Exhibit 10.1

 

POPE & TALBOT, INC.

NON-EMPLOYEE DIRECTOR COMPENSATION POLICY

AND STOCK OWNERSHIP GUIDELINES

 

The Compensation Committee (the “Committee”) of the Board of Directors (the
“Board”) of Pope & Talbot, Inc. (including its subsidiaries, the “Company”) has
recommended, and the Board has approved, this Non-Employee Director Compensation
Policy and Stock Ownership Guidelines (this “Policy”). This Policy is effective
as of January 1, 2005.

 

This document is in two parts. The first part sets forth a policy with respect
to the compensation of non-employee members of the Board (“Outside Directors”).
The second part sets forth guidelines with respect to Outside Directors’
ownership of the Company’s common stock.

 

I. POLICY REGARDING COMPENSATION FOR SERVICE ON THE BOARD AND ITS COMMITTEES

 

As compensation for service on the Board and its committees, Outside Directors
shall be entitled to the following fees:

 

1. Annual Cash Retainer. On the date of each Annual Meeting of Shareholders,
each Outside Director elected at or continuing to serve after that meeting shall
receive $25,000 payable in cash as a retainer for service in the next one-year
period.

 

2. Annual Stock Retainer. Subject to and conditioned upon shareholder approval
at the 2005 Annual Meeting of Shareholders of an amendment to the Company’s
Employee Stock Option Plan making Outside Directors eligible for stock awards
under that plan (the “Stock Plan Amendment”), on the date of each Annual Meeting
of Shareholders (including the 2005 meeting), each Outside Director elected at
or continuing to serve after that meeting shall receive, as an additional
retainer for service in the next one-year period, an award of the number of
shares of Company common stock determined by dividing $25,000 by the closing per
share price of the Company’s common stock as quoted on the NYSE on the date of
the meeting, rounded down to the nearest whole number of shares.

 

If the shareholders do not approve the Stock Plan Amendment at the 2005 Annual
Meeting of Shareholders, Outside Directors shall continue to receive annual
3,000 share stock option grants under the terms of the 1996 Non-Employee
Director Stock Option Plan. Option grants under that plan will otherwise
terminate.

 

3. Annual Committee Chair Retainers. On the date of each Annual Meeting of
Shareholders, the director selected to serve as the Chair of the Audit Committee
for the ensuing year shall receive $10,000 in cash as a retainer for service in
that capacity during the next one-year period. On the date of each Annual
Meeting of Shareholders, the

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director selected to serve as the Chair of any other Committee for the ensuing
year shall receive $7,500 in cash as a retainer for service in that capacity
during the next one-year period.

 

4. Meeting Fees. Each Outside Director shall receive a fee of $1,500 for each
Board meeting attended and a fee of $1,500 for each Committee meeting attended,
either in person or by teleconference. Such fees shall be in addition to
reimbursement for reasonable expenses incurred by the Outside Directors in
connection with attendance and such meetings (e.g., airfare, lodging, etc.).

 

5. New Directors. If a person becomes an Outside Director on a date other than
the date of an Annual Meeting of Shareholders, the new Outside Director shall
receive a fraction of the Annual Cash Retainer based on the number of whole or
partial one-month periods remaining until the next Annual Meeting of
Shareholders. Subject to and conditioned upon shareholder approval of the Stock
Plan Amendment at the 2005 Annual Meeting of Shareholders, a person who becomes
an Outside Director after that 2005 meeting and on a date other than the date of
an Annual Meeting of Shareholders shall receive a fraction of the Annual Stock
Retainer based on the number of whole or partial one-month periods remaining
until the next Annual Meeting of Shareholders with the number of shares issuable
to such person being determined by reference to the closing per share price of
the Company’s common stock as quoted on the NYSE on the date on which he or she
becomes an Outside Director.

 

6. Deferred Compensation Plan. Pursuant to the Company’s Non-Employee Directors
Deferred Compensation Plan, Outside Directors may elect to defer, in whole or in
part, receipt of the Annual Cash Retainer, the Annual Stock Retainer and Annual
Committee Chair Retainers. All such deferred compensation, whether otherwise
payable in cash or in stock, shall be credited under the plan to accounts
denominated in shares of Company common stock (“Stock Accounts”), and all
payouts of deferred compensation under the plan shall be in the form of Company
common stock.

 

7. Cash Retainers to Stock. As an additional means to achieve common stock
ownership, an Outside Director may elect, by written notice to the Company prior
to January 1 of any year, to receive in the form of Company common stock all or
any portion of the Annual Cash Retainer and any Annual Committee Chair Retainer
to be paid to him or her on the Annual Meeting date in that year, with the
number of shares of Company common stock determined by dividing the dollar
amount so elected by the closing per share price of the Company’s common stock
as quoted on the NYSE on the date of the meeting, rounded down to the nearest
whole number of shares.

 

II. GUIDELINES REGARDING STOCK OWNERSHIP

 

The Board believes that Outside Directors will more effectively represent
shareholders of the Company if the Outside Directors are themselves shareholders
of the Company. Accordingly, the Board encourages Outside Directors to own
shares of the Company’s common stock and believes that each Outside Director
should own a minimum of 5,000 shares of the Company’s common stock (the
“Ownership Goal”). Each Outside Director shall achieve the Ownership Goal within
the following parameters:

 

1. Time Period to Achieve Ownership Goal. Unless the Ownership Goal has been
attained as of the effective date of this Policy (in which case it shall be
maintained consistent with this Policy so long as a person serves on the Board),
each Outside Director shall have five years from the effective date to attain
the Ownership Goal. Any person who becomes an Outside Director after the
effective date shall have five years from the date on which such person becomes
an Outside Director to achieve the Ownership Goal.

 

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2. Shares Counted Towards Ownership Goal. For purposes of the Ownership Goal, an
Outside Director is deemed to own any shares of Company common stock (i) held by
the Outside Director (including shares received pursuant to this Policy), (ii)
held by a trust of which the Outside Director is a trustee and primary
beneficiary, and (iii) credited to the Outside Director’s Stock Account under
the Non-Employee Directors Deferred Compensation Plan. Shares subject to
unexercised options (whether or not vested) will not count towards the Ownership
Goal.

 

III. OTHER PROVISIONS

 

1. The Committee has the full authority to administer this Policy, including
authority to interpret and construe any provision of the Policy as the Committee
may deem necessary. Decisions of the Committee shall be final and binding.

 

2. The Committee has authority to obtain advice and assistance from internal or
external legal, accounting or other advisors with respect to the administration
of this Policy.

 

Adopted by the Committee: December 14, 2004

 

Adopted by the Board: December 14, 2004

 

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