Payments with respect to Interest Rate Deferrals generally shall be made in January of each year. Payments with respect to Stock Equivalents generally shall be made in February of each year. If the Commencement Date elected by a Director occurs during a year, payments shall begin in January or February, as applicable, of the following year.

 

  (b) Segregation of Funds . The Company shall be under no obligation to segregate any Fees deferred during the Deferral Period. Such unsegregated funds are subject to the claims of the Company’s general creditors during the Deferral Period.

 

  (c) Beneficiaries and Payment on Death . A Director may appoint a beneficiary or beneficiaries to receive payment of the Director’s account after the Director’s death. In the absence of such appointment, or if the appointed beneficiary or beneficiaries fail to survive the Director, the Director’s account shall be paid to the Director’s estate. The appointment shall be made on a form to be supplied by the Company and may be revoked or superseded at any time. The Director’s account shall be paid to the beneficiary or estate, as the case may be, in a lump sum in the calendar year immediately following the year of the Director’s death. For this purpose, the Director’s “account” refers to all of the Director’s Deferred Fees under the Plan, including any unpaid installments.

 

  (d) Restrictions on Deferred Fees . No Director’s interest in any Deferred Fees account is assignable, either by voluntary or involuntary assignment or by operation of law. No part of any Deferred Fees, regardless of the form thereof, may be paid over, loaned, sold, assigned, transferred, discounted, pledged as collateral for a loan or in any other way encumbered until the end of the Deferral Period with respect to such Deferred Fees.

 

8. Administration and Amendment of the Plan .

 

  (a) Powers of the Committee . Full power and authority to construe and interpret the Plan shall be vested in the Committee as, from time to time, constituted by the Board. Decisions hereunder by the Committee shall be final, conclusive and binding on all parties, including each Director and the Company.

 

6


 

  (b) Expenses of the Plan . The expenses of administering the Plan shall be borne by the Company.

 

  (c) Amendment and Termination . The Board in its sole discretion may (i) amend, suspend or terminate the Plan and (ii) supplement or replace the Plan with other Deferred Fees plans; provided that no amendment, supplement or replacement providing for the payment of Fees in the form of stock of the Company shall be effective unless approved by the shareholders of the Company.

 

  (d) Directors’ Rights . No amendment, suspension or termination of the Plan shall affect any deferral already made, and in the event of any such change, any Deferred Fees credited to a Director’s account shall be paid as provided herein. No Director shall have any right or interest in the Plan or its continuance or in his or her continued participation in the Plan, other than in the Deferred Fees credited to his or her account. The existence of the Plan does not extend to any Director a right to continued Director status with the Company, and each Director is deemed to have agreed to the terms herein.

 

9. Notice to the Plan Recordkeeper . Any notice required to be furnished by a Director to the Plan recordkeeper shall be deemed to be provided if sent via fax or first class mail, in accordance with information and instructions communicated by the Plan recordkeeper to the Directors from time to time.

 

10. Effective Date . The Plan is effective as of November 1, 2010. The Plan applies to Fees earned in 2011 and subsequent years that are subject to deferral elections made on or after November 1, 2010 or designated by the Board as Stock Equivalents.

 

11. No Acceleration. The acceleration of the time or schedule of any payment due under the Plan is generally prohibited. The Board may, however, accelerate certain distributions under the Plan to the extent permitted under Section 409A.

 

12. Miscellaneous .

 

  (a) Rights Unsecured . The rights of a Director or his or her beneficiary to receive a payment hereunder shall be an unsecured claim against the general assets of the Company, and neither the Director nor his or her beneficiary shall have any rights in or against any amount credited to his or her account or any other specific assets of the Company. The Plan at all times shall be considered entirely unfunded for tax purposes. Any funds set aside by the Company for the purpose of meeting its obligations under the Plan, including any amounts held by a trustee, shall continue for all purposes to be part of the general assets of the Company and shall be available to the Company’s general creditors in the event of the Company’s bankruptcy or insolvency. The Company’s obligation under the Plan shall be that of an unfunded and unsecured promise to pay benefits in the future. The Plan shall not be subject to any mistake of fact claim.

 

  (b) Taxes . The Company or any other payer may withhold from a benefit payment under the Plan or from any other compensation payable by the Company to the Director any federal, state or local taxes required by law to be withheld with respect to a deferral, payment or accrual under the Plan, and shall report such payments and other Plan-related information to the appropriate governmental agencies as required under applicable law.

 

7


 

  (c) No Guaranty of Tax Consequences . None of the Company, the Committee or any other person guaranties that any particular federal or state income, payroll, personal property or other tax consequence shall occur because of participation in the Plan. A Director should consult with professional tax advisors regarding all questions relative to the tax consequences arising from participation in the Plan.

 

  (d) Successors and Assigns . The terms and conditions of the Plan, as amended and in effect from time to time, shall be binding on the Company’s successors and assigns, including, without limitation, any entity into which the Company may be merged or with which the Company may be consolidated.

 

  (e) Applicable Law and Venue . The Plan and all determinations made and actions taken pursuant hereto, to the extent not otherwise governed by the laws of the United States, shall be governed by the laws of the State of Washington without giving effect to the choice or conflicts of law provisions thereof. The Company intends that the Plan constitutes, and shall be construed and administered as, an unfunded plan of deferred compensation. In addition, the Plan is intended to comply with the requirements of Section 409A, including any official guidance issued thereunder. Notwithstanding any other provision, the Plan shall be interpreted, operated and administered in a manner consistent with this intention to the extent the Board deems necessary to comply with such requirements of Section 409A and to avoid the imposition of any additional tax thereunder. In addition, notwithstanding anything in Subparagraph 8(d) to the contrary, the Plan shall be deemed to be amended, and any deferrals and distributions hereunder shall be deemed to be modified, to the extent necessary to comply with such requirements of Section 409A. If the Company or any Director or beneficiary initiates litigation related to the Plan, the venue for such action shall be King County, Washington.

*    *    *    *

IN WITNESS WHEREOF, the Company has caused this instrument to be executed on the                      day of              , 2010.

Weyerhaeuser Company

 

By:  

 

Its:  

 

 

8

Exhibit 10.5

WEYERHAEUSER COMPANY

2004 LONG-TERM

INCENTIVE PLAN

(As Amended and Restated Effective December 8, 2010)


WEYERHAEUSER COMPANY

2004 LONG-TERM INCENTIVE PLAN

(As Amended and Restated Effective December 8, 2010)

 

SECTION 1.

