EXHIBIT 10.2


 


EMPLOYMENT
AGREEMENT


 


THIS AGREEMENT is made as of the 20th day of November,
2008, between Boise Cascade, L.L.C., a Delaware limited liability company (the “Company”),
and Duane C. McDougall (“Executive”).


 


WHEREAS, the services of Executive and his managerial
and professional experience are of value to the Company.


 


WHEREAS the Company desires to employ Executive to act
as its Chief Executive Officer and as the Chief Executive Officer of Boise
Cascade Holdings, L.L.C. (“Holdings”) upon the terms and conditions set
forth herein.


 


In consideration of the mutual covenants contained
herein and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto agree as follows:


 


1.             Employment.  The Company
shall employ Executive, and Executive hereby accepts employment with the
Company, upon the terms and conditions set forth in this Agreement, during the
Employment Period (as defined in paragraph 5 hereof).


 


2.             Position and Duties. 
During the Employment Period, Executive shall serve as the Chairman and
Chief Executive Officer of the Company, Holdings and such subsidiaries of
Holdings as the Company may reasonably request and shall have the normal
duties, responsibilities, functions and authority of such position, subject to
the power and authority of the Board of Managers of Holdings  (the “Board”) to expand or limit
such duties, responsibilities, functions and authority and to overrule actions
of officers of the Company, Holdings and such subsidiaries.  During the Employment Period, Executive shall
render such administrative, financial and other executive and managerial
services to the Company and its Affiliates which are consistent with Executive’s
position as the Board may from time to time direct.


 


(a)           During the Employment Period, Executive
shall report to the Board and shall devote his best efforts and sufficient
business time and attention (except for permitted vacation periods and
reasonable periods of illness or other incapacity) to the business and affairs
of the Company and
its Affiliates in order to responsibly discharge his obligations and duties to
the Company and its Affiliates. 
Executive shall perform his duties, responsibilities and functions to
the Company and its Affiliates hereunder to the best of his abilities in a
diligent, trustworthy, professional and efficient manner and shall comply with
the Company’s and its Affiliates’ policies and procedures in all material
respects.  In performing his duties and
exercising his authority under the Agreement, Executive shall support and
implement the business and strategic plans approved from time to time by the
Board.   During the Employment Period,
Executive shall not accept other employment, serve as an officer or director
of, or otherwise perform services for compensation for, any other entity
without the prior written consent of the Board; provided that Executive
may serve as an officer or director of or otherwise participate in purely
educational, welfare, social, religious and civic organizations so long as such
activities do not interfere with 


 


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Executive’s employment.  The
Company hereby consents to the service of Executive on the board of directors
of each of Greenbrier Companies, Cascade Corp., and Westcoast Bancorp.


 


(b)           For purposes of this Agreement, “Affiliates”
shall mean any corporation or other entity which is directly or indirectly
controlled by or under common control with the Company or its subsidiaries; provided
that, for purposes of this Agreement, in no event shall an “Affiliate” be
deemed to include Madison Dearborn Capital Partners IV, L.P. (“MDCP”) or
any direct or indirect portfolio company of MDCP, other than Forest Products
Holdings, L.L.C. (“FPH”) and its subsidiaries and other controlled
investments of FPH.


 


3.             Compensation and Benefits.


 


(a)           During the Employment Period, Executive’s
base salary shall be Eight Hundred Thousand Dollars ($800,000) per annum (as
adjusted from time to time in accordance with the following sentence, the “Base
Salary”), which salary shall be payable by the Company in regular
installments in accordance with the Company’s general payroll practices (in
effect from time to time).  Executive and
the Company shall review the Base Salary each year during the Employment Period
(beginning January 1, 2010), and Executive may receive increases in his
Base Salary from time to time, based upon his performance, subject to approval
of the Compensation Committee of the Board (the “Compensation Committee”).  During the period beginning on the date of
this Agreement and ending December 31, 2008, the Base Salary shall be pro
rated on an annualized basis.  In
addition, during the Employment Period, Executive shall, subject to satisfying
the eligibility criteria therefor, be entitled to participate in the Company’s
welfare benefit programs, 401(k) plans, key executive deferred
compensation plan and other employee benefit plans and shall be entitled to
participate in other perquisite programs of the Company, in each case for which
other similarly situated senior executive employees of the Company that are
first beginning employment on the Effective Date are generally eligible, and
Executive shall be entitled to four weeks of paid vacation each calendar year
in accordance with the Company’s policies. 
Notwithstanding the foregoing, the Company may modify or terminate any
employee benefit plan or perquisite program at any time.


