Exhibit 10.2


 


CHANGE OF CONTROL


EMPLOYMENT AGREEMENT


 


AGREEMENT by and between Louisiana-Pacific
Corporation, a Delaware corporation (the “Company”), and Jeffrey N. Wagner (the
“Executive”), dated as of the 1st day of February, 2005.


 


The Board of Directors of the Company (the “Board”),
has determined that it is in the best interests of the Company and its
shareholders to assure that the Company will have the continued dedication of
the Executive, notwithstanding the possibility, threat or occurrence of a Change
of Control (as defined below) of the Company. The Board believes it is
imperative to diminish the inevitable distraction of the Executive by virtue of
the personal uncertainties and risks created by a pending or threatened Change
of Control and to encourage the Executive’s full attention and dedication to
the Company currently and in the event of any threatened or pending Change of
Control, and to provide the Executive with compensation and benefits
arrangements upon a Change of Control which ensure that the compensation and
benefits expectations of the Executive will be satisfied and which are
competitive with those of other corporations. Therefore, in order to accomplish
these objectives, the Board has caused the Company to enter into this Agreement.


 


NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:


 


1.             Certain
Definitions.


 


(a)           The
“Effective Date” shall mean the first date during the Change of Control Period
(as defined in Section (b)) on which a Change of Control (as defined in Section 2)
occurs. Anything in this Agreement to the contrary notwithstanding, if a Change
of Control occurs during the Change of Control Period and if the Executive’s
employment with the Company is terminated prior to the date on which the Change
of Control occurs, and if it is reasonably demonstrated by the Executive that
such termination of employment (i) was at the request of a third party who has
taken steps reasonably calculated to effect a Change of Control or (ii)
otherwise arose in connection with or anticipation of a Change of Control, then
for all purposes of this Agreement the “Effective Date” shall mean the date
immediately prior to the date of such termination of employment.


 


(b)           The
“Change of Control Period” shall mean the period commencing on the date hereof
and ending on the first anniversary of the date hereof.


 


2.             Change
of Control. For the purpose of this Agreement, a “Change of Control” shall
mean:


 


(a)           The
acquisition by any individual, entity or group (within the meaning of Section 13(d)(3)
or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the “Exchange
Act”)) (a “Person”) of beneficial ownership (within the meaning of Rule 13d-3
promulgated under the Exchange Act) of 20% or more of either (i) the then
outstanding shares of common stock of the Company (the “Outstanding Company


 


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Common Stock”) or (ii) the combined voting power of
the then outstanding voting securities of the Company entitled to vote
generally in the election of directors (the “Outstanding Company Voting
Securities”); provided, however, that for purposes of this subsection (a),
the following acquisitions shall not constitute a Change of Control: (i) any
acquisition directly from the Company, (ii) any acquisition by the Company, (iii)
any acquisition by any employee benefit plan (or related trust) sponsored or
maintained by the Company or any corporation controlled by the Company or (iv)
any acquisition pursuant to a transaction which complies with clauses (i), (ii)
and (iii) of subsection (c) of this Section 2; or


 


(b)           Individuals
who, as of the date hereof, constitute the Board (the “Incumbent Board”) cease
for any reason to constitute at least a majority of the Board; provided,
however, that any individual becoming a director subsequent to the date hereof
whose election, or nomination for election by the Company’s shareholders, was
approved by a vote of at least a majority of the directors then comprising the
Incumbent Board shall be considered as though such individual were a member of
the Incumbent Board, but excluding, for this purpose, any such individual whose
initial assumption of office occurs as a result of an actual or threatened
election contest with respect to the election or removal of directors or other
actual or threatened solicitation of proxies or consents by or on behalf of a
Person other than the Board; or


 


(c)           Consummation
by the Company of a reorganization, merger or consolidation or sale or other
disposition of all or substantially all of the assets of the Company or the
acquisition of assets of another entity (a “Business Combination”), in each
case, unless, following such Business Combination, (i) all or substantially all
of the individuals and entities who were the beneficial owners, respectively,
of the Outstanding Company Common Stock and Outstanding Company Voting
Securities immediately prior to such Business Combination beneficially own,
directly or indirectly, more than 60% of, respectively, the then outstanding
shares of common stock and the combined voting power of the then outstanding
voting securities entitled to vote generally in the election of directors, as
the case may be, of the corporation resulting from such Business Combination
(including, without limitation, a corporation which as a result of such
transaction owns the Company or all or substantially all of the Company’s
assets either directly or through one or more subsidiaries) in substantially
the same proportions as their ownership, immediately prior to such Business
Combination of the Outstanding Company Common Stock and Outstanding Company
Voting Securities, as the case may be, (ii) no Person (excluding any employee
benefit plan (or related trust) of the Company or such corporation resulting
from such Business Combination) beneficially owns, directly or indirectly, 20%
or more of, respectively, the then outstanding shares of common stock of the
corporation resulting from such Business Combination or the combined voting
power of the then outstanding voting securities of such corporation except to
the extent that such ownership existed prior to the Business Combination and
(iii) at least a majority of the members of the board of directors of the
corporation resulting from such Business Combination were members of the
Incumbent Board at the time of the execution of the initial agreement, or of
the action of the Board, providing for such Business Combination; or


 


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(d)           Approval
by the shareholders of the Company of a complete liquidation or dissolution of
the Company.


