EXHIBIT 10.1


 


RETIREMENT AGREEMENT


 


THIS RETIREMENT AGREEMENT is made as of November 20,
2008 (the “Signing Date”), by and among Boise Cascade, L.L.C., a
Delaware limited liability company (the “Company”), Boise Cascade
Holdings, L.L.C., a Delaware limited liability company (“BCH”), Forest
Products Holdings, L.L.C., a Delaware limited liability company (“Holdings”),
W. Thomas Stephens (“Executive”), Stephens Family Limited Partnership (“Executive
FPV 1”), Vera Ellen Stephens Millard Descendants Trust (“Executive FPV 2”),
Alice Anne Stephens Descendants Trust (“Executive FPV 3”), and Elizabeth
Lee Stephens Mullett Descendants Trust (“Executive FPV 4” and, together
with each of Executive FPV 1, Executive FPV 2 and Executive FPV 3, each an “Executive
FPV” and collectively, the “Executive FPVs”). The Company, BCH,
Holdings and each former and current subsidiary of Holdings are collectively
referred to herein as the “Boise Entities” and Executive and Executive
FPVs are collectively referred to herein as the “Executive Parties”.


 


In December 2004, one or more of the Executive Parties
acquired Series B Common Units of Holdings (the “Series B Units”) and
Series C Common Units of Holdings (the “Series C Units”) pursuant to the
terms of that certain Management Equity Agreement, dated as of November 29,
2004, by and among Holdings, one or more Executive Parties and certain other
persons party thereto from time to time (the “Management Equity Agreement”).
In May 2008, Executive’s FPV 1 sold certain of its Series B Units to Holdings
pursuant to the terms of that certain Repurchase Agreement and Amendment No. 1
to Management Equity Agreement, dated as of May 23, 2008, by and among
Holdings, Executive’s FPV 1 and certain other persons party thereto from time
to time (the “Amendment to MEA”). The Management Equity Agreement, as
amended by the Amendment to MEA and as the same may be further amended,
modified, supplemented or waived from time to time after the Signing Date in
accordance with its terms, is referred to herein as the “MEA”.


 


As of the Singing Date, Executive’s FPV 1 owns
2,058,252.43 Series B Units and 9,383,000 Series C Units and Executive’s FPV 2,
Executive’s FPV 3 and Executive’s FPV 4 each owns 600,000 Series C Units. The
rights and obligations of the Executive Parties with respect to the Series B
Units and Series C Units are governed by each of (i) the MEA and (ii) that
certain Operating Agreement of Holdings, dated as of November 10, 2006, by and
among Holdings and its members (as the same has been and may be amended,
modified, supplemented or waived from time to time after the Signing Date in
accordance with its terms, the “Operating Agreement”).


 


Executive has, since October 29, 2004, served as
Chairman and Chief Executive Officer of one or more of the Boise Entities. The
terms of Executive’s employment with the Boise Entities were set forth in that
certain Employment Agreement, dated as of October 29, 2004, by and between the
Company and Executive (as the same has been amended by that certain 


 


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First Amendment to
Employment Agreement, dated as of February 22, 2008, and that certain Second
Amendment to Employment Agreement, dated as of March 12, 2008, in each case by
and between the Company and Executive and as the same may be amended, modified,
supplemented or waived from time to time after the Signing Date in accordance
with its terms, the “Employment Agreement”). Executive has informed the
Boise Entities that he intends to retire as Chairman and Chief Executive Officer
of each of the Boise Entities effective as of the end of the day on November
30, 2008 (the “Termination Date”). In accordance with the MEA, Holdings
has certain rights to repurchase the Series B Units and Series C Units as a
result of such retirement.


 


The parties desire to enter into this Retirement
Agreement in order to determine the rights and obligations of the respective
parties with respect to the Series B Units, the Series C Units, the MEA, the
Operating Agreement and the Employment Agreement. This Retirement Agreement,
the MEA, the Operating Agreement, and the Employment Agreement are collectively
referred to herein as the “Relevant Agreements.”


 


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 hereby agree as follows:


 


1.             Treatment
of Equity Securities.


 


(a)           As
a material inducement to each party to agree to the provisions of this
Retirement Agreement, Holdings acknowledges and agrees that, from and after the
Termination Date, it waives any and all rights arising under Section 4 of the
MEA to purchase or repurchase any Series B Units or Series C Units as a result
of Executive’s retirement and each Executive Party acknowledges and agrees that
from and after the Signing Date such Executive Party waives any and all rights
arising under Section 4 of the MEA to have purchased or repurchased any Series
B Units or Series C Units. Each party to this Agreement acknowledges and agrees
that, other than Section 4 of the MEA, the Series B Units and Series C Units
remain subject to the rights and obligations of the Executive Parties with
respect thereto under the Relevant Agreements. Madison Dearborn Capital
Partners IV, L.P. executes and delivers this Agreement for the limited purpose
of agreeing to waive any rights to exercise its right to repurchase the Series
B Units or Series C Units pursuant to Section 4 of the MEA.


 


(b)           Each
of Holdings, BCH and the Company agrees that if (i) it purchases or repurchases
Series B Units and/or Series C Units from continuing employees of the Company
as part of a buy-back or repurchase program offered to continuing employees of
the Company generally or (ii) it agrees to exchange cash or other securities
for Series B Units and/or Series C Units of continuing employees of the Company
in connection with an initial public offering of equity securities of Holdings,
BCH or the Company, then Holdings, BCH or the Company, as applicable, shall
offer Executive the right to sell or exchange, as applicable, Series B Units


 


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and/or Series C Units on
the same terms and subject to the same conditions as continuing employees of
the Company are offered; provided that (x) for the avoidance of doubt,
in no event shall any rights of Executive pursuant to clause (i) of this Section
1(b) be triggered by any purchase or repurchase of Series B Units and/or
Series C Units from any employees of a Boise Entity in connection with their
termination of employment from a Boise Entity and (y) notwithstanding anything
to the contrary in this Section 1(b), the obligations of Holdings, BCH
and the Company shall be subject to any restrictions or prohibitions in the
debt financing agreements of any Boise Entity that would limit or prohibit the
ability of Holdings, BCH or the Company to fulfill its obligations under this Section
1(b) without breach of such debt financing agreement.


