Exhibit 10.1

 

CASCADE CORPORATION

 

STOCK APPRECIATION RIGHTS PLAN

 

1.                                      Purposes.

 

This Plan is intended to enable Cascade Corporation (the “Corporation”) to
recognize the contribution of executives of the Corporation and its subsidiaries
to the Corporation’s success, to provide them incentives to enhance the
Corporation’s business prospects and to recognize their role and that of the
Board of Directors (the “Board”) in increasing value over the long term.

 

2.                                      Effective Date and Duration of Plan.

 

(a)  Effective Date.  The Plan shall become effective upon approval by the
shareholders of the Corporation

 

(b)  Duration.  No stock appreciation rights may be granted under the Plan after
May 31, 2013. However, the Plan shall continue in effect until all rights issued
under the Plan have been exercised or have expired. The Board may suspend or
terminate the Plan at any time, except with respect to outstanding stock
appreciation rights. Termination shall not affect any outstanding stock
appreciation rights, or the forfeitability of rights granted under the Plan.

 

3.                                      Administration.

 

The Plan shall be administered by the Compensation Committee of the Board. The
Committee shall have full power and authority, subject to the provisions of the
Plan, to:

 

(a)                                  Designate employee participants;

 

(b)                                 Determine the amount and other terms and
conditions of awards of stock appreciation rights to employees, such
determinations to be subject to Board approval in the case of grants to officers
of the Corporation, and those terms and conditions of stock appreciation rights
awarded to non-employee members of the Board of Directors which are not stated
in Section 10 of the Plan..

 

(c)                                  Adopt and amend rules and regulations
relating to administration of the Plan, advance the lapse of any waiting period,
accelerate any exercise date, and make all other determinations in the judgment
of the Committee necessary or desirable for the administration of the Plan.

 

Decisions of the Committee as to interpretation of, and rights granted pursuant
to, the Plan and any related agreement shall be final. The Committee in its sole
discretion may correct any defect or supply any omission or reconcile any
inconsistency in the Plan or in any related agreement.

 

4.                                      Eligibility.

 

The Committee may from time to time grant stock appreciation rights (“Rights”)
to such key executive employees of the Corporation (“Participants”) or of any
subsidiary as the Committee may deem eligible.

 

5.                                      Rights/Share Limitation.

 

(a)                                  A Right is a right granted under the Plan
which enables the holder to receive at the time of exercise an amount, payable
solely in the form of Cascade Corporation common shares valued at Fair Market
Value, equal to the difference between the Fair Market Value of a single common
share of Cascade Corporation stock and the Base Price of a single common share
of Cascade Corporation stock.

 

(b)                                 In no event shall more than 750,000 Cascade
Corporation common shares, as adjusted by the Committee to reflect
proportionately any recapitalization, reclassification, stock split, combination
of shares, or dividend payable in shares in connection with Cascade Corporation
common shares be issued pursuant to the Plan.

 

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(c)                                  In no event shall more than 100,000 Cascade
Corporation shares, as adjusted by the Committee to reflect proportionately any
recapitalization, reclassification, stock split, combination of shares, or
dividend payable in shares in connection with Cascade Corporation common shares,
be issued to any one individual pursuant to the exercise of Rights granted to
such individual under the Plan in a single fiscal year.

 

6.                                      Required Terms and Conditions of Rights.

 

The Committee may grant Rights under the Plan, subject to such rules, terms, and
conditions as the Committee prescribes in accordance with the provisions of the
Plan, including the following:

 

(a)  Base Price.  The Base Price of each Right shall be established by the
Committee and may not be less than the Fair Market Value of a common share of
Cascade Corporation common stock on the date the grant is made.

 

(b)  Fair Market Value.  The Fair Market Value of a common share of Cascade
Corporation common stock means the closing price quoted on the New York Stock
Exchange or, if shares are not listed on that exchange, the primary trading
venue for Corporation shares, as reported in the Wall Street Journal on the date
of grant or exercise, as the case may be, or if the shares did not trade that
date, on the last prior date on which the shares were traded.

 

(c)  Maximum Term of Right.  A Right shall be exercisable during such period of
time as the Committee may specify, provided that no Right shall be exercisable
after the expiration of 10 years from the date on which it is granted.

 

(d)  Installment Exercise Limitations.  Each grant of Rights shall generally
become exercisable in equal cumulative annual installments over such period as
the Committee may establish, except to the extent that other terms of exercise
are specifically provided by other terms of the Plan. The Committee shall have
discretion to establish vesting periods and limitations on amounts to be
realized upon exercise in connection with grants it may make.

 

(e)  Termination of Employment.