  PURPOSE AND ESTABLISHMENT    1
1.1   P URPOSE    1
1.2   R EPLACEMENT P LAN    1

SECTION 2.

  DEFINITIONS    1

SECTION 3.

  ADMINISTRATION    5
3.1   A DMINISTRATION OF THE P LAN    5
3.2   A DMINISTRATION AND I NTERPRETATION BY C OMMITTEE    5

SECTION 4.

  SHARES SUBJECT TO THE PLAN    5
4.1   A UTHORIZED N UMBER OF S HARES    5
4.2   S HARE U SAGE    7
4.3   L IMITATIONS    7

SECTION 5.

  ELIGIBILITY    8

SECTION 6.

  AWARDS    8
6.1   F ORM AND G RANT OF A WARDS    8
6.2   E VIDENCE OF A WARDS    8

SECTION 7.

  OPTIONS    8
7.1   G RANT OF O PTIONS    8
7.2   O PTION E XERCISE P RICE    8
7.3   T ERMS OF O PTIONS    8
7.4   E XERCISE OF O PTIONS    8
7.5   P AYMENT OF E XERCISE P RICE    9
7.6   P OST -T ERMINATION E XERCISE    9
7.7   I NCENTIVE S TOCK O PTIONS    9

SECTION 8.

  STOCK APPRECIATION RIGHTS    10
8.1   G RANT OF S TOCK A PPRECIATION R IGHTS    10
8.2   P AYMENT OF SAR A MOUNT    10

SECTION 9.

  RESTRICTED STOCK AND STOCK UNITS    10
9.1   G RANT OF R ESTRICTED S TOCK AND S TOCK U NITS    10
9.2   I SSUANCE OF S HARES    10
9.3   D IVIDENDS AND D ISTRIBUTIONS    10

SECTION 10.

  PERFORMANCE SHARES AND PERFORMANCE UNITS    11
10.1   G RANT OF P ERFORMANCE S HARES    11
10.2   G RANT OF P ERFORMANCE U NITS    11

SECTION 11.

  PERFORMANCE CRITERIA    12
11.1   A WARDS S UBJECT TO P ERFORMANCE G OALS    12
11.2   U SE AND C ALCULATION OF P ERFORMANCE C RITERIA    12

SECTION 12.

  OTHER STOCK OR CASH BASED AWARDS    12

SECTION 13.

  WITHHOLDING    12


 

SECTION 14.

  ASSIGNABILITY    13

SECTION 15.

  AMENDMENT AND TERMINATION    13
15.1   A MENDMENT , S USPENSION OR T ERMINATION OF THE P LAN    13
15.2   T ERM OF THE P LAN    13
15.3   C ONSENT OF P ARTICIPANT    13

SECTION 16.

  GENERAL    14
16.1   N O I NDIVIDUAL R IGHTS    14
16.2   I SSUANCE OF S HARES    14
16.3   N O R IGHTS AS A S HAREHOLDER    14
16.4   C OMPLIANCE WITH L AWS AND R EGULATIONS    15
16.5   P ARTICIPANTS IN O THER C OUNTRIES    15
16.6   N O T RUST OR F UND    16
16.7   S UCCESSORS    16
16.8   S EVERABILITY    16
16.9   C HOICE OF L AW    16
16.10   T REATMENT OF A WARDS F OLLOWING A C HANGE IN C ONTROL    16

SECTION 17.

  EFFECTIVE DATE    17

 

ii


WEYERHAEUSER COMPANY

2004 LONG-TERM INCENTIVE PLAN

(As Amended And Restated Effective December 8, 2010)

SECTION 1. PURPOSE AND ESTABLISHMENT

1.1 Purpose

The purposes of this 2004 Long-Term Incentive Plan (the “Plan”) is to promote the interests of Weyerhaeuser Company (the “Company”) and its shareholders by attracting, retaining and motivating employees, officers and directors key to the growth and success of the Company by providing them the opportunity to acquire a proprietary interest in the Company and to link their interests and efforts to the long-term interests of the Company’s shareholders.

1.2 Replacement Plan

This Plan replaced the Company’s 1998 Long-Term Incentive Compensation Plan and 1992 Long-Term Incentive Compensation Plan (collectively, the “Prior Plans”). No further grants may be made under the Prior Plans. Shares of Common Stock reserved for issuance under the 1998 Plan in excess of the number of shares as to which awards had been made as April 12, 2003, are no longer be available for issuance.

SECTION 2. DEFINITIONS

As used in the Plan, the following definitions apply to the terms indicated below:

2.1 “Award” means any Option, Stock Appreciation Right, Restricted Stock, Stock Unit, Performance Share, Performance Unit, dividend equivalent, cash-based award or other incentive payable in cash or in shares of Common Stock as may be designated by the Committee from time to time.

2.2 “Beneficial Owner” has the meaning ascribed to such term in Rule 13d-3 promulgated under the Exchange Act.

2.3 “Board” means the Board of Directors of the Company.

2.4 “Change in Control” or “CIC” of the Company shall be deemed to have occurred as of the first day that any one or more of the following conditions shall have been satisfied:

(a) Any Person, but excluding the Company and any subsidiary of the Company and any employee benefit plan (or related trust) sponsored or maintained by the Company or any subsidiary of the Company (collectively, “Excluded Persons”), directly or indirectly, becomes the Beneficial Owner of securities of the Company representing 35% or more of the combined voting power of the Company’s then outstanding securities with respect to the election of directors of the Company and such ownership continues for at least a period of 30 days (with the end of such period being deemed the effective date of the CIC); or

 

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(b) During any 24-consecutive month period, the individuals who, at the beginning of such period, constitute the Board (the “Incumbent Directors”) cease for any reason other than death to constitute at least a majority of the Board, provided, however, that except as set forth in the following sentence, an individual who becomes a member of the Board subsequent to the beginning of the 24-month period shall be deemed to have satisfied such 24-month requirement (and be an Incumbent Director) if such director was elected by, or on the recommendation of or with the approval of, at least two-thirds of the directors who then qualified as Incumbent Directors either actually (because they were directors at the beginning of such period) or by prior operation of the provisions of this Section 2.4(b). Notwithstanding the proviso set forth in the preceding sentence, if any such individual initially assumes office as a result of or in connection with either an actual or threatened solicitation with respect to the election of directors (as such terms are used in Rule 14a-12(c) of Regulation 14A promulgated under the Exchange Act) or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board, then such individual shall not be considered an Incumbent Director. For purposes of this Section 2.4(b), if at any time individuals who initially assumed office as a result of or in connection with an arrangement or understanding between the Company and any Person (an “Entity Designee”) constitute at least one-half of the Board, none of such Entity Designees shall be considered Incumbent Directors from that time forward; or