 


(c)           Each
Executive Party acknowledges and agrees that, from and after the Signing Date,
no Executive Party has any right, title, or interest (i) to or in any equity
securities of any Boise Entity, (ii) to or in any rights to acquire any equity
securities of any Boise Entity, or (iii) in respect of any equity securities of
any Boise Entity, other than the Series B Units and Series C Units referenced
in the recitals to this Retirement Agreement as being owned by the Executive
Parties. Holdings acknowledges and agrees that its records reflect that the
Executive Parties own the Series B Units and Series C Units referenced in the
recitals to this Retirement Agreement as being owned by the Executive Parties
and that, as owners of such Series B Units and Series C Units, will retain the
rights and be subject to the obligations for holders of such Series B Units and
Series C Units under the Relevant Agreements, as amended by Section 1(a)
and Section 3 of this Agreement.


 


2.             Retirement
Pay.


 


(a)           On
the first regular payroll date for the Company after the Termination Date, in
exchange for the general release of all claims as set forth in Section 4
and the other promises, covenants and agreements by the Executive Parties set
forth herein, the Company shall pay to Executive in the same manner that the
Company has previously paid compensation to Executive  (e.g., by check or direct deposit) an
aggregate amount equal to the sum of (i) his accrued but unpaid base salary
through the Termination Date, plus (ii) $850,000 (which the parties acknowledge
and agree shall represent a payment to Executive of his incentive bonus for
calendar year 2008) (such sum, the “Retirement Pay”).


 


(b)           Executive
acknowledges and agrees that his rights to participate in any employee benefit
plan (including health benefit plan), program, policy or arrangement of any of
the Boise Entities terminate as of the Termination Date. Without limiting the
generality of the foregoing, effective as of the Termination Date, the Boise
Entities shall cease to pay the premium on the term-life insurance policy in
the name of Executive; provided that Executive may elect at any time
after the Termination Date to continue such insurance policy and the Company
shall, at Executive’s expense, provide assistance reasonably requested by
Executive in the assignment of such insurance policy to him. Notwithstanding
anything to the contrary in this Section 2(b), 


 


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Executive and his covered
dependants shall be entitled to participate in the health benefit plans of the
Company during the one-year period from and after the Termination Date and,
during such period of participation, Executive shall pay the same portion of
the costs related to his participation as other senior executives of the
Company of approximately the same age are paying for their participation in the
Company’s health plans. Furthermore, after such participation concludes, as
long as Executive timely elects and pays for COBRA continuation coverage,
Executive and his covered dependants shall be entitled to COBRA benefits to the
extent provided by applicable law.


 


(c)           Notwithstanding
the foregoing, the Retirement Pay and all other payments and benefits paid to
Executive hereunder shall be subject to (and reduced for) withholding taxes,
any normal payroll deductions and any other amounts required by law to be
withheld. For the avoidance of doubt, and without limiting the provisions of Section
4 hereof, the parties agree that the Retirement Pay nor any other payment
or benefit under this Agreement shall be deemed compensation for purposes of
any employee benefit plan, program, policy or arrangement maintained or
hereafter established by any Boise Entity. Notwithstanding anything in this
Retirement Agreement to the contrary, none of the Boise Entities shall have any
obligation to pay any amounts payable under this Section 2 after such
time as Executive has materially breached any provision of any of the Relevant
Agreements (a “Relevant Breach”) and to the extent that a Relevant
Breach occurs after any amount has been paid to Executive pursuant to this Section
2, Executive shall (as a non-exclusive remedy of the Boise Entities for
such Relevant Breach) repay all amounts previously paid to Executive pursuant
to this Section 2.


 


3.             Survival
of Existing Agreements. Except as expressly modified by the terms and
conditions of this Retirement Agreement, the terms and conditions of each of
the Relevant Agreements shall survive the execution and delivery of this
Retirement Agreement and shall remain in full force and effect; provided
that, effective as of the Termination Date, Sections 1, 2, 3, 4 and 5 of the
Employment Agreement are of no further force or effect and the rights of the
parties to cause the repurchase of the Series B Units and Series C Units
pursuant to Section 4 of the MEA are terminated in full; provided
further that, effective as of the Termination Date, notwithstanding anything to
the contrary in the Employment Agreement, Executive’s non-compete obligations
under Section 8(a) of the Employment Agreement shall terminate as of the
one-year anniversary of the Termination Date. Without limiting the generality
of the foregoing sentence, each Executive Party acknowledges and agrees for the
benefit of the Boise Released Persons (as hereinafter defined), and each Boise
Entity acknowledges and agrees for the benefit of the Executive Parties, that
the Executive Parties are party to, bound by and subject to the Operating
Agreement and, after giving effect to the amendments thereto effected by the
immediately foregoing sentence, the MEA (including Sections 5(c) and 7 thereof)
and the Employment Agreement (including Sections 6, 7, 8, 9 and 23 thereof).


 


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4.             Releases
by Executive Parties.


