Exhibit 10.1.6

 

POPE & TALBOT, INC.

1996 NON-EMPLOYEE DIRECTOR STOCK OPTION PLAN

(As Amended as of January 1, 2004)

 

I. PURPOSE OF THE PLAN

 

This 1996 Non-Employee Director Stock Option Plan (the “Plan”) is intended to
promote the interests of Pope & Talbot, Inc., a Delaware corporation (the
“Corporation”), by providing the non-employee members of the Corporation’s Board
of Directors with the opportunity to acquire a proprietary interest, or
otherwise increase their proprietary interest, in the Corporation as an
incentive for them to remain in the service of the Corporation.

 

II. DEFINITIONS

 

For purposes of the Plan, the following definitions shall be in effect:

 

BOARD: the Corporation’s Board of Directors.

 

CODE: the Internal Revenue Code of 1986, as amended.

 

COMMON STOCK: shares of the Corporation’s common stock.

 

CORPORATE TRANSACTION: any of the following stockholder-approved transactions to
which the Corporation is a party:

 

(a) a merger or consolidation in which the Corporation is not the surviving
entity, except for a transaction the principal purpose of which is to change the
State in which the Corporation is incorporated,

 

(b) the sale, transfer or other disposition of all or substantially all of the
Corporation’s assets in complete liquidation or dissolution of the Corporation,
or

 

(c) any reverse merger in which the Corporation is the surviving entity but in
which securities possessing more than fifty percent (50%) of the total combined
voting power of the Corporation’s outstanding securities are transferred to
person or persons different from the persons holding those securities
immediately prior to such merger.

 

DOMESTIC RELATIONS ORDER: any judgment, decree or order (including approval of a
property settlement agreement) which provides or otherwise conveys, pursuant to
applicable State domestic relations laws (including community property laws),
marital property rights to any spouse or former spouse of an Optionee.

 

EMPLOYEE PLAN: the Corporation’s Employee Stock Option Plan, as amended and
restated from time to time.

 

EFFECTIVE DATE: the date of the 1996 Annual Stockholders Meeting, provided the
Plan is approved by the affirmative vote of a majority of the outstanding shares
of the Corporation’s common stock present or represented and entitled to vote at
that Annual Meeting.

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ELIGIBLE DIRECTORS: those individuals who are serving as non-employee Board
members on the Effective Date and those individuals who first become
non-employee Board members after such Effective Date, whether through
appointment by the Board or election by the Corporation’s stockholders.

 

FAIR MARKET VALUE: the Fair Market Value per share of Common Stock determined in
accordance with the following provisions:

 

(a) If the Common Stock is at the time listed or admitted to trading on the New
York Stock Exchange or on any other national securities exchange, then the Fair
Market Value shall be the closing selling price per share on the grant date on
the exchange serving as the primary market for the Common Stock, as such price
is officially quoted in the composite tape of transactions on such exchange. If
there is no reported sale of Common Stock on such exchange on the grant date,
then the Fair Market Value shall be the closing selling price on the exchange on
the last preceding date for which such quotation exists.

 

(b) If the Common Stock is not at the time listed or admitted to trading on any
national securities exchange but is traded on the NASDAQ National Market, the
Fair Market Value shall be the closing selling price per share on the grant
date, as such price is reported by the National Association of Securities
Dealers on the NASDAQ National Market or any successor system. If there is no
reported closing selling price for the Common Stock on the grant date, then the
closing selling price on the last preceding date for which such quotation exists
shall be determinative of Fair Market Value.

 

1934 ACT: the Securities Exchange Act of 1934, as amended.

 

OPTIONEE: any person to whom an option is granted under the Plan.

 

QUALIFIED DOMESTIC RELATIONS ORDER: a Domestic Relations Order which
substantially complies with the requirements of Code Section 414(p).

 

III. ADMINISTRATION OF THE PLAN

 

The terms and conditions of each automatic option grant (including the timing
and pricing of the option grant) shall be determined by the express terms and
conditions of the Plan, and neither the Board nor any committee of the Board
shall exercise any discretionary functions with respect to option grants made
pursuant to the Plan.

 

IV. STOCK SUBJECT TO THE PLAN

 

(a) Shares of the Corporation’s Common Stock shall be available for issuance
under the Plan and shall be drawn from either the Corporation’s authorized but
unissued shares of Common Stock or from reacquired shares of Common Stock,
including shares repurchased by the Corporation on the open market. The maximum
number of shares of Common Stock issuable in the aggregate under this Plan and
the Employee Plan shall not exceed the number of shares set forth in Section
III(a) of the Employee Plan, as may be amended from time to time.

 

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(b) Should one or more outstanding options under this Plan or the Employee Plan
expire or terminate for any reason prior to exercise in full, then the shares
subject to the portion of each option not so exercised shall be available for
subsequent option grants under this Plan or the Employee Plan. However, should
the exercise price of an outstanding option under the Plan be paid with shares
of Common Stock, then the number of shares of Common Stock available for
issuance under this Plan and the Employee Plan shall be reduced by the gross
number of shares for which the option is exercised, and not by the net number of
shares of Common Stock actually issued to the holder of such option.