 


3.             Employment
Period. The Company hereby agrees to continue the Executive in its employ,
and the Executive hereby agrees to remain in the employ of the Company subject
to the terms and conditions of this Agreement, for the period commencing on the
Effective Date and ending on the third anniversary of such date (the “Employment
Period”).


 


4.             Terms
of Employment.


 


(a)           Position
and Duties.


 


(i)            During
the Employment Period, (A) the Executive’s position (including status, offices,
titles and reporting requirements), authority, duties and responsibilities
shall be at least commensurate in all material respects with the most
significant of those held, exercised and assigned to the Executive at any time
during the 120-day period immediately preceding the Effective Date and (B) the
Executive’s services shall be performed at the location where the Executive was
employed immediately preceding the Effective Date or any office or location
less than 25 miles from such location.


 


(ii)           During
the Employment Period, and excluding any periods of vacation and sick leave to
which the Executive is entitled, the Executive agrees to devote reasonable
attention and time during normal business hours to the business and affairs of
the Company and, to the extent necessary to discharge the responsibilities
assigned to the Executive hereunder, to use the Executive’s reasonable best
efforts to perform faithfully and efficiently such responsibilities. During the
Employment Period it shall not be a violation of this Agreement for the
Executive to (A) serve on corporate, civic or charitable boards or committees,
(B) deliver lectures, fulfill speaking engagements or teach at educational
institutions and (C) manage personal investments, so long as such activities do
not significantly interfere with the performance of the Executive’s
responsibilities as an employee of the Company in accordance with this
Agreement. It is expressly understood and agreed that to the extent that any
such activities have been conducted by the Executive prior to the Effective
Date, the continued conduct of such activities (or the conduct of activities
similar in nature and scope thereto) subsequent to the Effective Date shall not
thereafter be deemed to interfere with the performance of the Executive’s
responsibilities to the Company.


 


(b)           Compensation.


 


(i)            Base
Salary. During the Employment Period, the Executive shall receive an annual
base salary (“Annual Base Salary”), which shall be paid at a monthly rate, at
least equal to twelve times the highest monthly base salary paid or payable,
including any base salary which has been earned but deferred, to the Executive
by the Company and its affiliated companies in respect of the twelve-month
period immediately preceding the month in which the Effective


 


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Date occurs. During the Employment Period, the Annual
Base Salary shall be reviewed no more than 12 months after the last salary
increase awarded to the Executive prior to the Effective Date and thereafter at
least annually. Any increase in Annual Base Salary shall not serve to limit or
reduce any other obligation to the Executive under this Agreement. Annual Base
Salary shall not be reduced after any such increase and the term Annual Base
Salary as utilized in this Agreement shall refer to Annual Base Salary as so
increased. As used in this Agreement, the term “affiliated companies” shall
include any company controlled by, controlling or under common control with the
Company.


 


(ii)           Annual
Bonus. In addition to Annual Base Salary, the Executive shall be awarded,
for each fiscal year ending during the Employment Period, an annual bonus (the “Annual
Bonus”) in cash at least equal to the Executive’s target bonus under the
Company’s annual incentive plans for the fiscal year in which the Effective
Date occurs (or; if no target bonus has been set for such fiscal year, the
Executive’s target bonus for the immediately preceding fiscal year (the “Target
Bonus”)). Each such Annual Bonus shall be paid no later than the end of the
third month of the fiscal year next following the fiscal year for which the
Annual Bonus is awarded, unless the Executive shall elect to defer the receipt
of such Annual Bonus.


 


(iii)          Incentive,
Savings and Retirement Plans. During the Employment Period, the Executive
shall be entitled to participate in all incentive, savings and retirement
plans, practices, policies and programs applicable generally to other peer
executives of the Company and its affiliated companies, but in no event shall
such plans, practices, policies and programs provide the Executive with
incentive opportunities (measured with respect to both regular and special
incentive opportunities, to the extent, if any, that such distinction is
applicable), savings opportunities and retirement benefit opportunities, in
each case, less favorable, in the aggregate, than the most favorable of those
provided by the Company and its affiliated companies for the Executive under
such plans, practices, policies and programs as in effect at any time during
the 120-day period immediately preceding the Effective Date or if more
favorable to the Executive, those provided generally at any time after the
Effective Date to other peer executives of the Company and its affiliated
companies.