 

(i)  Death.If a Participant dies while entitled to exercise Rights granted under
this Plan, such Rights may be exercised for a period of one year after the
Participant’s death. Rights not exercisable at the time of death, and Rights not
exercised during the period provided by this subparagraph, will expire. In the
event of a Participant’s death, Rights exercisable as of the date of the
Participant’s death may be exercised by such beneficiary as the Participant may
have designated in writing in a manner determined by the Committee. In the
absence of such a designation, the Participant’s estate shall have the right to
exercise such Rights.

 

(ii)  Retirement.If a Participant terminates employment after age 62 under
circumstances which the Committee in its sole discretion deems equivalent to
retirement, any Rights the Participant was entitled to exercise at the date of
retirement may be exercised for a period of one year following retirement.
Rights not exercisable at the time of retirement, and Rights not exercised
during the period provided by this subparagraph, will expire. The provisions of
this subparagraph (ii) shall apply also to retirements due to physical or mental
disability which the Committee determines is of such a nature as to prevent
further performance of job duties. Should a retired Participant die while
entitled to exercise Rights, the provisions of subparagraph (i) above shall
apply to the exercise of such Rights, which may be exercised for a period of one
year following the Participant’s death.

 

(iii)  Other Termination of Employment—Not For Cause.Should a Participant cease
to be employed by the Corporation or its subsidiaries for reasons other than
Death or Retirement, any Rights the Participant was entitled to exercise at the
date of termination may be exercised for a period of 90 days following
termination or, if longer, until 30 days have elapsed following the public
dissemination of the Corporation’s financial results for the first fiscal period
ending after the termination of the Participant’s employment. Rights not
exercisable at the time of termination, and Rights not exercised during such
90-day or extended period, shall expire. Should a terminated Participant die
while entitled to exercise Rights, the provisions of subparagraph (i) above
shall apply to the exercise of such Rights, which may be exercised for a period
of one year following the Participant’s death. The rights granted by this
subparagraph (iii) shall not apply to a Participant who is terminated for Cause,
or whom the Committee determines in its sole discretion has entered into
competition with the Corporation.

 

(iv)  Termination for Cause.Participants whose employment is terminated for
(A) willful failure to perform reasonable directives of the Corporation’s
management; (B) use of alcohol or illegal drugs which interferes with the
Participant’s performance of duties in the judgment of the Corporation’s
management; (C) dishonesty affecting the

 

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Corporation or any related entity or conviction of a felony or any crime
involving fraud or misrepresentation; (D) gross negligence or willful misconduct
resulting in substantial loss to the Corporation, damage to the Corporation’s
reputation, or theft, embezzlement or similar loss to the Corporation; or
(E) other conduct which the Committee in its sole discretion determines
sufficiently harmful to the interests of the Corporation to constitute cause for
termination shall forfeit all outstanding Rights awarded under this Plan.

 

(f)  Acceleration of Vesting.  The Committee shall have discretion to provide in
an individual Participant’s grant agreement for the exercise of all or a portion
of Rights granted to the Participant which would not otherwise be exercisable,
in the event of the Participant’s Death or Retirement.

 

(g)  Exercise.

 

(i)  Subject to subparagraph (v) of this paragraph (g), the Committee shall
establish the time or times for exercise of Rights.

 

(ii)  Each Right shall entitle the holder, upon exercise, to receive from the
Corporation an amount equal in value to the excess of the Fair Market Value on
the date of exercise of one Right over its Base Price. Such amount shall be
payable solely in the form of Cascade Corporation common shares valued at Fair
Market Value. No Right shall be exercisable at a time that the amount determined
under this Subsection is negative. No fractional shares shall be issued as
payment hereunder.

 

(iv)  The Corporation shall make no payment hereunder prior to taking steps
necessary to assure that it will receive from a participant who has exercised a
Right amounts necessary to satisfy any applicable federal, state or local tax
withholding requirements, including social security and other normal
withholdings.

 

(v)  Rights may be exercised only during the 30-day period following the third
business day after public dissemination of the Corporation’s financial results
for any fiscal quarter or for its fiscal year.

 

(h)  Non-Transferability.  During a Participant’s lifetime, Rights shall be
exercisable only by the Participant, the Participant’s payee pursuant to a valid
order by a domestic relations court with jurisdiction, or by a legally
designated guardian or conservator. With the Committee’s prior consent, a
Participant may transfer Rights to a trust for his or her benefit established
for estate planning purposes.

 

7.                                      Changes in Capital Structure, Mergers,
Etc..

 

(a)  Change in Capital Structure.  If the outstanding shares of Common Stock of
the Corporation are hereafter increased, decreased or changed into or exchanged
for a different number or kind of shares of the Corporation or of another
corporation by reason of any recapitalization, reclassification, stock split,
combination of shares or dividend payable in shares, the Committee shall make
appropriate adjustments in the price and number of outstanding Rights or
portions thereof then unexercised, so that the participant’s proportionate
interest before and after the occurrence of the event is maintained; provided,
however, that this Section 7(a) shall not apply with respect to transactions
referred to in Section 7(b). Any such adjustment made by the Committee shall be
conclusive.