 


(a)           Effective
as of the Termination Date, each of the Executive Parties (for himself, herself
or itself and his, her or its successors, assigns and executors) forever
waives, releases, and discharges each of the Boise Entities and each of their
respective Affiliates and each of their respective past, present and future
predecessors, successors, assignees, parent companies, members (including each
of the Members (as defined in the Operating Agreement) and its Affiliates
(including the Investor and its Affiliates)), subsidiaries, Affiliates,
officers, directors, managers, partners, employees, agents and attorneys, past
and present (collectively, the “Boise Released Persons”) from any and
all claims, suits, demands, causes of action, contracts, covenants,
obligations, debts, costs, expenses, attorneys’ fees, liabilities of whatever
kind or nature in law or equity, by statute or otherwise whether now known or
unknown, vested or contingent, suspected or unsuspected, and whether or not
concealed or hidden, which have existed or may have existed, or which do exist,
through the Termination Date of any kind (“Claims”), which relate in any
way to Executive’s employment with or service as a director, officer or manager
of any of the Boise Entities or any other Boise Released Person or the
termination of such employment, directorship or officership (including in any
case as may exist under or relate to the Family Medical Leave Act, Title VII or
the Civil Rights Act of 1964, as amended; the Civil Rights Act of 1991; the
Americans with Disabilities Act of 1990; the Age Discrimination in Employment
Act of 1967, as amended or any other local, state, or federal law, order,
regulation, ordinance, or common law), any rights to severance pay, any bonus
or other payment from any Boise Released Person after the Termination Date
(whether pursuant to the Employment Agreement or otherwise), the determination
of the Boise Released Persons not to repurchase any of the Series B Units
and/or Series C Units (including that such units may have less value in the
future) or in any way to the operation or business activities or decisions of
the Boise Released Persons. In no event shall the Claims being waived, released
or discharged pursuant to this Section 4 be deemed to include (i) any
claim for breach of this Retirement Agreement by a Boise Entity, (ii)
Executive’s rights under the employee benefit plans (other than, for the
avoidance of doubt, any severance pay or similar plan (with it being understood
and agreed that the Retirement Pay shall be the only post-termination pay owed
to any Executive Party)) of any Boise Entity which have accrued as of the
Termination Date, (iii) any claim by Executive for coverage under any
directors’ and officers’ insurance policy of any Boise Entity or for
indemnification or advancement under the constitutive documents of any Boise
Entity or Section 23 of the Employment Agreement, in each case with respect
claims made while Executive served as a director, manager or officer of any
Boise Entity, (iv) subject to compliance with the expense reimbursement
policies of the Boise Entities, reimbursement of out-of-pocket business
expenses incurred prior to the Termination Date or (v) Executive’s rights under
applicable law and Company policies to accrued and unused vacation and sick
leave (if any) for the year that includes the Termination Date; provided
that nothing in this sentence shall limit the rights of any Boise Entity to
modify or cancel the terms of any such employee benefit plan or any
constitutive document or insurance policy, in each case as long as such changes
do not exclusively relate to Executive.


 


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(b)           Each
Executive Party represents and warrants to the Boise Released Persons that such
Executive Party has not filed any lawsuits, charges, complaints, petitions or
accusatory pleadings against any Boise Released Person with any governmental
agency or in any court or with any other dispute resolution panel, based upon,
arising out of or related in any way to any Claim waived, released or
discharged under this Section 4. Each Executive Party acknowledges and
agrees that such Executive Party owns all right, title and interest in and to
each of the Claims released hereunder and has not assigned, in whole or in
part, any of the Claims released under this Section 4.


 


(c)           In
executing this Retirement Agreement and agreeing to the provisions of this Section
4, each Executive Party acknowledges that it is intended that the releases,
waivers and discharges in this Section 4 shall be effective as a bar and
complete defense to each and every one of the Claims hereinabove mentioned or
implied. Each Executive Party expressly consents that the releases, waivers and
discharges in this Section 4 shall be given full force and effect
according to each and all of its express terms and provisions, including those
relating to unknown and unsuspected Claims (notwithstanding any state statute
that expressly limits the effectiveness of a general release of unknown,
unsuspected and unanticipated Claims), if any, as well as those relating to any
other Claims hereinabove mentioned or implied. Each Executive Party
acknowledges and agrees that this release, waiver, and discharge is an
essential and material term of this Retirement Agreement and, without such
release, waiver and discharge, the Boise Releasing Parties (as hereinafter
defined) would not have made the agreements and covenants herein made. Each
Executive Party further agrees that in the event that he, she or it brings a
Claim against any Boise Released Person, or in the event any Executive Party
seeks to recover against any Boise Entity in any Claim brought by a
governmental agency on Executive’s behalf, this Retirement Agreement (including
the provisions of this Section 4) shall serve as a bar and a complete
defense to such Claims and such Executive Party shall indemnify and hold
harmless the Boise Released Persons from any loss, liability or expense
suffered by each such Boise Released Person from or with respect to such Claim
(including reasonable legal fees incurred in barring or defending against such
Claim, in seeking to have such Claim dismissed and/or in filing a counterclaim
for breach of this Retirement Agreement by such Executive Party).


 


(d)           It
is specifically understood and agreed that the compensation and benefits
provided in this Retirement Agreement and the other consideration being
provided to the Executive Parties (including the waiver of the rights to
exercise the repurchase of Series B Units and Series C Units) are being paid or
provided in full and final settlement of any potential Claims, and that such
payment and the providing of such compensation, benefits and other
consideration does not constitute and shall not be construed as any admission
or evidence of fault or liability on the part of any of the Boise Released Persons.


 


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5.             Releases
by Boise Releasing Parties.