 


(b)           In addition to Base Salary, during the
Employment Period, Executive will have an opportunity to earn a cash bonus each
year as determined by the Compensation Committee or the Board, with a target
annual bonus equal to one hundred percent (100%) of Executive’s Base Salary
(the “Target Bonus”) with respect to any calendar year.  The Target Bonus will be based on financial
and other objective targets that the Compensation Committee or the Board
reasonably believes are reasonably attainable at the time that they are set.


 


(c)           On the date hereof, FPH and Executive
shall execute and deliver that certain Management Equity Agreement, dated as of
the Effective Date, in substantially the form attached hereto as Exhibit A.


 


(d)           During the Employment Period, the Company
shall reimburse Executive for all reasonable business expenses incurred by him
in the course of performing his duties and responsibilities under this
Agreement which are consistent with the Company’s policies in effect from time
to time with respect to travel, entertainment and other business expenses or
otherwise 


 


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provided for in this Agreement, subject to the Company’s requirements
with respect to reporting and documentation of such expenses.  During the Employment Period, Executive shall
be indemnified by the Company as provided in paragraph 22 pursuant to the
applicable provisions of its Operating Agreement and the laws of Delaware, and
the Company shall furnish director and officer liability insurance to the
Executive at the Company’s sole cost.


 


(e)           During the Employment Period, the Company
shall, at the Company’s cost, provide a furnished condominium for Executive’s
use in Boise, Idaho; provided that Executive shall comply with the terms
of any condominium agreement applicable thereto, shall keep such condominium in
good condition and repair and be solely responsible for any improvements
thereto; provided that for portions of the Employment Period prior to February 1,
2009, the Company may fulfill its obligations under this sentence by providing,
in lieu of a condominium, other reasonable accommodations to Executive.  In addition, during the Employment Period,
the Company shall provide Executive with access to private air travel (NetJets
or similar program) for Company business use (including travel from an airport
near Executive’s homes in Portland, Oregon and Palm Springs, California to one
or more Company business locations for which air travel is reasonably
necessary), in accordance with the Company’s security and other policies as in
effect from time to time.  To the extent
that the benefits described in this paragraph 3(e) result in any increase
to Executive’s net taxable income (i.e., the amount Executive is required to
include in taxable income as compensation as a result of the provision of the
benefits described in this paragraph 3(e) exceeds any deductions available
to Executive in connection with the benefits described in this paragraph 3(e)),
the Company shall pay to Executive a gross-up payment so that after Executive’s
payment of any tax liability (or any withholding of the associated tax
liability by the Company from Executive’s compensation) incurred as a result of
the provision of the benefits described in this paragraph 3(e) Executive
is in the same net cash position as if such benefits had not resulted in an
increase to Executive’s net taxable income. 
For purposes of determining the amount of such gross-up payment, if any,
the actual marginal rate of federal income taxation in the calendar year in
which the total payments are made or benefits are received (or such payments
are deemed to be made or deemed to be received for applicable tax purposes)
shall be used and the actual marginal rate of state and local taxation in the
state and locality of Executive’s residence on the date the total payments are
made or benefits are received (or such payments are deemed to be made or deemed
to be received for applicable tax purposes) shall be used, in either case
taking into account the maximum reduction in such taxes that can be obtained
from the deduction of any such state, local, or federal taxes  and for purposes of calculating the actual
marginal rate, the additional net taxable income incurred as a result of the
provision of benefits or making of payments under this paragraph 3(e) shall
be treated as the last items of income received for the applicable taxable year. If the net amount included in Executive’s
taxable income as a result of the benefits described in this paragraph 3(e) is
determined by the Internal Revenue Service, on audit or otherwise, to exceed
the amount taken into account hereunder in calculating the gross-up payment
(including by reason of any payment the existence or amount of which cannot be
determined at the time of the gross-up payment), the Company will make another
gross-up payment in respect of such excess 
following the date that the amount of such excess is finally determined.
The Company and Executive must each reasonably cooperate with the other in
connection with any administrative or judicial proceedings concerning any tax
implications to either the Company or the Executive as a result of the total 


 


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payments made or
benefits provided pursuant to this paragraph 3(e).  The gross-up payments provided to Executive
must be made no later than the end of the calendar year following the year in
which Executive remits the applicable taxes with respect to which a gross-up is
being paid hereunder.  As a condition to
the Company’s obligations under this paragraph 3(e), Executive shall (i) cooperate
as reasonably requested by the Company to reduce, to the greatest extent
practicable, the Company’s obligations under this paragraph 3(e) and (ii) except
to the extent required by a taxing authority of a competent jurisdiction, file
his income tax returns with respect to the benefits provided and payments made
to him in accordance with this paragraph 3(e) only in compliance with the Form W-2
issued by the Company to Executive with respect to such benefits and payments.