(c) There is consummated:

(i) a plan of complete liquidation of the Company; or

(ii) a sale or disposition of all or substantially all the Company’s assets in one or a series of related transactions; or

(iii) a merger, consolidation, or reorganization of the Company or the acquisition of outstanding Common Stock and as a result of or in connection with such transaction (A) 35% or more of the outstanding Common Stock or the voting securities of the Company outstanding immediately prior thereto or the outstanding shares of common stock or the combined voting power of the outstanding voting securities of the surviving entity are owned, directly or indirectly, by any other corporation or Person other than (x) an Excluded Person or (y) a Person who is, or if such Person beneficially owned 5% or more of the outstanding Common Stock would be, eligible to report such Person’s beneficial ownership on Schedule 13G pursuant to the rules under Section 13(d) of the Exchange Act or (z) a Person that has entered into an agreement with the Company pursuant to which such Person has agreed not to acquire additional voting securities of the Company (other than pursuant to the terms of such agreement), solicit proxies with respect to the Company’s voting securities or otherwise participate in any contest relating to the election of directors of the Company, or take other actions that could result in a Change in Control of the Company; provided that this exclusion shall apply only so long as such agreement shall remain in effect, or (B) the voting securities of the Company outstanding immediately prior thereto do not immediately after such transaction continue to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) more than sixty percent (60%) of the combined voting power of the voting securities of the Company (or such surviving entity) outstanding immediately after such merger, consolidation, or reorganization.

2.5 “Code” means the Internal Revenue Code of 1986, as amended from time to time.

2.6 “Committee” has the meaning set forth in Section 3.1.

2.7 “Common Stock” means the common stock, par value $1.25 per share, of the Company.

 

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2.8 “Company” means Weyerhaeuser Company, a Washington corporation.

2.9 “Covered Employee” means a “covered employee” as that term is defined in Section 162(m) of the Code or any successor provision.

2.10 “Disability” means “Disability” as defined by the Committee or the Company’s vice president of human resources for purposes of the Plan or an Award, or in the instrument evidencing the Award, or in a written employment or services agreement.

2.11 “Effective Date” has the meaning set forth in Section 17.

2.12 “Exchange Act” means the Securities Exchange Act of 1934, as amended from time to time.

2.13 “Fair Market Value” means the average of the high and low per share trading prices (or the average of the opening and closing prices, or the closing price, if so determined by the Committee) for the Common Stock as reported on the consolidated transaction reporting system for New York Stock Exchange issues during regular session trading or such other source the Committee deems reliable for a single trading day or an average of trading days not to exceed 30 days from the Grant Date or other date on which the Fair Market Value is determined, at the Committee’s discretion.

2.14 “Grant Date” means the date on which the Committee completes the corporate action authorizing the grant of an Award or such later date specified by the Committee, provided that conditions to the exercisability or vesting of Awards shall not defer the Grant Date.

2.15 “Incentive Stock Option” means an Option granted with the intention that it qualify as an “incentive stock option” as that term is defined in Section 422 of the Code or any successor provision.

2.16 “Layoff” means “Layoff” as defined by the Committee or the Company’s vice president of human resources for purposes of the Plan or an Award or in the instrument evidencing the Award or in a written employment or services agreement.

2.17 “Non-qualified Stock Option” means an Option other than an Incentive Stock Option.

2.18 “Non-recurring Items” means non-recurring items deemed not reflective of the Company’s core operating performance, including, but not limited to, exogenous events, acquisitions, divestitures, changes in accounting principles or “extraordinary items” determined under generally accepted accounting principles.

2.19 “Option” means a right to purchase Common Stock granted under Section 7.

2.20 “Participant” means any eligible person as set forth in Section 5 to whom an Award is granted.

2.21 “Performance Criteria” has the meaning set forth in Section 11.1.

2.22 “Performance Share” has the meaning set forth in Section 10.1.

2.23 “Performance Unit” has the meaning set forth in Section 10.2.

 

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2.24 “Person” means any individual, corporation, partnership, association, limited liability company, joint-stock company, trust, unincorporated organization or government or political subdivision thereof, and as used in Section 13(d) and 14(d) of the Exchange Act, including a “group” as defined in Section 13(d).

2.25 “Plan” means the Weyerhaeuser Company 2004 Long-Term Incentive Compensation Plan.

2.26 “Prior Plans” has the meaning set forth in Section 1.2.

2.27 “Related Company” means any entity that is directly or indirectly controlled by the Company.

2.28 “Restricted Stock” means an Award of shares of Common Stock granted under Section 9, the rights of ownership of which may be subject to restrictions prescribed by the Committee.

2.29 “Retirement” means “Retirement” as defined by the Committee or the Company’s vice president of human resources for purposes of the Plan or an Award or in the instrument evidencing the Award or in a written employment or services agreement.

2.30 “Securities Act” means the Securities Act of 1933, as amended from time to time.

2.31 “Stock Appreciation Right” has the meaning set forth in Section 8.1.

2.32 “Stock Unit” means an Award granted under Section 9 denominated in units of Common Stock.

2.33 “Substitute Awards” means Awards granted or shares of Common Stock issued by the Company in assumption of, or in substitution or exchange for, awards previously granted, or the right or obligation to make future awards, by a company acquired by the Company or with which the Company combines.

2.34 “Termination of Service,” unless otherwise defined by the Committee or the Company’s vice president of human resources or in the instrument evidencing the Award or in a written employment or services agreement, means a termination of employment or service relationship with the Company or a Related Company for any reason, whether voluntary or involuntary, including by reason of death, Disability, Retirement, or Layoff. Any question as to whether and when there has been a Termination of Service for the purposes of an Award and the cause of such Termination of Service shall be determined by the Company’s vice president of human resources or by the Committee with respect to officers subject to the reporting requirements of Section 16(a) of the Securities Act, and such determination shall be final. Transfer of a Participant’s employment or service relationship between wholly owned subsidiaries of the Company, or between the Company and any wholly owned subsidiaries of the Company, shall not be considered a Termination of Service for purposes of an Award. Unless the Committee determines otherwise, a Termination of Service shall be deemed to occur if the Participant’s employment or service relationship is with an entity that has ceased to be a Related Company.