 


(a)           Effective
as of the Termination Date, each of Holdings, BCH and the Company
(collectively, the “Boise Releasing Parties”), on behalf of itself and
each of its wholly-owned subsidiaries as of the Signing Date (collectively with
the Boise Releasing Parties, the “Boise Releasing Persons”), forever
waives, releases, and discharges each of the Executive Parties and his, her or
its successors, assigns, trustees, executors agents and attorneys, past and
present (collectively, the “Executive Released Persons”) from any and
all Claims which relate in any way to Executive’s employment with or service as
a director, officer or manager of any of the Boise Releasing Persons or the
termination of such employment, directorship or officership or in any way to
the operation or business activities or decisions of the Boise Releasing
Persons on and prior to the Termination Date. In no event shall the Claims
being waived, released or discharged be deemed to include any Claim (i) for
breach of a Relevant Agreement by an Executive Released Person (other than any
breach of any of Sections 1 through 5 of the Employment Agreement, which are
being waived, released and discharged), (ii) related to fraud against, or
misappropriation of assets of, any Boise Released Person or any customer or
supplier of the foregoing, or (iii) with respect to any other matter for which
a director of a Delaware corporation would not, under Delaware law (including
Section 102(b)(7) of the Delaware General Corporation Law), be entitled to be
indemnified or exculpated (with it being understood and agreed that these
matters shall be excluded from the releases, waivers and discharges of this Section
5(a) regardless of the fact that one or more Boise Entities is not a
Delaware corporation and shall apply in each capacity for which Executive
served for the Boise Entities).


 


(b)           Each
Boise Releasing Party represents and warrants to the Executive Released Persons
that no Boise Releasing Person has filed any lawsuits, charges, complaints,
petitions or accusatory pleadings against any Executive Released Person with
any governmental agency or in any court or with any other dispute resolution
panel, based upon, arising out of or related in any way to any Claim waived,
released or discharged under this Section 5. Each Boise Releasing Party
acknowledges and agrees that one or more Boise Releasing Persons own all right,
title and interest in and to each of the Claims released under this Section
5 and has not assigned, in whole or in part, any of the Claims released
hereunder.


 


(c)           In
executing this Retirement Agreement and agreeing to the provisions of this Section
5, each Boise Releasing Party acknowledges that it is intended that the
releases, waivers and discharges in this Section 5 shall be effective as
a bar and complete defense to each and every one of the Claims hereinabove
mentioned or implied that is being released, waived and discharged under this Section
5. Each Boise Releasing Party expressly consents that the releases, waivers
and discharges in this Section 5 shall be given full force and effect
according to each and all of its express terms and provisions, including those
relating to unknown and unsuspected Claims (notwithstanding any state statute
that expressly limits the effectiveness of a general release of unknown,
unsuspected and unanticipated Claims), if any, as well as those relating to any
other Claims hereinabove mentioned or implied. Each Boise Releasing Party
acknowledges 


 


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and agrees that this
release, waiver, and discharge is an essential and material term of this
Retirement Agreement and, without such release, waiver and discharge, the
Executive Parties would not have made the agreements and covenants herein made.
Each Boise Releasing Party further agrees that in the event that it brings a
Claim against any Executive Released Person, or in the event any Boise Released
Party seeks to recover against any Executive Released Person in any Claim
brought by a governmental agency on behalf of any Boise Releasing Party, in
each case that is released, waived and discharged pursuant to this Retirement
Agreement, this Retirement Agreement (including the provisions of this Section
5) shall serve as a bar and a complete defense to such Claims and such
Boise Releasing Party shall indemnify and hold harmless the Executive Released
Persons from any loss, liability or expense suffered by each such Executive
Released Person from or with respect to such Claim (including reasonable legal
fees incurred in barring or defending against such Claim, in seeking to have
such Claim dismissed and/or in filing a counterclaim for breach of this
Retirement Agreement by such Boise Releasing Party).


 


(d)           It
is specifically understood and agreed that the compensation and benefits
provided in this Retirement Agreement and the other consideration being
provided to the Boise Releasing Parties are being paid or provided in full and
final settlement of any potential Claims, and that such payment and the
providing of such compensation, benefits and other consideration does not
constitute and shall not be construed as any admission or evidence of fault or
liability on the part of any of the Executive Released Persons.


 


6.             Revocation
of ADEA Claims. This Retirement Agreement shall become effective and
enforceable immediately upon execution by the parties hereto. However, with
respect solely to any claim of age discrimination under the Age Discrimination
in Employment Act of 1967, as amended (the “ADEA”), this Retirement
Agreement will become effective and enforceable only after the expiration of
seven days following its execution by the parties hereto and during such
seven-day period Executive may revoke the Retirement Agreement, solely with
respect to his release of claims under such statute, if he so desires by
delivering written notice during such seven-day period to the Boise Entities (a
“Revocation Notice”); provided that if Executive so elects to revoke
this Retirement Agreement with respect to his release of claims under such
statute prior to the eighth day after the Signing Date, the Company may, by
giving written notice (a “Termination Notice”) to Executive within ten
days after delivery of the Revocation Notice or the Signature Deadline Date,
elect to terminate the obligations of the Boise Entities under this Retirement
Agreement that are to be performed on or after the Termination Date and
thereafter enforce any rights that they may have under the Relevant Agreements.