 


(iv)          Welfare
Benefit Plans. During the Employment Period, the Executive and/or the
Executive’s family, as the case may be, shall be eligible for participation in
and shall receive all benefits under welfare benefit plans, practices, policies
and programs provided by the Company and its affiliated companies (including,
without limitation, medical, prescription, dental, disability, salary
continuance, employee life, group life, accidental death and travel accident
insurance plans and programs) to the extent applicable generally to other peer
executives of the Company and its affiliated companies, but in no event shall
such plans, practices, policies and programs provide the Executive with
benefits which are less favorable, in the aggregate, than the most favorable of
such plans, practices, policies and programs in effect for the Executive at any
time during the


 


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120-day period immediately preceding the Effective
Date or, if more favorable to the Executive, those provided generally at any
time after the Effective Date to other peer executives of the Company and its
affiliated companies.


 


(v)           Expenses.
During the Employment Period, the Executive shall be entitled to receive prompt
reimbursement for all reasonable expenses incurred by the Executive in
accordance with the most favorable policies, practices and procedures of the
Company and its affiliated companies in effect for the Executive at any time
during the 120-day period immediately preceding the Effective Date or, if more
favorable to the Executive, as in effect generally at any time thereafter with
respect to other peer executives of the Company and its affiliated companies.


 


(vi)          Fringe
Benefits. During the Employment Period, the Executive shall be entitled to
fringe benefits, including, without limitation, tax and financial planning
services, payment of club dues, and, if applicable, use of an automobile and
payment of related expenses, in accordance with the most favorable plans,
practices, programs and policies of the Company and its affiliated companies in
effect for the Executive at any time during the 120-day period immediately
preceding the Effective Date or, if more favorable to the Executive, as in
effect generally at any time thereafter with respect to other peer executives
of the Company and its affiliated companies.


 


(vii)         Office
and Support Staff.  During the
Employment Period, the Executive shall be entitled to an office or offices of a
size and with furnishings and other appointments, and to exclusive personal
secretarial and other assistance, at least equal to the most favorable of the
foregoing provided to the Executive by the Company and its affiliated companies
at any time during the 120-day period immediately preceding the Effective Date
or, if more favorable to the Executive, as provided generally at any time
thereafter with respect to other peer executives of the Company and its
affiliated companies.


 


(viii)        Vacation.
During the Employment Period, the Executive shall be entitled to paid vacation
in accordance with the most favorable plans, policies, programs and practices
of the Company and its affiliated companies as in effect for the Executive at
any time during the 120-day period immediately preceding the Effective Date or,
if more favorable to the Executive, as in effect generally at any time
thereafter with respect to other peer executives of the Company and its
affiliated companies.


 


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5.             Termination
of Employment.


 


(a)           Death
or Disability. The Executive’s employment shall terminate automatically
upon the Executive’s death during the Employment Period.  If the Company determines in good faith that
the Disability of the Executive has occurred during the Employment Period
(pursuant to the definition of Disability set forth below), it may give to the
Executive written notice in accordance with Section 12(b)of this Agreement
of its intention to terminate the Executive’s employment. In such event, the
Executive’s employment with the Company shall terminate effective on the 30th
day after receipt of such notice by the Executive (the “Disability Effective
Date”), provided that, within the 30 days after such receipt, the Executive
shall not have returned to full-time performance of the Executive’s duties. For
purposes of this Agreement, “Disability” shall mean the absence of the
Executive from the Executive’s duties with the Company on a full-time basis for
180 consecutive business days as a result of incapacity due to mental or
physical illness which is determined to be total and permanent by a physician
selected by the Company or its insurers and acceptable to the Executive or the
Executive’s legal representative.


 


(b)           Cause.
The Company may terminate the Executive’s employment during the Employment
Period for Cause. For purposes of this Agreement, “Cause” shall mean:


 


(i)            the
willful and continued failure of the Executive to perform substantially the
Executive’s duties with the Company or one of its affiliates (other than any
such failure resulting from incapacity due to physical or mental illness),
after a written demand for substantial performance is delivered to the
Executive by the Board or the Chief Executive Officer of the Company which
specifically identifies the manner in which the Board or Chief Executive
Officer believes that the Executive has not substantially performed the
Executive’s duties, or


 


(ii)           the
willful engaging by the Executive in illegal conduct or gross misconduct which
is materially and demonstrably injurious to the Company.