 


(f)            Promptly after the Effective Date, the
Company and Executive shall cooperate in an attempt to obtain, at commercially
reasonable rates, a term life insurance policy or policies on the life of
Executive with an aggregate face amount of One Million Six Hundred Thousand
Dollars ($1,600,000), payable to such beneficiaries as Executive may
designate.  In the event that any such
policy or policies are available at commercially reasonable rates (to be
defined for purposes of this Agreement as rates prevailing as of December 1,
2008 for healthy men of Executive’s age), the Company shall pay the premium(s) on
such policy or policies during the Employment Period.  Executive agrees to cooperate in any medical
or other examination, supply any information and execute and deliver any
applications or other instruments in writing as may be reasonably necessary to
obtain such insurance.  Executive may, at
his expense, purchase additional insurance at the time the Company purchases
said policy or policies.  In the event
Executive’s employment terminates for any reason, Executive shall have the
right, at his expense, to begin paying the premiums required to continue such
insurance coverage from and after the date of his termination.


 


(g)           All amounts payable to Executive as compensation pursuant to this Agreement shall be subject
to all required and customary withholding by the Company as provided in
paragraph 19 herein.


 


4.             Board Membership. 
With respect to all regular elections of the Board of Managers of Boise
Cascade Holdings, L.L.C. during the Employment Period, the Company shall
nominate, and use its reasonable efforts to cause the election of, Executive to
serve as Chairman of the Board.  Upon the
termination or expiration of the Employment Period, Executive shall resign as
Chairman and as a member of the Board and all other governing bodies of the
Company and its Affiliates and any other entity for which Executive serves on
the board of directors or similar governing body as requested , as the case may
be.


 


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5.             Term.


 


(a)           Subject to earlier termination in
accordance with the proviso to this sentence, the “Employment Period”
shall begin on December 1, 2008 and end on December 31, 2010 and
shall automatically be renewed on the same terms and conditions set forth
herein as modified from time to time by the parties hereto in accordance with
this Agreement for additional one-year periods beginning on December 31,
2010 and each successive anniversary thereof, unless the Company or Executive
gives the other party written notice of the election not to renew the
Employment Period at least 60 days prior to any such renewal date; provided
that (i) the “Employment Period” shall terminate prior to any such date
immediately upon Executive’s resignation (with or without Good Reason, as defined
below), death or Disability and (ii) the “Employment Period” may be
terminated by the Company at any time prior to such date for Cause (as defined
below) or without Cause (it being understood and agreed that Executive is an
at-will employee whose employment may be terminated at any time for any reason,
subject to his rights under this Agreement). 
Except as otherwise provided herein, any termination of the Employment
Period by the Company shall be effective as specified in a written notice from
the Company to Executive.


 


(b)           If the Employment Period is terminated by
the Company without Cause (and, for the avoidance of doubt, a termination by
the Company without Cause shall not be deemed to occur if the Company provides
written notice that it elects not to renew the Employment Period or upon any
expiration of the Employment Period for non-renewal) or upon Executive’s
resignation with Good Reason (and, for the avoidance of doubt, a resignation by
Executive for Good Reason shall not be deemed to occur if Executive provides
written notice that he elects not to renew the Employment Period or upon any
expiration of the Employment Period for non-renewal), Executive shall be
entitled to receive (i) his Base Salary through the date of expiration, (ii) the
value of any unused and accrued time off, less any advanced time off, in
accordance with the time off policy applicable to Executive immediately prior
to Executive’s date of termination, (iii) severance in accordance with the
Company’s Executive Officer Severance Pay Policy or any general severance
policy for executive officers issued in replacement thereof, and (iv) unless
such severance policy already provides for a portion of his Target Bonus to be
paid as part of his severance, an amount equal to his Target Bonus for the
calendar year in which such termination occurred multiplied by a fraction, the
numerator of which is the number of days from January 1 of such calendar
year through the date of termination and the denominator of which is 365 or
366, as applicable.