 

(c) Should any change be made to the Common Stock issuable under the Plan and
the Employee Plan by reason of any stock split, stock dividend,
recapitalization, combination of shares, exchange of shares or other change
affecting the outstanding Common Stock as a class without the Corporation’s
receipt of consideration, then the Board shall make appropriate adjustments to
(i) the maximum number and/or class of securities issuable in the aggregate
under this Plan and the Employee Plan, (ii) the number and/or class of
securities for which automatic option grants are to be subsequently made per
each newly-elected or continuing non-employee Board member under the Plan, and
(iii) the number and/or class of securities and price per share in effect for
each option outstanding under the Plan. Such adjustments to the outstanding
options are to be effected in a manner which shall preclude the enlargement or
dilution of rights and benefits under such options. The adjustments determined
by the Board shall be final, binding and conclusive.

 

V. TERMS AND CONDITIONS OF AUTOMATIC OPTION GRANTS

 

(a) Grant Date. Option grants shall be made on the dates specified below:

 

(1) Each individual who is serving as an Eligible Director on the Effective Date
shall automatically be granted on that date a non-statutory option to purchase
2,000 shares of Common Stock, provided such individual has not previously been
in the employ of the Corporation (or any subsidiary).

 

(2) Each individual who first becomes an Eligible Director after the Effective
Date, whether through election by the Corporation’s stockholders or appointment
by the Board, shall automatically be granted, at the time of such initial
election or appointment, a non-statutory option to purchase 3,000 shares of
Common Stock, provided such individual has not previously been in the employ of
the Corporation (or any subsidiary corporation).

 

(3) At every Annual Stockholders Meeting, beginning with the 2001 Annual
Meeting, each individual who is to continue to serve as a non-employee Board
member, whether or not such individual is standing for re-election as a Board
member at that Annual Meeting, shall automatically be granted a non-statutory
option to purchase 3,000 shares of Common Stock, provided such individual has
served as a director for at least six (6) months. There shall be no limit on the
number of such 3,000 share option grants any one non-employee Board member may
receive over his or her period of Board service, and non-employee Board members
who have previously been in the employ of the Corporation (or any subsidiary)
shall be eligible to receive such annual option grants.

 

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(b) Exercise Price. The exercise price per share of Common Stock subject to each
automatic option grant shall be equal to one hundred percent (100%) of the Fair
Market Value per share of Common Stock on the automatic grant date.

 

(c) Payment. The exercise price shall become immediately due upon exercise of
the option and shall be payable in one or more of the forms specified below:

 

(1) cash or check made payable to the Corporation’s order;

 

(2) shares of Common Stock held for the requisite period necessary to avoid a
charge to the Corporation’s earnings for financial reporting purposes and valued
at Fair Market Value on the Exercise Date (as such term is defined below); or

 

(3) payment through a broker-dealer sale and remittance procedure pursuant to
which the non-employee Board member (I) shall provide irrevocable written
instructions to a Corporation-designated brokerage firm to effect the immediate
sale of the purchased shares and remit to the Corporation, out of the sale
proceeds available on the settlement date, sufficient funds to cover the
aggregate exercise price payable for the purchased shares and (II) shall
concurrently provide written directives to the Corporation to deliver the
certificates for the purchased shares directly to such brokerage firm in order
to complete the sale transaction.

 

For purposes of this Section V(c), the Exercise Date shall be the date on which
written notice of the option exercise is delivered to the Corporation. Except to
the extent the sale and remittance procedure specified above is utilized in
connection with the exercise of the option, payment of the option exercise price
for the purchased shares must accompany the exercise notice.

 

(d) Option Term. Each automatic grant under the Plan shall have a maximum term
of ten (10) years measured from the automatic grant date.

 

(e) Exercisability. Each automatic grant shall be immediately exercisable for
any or all of the option shares as fully vested shares.

 

(f) Limited Transferability of Options. During Optionee’s lifetime, the option
may be exercised only by the Optionee and shall not be assignable or
transferable other than by will or by the laws of descent and distribution
following the Optionee’s death. However, an option may be assigned in whole or
in part pursuant to the terms of a Qualified Domestic Relations Order. The
assigned portion may only be exercised by the person or persons who acquire a
proprietary interest in the option pursuant to such order. The terms applicable
to the assigned portion shall be the same as those in effect for the option
immediately prior to such assignment and shall be set forth in such documents
issued to the assignee as the Corporation may deem appropriate.

 

(g) Effect of Termination of Board Service.

 

(1) Should the Optionee cease for any reason to serve as a Board member while
holding one or more automatic option grants under the Plan, then such individual
shall have a twelve (12)-month period following the date of such cessation of
Board service in which to exercise each such option for any or all of the option
shares at the time subject to that option.