 


For purposes of this provision, no act or failure to
act, on the part of the Executive, shall be considered “willful” unless it is
done, or omitted to be done, by the Executive 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 authority
given pursuant to a resolution duly adopted by the Board or upon the
instructions of the Chief Executive Officer or a senior officer of the Company
or based upon the 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. The cessation of employment of the
Executive shall not be deemed to be 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 of the entire membership of
the Board at a meeting of the Board 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


 


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Board, the Executive is guilty of the conduct
described in subparagraph (i) or (ii) above, and specifying the particulars
thereof in detail.


 


(c)           Good
Reason. The Executive’s employment may be terminated by the Executive for
Good Reason. For purposes of this Agreement, “Good Reason” shall mean:


 


(i)            the
assignment to the Executive of any duties inconsistent in any respect with the
Executive’s position (including status, offices, titles and reporting
requirements), authority, duties or responsibilities as contemplated by Section 4(a)
of this Agreement, or any other action by the Company which results in a
diminution in such position, authority, duties or responsibilities, excluding
for this purpose an isolated, insubstantial and inadvertent action not taken in
bad faith and which is remedied by the Company promptly after receipt of notice
thereof given by the Executive;


 


(ii)           any
failure by the Company to comply with any of the provisions of Section 4(b)
of this Agreement, other than an isolated, insubstantial and inadvertent failure
not occurring in bad faith and which is remedied by the Company promptly after
receipt of notice thereof given by the Executive;


 


(iii)          the
Company’s requiring the Executive to be based at any office or location other
than as provided in Section 4(a)(i)(B) hereof or the Company’s requiring
the Executive to travel on Company business to a substantially greater extent
than required immediately prior to the Effective Date;


 


(iv)          any
purported termination by the Company of the Executive’s employment otherwise
than as expressly permitted by this Agreement; or


 


(v)           any
failure by the Company to comply with and satisfy Section 11(c) of this
Agreement.


 


(d)           Notice
of Termination. Any termination by the Company for Cause, or by the
Executive for Good Reason, shall be communicated by Notice of Termination to
the other party hereto given in accordance with Section 12(b) of this
Agreement. For purposes of this Agreement, a “Notice of Termination” means a
written notice which (i) indicates the specific termination provision in this
Agreement relied upon, (ii) to the extent applicable, sets 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 and (iii) if the
Date of Termination (as defined below) is other than the date of receipt of
such notice, specifies the termination date (which date shall be not more than
thirty days after the giving of such notice). The failure by the Executive or
the Company to set forth in the Notice of Termination any fact or circumstance
which contributes to a showing of Good Reason or Cause shall not waive any
right of the Executive or the Company, respectively, hereunder or preclude the
Executive or the Company, respectively, from asserting such fact or
circumstance in enforcing the Executive’s or the Company’s rights hereunder.


 


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(e)           Date
of Termination. “Date of Termination” means (i) if the Executive’s
employment is terminated by the Company for Cause, or by the Executive for Good
Reason, the date of receipt of the Notice of Termination or any later date
specified therein, as the case may be, (ii) if the Executive’s employment is
terminated by the Company other than for Cause or Disability, the date on which
the Company notifies the Executive of such termination and (iii) if the
Executive’s employment is terminated by reason of death or Disability, the date
of death of the Executive or the Disability Effective Date, as the case may be.


 


6.             Obligations
of the Company upon Termination.


 


(a)           Good
Reason; Other Than for Cause, Death or Disability. If, during the
Employment Period, the Company shall terminate the Executive’s employment other
than for Cause or Disability or the Executive shall terminate employment for
Good Reason:


 


(i)            the
Company shall pay to the Executive in a lump sum in cash within 30 days after
the Date of Termination the aggregate of the following amounts:


 


(A)          the
sum of (1) the Executive’s Annual Base Salary through the Date of Termination
to the extent not theretofore paid, (2) the product of (x) the Target Bonus and
(y) a fraction, the numerator of which is the number of days in the current
fiscal year through the Date of Termination, and the denominator of which is 365
and (3) any compensation previously deferred by the Executive (together with
any accrued interest or earnings thereon) and any accrued vacation pay, in each
case to the extent not theretofore paid (the sum of the amounts described in
clauses (1), (2), and (3) shall be hereinafter referred to as the “Accrued
Obligations”); and


 


(B)           the
amount equal to the product of (1) three and (2) the sum of (x) the Executive’s
Annual Base Salary and (y) the Target Bonus; and


 


(C)           an
amount equal to the difference between (a) the aggregate benefit under the
Company’s qualified defined benefit retirement plans (collectively, the “Retirement
Plan”) and any excess or supplemental defined benefit retirement plans in which
the Executive participates (collectively, the “SERP”) which the Executive would
have accrued (whether or not vested) if the Executive’s employment had
continued for three years after the Date of Termination and (b) the actual
vested benefit, if any, of the Executive under the Retirement Plan and the
SERP, determined as of the Date of Termination (with the foregoing amounts to
be computed on an actuarial present value basis, based on the assumption that
the Executive’s compensation in each of the three years following such
termination would have been that required by Section 4(b)(i) and Section 4(b)(ii),
and using actuarial assumptions no less favorable to the Executive than the
most favorable of those in effect for purposes of computing benefit
entitlements under the Retirement Plan and the SERP at