 


(c)           If the Employment Period is terminated by
the Company for Cause, if the Employment Period expires due to the Company or
Executive electing not to renew the Employment Period or if the Employment
Period is terminated pursuant to clause (a)(i) above (other than as a
result termination with Good Reason), Executive shall only be entitled to
receive his Base Salary through the date of termination, the value of any
unused and accrued time off, less any advanced time off, in accordance with the
time off policy applicable to Executive immediately prior to Executive’s date
of termination and shall not be entitled to any other salary, compensation or
benefits from the Company or its Affiliates thereafter, except as expressly
required under applicable law.


 


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(d)           Payments pursuant to this Section 5
shall be made as soon as practical and in any event by the later of the end of
the year in which the termination occurs or two and one-half (21⁄2) months
following the date of termination (but subject in any case to the release
having then become effective in accordance with this paragraph 5(d)). 
Executive shall not be entitled to any other salary, compensation or benefits
after termination of the Employment Period, except as specifically provided for
in this Agreement or as otherwise expressly required by applicable law. 
Executive shall have no duty or obligation to seek other employment or
otherwise mitigate damages hereunder.  Amounts paid pursuant to this
paragraph 5 shall be in lieu of all other severance payments that would have
otherwise been payable pursuant to the Company’s severance plans, programs or
policies.  Except as otherwise expressly
provided herein, all of Executive’s rights to salary, bonuses, employee
benefits and other compensation hereunder which would have accrued or become
payable after the termination or expiration of the Employment Period shall
cease upon such termination or expiration, other than those expressly required
under applicable law (such as COBRA). 
The Company may offset any amounts Executive owes it or its Affiliates
against any amounts it or its Affiliates owes Executive hereunder.  Notwithstanding anything to the contrary,
payment of amounts under this paragraph 5 are conditioned upon the execution by
Executive of a separation and release agreement in a form mutually acceptable
to Executive and the Company and the observation of any applicable waiting or
revocation periods that are necessary for the release to become fully effective
and irrevocable under state and federal laws.


 


(e)           For purposes of this Agreement, “Cause”
shall mean with respect to Executive one or more of the following:  (i) Executive’s theft or embezzlement, or attempted theft or embezzlement, of
money or property of the Company, its Affiliates or any of their equityholders,
perpetration or attempted perpetration of fraud, or participation in a fraud or
attempted fraud, on the Company, its Affiliates or any of their respective
equityholders or unauthorized appropriation of, or attempt to misappropriate,
any tangible or intangible assets or property of the Company, its Affiliates or
any of their respective equityholders, (ii) any act or acts of disloyalty,
misconduct or moral turpitude by Executive injurious to the interest, property,
operations, business or reputation of the Company, its Affiliates or any of
their respective equityholders or conviction of Executive (or a plea of guilty
or nolo contendre) of a felony which results in injury to the Company, its
Affiliates or any of their respective equityholders or (iii) Executive’s
failure or inability (other than by reason of his Disability) to carry out
effectively his duties and obligations to the Company or its Affiliates or to
participate effectively and actively in the management of the Company or its
Affiliates, as determined in the reasonable judgment of the Board or any
material breach of this Agreement or any Company policy or code of conduct
applicable to senior executives of the Company; provided, however, that the
Company shall provide specific written notice of such alleged failure or
inability and provide Executive with 15 days to cure such alleged failure or
inability.


 


The Board shall give Executive written notice of the
Board’s concern over Executive’s action or inaction constituting alleged Cause
and Executive shall have 15 days to cure the alleged Cause and to prepare for a
meeting with the Board, at which time Executive may present any information and
any other factors relevant to the Board’s determination of Cause, after which a
majority of the Board (disregarding Executive’s membership on the Board) must
ratify the finding of “Cause” for it to be effective.


 


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(f)            For purposes of this Agreement, “Disability”
shall mean Executive’s inability to perform the essential duties,
responsibilities and functions of his position with the Company and its
Affiliates for six (6) consecutive months as a result of any mental or
physical disability or incapacity even with reasonable accommodations of such
disability or incapacity provided by the Company and its Affiliates or if
providing such accommodations would be unreasonable, all as determined by the
Board in its reasonable good faith judgment; provided, however, that the
Company shall provide 30 days notice of termination due to Disability where
such termination shall be effective if Executive does not return to full-time
active employment within such 30-day period. 
Executive shall cooperate in all respects with the Company if a question
arises as to whether he has become disabled (including submitting to an
examination by a medical doctor or other health care specialists selected by
the Company and authorizing such medical doctor or such other health care
specialist to discuss Executive’s condition with the Company).