 

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SECTION 3. ADMINISTRATION

3.1 Administration of the Plan

The Plan shall be administered by the Compensation Committee of the Board. Notwithstanding the foregoing, the Board or the Compensation Committee may delegate responsibility for administering the Plan with respect to designated classes of eligible persons to different committees consisting of one or more members of the Board, subject to such limitations as the Board or the Compensation Committee deems appropriate, except with respect to benefits to non-employee directors and to officers subject to Section 16 of the Exchange Act or officers who are or may be Covered Employees. Members of any committee shall serve for such term as the Board may determine, subject to removal by the Board at any time. To the extent consistent with applicable law, the Board or the Compensation Committee may authorize one or more officers of the Company to grant Awards to designated classes of eligible persons, within limits specifically prescribed by the Board or the Committee; provided, however, that no such officer shall have or obtain authority to grant Awards to himself or herself or to any person subject to Section 16 of the Exchange Act. All references in the Plan to the “Committee” shall be, as applicable, to the Compensation Committee, or any other committee or any officer to whom the Board or the Compensation Committee has delegated authority to administer the Plan.

3.2 Administration and Interpretation by Committee

Except for the terms and conditions explicitly set forth in the Plan, the Committee shall have full power and exclusive authority, subject to such orders or resolutions not inconsistent with the provisions of the Plan as may from time to time be adopted by the Board, to (a) select the eligible persons as set forth in Section 5 to whom Awards may from time to time be granted under the Plan; (b) determine the type or types of Award to be granted to each Participant under the Plan; (c) determine the number of shares of Common Stock to be covered by each Award granted under the Plan; (d) determine the terms and conditions of any Award granted under the Plan; (e) approve the forms of agreements for use under the Plan; (f) determine whether, to what extent and under what circumstances Awards may be settled in cash, shares of Common Stock or other property or canceled or suspended; (g) interpret and administer the Plan and any instrument or agreement entered into under the Plan; (h) establish such rules and regulations and appoint such agents as it shall deem appropriate for the proper administration of the Plan; (i) delegate ministerial duties to such of the Company’s officers as it so determines; and (j) make any other determination and take any other action that the Committee deems necessary or desirable for administration of the Plan. Decisions of the Committee shall be final, conclusive and binding on all persons, including the Company, any Participant, any shareholder and any eligible person. A majority of the members of the Committee may determine its actions and fix the time and place of its meetings.

SECTION 4. SHARES SUBJECT TO THE PLAN

4.1 Authorized Number of Shares

(a) Subject to adjustment from time to time as provided in this Section 4.1, the maximum number of shares of Common Stock available for issuance under the Plan shall be 10,033,509.

 

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(b) In the event a company acquired by the Company or with which the Company combines (“Acquisition Party”) has shares available for awards or grants under a pre-existing plan not adopted in contemplation of such acquisition or combination, to the extent determined by the Committee or the Board, a number of shares of Common Stock determined by applying the exchange ratio or other adjustment or valuation ratio or formula used in such acquisition or combination to determine the consideration payable to the holders of common stock of the Acquisition Party to the number of shares available for grant under the terms of such pre-existing plan shall be available for Awards under the Plan and shall not reduce the shares of Common Stock authorized for issuance under the Plan; provided, that such Awards shall not be made after the date awards or grants could have been made under the terms of the pre-existing plan, absent the acquisition or combination; and provided, further, that such Awards shall be made only to individuals who were not employees or non-employee directors of the Company or a Related Company prior to such acquisition or combination.

(c) Shares available for issuance under the Plan shall be increased by any shares subject to outstanding awards under the Company’s Prior Plans on the date of shareholder approval of the Plan that cease to be subject to such awards (other than by reason of exercise or settlement of the awards to the extent they are exercised for or settled in shares of Common Stock), subject to adjustment from time to time as provided in this Section 4.1, which shares of Common Stock shall cease, as of such date, to be available for grant and issuance under the Prior Plans, but shall be available for issuance under the Plan.

(d) In the event, at any time or from time to time, a stock dividend, stock split, reverse stock split, spin-off, combination or exchange of shares, recapitalization, merger, consolidation, distribution to shareholders other than a normal cash dividend or other change in the Company’s corporate or capital structure results in (i) the outstanding shares of Common Stock, or any securities exchanged therefore or received in their place, being exchanged for a different number or kind of securities of the Company or of any other company or (ii) new, different or additional securities of the Company or of any other company being received by the holders of shares of Common Stock, then the Committee shall make proportional adjustments in (A) the maximum number and kind of securities available for issuance under the Plan; (B) the maximum number and kind of securities issuable as Incentive Stock Options as set forth in Section 4.2; (C) the maximum number and kind of securities that may be issued to an individual in any one calendar year as set forth in Section 4.3; (D) the maximum number and kind of securities that may be made subject to the different types of Awards available under the Plan; and (E) the number and kind of securities that are subject to any outstanding Award and the per share price of such securities, without any change in the aggregate price to be paid therefor.

(e) The determination by the Committee as to the terms of any of the foregoing adjustments shall be conclusive and binding.

(f) Notwithstanding the foregoing, the issuance by the Company of shares of stock of any class, or securities convertible into shares of stock of any class, for cash or property, or for labor or services rendered, either upon direct sale or upon the exercise of rights or warrants to subscribe therefore, or upon conversion of shares or obligations of the Company convertible into such shares or other securities, shall not affect, and no adjustment by reason thereof shall be made with respect to, outstanding Awards.

 

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4.2 Share Usage

(a) Shares of Common Stock covered by an Award shall not be counted as used unless and until they are actually issued and delivered to a Participant. If any Award based on shares is settled for cash, or lapses, expires, terminates or is canceled prior to the issuance of shares thereunder, the shares subject to such Awards shall again be available for issuance under the Plan. In the event that any Option or other Award granted hereunder is exercised through the tendering of shares (either actually or by attestation) or in the event that withholding tax liabilities arising from such Award are satisfied by the tendering of shares or by the withholding of shares by the Company, the number of shares of Common Stock issued net of the shares of Common Stock tendered or withheld shall be counted for purposes of determining the maximum number of shares of Common Stock available for issuance under the Plan. In addition, Substitute Awards shall not reduce the shares of Common Stock authorized for issuance under the Plan. The number of shares available for issuance under the Plan shall not be reduced to reflect any dividends or dividend equivalents that are reinvested into additional shares or credited as additional Restricted Stock, Stock Units, Performance Shares or Performance Units. All shares issued under the Plan shall be authorized and unissued shares.