 


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any time from the day before the Effective Date)
through the Date of Termination;


 


(ii)           for
three years after the Executive’s Date of Termination, or such longer period as
may be provided by the terms of the appropriate plan, program, practice or
policy, the Company shall continue benefits to the Executive and/or the
Executive’s family at least equal to those which would have been provided to
them in accordance with the plans, programs, practices and policies described
in Section 4(b)(iv)of this Agreement if the Executive’s employment had not
been terminated or, if more favorable to the Executive, as in effect generally
at any time thereafter with respect to other peer executives of the Company and
its affiliated companies and their families, provided, however, that if the
Executive becomes re-employed with another employer and is eligible to receive
medical or other welfare benefits under another employer-provided plan, the
medical and other welfare benefits described herein shall be secondary to those
provided under such other plan during such applicable period of eligibility,
and for purposes of determining eligibility (but not the time of commencement
of benefits) of the Executive for retiree benefits pursuant to such plans,
practices, programs and policies, the Executive shall be considered to have
remained employed until three years after the Date of Termination and to have
retired on the last day of such period;


 


(iii)          the
Company shall, at its sole expense as incurred, provide the Executive with
outplacement services the scope and provider of which shall be selected by the
Executive in the Executive’s sole discretion; and


 


(iv)          to
the extent not theretofore paid or provided, the Company shall timely pay or
provide to the Executive any other amounts or benefits required to be paid or
provided or which the Executive is eligible to receive under any plan, program,
policy or practice or contract or agreement of the Company and its affiliated
companies (such other amounts and benefits shall be hereinafter referred to as
the “Other Benefits”).


 


(b)           Death.
If the Executive’s employment is terminated by reason of the Executive’s death
during the Employment Period, this Agreement shall terminate without further
obligations to the Executive’s legal representatives under this Agreement,
other than for payment of Accrued Obligations and the timely payment or
provision of Other Benefits. Accrued Obligations shall be paid to the Executive’s
estate or beneficiary, as applicable, in a lump sum in cash within 30 days of
the Date of Termination. With respect to the provision of Other Benefits, the
term Other Benefits as utilized in this Section 6(b) shall include,
without limitation, and the Executive’s estate and/or beneficiaries shall be
entitled to receive, benefits at least equal to the most favorable benefits
provided by the Company and affiliated companies to the estates and
beneficiaries of peer executives of the Company and such affiliated companies
under such plans, programs, practices and policies relating to death benefits,
if any, as in effect with respect to other peer executives and their
beneficiaries at any time during the 120-day period immediately preceding the
Effective Date or, if more favorable to the


 


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Executive’s estate and/or the Executive’s
beneficiaries, as in effect on the date of the Executive’s death with respect
to other peer executives of the Company and its affiliated companies and their
beneficiaries.


 


(c)           Disability.
If the Executive’s employment is terminated by reason of the Executive’s
Disability during the Employment Period, this Agreement shall terminate without
further obligations to the Executive, other than for payment of Accrued
Obligations and the timely payment or provision of Other Benefits. Accrued
Obligations shall be paid to the Executive in a lump sum in cash within 30 days
of the Date of Termination. With respect to the provision of Other Benefits,
the term Other Benefits as utilized in this Section 6(c) shall include,
and the Executive shall be entitled after the Disability Effective Date to
receive, disability and other benefits at least equal to the most favorable of
those generally provided by the Company and its affiliated companies to
disabled executives and/or their families in accordance with such plans,
programs, practices and policies relating to disability, if any, as in effect
generally with respect to other peer executives and their families at any time
during the 120-day period immediately preceding the Effective Date or, if more
favorable to the Executive and/or the Executive’s family, as in effect at any
time thereafter generally with respect to other peer executives of the Company
and its affiliated companies and their families.


 


(d)           Cause;
Other than for Good Reason. If the Executive’s employment shall be
terminated for Cause during the Employment Period, this Agreement shall
terminate without further obligations to the Executive other than the
obligation to pay to the Executive (x) the Annual Base Salary through the Date
of Termination, (y) the amount of any compensation previously deferred by the
Executive, and (z) Other Benefits, in each case to the extent theretofore
unpaid. If the Executive voluntarily terminates employment during the
Employment Period, excluding a termination for Good Reason, this Agreement
shall terminate without further obligations to the Executive, other than for
Accrued Obligations and the timely payment or provision of Other Benefits. In
such case, all Accrued Obligations shall be paid to the Executive in a lump sum
in cash within 30 days of the Date of Termination.


