**Exhibit10.7**

 

**STOCKAPPRECIATION RIGHTS AGREEMENT**

 

 

DATE:                                                                                                             

 

PARTIES:              CASCADECORPORATION, an Oregon corporation (“Cascade”), whose address is 2201 N.E.201st Avenue, Fairview, Oregon 97024

 

and

 

NAME (“Participant”),whose address is                                     .

 

**RECITALS**

 

**A.**                                    Cascadehas adopted the Cascade Corporation Stock Appreciation Rights Plan (the “Plan”).  The Plan provides for the grant of stockappreciation rights (“SARs”) with respect to shares of Cascade common stock (“CommonStock”).

 

**B.**                                    OnMay 26, 2004 the Compensation Committee of Cascade’s Board of Directors (the “Board”)granted Participant certain SARs, subject to the terms and conditions of thePlan and this Stock Appreciation Rights Agreement (“Agreement”).

 

**C.**                                    ThisAgreement evidences the grant of such SARs to Participant.

 

**AGREEMENT**

 

The parties agree asfollows:

 

**SECTION 1.**                                                    **DEFINED TERMS**

 

When used in thisAgreement, the following terms have the meaning specified below:

 

**“Base Price”**means the base price of each SAR as established by the Compensation Committeeof the Board (“Committee”), which may not be less than the Fair Market Value ofa common share of Common Stock on the date the grant of the SAR is made.  The Base Price of each SAR evidenced by thisAgreement is $       .

 

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**“FairMarket Value”** means with respect to a share of Common Stock,the closing price of such Common Stock as quoted on the New York Stock Exchangeor, if shares are not listed on that exchange, the primary trading venue forCascade shares, as reported in the Wall Street Journal on the date of grant orexercise, as the case may be, or if the shares did not trade that date, on thelast prior date on which the shares were traded.

 

**“GrantDate”** means the date the grant of the SAR is made, which isreflected as the date of this Agreement.

 

**SECTION 2.**                                                    **GRANT OF SARs**

 

Subject to the terms andconditions of this Agreement and the Plan, Cascade grants to Participant                SARs.  Each SAR entitles Participant, upon exerciseof the SAR, to receive an amount (payable solely in the form of Common Stockvalued at Fair Market Value) equal to the difference between the Fair MarketValue of a single share of Common Stock on the date of exercise and the BasePrice of the SAR.

 

**SECTION 3.**                                                    **EXERCISE OF SARs**

 

**3.1**                               **Date Exercisable.  **The SARs granted pursuant toSection 2 above shall become exercisable at the rate of 25% after one year, 50%after two years, 75% after three years and 100% after four years from the dateof this Agreement.

 

**3.2**                               **Manner of Exercise.  **The SARs may be exercised bydelivery to Cascade of a written notice, signed by Participant, specifying thenumber of SARs that Participant then desires to exercise.  SARs may be exercised only during the 30-dayperiod following the third business day after public dissemination of Cascade’sfinancial results for any fiscal quarter or for its fiscal year.

 

**3.3**                               **Stock Certificates.  **Promptly after Participantexercises SARs in accordance with Section 3.2 above, Cascade shall deliver toParticipant a certificate or certificates for the number of shares of CommonStock to which Participant is entitled as a result of such exercise, registeredin Participant’s name.

 

**SECTION 4.**                                                    **DURATION OF SARs**

 

Each SAR, to the extentnot previously exercised, shall terminate on the earliest of the followingdates:

 

(a)                                  Thetenth anniversary of the Grant Date.

 

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(b)                                 The90th day following the date of termination of Participant’s Cascadeemployment or, if longer, the 30th day after public dissemination ofCascade’s financial results for the first fiscal period ending after thetermination of Participant’s employment; however, if such termination is byreason of the Participant’s (i) termination of employment after age 62 undercircumstances that the Committee in its sole discretion deems equivalent toretirement (including retirement due to physical or mental disability that theCommittee determines is of such a nature as to prevent further performance ofjob duties) or (ii) death, the SAR shall terminate on the first anniversary ofsuch termination.  Notwithstanding theforegoing, if Participant’s employment is terminated for (i) willful failure to performreasonable directives of the Cascade’s management; (ii) use of alcohol orillegal drugs which interferes with Participant’s performance of duties in thejudgment of Cascade’s management; (iii) dishonesty affecting Cascade or anyrelated entity or conviction of a felony or any crime involving fraud ormisrepresentation; (iv) gross negligence or willful misconduct resulting insubstantial loss to Cascade, damage to Cascade’s reputation, or theft,embezzlement or similar loss to Cascade; or (v) other conduct that theCommittee in its sole discretion determines sufficiently harmful to the interestsof Cascade to constitute cause for termination shall forfeit all outstandingSARs granted pursuant to this Agreement immediately upon such termination.