 

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(2) Should the Optionee die while in Board service or within twelve (12) months
after cessation of Board service, then any automatic option grant held by the
Optionee at the time of death may subsequently be exercised, for any or all of
the option shares at the time subject to that option, by the personal
representative of the Optionee’s estate or by the person or persons to whom the
option is transferred pursuant to the Optionee’s will or in accordance with the
laws of descent and distribution. The right to exercise each such option shall
lapse upon the expiration of the twelve (12)-month period measured from the date
of the Optionee’s cessation of Board service.

 

(3) In no event shall any automatic grant remain exercisable after the
expiration date of the ten (10)-year option term. Upon the expiration of the
applicable post-service exercise period under subparagraphs 1 or 2 above or (if
earlier) upon the expiration of the ten (10)-year option term, the automatic
grant shall terminate and cease to be outstanding with respect to all remaining
option shares.

 

(h) Stockholder Rights. The holder of an automatic option grant shall have no
stockholder rights with respect to any shares subject to such option until such
individual shall have exercised the option and paid the exercise price for the
purchased shares.

 

(i) Stock Option Agreement. Each automatic option grant shall be evidenced by a
Stock Option Agreement in a form consistent with the terms of the Plan.

 

VI. CORPORATE TRANSACTION

 

(a) Immediately following the consummation of any Corporate Transaction, each
automatic option grant under the Plan shall terminate and cease to be
outstanding, except to the extent such grant is assumed by the successor entity
or its parent corporation.

 

(b) Each option which is assumed in connection with a Corporate Transaction
shall be appropriately adjusted, immediately after such Corporate Transaction,
to apply to the number and class of securities which would have been issuable to
the Optionee in the consummation of such Corporate Transaction, had the option
been exercised immediately prior to such Corporate Transaction. Appropriate
adjustments shall also be made to (i) the number and class of securities
available for issuance under the Plan following the consummation of such
Corporate Transaction and (ii) the exercise price payable per share under each
outstanding option, provided the aggregate exercise price payable for such
securities shall remain the same.

 

(c) The automatic option grants outstanding under the Plan shall in no way
affect the right of the Corporation to adjust, reclassify, reorganize or
otherwise change its capital or business structure or to merge, consolidate,
dissolve, liquidate or sell or transfer all or any part of its business or
assets.

 

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VII. AMENDMENT OF THE PLAN AND AWARDS

 

The Board has complete and exclusive power and authority to amend or modify the
Plan in any or all respects whatsoever. However, no such amendment or
modification shall adversely affect rights and obligations with respect to
options at the time outstanding under the Plan, unless the affected Optionees
consent to such amendment. In addition, the Board may not, without the approval
of the Corporation’s stockholders, amend the Plan to materially increase the
maximum number of shares issuable in the aggregate under this Plan and the
Employee Plan.

 

VIII. EFFECTIVE DATE AND TERM OF PLAN

 

(a) The Plan shall be effective on the date of the 1996 Annual Stockholders
Meeting, provided the Plan is approved by the affirmative vote of a majority of
the outstanding shares of the Corporation’s common stock present or represented
and entitled to vote at such Annual Meeting, and the initial automatic option
grants under the Plan shall be made on such date. If such stockholder approval
is not obtained, then the Plan shall terminate and no options shall be granted
under the Plan.

 

(b) The Plan shall remain in effect until the date on which all shares available
for issuance under this Plan and the Employee Plan shall have been issued
pursuant to the exercise of outstanding options.

 

IX. USE OF PROCEEDS

 

Any cash proceeds received by the Corporation from the sale of shares pursuant
to option grants or share issuances under the Plan shall be used for general
corporate purposes.

 

X. REGULATORY APPROVALS

 

(a) The implementation of the Plan, the granting of any option under the Plan
and the issuance of Common Stock upon the exercise of the option grants made
hereunder shall be subject to the Corporation’s procurement of all approvals and
permits required by regulatory authorities having jurisdiction over the Plan,
the options granted under it, and the Common Stock issued pursuant to it.

 

(b) No shares of Common Stock or other assets shall be issued or delivered under
this Plan unless and until there shall have been compliance with all applicable
requirements of Federal and state securities laws, including the filing and
effectiveness of the Form S-8 registration statement for the shares of Common
Stock issuable under the Plan, and all applicable listing requirements of any
securities exchange on which the Common Stock is then listed for trading.

 

XI. NO IMPAIRMENT OF RIGHTS

 

Neither the action of the Corporation in establishing the Plan nor any provision
of the Plan shall be construed or interpreted so as to affect adversely or
otherwise impair the right of the Corporation or the stockholders to remove any
individual from the Board at any time in accordance with the provisions of
applicable law.

 

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XII. MISCELLANEOUS PROVISIONS

 

(a) The right to acquire Common Stock or other assets under the Plan may not be
assigned, encumbered or otherwise transferred by any Optionee.

 

(b) The provisions of the Plan relating to the exercise of the outstanding
options shall be governed by the laws of the State of Oregon, as such laws are
applied to contracts entered into and performed in such State.

 

(c) The provisions of the Plan shall inure to the benefit of, and be binding
upon, the Corporation and its successors or assigns, and the Optionees, the
legal representatives of their respective estates, their respective heirs or
legatees and their permitted assignees.

 

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