(b) The Committee shall have the authority to grant Awards as an alternative to or as the form of payment for grants or rights earned or due under other compensation plans or arrangements of the Company.

(c) Notwithstanding the foregoing, the maximum number of shares that may be issued upon the exercise of Incentive Stock Options shall be 10,033,509, subject to adjustment as provided in Section 4.1(d); and provided, further, that for purposes of Section 4.3, any such shares shall be counted in accordance with the requirements of Section 162(m) of the Code.

4.3 Limitations

(a) Subject to adjustment as provided in Section 4.1(d), no Participant shall be eligible to receive in any one calendar year (i) Options or Stock Appreciation Rights under the Plan relating to more than 1,327,093 shares of Common Stock or (ii) Restricted Stock, Stock Units, Performance Shares or Performance Units under the Plan aggregating more than 540,584 shares of Common Stock.

(b) Subject to adjustment as provided in Section 4.1(d), the aggregate number of shares that may be issued pursuant to Awards granted under the Plan (other than Awards of Options or Stock Appreciation Rights) shall not exceed 9,189,936

(c) Subject to adjustment as provided in Section 4.1(d), the aggregate number of shares that may be issued pursuant to Awards granted under the Plan (other than Awards of Options or Stock Appreciation Rights) that (i) are not (A) subject to restrictions based on the satisfaction of specified performance goals or (B) granted in lieu of the payment of performance-based cash incentive awards; or (ii) contain no restrictions or contain restrictions based solely on continuous employment or services for less than three years (except where Termination of Service occurs by reason of death, Retirement, Disability or Layoff) shall not exceed 5% of the authorized number of shares pursuant to Section 4.1(a).

 

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SECTION 5. ELIGIBILITY

An Award may be granted to any employee, officer or director of the Company or a Related Company whom the Committee from time to time selects. The above are “eligible persons.”

SECTION 6. AWARDS

6.1 Form and Grant of Awards

The Committee shall have the authority, in its sole discretion, to determine the type or types of Awards to be granted under the Plan. Such Awards may be granted either alone, in addition to or in tandem with any other type of Award.

6.2 Evidence of Awards

Awards granted under the Plan shall be evidenced by a written instrument that shall contain such terms, conditions, limitations and restrictions as the Committee shall deem advisable and that are not inconsistent with the Plan.

SECTION 7. OPTIONS

7.1 Grant of Options

The Committee may grant Options designated as Incentive Stock Options or Non-qualified Stock Options.

7.2 Option Exercise Price

The exercise price for shares purchased under an Option shall be as determined by the Committee, but shall not be less than the Fair Market Value of the Common Stock for the Grant Date, except in the case of Substitute Awards. In no event shall the Committee, without the prior approval of the Company’s shareholders, cancel any outstanding Option for the purpose of reissuing the Option to the Participant at a lower exercise price or reduce the exercise price of an outstanding Option.

7.3 Terms of Options

Subject to earlier termination in accordance with the terms of the Plan and the instrument evidencing the Option, the maximum term of an Option shall be as established for that Option by the Committee or, if not so established, shall be 10 years from the Grant Date.

7.4 Exercise of Options

(a) The Committee shall establish and set forth in each instrument that evidences an Option the time at which, or the installments in which, the Option shall vest and become exercisable, any of which provisions may be waived or modified by the Committee at any time.

(b) To the extent an Option has vested and become exercisable, the Option may be exercised in whole or from time to time in part by delivery as directed by the Company to the Company or a brokerage firm designated or approved by the Company of a written stock option exercise agreement or notice, in a form and in accordance with procedures established by the Committee, setting forth the number of shares with respect to which the Option is being exercised, the restrictions imposed on the shares purchased under such exercise agreement, if any, and such representations and agreements as may be required by the Committee, accompanied by payment in full as described in Section 7.5. An Option may be exercised only for whole shares and may not be exercised for less than a reasonable number of shares at any one time, as determined by the Committee.

 

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7.5 Payment of Exercise Price

The exercise price for shares purchased under an Option shall be paid in full as directed by the Company to the Company or a brokerage firm designated or approved by the Company by delivery of consideration equal to the product of the Option exercise price and the number of shares purchased. Such consideration must be paid before the Company will issue the shares being purchased and must be in a form or a combination of forms acceptable to the Committee for that purchase, which forms may include: (a) check; (b) wire transfer; (c) tendering by attestation shares of Common Stock already owned by the Participant for at least six months (or any shorter period sufficient to avoid a charge to the Company’s earnings for financial reporting purposes) that on the day prior to the exercise date have a Fair Market Value equal to the aggregate exercise price of the shares being purchased under the Option; (d) to the extent permitted by applicable law, delivery of a properly executed exercise notice, together with irrevocable instructions to a brokerage firm designated or approved by the Company to deliver promptly to the Company the aggregate amount of sale or loan proceeds to pay the Option exercise price and any tax withholding obligations that may arise in connection with the exercise, all in accordance with the regulations of the Federal Reserve Board; or (e) such other consideration as the Committee may permit in its sole discretion, including, where permitted by law and the Committee, other Awards. Notwithstanding the foregoing, if the Company becomes subject to new accounting rules applicable to equity-based compensation, and is required to or elects to expense the cost of Options pursuant to FAS 123 (or a successor or other standard), the Committee shall have the sole discretion to substitute, without receiving Participant permission, SARs paid only in stock for outstanding Options; provided, the terms of the substituted stock SARs are the same as the terms for the Options, the number of shares underlying the number of stock SARs equals the number of shares underlying the Options and the difference between the Fair Market Value of the underlying Shares and the Grant Price of the SARs is equivalent to the difference between the Fair Market Value of the underlying Shares and the Option Price of the Options.

7.6 Post-Termination Exercise

The Committee shall establish and set forth in each instrument that evidences an Option whether the Option shall continue to be exercisable, and the terms and conditions of such exercise, after a Termination of Service, any of which provisions may be waived or modified by the Committee at any time.