 


(g)           For purposes of this Agreement, “Good
Reason” shall exist if:  (i) the
Company reduces the amount of Executive’s Base Salary below $800,000 or Target
Bonus below 100% of Executive’s Base Salary, and (ii) the Company
adversely changes Executive’s titles or impairs or reduces his responsibilities
materially inconsistent with the positions he holds, in each case without the
prior written consent of Executive; provided that written notice of Executive’s
resignation for Good Reason must be delivered to the Company within 30 days
after the occurrence of any such event in order for Executive’s resignation
with Good Reason to be effective hereunder.


 


6.             Confidential Information.


 


(a)           Executive acknowledges that the
information, observations and data (including trade secrets) obtained by him
while employed by the Company and its Affiliates, or during the Consulting
Period, concerning the business or affairs of the Company or any of its
Affiliates (“Confidential Information”) are the property of the Company
or such Affiliate.  Therefore, Executive
agrees that, during the Employment Period and thereafter, he shall not disclose
to any person or entity or use for his own purposes any Confidential
Information or any confidential or proprietary information of other persons or
entities in the possession of the Company and its Affiliates (“Third Party
Information”), without the prior written consent of the Board, unless and
to the extent that the Confidential Information or Third Party Information
becomes generally known to and available for use by the public other than as a
result of Executive’s acts or omissions. 
Executive shall deliver to the Company at the termination or expiration
of the Employment Period, or at any other time the Company may request, all
memoranda, notes, plans, records, reports, computer files, disks and tapes,
printouts and software and other documents and data (and copies thereof)
embodying or relating to Third Party Information, Confidential Information,
Work Product (as defined below) or the business of the Company or any other
Affiliates which he may then possess or have under his control.


 


(b)           Executive shall be prohibited from using
or disclosing any confidential information or trade secrets that Executive may
have learned through any prior employment. 
If at any time during this employment with the Company or any Affiliate,
Executive believes he is being asked to engage in work that will, or will be
likely to, jeopardize any confidentiality or 


 


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other obligations Executive may have to former employers, Executive
shall immediately advise the Board so that Executive’s duties can be modified
appropriately.  Executive represents and
warrants to the Company that Executive took nothing with him which belonged to
any former employer when Executive left his prior position and that Executive
has nothing that contains any information which belongs to any former
employer.  If at any time Executive
discovers this is incorrect, Executive shall promptly return any such materials
to Executive’s former employer.  The
Company does not want any such materials, and Executive shall not be permitted
to use or refer to any such materials in the performance of Executive’s duties
hereunder.


 


7.             Intellectual Property, Inventions and
Patents.  Executive acknowledges that all discoveries,
concepts, ideas, inventions, innovations, improvements, developments, methods,
designs, analyses, drawings, reports, patent applications, copyrightable work
and mask work (whether or not including any confidential information) and all
registrations or applications related thereto, all other proprietary
information and all similar or related information (whether or not patentable)
which relate to the Company’s or any of its Affiliates’ actual or anticipated
business, research and development or existing or future products or services
and which are conceived, developed or made by Executive (whether alone or
jointly with others) while employed by the Company and its Affiliates, whether
before or after the date of this Agreement (“Work Product”), belong to
the Company or such Affiliate.  Executive
shall promptly disclose such Work Product to the Board and, at the Company’s
expense, perform all actions reasonably requested by the Board (whether during
or after the Employment Period) to establish and confirm such ownership
(including assignments, consents, powers of attorney and other instruments).


 


8.             Non-Compete, Non-Solicitation.


 


(a)           In further consideration of the
compensation to be paid to Executive hereunder, Executive acknowledges that
during the course of his employment with the Company and its Affiliates he
shall become familiar with the Company’s trade secrets and with other
Confidential Information and that his services shall  be of special, unique and extraordinary value
to the Company and its Affiliates, and therefore, Executive agrees that, during
the Employment Period and for two years thereafter (the “Noncompete Period”),
he shall not directly or indirectly own any interest in, manage, control,
participate in, consult with, render services for, be employed in an executive,
managerial or administrative capacity by, or in any manner engage in any
business competing with the businesses of the Company or its Affiliates, as
such businesses exist or are in process during the Employment Period or on the
date of the termination or expiration of the Employment Period, within any
geographical area in which the Company or its Affiliates engage or, solely with
respect to geographical areas with respect to which the Company has invested at
least $500,000 in, plan to engage in such businesses.  Nothing herein shall prohibit Executive from
being a passive owner of not more than 2% of the outstanding stock of any class
of a corporation which is publicly traded, so long as Executive has no active
participation in the business of such corporation.