 

**SECTION 5.**                                                    **NONTRANSFERABILITY**

 

During Participant’slifetime, SARs are exercisable only by Participant, Participant’s payeepursuant to a valid order by a domestic relations court with jurisdiction, orby a legally designated guardian or conservator.  With the Committee’s prior consent,Participant may transfer SARs to a trust for Participant’s benefit establishedfor estate planning purposes.  In theevent of Participant’s death, SARs exercisable as of the date of Participant’sdeath may be exercised by such beneficiary as Participant may have designatedin writing in a manner determined by the Committee.  In the absence of such a designation,Participant’s estate shall have the right to exercise such SARs.  No assignment or transfer of SARs, whethervoluntary, involuntary, or by operation of law or otherwise, except aspermitted by this Agreement or the Plan, shall vest in the assignee ortransferee any interest or right.

 

**SECTION 6.**                                                    **NO RIGHTS AS SHAREHOLDER PRIOR TO EXERCISE**

 

Participant shall not bedeemed for any purpose to be a Cascade shareholder with respect to SARs thathave been granted to Participant under this Agreement prior to the exercise ofsuch SARs.

 

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**SECTION 7.**                                                    **TAX REIMBURSEMENT**

 

Participant agrees to payto Cascade an amount sufficient to provide for any withholding or similar taxliability imposed on Cascade in connection with or with respect to any exerciseof SARs.  Alternatively, the Committeemay in its discretion may reduce the number of shares issued to Participantupon exercise of a SAR so that Fair Market Value of the shares issued to the Participantequals the Fair Market Value of all shares to which the Participant wasotherwise entitled as a result of the SAR exercise, less the Committee’sestimate of such withholding or similar tax liability.

 

**SECTION 8.**                                                    **COMPLIANCE WITH LAWS**

 

No shares shall be issuedor delivered under this Agreement unless and until, in the opinion of counselto Cascade, all applicable requirements of law or of any regulatory bodieshaving jurisdiction over such issuance and delivery have been met.  Certificates representing shares may bearsuch restrictions on sale or other transfer as counsel to Cascade may determineare required under securities or other applicable laws.

 

**SECTION 9.**                                                    **MISCELLANEOUS PROVISIONS**

 

**9.1**                               **Disputes.  **Any dispute or disagreement that mayarise under or as a result of this Agreement, or any question as to theinterpretation of this Agreement or the Plan, may be determined by theCommittee in its sole discretion, and any such determination shall be final,binding, and conclusive on all affected persons.

 

**9.2**                               **Notices.  **Any notices under this Agreement must bein writing and will be effective when actually delivered personally or, ifmailed, when deposited as registered or certified mail directed to the addressof the parties set forth above or to such other address as a party may certifyby notice to the other party.

 

**9.3**                               **Waiver and Modification.  **Provisions of thisAgreement may be waived or modified only by an agreement in writing signed bythe parties.

 

**9.4**                               **Governing Law.  **This Agreement shall be governedby and construed in accordance with the laws of the state of Oregon, withoutregard to principles of conflicts of laws.

 

**9.5**                               **Attorneys’ Fees  **In the event of any suit oraction or arbitration proceeding to enforce or interpret any provision of thisAgreement (or that is based on this Agreement), the prevailing party will beentitled to recover, in addition to other costs, reasonable attorneys’ fees inconnection with such suit, action, or arbitration, and in any appeal.  The determination of who is the prevailingparty and the amount of reasonable attorneys’ fees to be paid to the prevailingparty will be decided by the arbitrator or arbitrators (with respect to

 

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attorneys’ fees incurredprior to and during the arbitration proceedings) and by the court or courts,including any appellate courts, in which the matter is tried, heard, ordecided, including the court that hears any exceptions made to an arbitrationaward submitted to it for confirmation as a judgment (with respect to attorneys’fees incurred in such confirmation proceedings).

 
| CASCADE CORPORATION | PARTICIPANT: |
|---------------------|--------------|
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| By                  |         |   |   |   |
| Its                 |         |   | [print name] |
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|                |         |   |
|                | Signature    |
|                     |              |  |  |  |  |

 

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