7.7 Incentive Stock Options

The terms of any Incentive Stock Options shall comply in all respects with the provisions of Section 422 of the Code, or any successor provision, and any regulations promulgated thereunder. Individuals who are not employees of the Company or one of its parent or subsidiary corporations (as such terms are defined for purposes of Section 422 of the Code) may not be granted Incentive Stock Options. To the extent that the aggregate Fair Market Value of Common Stock with respect to which Incentive Stock Options are exercisable for the first time by a Participant during any calendar year exceeds $100,000 or, if different, the maximum limitation in effect at the time of grant under the Code (the Fair Market Value being determined as of the Grant Date for the Option), such portion in excess of $100,000 shall be treated as Nonqualified Stock Options.

 

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SECTION 8. STOCK APPRECIATION RIGHTS

8.1 Grant of Stock Appreciation Rights

The Committee may grant stock appreciation rights (“Stock Appreciation Rights” or “SARs”) to Participants at any time. A SAR may be granted in tandem with an Option or alone (“freestanding”). The grant price of a tandem SAR shall be equal to the exercise price of the related Option, and the grant price of a freestanding SAR shall be equal to the Fair Market Value of the Common Stock for the Grant. A SAR may be exercised upon such terms and conditions and for the term as the Committee determines in its sole discretion; provided, however, that, subject to earlier termination in accordance with the terms of the Plan and the instrument evidencing the SAR, the term of a freestanding SAR shall be as established for that SAR by the Committee or, if not so established, shall be 10 years, and in the case of a tandem SAR, (a) the term shall not exceed the term of the related Option and (b) the tandem SAR may be exercised for all or part of the shares subject to the related Option upon the surrender of the right to exercise the equivalent portion of the related Option, except that the tandem SAR may be exercised only with respect to the shares for which its related Option is then exercisable.

8.2 Payment of SAR Amount

Upon the exercise of a SAR, a Participant shall be entitled to receive payment from the Company in an amount determined by multiplying: (a) the difference between the market price at which the shares of Common Stock are trading on the New York Stock Exchange as of the time of exercise over the grant price by (b) the number of shares with respect to which the SAR is exercised. At the discretion of the Committee, the payment upon exercise of a SAR may be in cash, in shares of equivalent value, in some combination thereof or in any other manner approved by the Committee in its sole discretion.

SECTION 9. RESTRICTED STOCK AND STOCK UNITS

9.1 Grant of Restricted Stock and Stock Units

The Committee may grant Restricted Stock and Stock Units on such terms and conditions and subject to such repurchase or forfeiture restrictions, if any (which may be based on continuous service with the Company or a Related Company or the achievement of any of the Performance Criteria set forth in Section 11.1), as the Committee shall determine in its sole discretion, which terms, conditions and restrictions shall be set forth in the instrument evidencing the Award.

9.2 Issuance of Shares

Upon the satisfaction of any terms, conditions and restrictions prescribed with respect to Restricted Stock or Stock Units, or upon a Participant’s release from any terms, conditions and restrictions of Restricted Stock or Stock Units, as determined by the Committee, and subject to the provisions of Section 13, (a) the shares of Restricted Stock covered by each Award of Restricted Stock shall become freely transferable by the Participant, and (b) Stock Units shall be paid in cash, shares of Common Stock or a combination of cash and shares of Common Stock as the Committee shall determine in its sole discretion. Any fractional shares subject to such Awards shall be paid to the Participant in cash.

 

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9.3 Dividends and Distributions

Participants holding shares of Restricted Stock or Stock Units may, if the Committee so determines, be credited with dividends paid with respect to the underlying shares or dividend equivalents while they are so held in a manner determined by the Committee in its sole discretion. The Committee may apply any restrictions to the dividends or dividend equivalents that the Committee deems appropriate. The Committee, in its sole discretion, may determine the form of payment of dividends or dividend equivalents, including cash, shares of Common Stock, Restricted Stock or Stock Units.

SECTION 10. PERFORMANCE SHARES AND PERFORMANCE UNITS

10.1 Grant of Performance Shares

The Committee may grant Awards of performance shares (“Performance Shares”) and designate the Participants to whom Performance Shares are to be awarded and determine the number of Performance Shares, the length of the performance period and the other terms and conditions of each such Award. Each Award of Performance Shares shall, upon the attainment of performance goals and other terms and conditions specified by the Committee, entitle the Participant to a payment in the form established by the Committee. The form of payment may be in cash, shares of Common Stock, Options, Share Appreciation Rights, Restricted Stock or other awards or any combination of cash, shares of Common Stock, Share Appreciation Rights, Restricted Stock or other awards. Notwithstanding satisfaction of any performance goals, the number of shares of Common Stock issued under an Award of Performance Shares may be adjusted on the basis of such further consideration as the Committee shall determine in its sole discretion. However, the Committee may not, in any event, increase the number of shares of Common Stock earned upon satisfaction of any performance goal by any Covered Employee.

10.2 Grant of Performance Units

The Committee may grant Awards of performance units (“Performance Units”) and designate the Participants to whom Performance Units are to be awarded and determine the number of Performance Units and the terms and conditions of each such Award. Performance Units shall entitle the Participant to a payment in cash upon the attainment of performance goals and other terms and conditions specified by the Committee. Notwithstanding the satisfaction of any performance goals, the amount to be paid under an Award of Performance Units may be adjusted on the basis of such further consideration as the Committee shall determine in its sole discretion. However, the Committee may not, in any event, increase the amount earned under Awards of Performance Units upon satisfaction of any performance goal by any Covered Employee, and the maximum amount earned by such Covered Employee in any calendar year may not exceed $5,000,000. The Committee, in its discretion, may substitute actual shares of Common Stock for the cash payment otherwise required to be made to a Participant pursuant to a Performance Unit.

 

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SECTION 11. PERFORMANCE CRITERIA

11.1 Awards Subject to Performance Goals

Awards of Restricted Stock, Stock Units, Performance Shares, Performance Units and other Awards made pursuant to the Plan may be made subject to the attainment of performance goals relating to one or more of the following business criteria within the meaning of Section 162(m) of the Code: profits (including, but not limited to, profit growth, net operating profit or economic profit); profit-related return ratios; return measures (including, but not limited to, return on assets, capital, equity or sales); cash flow (including, but not limited to, operating cash flow, free cash flow or cash flow return on capital); earnings (including, but not limited to, earnings growth, net earnings, earnings per share, or earnings before or after taxes); net sales growth; net income (before or after taxes, interest, depreciation and/or amortization); gross or operating margins; productivity ratios; share price (including, but not limited to, growth measures and total shareholder return); expense targets; margins; cost reduction; cash value added; operating efficiency; customer satisfaction; and working capital targets (“Performance Criteria”). Performance Criteria may be stated in absolute terms or relative to comparison companies or indices to be achieved during a period of time.