 


7.             Representations
and Warranties; Knowing and Voluntary Execution by Executive.


 


(a)           Each
of the Executive Parties hereby represents and warrants to the Boise Entities
that (i) such Executive Party has been offered sufficient time to consider it;
(ii) such 


 


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Executive Party has
carefully read and fully understands all of the provisions of this Retirement
Agreement; (iii) such Executive Party has been offered the opportunity to consult
with an attorney prior to executing and delivering this Retirement Agreement
and understands such Executive Party’s rights and obligations hereunder, (iv)
such Executive Party has freely entered into this Retirement Agreement and has
agreed to the terms hereof, (v) such Executive Party has (in the case of
Executive, and, in the case of Executive’s FPV, the individual signing on
behalf of the Executive FPV) sufficient capacity to enter into this Retirement
Agreement and perform his, her or its obligations hereunder, (vi) the Executive
FPV has duly authorized, executed and delivered this Retirement Agreement,
(vii) this Retirement Agreement has been duly executed and delivered by such
Executive Party and constitutes the valid and binding obligation of such
Executive Party, enforceable against such Executive Party in accordance with
its terms, (viii) other than the Relevant Agreements to which such Executive
Party may be a party and other than employee benefit plans, programs, policies
and arrangements applicable to employees of the Boise Entities generally,
Executive is not party to any other agreement with any Boise Entity regarding
his employment or his rights upon termination thereof, and (ix) such Executive
Party has at all times owned and held beneficially and of record, all right,
title and interest in and to the Series B Units and Series C Units referenced
in the recitals to this Retirement Agreement, free and clear of all liens,
encumbrances and restrictions, other than liens, encumbrances and restrictions
created by the Relevant Agreements and by applicable securities law.


 


(b)           Executive
acknowledges and agrees that (i) he was offered the opportunity to take up to
21 days to consider this Retirement Agreement prior to signing and waiving his
rights under the ADEA; (ii) the Executive was advised by this writing to obtain
counsel regarding his waiver of rights under the ADEA; (iii) the Executive is
receiving consideration in addition to what he was already entitled to waive
his rights under the ADEA; and (iv) the Executive acknowledges that he has
reviewed this Retirement Agreement carefully and understands that he is waiving
any and all rights to bring any claims against any of the Boise Entities under
the ADEA.


 


8.             Public
Statements; Confidentiality.


 


(a)           Executive
agrees that, by his execution hereof, he retires as an employee and resigns as
a director, manager and an officer from each of the Boise Entities, in each
case effective as of the end of the day on the Termination Date and, from and
after the Termination Date, Executive agrees not to hold himself out in any
manner as a director, manager, officer, employee, agent or in any other manner
as a representative of any Boise Entity or any of their respective subsidiaries
or Affiliates. Without limiting the resignation Executive shall deliver,
promptly after requested by any Boise Entity a written resignation in the form
requested by the Boise Entities for inclusion in the minute or similar record
books of the various Boise Entities. Notwithstanding the foregoing, Executive
may remain as a member of the Board of Directors of Boise Inc., but shall at
the request of any Boise Entity made at any time after the date hereof, deliver
a written resignation from such board position promptly after so requested by a
Boise


 


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Entity. Notwithstanding
the immediately preceding sentence, Executive may serve as an independent
director of Boise Inc. (as opposed to a designee of a Boise Entity) if and when
he may be so duly elected. For purposes of this Retirement Agreement, the term
“Affiliate” of any particular person means (i) any other person
controlling, controlled by or under common control with such particular person,
where “control” means the possession, directly or indirectly, of the power to
direct the management and policies of a person whether through the ownership of
voting securities, contract or otherwise and (ii) any member, manager,
shareholder, partner or officer of such person.


 


(b)           Each
Executive Party hereby covenants to the Boise Entities that such Executive
Party shall not, directly or indirectly, publicly or privately, make, publish
or solicit or encourage others to make, publish or solicit any disparaging or
otherwise negative statements, comments, announcements or remarks concerning
any Boise Released Person; provided that this sentence shall not
prohibit or restrict such Executive Party from answering truthfully any
question such Executive Party is asked under oath in any legal proceeding.
Without limiting the generality of the foregoing, each Executive Party agrees
that such Executive Party will not post any disparaging or otherwise negative
remarks about any Boise Released Person on any Web site or provide any
disparaging or otherwise negative commentary regarding any Boise Released
Person to any media or other parties.


 


(c)           The
Boise Entities hereby covenant to Executive that they shall direct the members
of their board and senior management not to, directly or indirectly, publicly
or privately, make, publish or solicit or encourage others to make, publish or
solicit any disparaging or otherwise negative statements, comments,
announcements or remarks concerning Executive; provided that this
sentence shall not prohibit or restrict any such person or entity from
answering truthfully any question that such person is asked under oath in any
legal proceeding.


 


(d)           Notwithstanding
anything in this Section 8 to the contrary, the parties agree that on or
about the Signing Date, one or more of the Boise Entities shall make
announcements to employees and the public in the form of Exhibit A to this
Agreement and such release shall not constitute a breach of this Agreement.
Furthermore, if any of the Boise Entities or Executive is requested to provide
information regarding his departure from the Boise Entities, each such party
shall respond that Executive voluntarily retired from the Boise Entities.


 


9.             Condominium
Purchase. As promptly as practicable after the Termination Date, Executive
shall (and shall cause any co-owner to) sell to the Company, and the Company
shall purchase from Executive and any such co-owner, Executive’s condominium
located in the Grove Hotel, together with all improvements thereto, in Boise,
Idaho for $935,000. As a condition to the Company’s obligations under this Section
9, Executive shall deliver to the Company the following items: (a) a
general warranty deed executed by the owners thereof conveying good and
marketable fee simple title to the condominium free and clear of all liens and
encumbrances, except easements and condominium declarations, (b) a letter from
the


 


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condominium association
indicating that all assessments have been paid through the date of closing and
that there are no outstanding special assessments, (c) a letter from the condominium
association waiving any right of first refusal or first offer, (d) state, local
and city transfer tax affidavits executed by the owners of the condominium as
applicable, (e) reasonable and customary gap affidavits and title indemnities
executed by the owners of the condominium as requested by the title company,
and (f) other customary closing instruments for sales of condominiums in Boise,
Idaho. The costs of the closing shall be split evenly between Executive and the
Company and taxes, assessments and other costs related to the condominium shall
be subject to customary proration. Executive shall (i) be responsible for any
damages to the condominium incurred prior to moving out and (ii) be entitled to
take with him all personal items and all furniture in such condominium that is
not a fixture. Without limiting or waiving the conditions specified in this Section
9, each of the Company and Executive shall use commercially reasonable
efforts to cause the purchase and sale contemplated by this Section 9 to
occur on or prior to December 31, 2008.