 


(b)   During the Noncompete Period, Executive shall not
directly or indirectly through another person or entity (i) induce or
attempt to induce any employee of the Company or any Affiliate to leave the
employ of the Company or such Affiliate, or in any way interfere with the
relationship between the Company or any Affiliate and any employee thereof, (ii) hire
any 


 


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person (other than Executive’s secretary) who was an employee of the
Company or any Affiliate at any time during the Employment Period or (iii) induce
or attempt to induce any customer, supplier, licensee, licensor, franchisee or
other business relation of the Company or any Affiliate to cease doing business
with the Company or such Affiliate, or in any way interfere with the
relationship between any such customer, supplier, licensee or business relation
and the Company or any Affiliate.


 


(c)           Executive agrees that he shall not make
any oral or written statements that disparage the Company, its subsidiaries or
their respective direct or indirect Affiliates, equityholders, employees,
officers, directors, products or services; provided that this paragraph shall
not be deemed to have been violated by statements or releases of information by
Executive (i) during the period of his employment under this Agreement
which Executive believes to be truthful and which are made in good faith in the
performance of his duties under this Agreement or (ii) statements made in
the course of sworn testimony in administrative, judicial or arbitral
proceedings.


 


(d)           If, at the time of enforcement of this
paragraph 8, a court shall hold that the duration, scope or area restrictions
stated herein are unreasonable under circumstances then existing, the parties
agree that the maximum duration, scope or area reasonable under such
circumstances shall be substituted for the stated duration, scope or area and
that the court shall be allowed to revise the restrictions contained herein to
cover the maximum period, scope and area permitted by law.  Executive acknowledges that the restrictions
contained in this paragraph 8 are reasonable and that he has reviewed the
provisions of this Agreement with his legal counsel.


 


(a)           In the event of the breach or a
threatened breach by Executive of any of the provisions of this paragraph 8,
the Company would suffer irreparable harm, and in addition and supplementary to
other rights and remedies existing in its favor, the Company shall be entitled
to specific performance and/or injunctive or other equitable relief from a
court of competent jurisdiction in order to enforce or prevent any violations
of the provisions hereof (without posting a bond or other security).  In addition, in the event of a breach or
violation by Executive of this paragraph 8, the Noncompete Period shall be
automatically extended by the amount of time between the initial occurrence of
the breach or violation and when such breach or violation has been duly cured.


 


9.             Executive’s Representations. 
Executive hereby represents and warrants to the Company that (i) the
execution, delivery and performance of this Agreement by Executive do not and
shall not conflict with, breach, violate or cause a default under any contract,
agreement, instrument, order, judgment or decree to which Executive is a party
or by which he is bound, (ii) Executive is not a party to or bound by any
employment agreement, noncompete agreement or confidentiality agreement with
any other person or entity and (iii) upon the execution and delivery of
this Agreement by the Company, this Agreement shall be the valid and binding
obligation of Executive, enforceable in accordance with its terms.  Executive hereby acknowledges and represents
that he has consulted with independent legal counsel regarding his rights and
obligations under this Agreement and that he fully understands the terms and
conditions contained herein.


 


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10.           Survival.  Paragraphs 5
through 24, inclusive, shall survive and continue in full force in accordance
with their terms notwithstanding the expiration or termination of the
Employment Period.


 


11.           Notices.  Any notice
provided for in this Agreement shall be in writing and shall be either
personally delivered, sent by reputable overnight courier service or mailed by
first class mail, return receipt requested, to the recipient at the address
below indicated:


 


	
  Notices to Executive:

  
	
   

  
	
   

  	
   

  	
  Duane C. McDougall

  
	
   

  	
   

  	
  876 Northshore Road

  
	
   

  	
   

  	
  Lake Oswego, OR 97034

  
	
   

  	
   

  	
   

  
	
  Notices to the Company:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Boise Cascade, L.L.C.

  
	
   

  	
   

  	
  1111 W. Jefferson
  Street, Suite 300

  
	
   

  	
   

  	
  Boise, ID 83702-5389

  
	
   

  	
   

  	
  Attention:  General Counsel

  



 


or such other address or to the attention of such
other person as the recipient party shall have specified by prior written
notice to the sending party.  Any notice
under this Agreement shall be deemed to have been given when so delivered, sent
or mailed.