11.2 Use and Calculation of Performance Criteria

Any Performance Criteria may be used to measure the performance of the Company as a whole or any business unit of the Company. Any Performance Criteria may include or exclude Non-recurring Items. Performance Criteria shall be calculated in accordance with (a) the Company’s financial statements or generally accepted accounting principles, or (b) under a methodology established by the Committee prior to the issuance of an Award that is consistently applied and identified in the audited financial statements, including footnotes, or the Management’s Discussion and Analysis section of the Company’s annual report. The Committee may not in any event increase the amount of compensation payable to a Covered Employee upon the satisfaction of any Performance Criteria.

SECTION 12. OTHER STOCK OR CASH BASED AWARDS

In addition to the Awards described in Sections 7 through 10, and subject to the terms of the Plan, the Committee may grant other incentives payable in cash or in shares of Common Stock under the Plan as it determines to be in the best interests of the Company and subject to such other terms and conditions as it deems appropriate; provided, however, that the maximum amount that any Participant shall be eligible to receive in any one calendar year shall be $5,000,000.

SECTION 13. WITHHOLDING

(a) The Company may require the Participant to pay to the Company the amount of (i) any taxes that the Company is required by applicable federal, state, local or foreign law to withhold with respect to the grant, vesting or exercise of an Award (“tax withholding obligations”) and (ii) any amounts due from the Participant to the Company or to any Related Company (“other obligations”). The Company shall not be required to issue any shares of Common Stock under the Plan until such tax withholding obligations and other obligations are satisfied.

 

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(b) The Committee may permit or require a Participant to satisfy all or part of his or her tax withholding obligations and other obligations by (i) paying cash to the Company, (ii) having the Company withhold an amount from any cash amounts otherwise due or to become due from the Company to the Participant, (iii) having the Company withhold a number of shares of Common Stock that would otherwise be issued to the Participant (or become vested in the case of Restricted Stock) having a Fair Market Value equal to the tax withholding obligations and other obligations (up to the employer’s minimum required tax withholding rate if such a limitation is necessary to avoid a charge to the Company for financial reporting purposes), or (iv) surrendering a number of shares of Common Stock the Participant already owns having a value equal to the tax withholding obligations and other obligations (up to the employer’s minimum required tax withholding rate to the extent the Participant has owned the surrendered shares for less that six months if such a limitation is necessary to avoid a charge to the Company for financial reporting purposes).

SECTION 14. ASSIGNABILITY

No Award or interest in an Award may be sold, assigned, pledged (as collateral for a loan or as security for the performance of an obligation or for any other purpose) or transferred by the Participant or made subject to attachment or similar proceedings otherwise than by will or by the applicable laws of descent and distribution, except that to the extent permitted by the Committee, in its sole discretion, a Participant may designate one or more beneficiaries on a Company-approved form who may receive payment under an Award after the Participant’s death. During a Participant’s lifetime, an Award may be exercised only by the Participant.

SECTION 15. AMENDMENT AND TERMINATION

15.1 Amendment, Suspension or Termination of the Plan

The Board or the Compensation Committee of the Board may amend, suspend or terminate the Plan or any portion of the Plan at any time and in such respects as it shall deem advisable; provided, however, that, to the extent required by applicable law, regulation or stock exchange rule, shareholder approval shall be required for any amendment to the Plan.

15.2 Term of the Plan

Unless sooner terminated as provided herein, the Plan shall terminate on April 13, 2013. After the Plan is terminated, no future Awards may be granted, but Awards previously granted shall remain outstanding in accordance with their applicable terms and conditions and the Plan’s terms and conditions. Notwithstanding the foregoing, no Incentive Stock Options may be granted more than 10 years after April 13, 2004.

15.3 Consent of Participant

The amendment, suspension or termination of the Plan or a portion thereof or the amendment of an outstanding Award shall not, without the Participant’s consent, materially adversely affect any rights under any outstanding Award under the Plan. Any change or adjustment to an outstanding Incentive Stock Option shall not, without the consent of the Participant, be made in a manner so as to constitute a “modification” that would cause such Incentive Stock Option to fail to continue to qualify as an Incentive Stock Option. Notwithstanding the foregoing, any adjustments made pursuant to Section 4.1 shall not be subject to these restrictions.

 

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SECTION 16. GENERAL

16.1 No Individual Rights

(a) No individual or Participant shall have any claim to be granted any Award under the Plan, and the Company has no obligation for uniformity of treatment of Participants under the Plan.

(b) Nothing in the Plan or any Award granted under the Plan shall be deemed to constitute an employment contract or confer or be deemed to confer on any Participant any right to continue in the employ of, or to continue any other relationship with, the Company or any Related Company or limit in any way the right of the Company or any Related Company to terminate a Participant’s employment or other relationship at any time, with or without cause.

16.2 Issuance of Shares

(a) Notwithstanding any other provision of the Plan, the Company shall have no obligation to issue or deliver any shares of Common Stock under the Plan or make any other distribution of benefits under the Plan unless, in the opinion of the Company’s counsel, such issuance, delivery or distribution would comply with all applicable laws (including, without limitation, the requirements of the Securities Act or the laws of any state or foreign jurisdiction) and the applicable requirements of any securities exchange or similar entity.

(b) The Company shall be under no obligation to any Participant to register for offering or resale or to qualify for exemption under the Securities Act, or to register or qualify under the laws of any state or foreign jurisdiction, any shares of Common Stock, security or interest in a security paid or issued under, or created by, the Plan, or to continue in effect any such registrations or qualifications if made. The Company may issue certificates for shares with such legends and subject to such restrictions on transfer and stop-transfer instructions as counsel for the Company deems necessary or desirable for compliance by the Company with federal, state and foreign securities laws. The Company may also require such other action or agreement by the Participants as may from time to time be necessary to comply with applicable securities laws.

(c) To the extent the Plan or any instrument evidencing an Award provides for issuance of stock certificates to reflect the issuance of shares of Common Stock, the issuance may be effected on a non-certificated basis, to the extent not prohibited by applicable law or the applicable rules of any stock exchange.

16.3 No Rights as a Shareholder

Unless otherwise provided by the Committee or in the instrument evidencing the Award or in a written employment or services agreement, no Option or Award denominated in units shall entitle the Participant to any cash dividend, voting or other right of a shareholder unless and until the date of issuance under the Plan of the shares that are the subject of such Award.