 


10.           Notices.
All notices, demands or other communications to be given or delivered under or
by reason of the provisions of this Retirement Agreement shall be in writing
and shall be deemed to have been given (a) when delivered personally to the
recipient, (b) one business day after being sent to the recipient by reputable
express courier service (charges for overnight delivery prepaid), (c) three
business days after being deposited in the United States addressed to the
recipient by, first class, postage prepaid, or (d) when received before 5:00
p.m. Boise, Idaho time by facsimile, if received on a business day and
otherwise on the business day next following such receipt. Such notices,
demands and other communications shall be sent to the Boise Entities at the
address indicated below:


 


	
   

  	
   

  	
  If to any of the Executive Parties:

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  c/o W. Thomas Stephens

  
	
   

  	
   

  	
   

  	
  3333 E. Platte Avenue

  
	
   

  	
   

  	
   

  	
  Greenwood Village, CO
  80121

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  and to:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Rothgerber, Johnson & Lyons LLP

  
	
   

  	
   

  	
   

  	
  One Tabor Center, Suite 3000

  
	
   

  	
   

  	
   

  	
  1200 17th Street

  
	
   

  	
   

  	
   

  	
  Denver, CO 80202-5855

  
	
   

  	
   

  	
   

  	
  Attention:

  	
  James M. Lyons, Esq.

  
	
   

  	
   

  	
   

  	
  Tel No.:

  	
  303-628-9546

  
	
   

  	
   

  	
   

  	
  Fax No.:

  	
  303-623-9222

  



 


11
















 


	
  If to any Boise Entity:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Boise Cascade, L.L.C.

  
	
   

  	
   

  	
  1111 W. Jefferson Street, Suite 300

  
	
   

  	
   

  	
  Boise, ID 83702-5389

  
	
   

  	
   

  	
  Attention:

  	
   

  	
  General Counsel

  
	
   

  	
   

  	
  Tel No.:

  	
   

  	
  (208) 384-4918

  
	
   

  	
   

  	
  Fax No.:

  	
   

  	
  (208) 384-6566

  
	
   

  	
   

  	
   

  
	
  and to:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Kirkland & Ellis LLP

  
	
   

  	
   

  	
  200 East Randolph Drive

  
	
   

  	
   

  	
  Chicago, IL 60601

  
	
   

  	
   

  	
  Attention:

  	
   

  	
  Richard J. Campbell, PC

  
	
   

  	
   

  	
  Tel No.:

  	
   

  	
  (312) 861-2000

  
	
   

  	
   

  	
  Fax No.:

  	
   

  	
  (312) 861-2200

  



 


11.           General
Provisions.


 


(a)           Severability.
Whenever possible, each provision of this Retirement Agreement will be interpreted
in such manner as to be effective and valid under applicable law, but if any
provision of this Retirement 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 will not affect
any other provision or any other jurisdiction, but this Retirement Agreement
will be reformed, construed and enforced in such jurisdiction as if such
invalid, illegal or unenforceable provision had never been contained herein. If
this Retirement Agreement is held to not satisfy the requirements of the Older
Workers Benefit Protection Act or any other law, rule or regulation for an
effective release of any age discrimination claim by Executive, Executive
specifically agrees that such holding will not effect the validity and
enforceability of all other provisions of this Retirement Agreement, including
the release contained herein with respect to all other claims.


 


(b)           Complete
Agreement. This Retirement Agreement and the provisions of the Relevant
Agreements which remain in full force and effect as described herein, embody
the complete agreement and understanding among the parties and supersede and
preempt any prior understandings, agreements or representations by or among the
parties, written or oral, which may have related to the subject matter hereof
or thereof in any way. Whenever used herein, “including” means “including,
without limitation”.


 


(c)           Counterparts.
This Retirement Agreement may be executed in separate counterparts (including
by facsimile or electronic transmission), each of which is deemed to be 


 


12

















 


an original and all of
which taken together constitute one and the same agreement. This Agreement and
any amendments hereto to the extent signed and delivered by means of a
facsimile machine or by electronic transmission (including electronic .pdf),
will be treated in all manner and respects as an original agreement and will be
considered to have the same binding legal effect as if it were the original
signed version thereof delivered in person. At the request of any party hereto,
each other party hereto will re-execute original forms thereof and deliver them
to the other party. No party hereto will raise the use of a facsimile machine
or electronic transmission to deliver a signature or the fact that any
signature or agreement or instrument was transmitted or communicated through
the use of a facsimile machine or electronic transmission as a defense to the
formation or enforceability of a contract and each such party forever waives
any such defense.


 


(d)           Successors
and Assigns. Except as otherwise provided herein, this Retirement Agreement
shall bind and inure to the benefit of and be enforceable by each of the
Executive Parties and each of the Boise Entities and their respective
successors and assigns; provided that no Executive Party may assign, in
whole or in part, its rights or obligations under this Agreement without the
prior written consent of the Boise Entities.