 


7.             Non-exclusivity
of Rights. Nothing in this Agreement shall prevent or limit the Executive’s
continuing or future participation in any plan, program, policy or practice
provided by the Company or any of its affiliated companies and for which the
Executive may qualify, nor, subject to Section 12(f), shall anything
herein limit or otherwise affect such rights as the Executive may have under
any contract or agreement with the Company or any of its affiliated companies.
Amounts which are vested benefits or which the Executive is otherwise entitled
to receive under any plan, policy, practice or program of or any contract or
agreement with the Company or any of its affiliated companies at or subsequent
to the Date of Termination shall be payable in accordance with such plan,
policy, practice or program or contract or agreement except as explicitly
modified by this Agreement.


 


8.               Full
Settlement; Legal Fees. The Company’s obligation to make the payments
provided for in this Agreement and otherwise to perform its obligations
hereunder shall not be affected by any set-off, counterclaim, recoupment,
defense or other claim, right or action which the Company may have against the
Executive or others. In no event shall the Executive be


 


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obligated to seek
other employment or take any other action by way of mitigation of the amounts
payable to the Executive under any of the provisions of this Agreement and
except as specifically provided in Section 6(a)(ii), such amounts shall
not be reduced whether or not the Executive obtains other employment. The
Company agrees to pay as incurred, to the full extent permitted by law, all
legal fees and expenses which the Executive may reasonably incur as a result of
any contest (regardless of the outcome thereof) by the Company, the Executive
or others of the validity or enforceability of, or liability or entitlement under,
any provision of this Agreement or any guarantee of performance thereof
(whether such contest is between the Company and the Executive or between
either of them and any third party, and including as a result of any contest by
the Executive about the amount of any payment pursuant to this Agreement), plus
in each case interest on any delayed payment at the applicable Federal rate
provided for in Section 7872(f)(2)(A) of the Internal Revenue Code of
1986, as amended (the “Code”).


 


9.             Certain
Additional Payments by the Company.


 


(a)           Anything
in this Agreement to the contrary notwithstanding, in the event it shall be
determined that any payment, award, benefit or distribution by the Company (or
any of its affiliated entities) or by any entity which effectuates a Change of
Control (or any of its affiliated entities) to or for the benefit of the
Executive (whether pursuant to the terms of this Agreement or otherwise, but
determined without regard to any additional payments required under this Section 9)
(a “Payment”) would be subject to the excise tax imposed by Section 4999
of the Code or any corresponding provisions of state or local tax laws, or any
interest or penalties are incurred by the Executive with respect to such excise
tax (such excise tax, together with any such interest and penalties, are
hereinafter collectively referred to as the “Excise Tax”), then the Executive
shall be entitled to receive an additional payment (a “Gross-Up Payment”) in an
amount such that after payment by the Executive of all taxes (including any
interest or penalties imposed with respect to such taxes), including, without
limitation, any income taxes (and any interest and penalties imposed with
respect thereto) and Excise Tax imposed upon the Gross-Up Payment, the
Executive retains an amount of the Gross-Up Payment equal to the Excise Tax
imposed upon the Payments. The payment of a Gross-Up Payment under this Section 9(a)
shall not be conditioned upon the Executive’s termination of employment.
Notwithstanding the foregoing provisions of this Section 9(a), if it shall
be determined that the Executive is entitled to a Gross-Up Payment, but that
the portion of the Payments that would be treated as “parachute payments” under
Section 280G of the Code does not exceed 110% of the greatest amount (the “Safe
Harbor Amount”) that could be paid to the Executive such that the receipt of
Payments would not give rise to any Excise Tax, then no Gross-Up Payment shall
be made to the Executive and the amounts payable under this Agreement shall be
reduced so that the Payments, in the aggregate, are reduced to the Safe Harbor
Amount. The reduction of the amounts payable hereunder, if applicable, shall be
made by first reducing the payments under Section 6(a)(i)(B), unless an
alternative method of reduction is elected by the Executive. For purposes of
reducing the Payments to the Safe Harbor Amount, only amounts payable under
this Agreement (and no other Payments) shall be reduced. If the reduction of
the amounts payable under this Agreement would not result in a reduction of the
Payments to the Safe Harbor Amount, no amounts payable under this Agreement
shall be reduced pursuant to this Section 9(a).