 


12.           Severability. 
Whenever possible, each provision of this Agreement shall be interpreted
in such manner as to be effective and valid under applicable law, but if any
provision of this Agreement is held to be invalid, illegal or unenforceable in
any respect under any applicable law or rule in any jurisdiction, such
invalidity, illegality or unenforceability shall not affect any other provision
of this Agreement or any action in any other jurisdiction, but this Agreement
shall be reformed, construed and enforced in such jurisdiction as if such
invalid, illegal or unenforceable provision had never been contained herein.


 


13.           Complete Agreement. 
This Agreement embodies the complete agreement and understanding among
the parties and supersedes and preempts any prior understandings, agreements or
representations by or among the parties, written or oral, which may have
related to the subject matter hereof in any way.


 


14.           No Strict Construction. 
The language used in this Agreement shall be deemed to be the language
chosen by the parties hereto to express their mutual intent, and no rule of
strict construction shall be applied against any party.  Whenever used herein, “including” shall mean “including,
without limitation.”


 


15.           Counterparts. 
This Agreement may be executed in separate counterparts, each of which
is deemed to be an original and all of which taken together constitute one and
the same agreement.


 


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16.           Successors and Assigns; No Third Party
Beneficiaries.  This Agreement is intended to bind and inure
to the benefit of and be enforceable by Executive, the Company and their
respective heirs, successors and assigns, except that Executive may not assign
his rights or delegate his duties or obligations hereunder without the prior
written consent of the Company.  This
Agreement shall not confer any rights or remedies upon any person other than
the Executive, the Company, the Company’s Affiliates and their respective
heirs, successors and permitted assigns.


 


17.           Choice of Law.  ALL
ISSUES AND QUESTIONS CONCERNING THE CONSTRUCTION, VALIDITY, ENFORCEMENT AND
INTERPRETATION OF THIS AGREEMENT AND THE EXHIBITS AND SCHEDULES HERETO SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
DELAWARE, WITHOUT GIVING EFFECT TO ANY CHOICE OF LAW OR CONFLICT OF LAW RULES
OR PROVISIONS (WHETHER OF THE STATE OF IDAHO OR ANY OTHER JURISDICTION) THAT
WOULD CAUSE THE APPLICATION OF THE LAWS OF ANY JURISDICTION OTHER THAN THE
STATE OF DELAWARE.


 


18.           Amendment and Waiver. 
The provisions of this Agreement may be amended or waived only with the
prior written consent of the Company (as approved by the Board) and Executive,
and no course of conduct or course of dealing or failure or delay by any party
hereto in enforcing or exercising any of the provisions of this Agreement
(including the Company’s right to terminate the Employment Period for Cause)
shall affect the validity, binding effect or enforceability of this Agreement
or be deemed to be an implied waiver of any provision of this Agreement.


 


19.           Indemnification and Reimbursement of
Payments on Behalf of Executive.  The Company
and its Affiliates shall be entitled to deduct or withhold from any amounts
owing from the Company or any of its Affiliates to Executive any federal,
state, local or foreign withholding taxes, excise tax, or employment taxes (“Taxes”)
imposed with respect to Executive’s compensation, other payments or provisions
of benefits from the Company or any of its Affiliates or Executive’s ownership
interest in the Company (including wages, bonuses, dividends, the receipt or
exercise of equity options and/or the receipt or vesting of restricted
equity).  In the event the Company or any
of its Affiliates does not make any such deductions or withholdings, Executive
shall indemnify the Company and its Affiliates for any amounts paid with
respect to any such Taxes, together with any interest, penalties and related
expenses thereto.


 


20.           Consent to Jurisdiction. 
Each of the parties irrevocably submits to the non-exclusive
jurisdiction of the United States District Court for the District of Idaho
located in Boise, Idaho, for the purposes of any suit, action or other
proceeding arising out of this Agreement, any related agreement or any
transaction contemplated hereby or thereby. 
Each of the parties hereto further agrees that service of any process,
summons, notice or document by U.S. registered mail to such party’s respective
address set forth above shall be effective service of process for any action,
suit or proceeding in such court with respect to any matters to which it has
submitted to jurisdiction in this paragraph 20. 
Each of the parties hereto irrevocably and unconditionally waives any
objection to the laying of venue of any action, suit or proceeding arising out
of this Agreement, any related document or the transactions contemplated hereby
and 


 


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thereby in the
United States District Court for the District of Idaho located in Boise, Idaho,
and hereby and thereby further irrevocably and unconditionally waives and
agrees not to plead or claim in any such court that any such action, suit or
proceeding brought in any such court has been brought in an inconvenient forum.