 


(e)           Choice
of Law. All questions concerning the construction, validity and
interpretation of this Retirement Agreement, and all other matters related to
this Retirement Agreement, will be governed by the internal law, and not the
law of conflicts, of the State of Idaho.


 


(f)            Disputes.
Except for claims for injunctive relief or specific performance, any dispute or
controversy arising under or in connection with this Retirement Agreement shall
be settled exclusively by binding arbitration in Boise, Idaho in accordance
with the Rules of Endispute/JAAMS then in effect, except to the extent
inconsistent with this Retirement Agreement. In such an arbitration, the
arbitrators shall permit discovery of documents and witnesses to the extent
permitted under United States Federal Rules of Civil Procedure 26 through 34.
Notwithstanding the foregoing, the arbitrators shall be empowered only to
interpret and apply the terms of this Retirement Agreement, and shall not be
empowered to revise or amend any provision in this Retirement Agreement, nor to
make a decision based on any such revision or amendment. The arbitral award
shall state the reasons for the award and relief granted, shall be final and
binding on the parties to the arbitration, and may include an award of costs,
including reasonable attorneys’ fees and disbursements. Any award rendered may
be enforced in any court of any state or country having jurisdiction over the
parties and/or their assets. EACH PARTY HERETO IRREVOCABLY SUBMITS ITSELF TO THE
PERSONAL JURISDICTION OF AN ARBITRATION PANEL OR COURT LOCATED IN THE STATE OF
IDAHO FOR RESOLUTION OF ANY DISPUTE ARISING UNDER THIS AGREEMENT.


 


(g)           Amendment
and Waiver. The provisions of this Retirement Agreement may be amended and
waived only with the prior written consent of Executive and each of the 


 


13

















 


Boise Entities.


 


(h)           Business
Days. If any time period for giving notice or taking action hereunder
expires on a day which is a Saturday, Sunday or holiday in the state of New
York, the time period shall be automatically extended to the business day
immediately following such Saturday, Sunday or holiday.


 


(i)            Third
Party Beneficiaries. Certain provisions of this Retirement Agreement are
entered into for the benefit of and shall be enforceable by the Boise Released
Persons or Executive Released Persons as provided herein. Except for the rights
of Executive’s estate and heirs to payments and benefits hereunder pursuant to
the applicable laws of descent and distribution and other than as provided in
the preceding sentence, this Retirement Agreement is for the benefit of the
parties hereto and their permitted successors and assigns and no other person
or entity (other than the Boise Released Persons and Executive Released
Persons) shall be entitled to exercise any rights hereunder or obtain any
benefits from this Retirement Agreement.


 


(j)            Cooperation.
Executive agrees to cooperate with and assist the Boise Released Persons and
their respective successors and assigns in the investigation and handling of
any actual or threatened court action, arbitration or administrative proceeding
involving any action that arose during, or any state of facts existing during,
Executive’s employment with any Boise Entity (including but not limited to
testifying or providing information); provided, however, that the Executive
shall not be required to cooperate with or assist any Boise Released Person in
any action against the Executive by such Boise Released Person.


 


(k)           Taxes.
Executive agrees that he is solely responsible for all tax liabilities arising
from or out of the payments made hereunder and shall indemnify and hold
harmless each of the Boise Entities from any costs, expenses (including
reasonable attorneys’ fees) and other liabilities arising from Executive’s
failure to pay the full amount of taxes required hereunder; provided
that the Boise Entities shall be responsible for remitting to the appropriate
governmental authority any taxes withheld by the Boise Entities from the
Retirement Pay.


 


(l)            Construction.
The various titles of the sections herein are used solely for convenience and
shall not be used for interpreting or construing any word, clause, section,
paragraph, or subparagraph of this Agreement. 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. When used herein, “including” or any variation
thereof shall mean “including, without limitation.”


 


(m)          Reimbursement
of Certain Fees and Exepnses. Promptly (but in any event within 30 days)
after receipt of invoices and/or back-up therefor, the Company shall, or shall
cause one of the Boise Entities to, (i) reimburse Executive for his reasonable
relocation expenses for the moving of his personal items and furniture from
Boise, Idaho to his home in Colorado and 


 


14

















 


(ii) pay to Rothgerber,
Johnson & Lyons LLP all legal fees reasonably incurred by Executive in
connection with the negotiation, execution and delivery of this Retirement
Agreement; provided that in no event shall the obligations of the
Company (or any other Boise Entity) (x) pursuant to clause (i) of this Section
11(m) include any obligation to reimburse Executive for any storage costs
or (y) pursuant to clause (ii) of this Section 11(m) exceed $20,000.


 


*          *          *          *          *


 


15

















 


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


 


 


	
   

  	
  FOREST
  PRODUCT HOLDINGS, L.L.C

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
            /s/
  Thomas Carlile

  
	
   

  	
   

  	
  Name:

  	
      Thomas Carlile

  
	
   

  	
   

  	
  Title:

  	
      Executive Vice President
  &

  
	
   

  	
   

  	
   

  	
        Chief Financial
  Officer

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  BOISE CASCADE HOLDINGS, L.L.C.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
            /s/
  Thomas Carlile

  
	
   

  	
   

  	
  Name:

  	
     Thomas Carlile

  
	
   

  	
   

  	
  Title:

  	
     Executive Vice President &

  
	
   

  	
   

  	
   

  	
       Chief Financial
  Officer

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  BOISE CASCADE,
  L.L.C.

