Document:

Exhibit 10.29

    
      Exhibit
        10.29

      April
        13,
        2004

       

      Mr.
        _______________

      [Title]

      

       

      Dear
        ____________:

       

      We
        are
        pleased to inform you that the Board of Directors of Pope MGP, Inc., the
        General
        Partner of Pope Resources (the “Company”), has recently authorized and approved
        a special severance benefit program for you and other key executives. The
        purpose of this letter agreement is to set forth the terms and conditions
        of
        your benefit package and to explain the limitations which will govern the
        overall value of your benefits.

       

      This
        program is intended to be available to selected executives who are employed
        by
        the Company or any affiliate of the Company. Subsequent references to the
        “Company” in this letter shall be deemed to include affiliates, to the extent
        required by context, when they pertain directly to your own employment
        relationship, but references to the “Company” that do not pertain directly to
        that employment relationship shall be deemed to refer exclusively to Pope
        Resources and not to any affiliate.

       

      Your
        severance benefits will become payable in the event your employment terminates
        involuntarily within a specified time period following certain changes in
        ownership or control of the Company. To understand the full scope of your
        severance benefits, you should familiarize yourself with the definitional
        provisions of Part One of this letter agreement. The benefits comprising
        your
        severance package are detailed in Part Two, and the dollar limitations on
        the
        overall value of your benefit package are specified in Part Three. Part Four
        deals with ancillary matters affecting your severance arrangement. In any
        circumstance in which severance benefits become payable to you pursuant to
        this
        letter agreement, those benefits will be your sole and exclusive severance
        benefits to be paid to you by the Company as a result of your termination,
        and
        you will not be entitled to severance benefits under any other policy or
        program
        of the Company, unless the Board of Directors shall specifically approve
        such
        other severance benefits at that time.

       

      PART
        ONE —
        DEFINITIONS

       

      For
        purposes of this letter agreement, the following definitions will be in
        effect:

       

      Andrews
        Family
        means
        Emily T. Andrews, her parents, and Adolphus Andrews, Jr., and their lineal
        descendants, any present or former spouse of such persons, any lineal
        descendants of such spouses or former spouses, any estate of any of the
        foregoing persons, any trust in which the foregoing persons collectively
        have
        all of the beneficial interests as income beneficiaries or remaindermen,
        and any
        corporation, partnership, or other entity in which any one or more of such
        persons or entities own all of the interests.

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      Assets
        means
        all or substantially all of the assets of the Company and its affiliates,
        as
        they shall be held by the Company and its affiliates from time to time,
        including the assets of all divisions, segments, and business units in existence
        at such time.

       

      Average
        Compensation means
        the
        average of your W-2 wages from the Company for the five (5) calendar years
        (or
        such fewer number of calendar years of employment with the Company) completed
        immediately prior to the calendar year in which the Change of Control is
        effected. Any W-2 wages for a partial year of employment will be annualized,
        in
        accordance with the frequency which such wages are paid during such partial
        year, before inclusion in your Average Compensation. If any of your compensation
        from the Company during such five (5)-year or shorter period was not included
        in
        your W-2 wages for U.S. income tax purposes, either because you were not
        a U.S.
        citizen or resident or because such compensation was excludible from income
        as
        foreign earned income under Code Section 911, then such compensation will
        nevertheless be included in your Average Compensation to the same extent
        as if
        it were part of your W-2 wages.

       

      Base
        Salary means
        the
        annual rate of base salary in effect for you immediately prior to the Change
        in
        Control or (if greater) the annual rate of base salary in effect at the time
        of
        your Involuntary Termination.

       

      Change
        in Control means:

       

      (i) any
        event
        or circumstance that results in persons other than Controlling Persons
        collectively being In Control of MGP and/or EGP unless, prior to the occurrence
        of such event or circumstance, the Assets shall have been transferred
        exclusively to Controlling Persons and/or to entities of which Controlling
        Persons collectively are In Control; or

       

      (ii) an
        event
        or circumstance that results in MGP and/or EGP collectively ceasing to act
        as
        the sole General Partners and the Managing General Partner of the Company
        and to
        have the sole and exclusive right to direct, manage, and conduct the business
        of
        the Company unless, prior to the occurrence of such event or circumstance,
        the
        Assets shall have been transferred exclusively to Controlling Persons and/or
        to
        entities of which Controlling Persons collectively are In Control;
        or