 


21.           Waiver of Jury Trial. 
As a specifically bargained for inducement for each of the parties
hereto to enter into this Agreement (after having the opportunity to consult
with counsel), each party hereto expressly waives the right to trial by jury in
any lawsuit or proceeding relating to or arising in any way from this Agreement
or the matters contemplated hereby.


 


22.           Indemnity of Executive by Company. 
To the maximum extent permitted by applicable law and the constitutive
documents of the Company and its Affiliates, Executive shall be indemnified and
held harmless by the Company and its Affiliates, as applicable, from and
against any and all potential, threatened, pending or completed claims,
damages, liabilities (joint and/or several), losses, expenses, judgments,
fines, settlements and other amounts (including all legal fees and expenses)
arising from any and all claims, demands, actions, suits or proceedings
(including, but not limited to, those in civil, criminal, administrative or
investigative forums) in which Executive may become involved, as a party or
otherwise, by reason of the management affairs of the Company by the Executive,
or other work performed by Executive on behalf of the Company, or the rendering
of advice by the Executive or consultation with Executive in Executive’s
management capacity at the Company, or that relate in any way to Executive
serving as a director, manager, officer, employee or agent of the Company, its
business or its affairs, provided that such actions or failures to act are not
finally adjudicated by a court of competent jurisdiction (a) to have
constituted criminal misconduct, and (b) were not taken or omitted (i) in
good faith and (ii) in the reasonable belief that such action was taken or
omitted in, or not opposed to, the best interests of the Company.  In addition, the Company will, to the extent
provided for in the constitutive documents for the Company, promptly pay on
request any expenses, including all attorneys’ fees incurred by Executive, in
defending any civil, criminal or regulatory action or investigation relating to
the Company, and in no case later than in advance of the final disposition of
such action, provided that the Executive agrees to repay such expenses if the
Executive is specifically and finally found by a court of competent jurisdiction
not to be entitled to such indemnification. 
The termination of any action, suit or proceeding by judgment, order or
settlement shall not create, of itself, a presumption that the Executive did
not act in good faith or in the best interests of the Company.  Notwithstanding anything to
the contrary, Executive shall request payment of an expense pursuant to this
section no later than six months after the end of the year in which the expense
was incurred, and any such expense will be paid by Company or any of its
Affiliates by the end of the year after the year in which the expense was
incurred.


 


23.           Corporate Opportunity. 
During the Employment Period, Executive shall submit to the Board all
business, commercial and investment opportunities or offers presented to
Executive or of which Executive becomes aware which relate to any lines of
business that the Company or its Affiliates derive more than $50,000 annually
of their revenue from or with respect to which the Company and its Affiliates
have made a significant investment (“Corporate Opportunities”).  Unless approved by the Board, Executive shall
not accept or pursue, directly or 


 


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indirectly, any
Corporate Opportunities on Executive’s own behalf or on behalf of another
person or entity in or with respect to whom Executive has any economic
interest.


 


24.           Executive’s Cooperation. 
During the Employment Period and thereafter, Executive shall cooperate
with the Company and its Affiliates in any internal investigation, any
administrative, regulatory or judicial investigation or proceeding or any
dispute with a third party as reasonably requested by the Company (including
Executive being available to the Company upon reasonable notice for interviews
and factual investigations, appearing at the Company’s request to give
testimony without requiring service of a subpoena or other legal process,
volunteering to the Company all pertinent information and turning over to the
Company all relevant documents which are or may come into Executive’s
possession, all at times and on schedules that are reasonably consistent with
Executive’s other permitted activities and commitments). In the event the
Company requires Executive’s cooperation in accordance with this paragraph, the
Company shall reimburse Executive solely for reasonable travel expenses
(including lodging and meals) upon submission of receipts.


 


*    *    *   
*    *


 


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IN WITNESS WHEREOF, the parties hereto have executed
this Agreement as of the date first written above.


 


 


	
   

  	
  Boise Cascade, L.L.C.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
      /s/
  Thomas Carlile

  
	
   

  	
   

  	
   

  
	
   

  	
  Its: 

  	
      Executive
  Vice President &

  
	
   

  	
   

  	
          Chief
  Financial Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
      /s/
  Duane C. McDougall

  
	
   

  	
  Duane C.
  McDougall

  



 


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