 

(b)  Reorganization or Liquidation.

 

(i)  Cash, Stock or Other Property for Stock.Except as provided in
Section 7(b)(ii), upon a merger, consolidation, reorganization, plan of exchange
or liquidation involving the Corporation, as a result of which the shareholders
of the Corporation receive cash, stock or other property in exchange for or in
connection with their Common Stock (any such transaction to be referred to in
this Section 7 as an “Accelerating Event”), any Right granted hereunder shall
terminate, except as specified in the first sentence of Section 7(b)(ii), but
the employee shall have the right during the 30-day period immediately prior to
any such Accelerating Event to elect to exercise Rights awarded him or her, in
whole or in part, without any limitation on exercisability; provided, however,
that such exercise shall be deemed to occur immediately prior to such
Accelerating Event and shall be contingent upon the occurrence of such
Accelerating Event.

 

(ii)  Stock for Stock.If the shareholders of the Corporation receive capital
stock of another Corporation (“Exchange Stock”) in exchange for their Common
Stock in any transaction involving a merger, consolidation,

 

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reorganization, or plan of exchange, all Rights granted hereunder shall be
converted into stock appreciation rights and awards measured by the Exchange
Stock, unless the Committee, in its sole discretion, determines that any or all
such Rights shall not be converted, but instead shall terminate in accordance
with the provisions of Section 7(b)(i) The amount and price of converted Rights
shall be determined by adjusting the amount and price of the Rights or other
awards granted hereunder to take into account the relative values of the
Exchange Stock and Corporation’s common shares in the transaction.

 

(iii)  Mergers, Acquisitions, Etc.The Committee may also grant Rights, with
terms, conditions and provisions that vary from those specified in the Plan if
such awards are granted in substitution for, or in connection with the
assumption of, stock appreciation rights awarded by another Corporation and
assumed or otherwise agreed to be provided for by the Corporation pursuant to or
by reason of a transaction involving a corporate merger, consolidation,
acquisition of property or stock, separation, reorganization or liquidation to
which the Corporation or a parent or subsidiary Corporation of the Corporation
is a party.

 

8.                                      Amendment of Plan.

 

The Board may modify or amend the Plan in such respects as it deems advisable
because of changes in the law while the Plan is in effect or for any other
reason; provided, however, that the maximum number of shares which may be issued
under the Plan may be increased, and the provisions of Paragraph 10 may be
modified, only upon approval by the shareholders of the Corporation. No change
in an award already granted shall be made without the written consent of the
holder of such award.

 

9.                                      Employment and Service Rights.

 

Nothing in the Plan or any award pursuant to the Plan shall (a) confer upon any
employee any right to be continued in the employment of the Corporation or any
parent or subsidiary Corporation of the Corporation or interfere in any way with
the right of the Corporation or any subsidiary of the Corporation by whom such
employee is employed to terminate such employee’s employment at any time, for
any reason, with or without cause, or increase or decrease such employee’s
compensation or benefits; or (b) confer upon any person engaged by the
Corporation or any parent or subsidiary Corporation of the Corporation any right
to be retained or employed by the Corporation or any parent or subsidiary
Corporation of the Corporation or to the continuation, extension, renewal, or
modification of any compensation, contract, or arrangement with or by the
Corporation or any subsidiary of the Corporation.

 

10.                               Participation by Directors

 

Each non-employee director of the Corporation shall be awarded 5,000 Rights upon
the later of the approval of this Plan by the shareholders or the election of
the director to the Board of Directors by the shareholders and 2,700 additional
Rights following each subsequent annual meeting of the shareholders. Awards of
Rights to directors shall vest and become exercisable 25% after one year and 25%
following each year of director service thereafter. Such awards shall be subject
to the provisions of this Plan in all other respects. All Rights granted to a
director shall be exercisable upon the director’s death or reaching of the
mandatory retirement age established for directors, whether or not they would
otherwise be subject to exercise.

 

11.                               Rights as a Shareholder.

 

The recipient of any award under the Plan shall have no rights as a shareholder
with respect to any Right, and except as otherwise expressly provided in the
Plan, no adjustment shall be made for dividends or other rights issued to
shareholders. Shares issued pursuant to the Plan may bear such restrictions on
sale or other transfer as counsel to the Corporation may determine are required
under securities or other applicable laws.

 

12.                               Governing Law.

 

The provisions of this Plan shall be governed by and interpreted in accordance
with the laws of the State of Oregon.

 

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