 


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(b)           Subject
to the provisions of Section 9(c), all determinations required to be made
under this Section 9, including whether and when a Gross-Up Payment is
required and the amount of such Gross-Up Payment and the assumptions to be
utilized in arriving at such determination, shall be made by Deloitte & Touche
LLP or such other certified public accounting firm as may be designated by the
Executive (the “Accounting Firm”), which shall provide detailed supporting
calculations both to the Company and the Executive within 15 business days of
the receipt of notice from the Executive that there has been a Payment, or such
earlier time as is requested by the Company. In the event that the Accounting
Firm is serving as accountant or auditor for the individual, entity or group
effecting the Change of Control, the Executive shall appoint another nationally
recognized accounting firm to make the determinations required hereunder (which
accounting firm shall then be referred to as the Accounting Firm
hereunder).  All fees and expenses of the
Accounting Firm shall be borne solely by the Company. Any Gross-Up Payment, as
determined pursuant to this Section 9, shall be paid by the Company to the
Executive within five days of the receipt of the Accounting Firm’s
determination. Any determination by the Accounting Firm shall be binding upon
the Company and the Executive. As a result of the uncertainty in the
application of Section 4999 of the Code at the time of the initial
determination by the Accounting Firm hereunder, it is possible that Gross-Up
Payments which will not have been made by the Company should have been made (“Underpayment”),
consistent with the calculations required to be made hereunder. In the event
that the Company exhausts its remedies pursuant to Section 9(c) and the
Executive thereafter is required to make a payment of any Excise Tax, the
Accounting Firm shall determine the amount of the Underpayment that has
occurred and any such Underpayment shall be promptly paid by the Company to or
for the benefit of the Executive.


 


(c)           The
Executive shall notify the Company in writing of any claim by the Internal
Revenue Service that, if successful, would require the payment by the Company
of the Gross-Up Payment. Such notification shall be given as soon as
practicable but no later than ten business days after the Executive is informed
in writing of such claim and shall apprise the Company of the nature of such
claim and the date on which such claim is requested to be paid. The Executive
shall not pay such claim prior to the expiration of the 30-day period following
the date on which the Executive gives such notice to the Company (or such
shorter period ending on the date that any payment of taxes with respect to
such claim is due). If the Company notifies the Executive in writing prior to
the expiration of such period that it desires to contest such claim, the
Executive shall:


 


(i)            give
the Company any information reasonably requested by the Company relating to
such claim,


 


(ii)           take
such action in connection with contesting such claim as the Company shall
reasonably request in writing from time to time, including, without limitation,
accepting legal representation with respect to such claim by an attorney
reasonably selected by the Company,


 


(iii)          cooperate
with the Company in good faith in order effectively to contest such claim, and


 


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(iv)          permit the
Company to participate in any proceedings relating to such claim;


 


provided, however, that the Company shall bear and pay
directly all costs and expenses (including additional interest and penalties)
incurred in connection with such contest and shall indemnify and hold the
Executive harmless, on an after-tax basis, for any Excise Tax or income tax
(including interest and penalties with respect thereto) imposed as a result of
such representation and payment of costs and expenses. Without limitation on
the foregoing provisions of this Section 9(c), the Company shall control
all proceedings taken in connection with such contest and, at its sole option,
may pursue or forgo any and all administrative appeals, proceedings, hearings
and conferences with the taxing authority in respect of such claim and may, at
its sole option, either direct the Executive to pay the tax claimed and sue for
a refund or contest the claim in any permissible manner, and the Executive
agrees to prosecute such contest to a determination before any administrative
tribunal, in a court of initial jurisdiction and in one or more appellate
courts, as the Company shall determine; provided, however, that if the Company
directs the Executive to pay such claim and sue for a refund, the Company shall
advance the amount of such payment to the Executive, on an interest-free basis
and shall indemnify and hold the Executive harmless, on an after-tax basis,
from any Excise Tax or income tax (including interest or penalties with respect
thereto) imposed with respect to such advance or with respect to any imputed
income with respect to such advance; and further provided that any extension of
the statute of limitations relating to payment of taxes for the taxable year of
the Executive with respect to which such contested amount is claimed to be due
is limited solely to such contested amount. Furthermore, the Company’s control
of the contest shall be limited to issues with respect to which a Gross-Up
Payment would be payable hereunder and the Executive shall be entitled to
settle or contest, as the case may be, any other issue raised by the Internal
Revenue Service or any other taxing authority.


 


(d)           If,
after the receipt by the Executive of an amount advanced by the Company
pursuant to Section 9(c), the Executive becomes entitled to receive any
refund with respect to such claim, the Executive shall (subject to the Company’s
complying with the requirements of Section 9(c) promptly pay to the
Company the amount of such refund (together with any interest paid or credited
thereon after taxes applicable thereto). If, after the receipt by the Executive
of an amount advanced by the Company pursuant to Section 9(c), a
determination is made that the Executive shall not be entitled to any refund
with respect to such claim and the Company does not notify the Executive in
writing of its intent to contest such denial of refund prior to the expiration
of 30 days after such determination, then such advance shall be forgiven and
shall not be required to be repaid and the amount of such advance shall offset,
to the extent thereof, the amount of Gross-Up Payment required to be paid.