  
	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
            /s/
  Thomas Carlile

  
	
   

  	
   

  	
  Name:

  	
     Thomas Carlile

  
	
   

  	
   

  	
  Title:

  	
     Executive Vice President &

  
	
   

  	
   

  	
   

  	
       Chief Financial
  Officer

  



 


16

















 


	
   

  	
   

  	
      /s/ W. Thomas Stephens

  
	
   

  	
   

  	
  W. THOMAS STEPHENS

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  STEPHENS FAMILY LIMITED PARTNERSHIP

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
      /s/ W. Thomas Stephens

  
	
   

  	
   

  	
  Its: 

  	
  General Partner

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  VERA ALLEN STEPHENS MILLARD

  
	
   

  	
   

  	
  DESCENDANTS TRUST

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
      /s/ Alice Stephens

  
	
   

  	
   

  	
  Its:

  	
  Trustee

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Title:

  	
   

  
									



 


17

















 


	
   

  	
   

  	
  ALICE ANNE STEPHENS

  
	
   

  	
   

  	
  DESCENDANTS TRUST

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
      /s/ Alice Stephens

  
	
   

  	
   

  	
  Its: 

  	
  Trustee

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ELIZABETH LEE STEPHENS MULLETT

  
	
   

  	
   

  	
  DESCENDANTS TRUST

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
      /s/ Alice Stephens

  
	
   

  	
   

  	
  Its: 

  	
  Trustee

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Title:

  	
   

  
								



 


 


Acknowledged and agreed for the limited


purposes of the last sentence of Section 1(a) hereof:


 


MADISON DEARBORN CAPITAL PARTNERS IV, L.P.


 


	
  By:

  	
  Madison Dearborn Partners IV, L.P.

  
	
  Its:

  	
  General Partner

  
	
   

  	
   

  
	
  By:

  	
  Madison Dearborn Partners, LLC

  
	
  Its:

  	
  General Partner

  



 


	
  By:

  	
  /s/ Thomas S. Souleles

  	
   

  
	
   

  	
  Name:

  	
      /s/ Thomas S. Souleles

  	
   

  
	
   

  	
  Title:

  	
      Managing Director

  	
   

  



 


18

















 


EXHIBIT A


INTERNAL AND EXTERNAL
ANNOUNCEMENTS


 


Internal BC Announcement


 


Today I’m delighted to announce that Duane McDougall has been named
Chairman and CEO of Boise Cascade. Duane will assume that role on December 1.
Duane has been a member of our board of directors since the acquisition of the
company from OfficeMax. Duane was CEO of Willamette from 1998 until its merger
into Weyerhaeuser in 2002. He knows our company and our industry extremely well
and is a proven leader. We are fortunate to have Duane join Boise Cascade at
this critical period in our history.


 


The last four and a half years working with MDP and the Boise Cascade
organization has been a perfect ending to my career in the forest products
industry and I look forward to the opportunity to retire. I want to thank the
employees of our company for their hard work and support during my tenure. When
I joined the company in 2004, I suggested three basic goals for us to strive
for: first, was to be the safest company in the industry; second, to be a
satisfying place to spend a career; and finally, to be the partner of choice
for our customers. I think we have made considerable progress toward those
goals and I deeply appreciate your commitment to those objectives.


 


While the markets we compete in are very difficult today, I believe
Boise Cascade is well positioned to not only navigate through these tough
times, but to also emerge from this down cycle as one of the strongest
companies in the building materials industry. This has come about because of
your hard work and you should be proud of what you have accomplished.


 


Duane will be joining us at a great time for a handoff in the CEO’s
office. This month we will launch our planning and budgeting process and there
are many basic decisions to be made about our business. I am sure you will all
welcome Duane in his new job and give him the same support you have given me.


 


19

















 


External Announcement


 


Boise Cascade Announces McDougall as Chairman and CEO


Stephens to Retire December 1, 2008


 


BOISE, Idaho -Boise Cascade Holdings, LLC announced today that Duane
McDougall will become the new Chairman and CEO of Boise Cascade effective
December 1, 2008. McDougall will replace Tom Stephens who has served as
Chairman and CEO of Boise Cascade since 2004.


 


McDougall has served on Boise Cascade’s Board of Directors since 2004
and has extensive experience in the forest products industry. He served as
President and Chief Executive Officer of Willamette Industries, Inc., an
international forest products company, from 1998 to 2002. McDougall’s
Willamette Industries career spanned 23 years, during which time he served in
various operating and finance capacities. “I am delighted to have the
opportunity to guide Boise Cascade through the most difficult markets we have
seen in our industry since the depression,” says McDougall. “Tom Stephens has
positioned the organization well, and we will emerge from these difficult times
as one of the strongest companies in the building materials industry. On behalf
of the company and the Board of Directors, I want to thank Tom for his
significant contributions and wish him well in his retirement.”


 


McDougall will replace Tom Stephens who became CEO of Boise Cascade
upon its formation in October 2004 when Madison Dearborn Partners, a private
equity group, purchased the forest products assets of Boise Cascade
Corporation. Over the past four years, Mr. Stephens transformed the company
through a sale of its timberlands in February 2005, growth in engineered wood
products manufacturing and building materials distribution, and the sale of the
company’s paper and container assets to Boise Inc. in February of 2008. “Duane
knows our company and our industry extremely well and is a proven leader,” said
Stephens. “We are fortunate to have Duane join Boise Cascade at this critical
period in our history.”


 


McDougall currently serves on the boards of West Coast Bancorp, Cascade
Corporation, and Greenbrier Companies. He has a Bachelor of Science degree from
Oregon State University and has attended executive programs at Stanford and the
University of Virginia.


 


About Boise Cascade


 


Boise Cascade manufactures engineered wood products, plywood, lumber,
and particleboard and distributes a broad line of building materials, including
wood products manufactured by the company. The company is privately owned and
headquartered in Boise, Idaho. Visit Boise’s website at www.bc.com.


 


20