 

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16.4 Compliance with Laws and Regulations

(a) Notwithstanding anything in the Plan to the contrary, the Committee, in its sole discretion, may bifurcate the Plan so as to restrict, limit or condition the use of any provision of the Plan to Participants who are officers or directors subject to Section 16 of the Exchange Act without so restricting, limiting or conditioning the Plan with respect to other Participants. Additionally, in interpreting and applying the provisions of the Plan, any Option granted as an Incentive Stock Option pursuant to the Plan shall, to the extent permitted by law, be construed as an “incentive stock option” within the meaning of Section 422 of the Code.

(b) The Plan and Awards granted under the Plan are intended to be exempt from the requirements of Code Section 409A to the maximum extent possible, whether pursuant to the short-term deferral exception described in Treasury Regulation Section 1.409A-1(b)(4), the involuntary separation pay plan exception described in Treasury Regulation Section 1.409A-1(b)(9)(iii), or otherwise. To the extent Code Section 409A is applicable to the Plan or any Award granted under the Plan, it is intended that the Plan and any Awards granted under the Plan comply with the deferral, payout and other limitations and restrictions imposed under Code Section 409A. Notwithstanding any other provision of the Plan or any Award granted under the Plan to the contrary, the Plan and any Award granted under the Plan shall be interpreted, operated and administered in a manner consistent with such intentions.

Without limiting the generality of the foregoing, and notwithstanding any other provision of the Plan or any Award granted under the Plan to the contrary, with respect to any payments and benefits under the Plan or any Award granted under the Plan to which Code Section 409A applies, all references in the Plan or any Award granted under the Plan to the termination of the Participant’s employment or service are intended to mean the Participant’s “separation from service,” within the meaning of Code Section 409A(a)(2)(A)(i). In addition, if the Participant is a “specified employee,” within the meaning of Code Section 409, then to the extent necessary to avoid subjecting the Participant to the imposition of any additional tax under Code Section 409A, amounts that would otherwise be payable under the Plan or any Award granted under the Plan during the six-month period immediately following the Participant’s “separation from service,” within the meaning of Code Section 409A(a)(2)(A)(i), shall not be paid to the Participant during such period, but shall instead be accumulated and paid to the Participant (or, in the event of the Participant’s death, the Participant’s estate) in a lump sum on the first business day after the earlier of the date that is six months following the Participant’s separation from service or the Participant’s death.

Notwithstanding any other provision in the Plan, the Committee, to the extent it deems necessary or advisable in its sole discretion, reserves the right, but shall not be required, to unilaterally amend or modify the Plan and any Award granted under the Plan so that the Award qualifies for exemption from or complies with Code Section 409A; provided, however, that the Committee makes no representations that Awards granted under the Plan shall be exempt from or comply with Code Section 409A and makes no undertaking to preclude Code Section 409A from applying to Awards granted under the Plan.

16.5 Participants in Other Countries

The Committee shall have the authority to adopt such modifications, procedures and subplans as may be necessary or desirable to comply with provisions of the laws of other countries in which the Company or any Related Company may operate to ensure the viability of the benefits from Awards granted to Participants employed in such countries, to comply with applicable foreign laws and to meet the objectives of the Plan.

 

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16.6 No Trust or Fund

The Plan is intended to constitute an “unfunded” plan. Nothing contained herein shall require the Company to segregate any monies or other property, or shares of Common Stock, or to create any trusts, or to make any special deposits for any immediate or deferred amounts payable to any Participant, and no Participant shall have any rights that are greater than those of a general unsecured creditor of the Company.

16.7 Successors

All obligations of the Company under the Plan with respect to Awards shall be binding on any successor to the Company, whether the existence of such successor is the result of a direct or indirect purchase, merger, consolidation, or otherwise, of all or substantially all the business and/or assets of the Company.

16.8 Severability

If any provision of the Plan or any Award is determined to be invalid, illegal or unenforceable in any jurisdiction, or as to any person, or would disqualify the Plan or any Award under any law deemed applicable by the Committee, such provision shall be construed or deemed amended to conform to applicable laws, or, if it cannot be so construed or deemed amended without, in the Committee’s determination, materially altering the intent of the Plan or the Award, such provision shall be stricken as to such jurisdiction, person or Award, and the remainder of the Plan and any such Award shall remain in full force and effect.

16.9 Choice of Law

The Plan, all Awards granted thereunder and all determinations made and actions taken pursuant hereto, to the extent not otherwise governed by the laws of the United States, shall be governed by the laws of the State of Washington without giving effect to principles of conflicts of law.

16.10 Treatment of Awards Following a Change in Control

(a) Notwithstanding any other provision in the Plan to the contrary, upon the occurrence of a Change in Control, unless otherwise provided in the instrument evidencing the Award or in a written employment or other agreement between the Participant and the Company, or specifically prohibited under applicable laws, or by the rules and regulations of any governing governmental agencies or national securities exchanges:

(i) Any and all Options and Stock Appreciation Rights shall become fully vested and immediately exercisable, and shall remain exercisable throughout their entire term;

(ii) Any restriction periods and restrictions imposed on Restricted Stock or Stock Unit Awards that are not performance-based shall lapse;

(iii) The target pay out opportunities attainable under all outstanding Awards that are performance-based shall be deemed to have been fully earned for the entire performance period(s) and restrictions shall lapse and such Awards shall be immediately settled or distributed;

(iv) The restrictions and other conditions applicable to any other Stock Unit Awards or any other awards shall lapse, and such other Stock Unit Awards or such other awards shall become free of all restrictions, limitations or conditions and become fully vested and transferable to the full extent of the original grant.

 

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(b) Notwithstanding anything in this Plan to the contrary, (i) any adjustments made pursuant to this Section 16.10 to Awards that are considered “deferred compensation” within the meaning of Code Section 409A shall be made in compliance with the requirements of Code Section 409A and (ii) any adjustments made pursuant to this Section 16.10 to Awards that are not considered “deferred compensation” subject to Code Section 409A shall be made in such a manner as to ensure that after such adjustment the Awards either (x) continue not to be subject to Code Section 409A or (y) comply with the requirements of Code Section 409A.

SECTION 17. EFFECTIVE DATE

The Plan is amended and restated effective December 8, 2010 (the “Effective Date”).

 

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