 


10.           Confidential
Information. The Executive shall hold in a fiduciary capacity for the
benefit of the Company all secret or confidential information, knowledge or
data relating to the Company or any of its affiliated companies, and their
respective businesses, which shall have been obtained by the Executive during
the Executive’s employment by the Company or any of its affiliated companies
and which shall not be or become public knowledge (other than by acts by the
Executive or representatives of the Executive in violation of this Agreement).
After termination of the Executive’s employment with the Company, the Executive
shall not, without


 


13





















 


the prior written
consent of the Company or as may otherwise be required by law or legal process,
communicate or divulge any such information, knowledge or data to anyone other
than the Company and those designated by it. In no event shall an asserted
violation of the provisions of this Section 10 constitute a basis for
deferring or withholding any amounts otherwise payable to the Executive under
this Agreement.


 


11.           Successors.


 


(a)           This
Agreement is personal to the Executive and without the prior written consent of
the Company shall not be assignable by the Executive otherwise than by will or
the laws of descent and distribution. This Agreement shall inure to the benefit
of and be enforceable by the Executive’s legal representatives.


 


(b)           This
Agreement shall inure to the benefit of and be binding upon the Company and its
successors and assigns.


 


(c)           The
Company will require any successor (whether direct or indirect, by purchase,
merger, consolidation or otherwise) to all or substantially all of the business
and/or assets of the Company to assume expressly and agree to perform this
Agreement in the same manner and to the same extent that the Company would be
required to perform it if no such succession had taken place. As used in this
Agreement, “Company” shall mean the Company as hereinbefore defined and any
successor to its business and/or assets as aforesaid which assumes and agrees
to perform this Agreement by operation of law, or otherwise.


 


12.           Miscellaneous.


 


(a)           This
Agreement shall be governed by and construed in accordance with the laws of the
State of Delaware, without reference to principles of conflict of laws. The
captions of this Agreement are not part of the provisions hereof and shall have
no force or effect. This Agreement may not be amended or modified otherwise
than by a written agreement executed by the parties hereto or their respective
successors and legal representatives.


 


(b)           All
notices and other communications hereunder shall be in writing and shall be
given by hand delivery to the other party or by registered or certified mail,
return receipt requested, postage prepaid, addressed as follows:


 


If to the Executive:


 


Jeffrey
N. Wagner


4900
Watson Lane


Dickson,
TN 37055-3499


 


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If to the Company:


 


Louisiana-Pacific Corporation


414 Union Street, Suite 2000


Nashville, Tennessee 37219-1711


Attention: General Counsel


 


or to such other address as either party shall have
furnished to the other in writing in accordance herewith. Notice and
communications shall be effective when actually received by the addressee.


 


(c)           The
invalidity or unenforceability of any provision of this Agreement shall not
affect the validity or enforceability of any other provision of this Agreement.


 


(d)           The
Company may withhold from any amounts payable under this Agreement such
Federal, state, local or foreign taxes as shall be required to be withheld
pursuant to any applicable law or regulation.


 


(e)           The
Executive’s or the Company’s failure to insist upon strict compliance with any
provision hereof or any other provision 6f this Agreement or the failure to
assert any right the Executive or the Company may have hereunder, including,
without limitation, the right of the Executive to terminate employment for Good
Reason pursuant to Section 5(c)(i) to 5(c)(v) of this Agreement, shall not
be deemed to be a waiver of such provision or right or any other provision or
right of this Agreement.


 


(f)            The
Executive and the Company acknowledge that, except as may otherwise be provided
under any other written agreement between the Executive and the Company, the
employment of the Executive by the Company is “at will” and, prior to the
Effective Date, the Executive’s employment may be terminated by either the
Executive or the Company at any time prior to the Effective Date, in which case
the Executive shall have no further rights under this Agreement. From and after
the Effective Date this Agreement shall supersede any other agreement between
the parties with respect to the subject matter hereof, including, without
limitation, the right of the Executive to participate in any severance plan of
the Company or otherwise receive severance benefits from the Company during the
Employment Period.


 


IN WITNESS WHEREOF, the Executive has hereunto set the
Executive’s hand and, pursuant to the authorization from its Board of
Directors, the Company has caused this Agreement to be executed in its name on
its behalf, all as of the day and year first above written.


 


 


	
   

  	
  /S/ JEFFERY N. WAGNER

  	
   

  
	
   

  	
  Jeffrey N. Wagner

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  LOUISIANA-PACIFIC
  CORPORATION

  
	
   

  	
   

  
	
   

  	
  By

  	
   /S/ Rick Frost

  	
   

  
					



 


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