       

      (iii) the
        Transfer of the Assets to any person or persons who are not Controlling Persons
        and/or to any entity or entities of which Controlling Persons collectively
        are
        not In Control; or

       

      (iv) any
        merger or consolidation in which Controlling Persons collectively are not
        In
        Control of the surviving or resulting entity unless, prior to the occurrence
        of
        such event or circumstance, the Assets shall have been transferred exclusively
        to Controlling Persons and/or to entities of which Controlling Persons
        collectively are In Control; or

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      (v) the
        dissolution and/or liquidation of the Company that results in ownership or
        control of the Assets by any persons who are not Controlling Persons and/or
        by
        any entity or entities of which Controlling Persons collectively are not
        In
        Control.

       

      Code
        means
        the
        Internal Revenue Code of 1986, as amended.

       

      Controlling
        Persons
        means
        members of the Andrews Family and members of the Pope Family,
        collectively.

       

      EGP
        means
        Pope EGP, a Delaware corporation and a standby general partner of the
        Company.

       

      Fair
        Market Value means,
        with respect to any Units subject to any of your Options, the closing selling
        price per Unit on the date in question, as reported on the Nasdaq National
        Market System. If there is no reported sale of Units on such date, then the
        closing selling price on the Nasdaq National Market System on the next preceding
        day for which there does exists such quotation will be determinative of Fair
        Market Value.

       

      Health
        Care Coverage means
        the
        continued health care coverage to which you and your eligible dependents
        may
        become entitled under Part Two of this letter agreement upon the Involuntary
        Termination of your employment.

       

      In
        Control
        means
        owning, and having the present and continuing right to exercise control over,
        a
        majority of the voting power of, and right to exercise control over management
        of, any entity, which right is not subject to any material limitations,
        qualifications, or exceptions (whether temporary or permanent) in excess
        of
        those applicable on the date of this letter agreement to the interests of
        the
        Controlling Persons in MGP and EGP.

       

      Involuntary
        Termination means
        the
        termination of your employment with the Company:

       

      
        	 	
                ■

              	
                involuntarily
                  upon your discharge or dismissal (other than a Termination for
                  Cause),
                  or

              

      

       

      
        	 	
                ■

              	
                voluntarily
                  upon your resignation following (I) a change in your position with
                  the
                  Company which materially reduces your duties or level of responsibility,
                  (II) a 20% or more reduction in your level of compensation (including
                  base
                  salary, fringe benefits and target bonus under any incentive performance
                  plan) or (III) a change in your place of employment which is more
                  than
                  fifty (50) miles from your place of employment prior to the Change
                  in
                  Control, provided and only if such change or reduction is effected
                  without
                  your written concurrence.

              

      

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      In
        no
        event shall an Involuntary Termination be deemed to occur should your employment
        terminate by reason of your death or disability.

       

      MGP
        means
        Pope MGP, Inc., a Delaware corporation and the Managing General Partner of
        the
        Company.

       

      Option
        means
        any
        option granted to you under the Plan which is outstanding at the time of
        the
        Change in Control or upon your subsequent Involuntary Termination.

       

      Option
        Parachute Payment means,
        with respect to any Option, the portion of that Option deemed to be a parachute
        payment under Code Section 280G and the Treasury Regulations issued thereunder.
        The portion of such Option which is categorized as an Option Parachute Payment
        will be calculated in accordance with the valuation provisions established
        under
        Code Section 280G and the applicable Treasury Regulations and will include
        an
        appropriate dollar adjustment to reflect the lapse of your obligation to
        remain
        in the Company’s employ as a condition to the vesting of the accelerated
        installment. In no event, however, will the Option Parachute Payment
        attributable to any Option (or accelerated installment) exceed the spread
        (the
        excess of the Fair Market Value of the accelerated option Units over the
        option
        exercise price payable for those Units) existing at the time of
        acceleration.

       

      Other
        Parachute Payment means
        any
        payment in the nature of compensation (other than the benefits to which you
        become entitled under Part Two of this letter agreement) which are made to
        you
        in connection with the Change in Control and which accordingly qualify as
        parachute payments within the meaning of Code Section 280G(b)(2) and the
        Treasury Regulations issued thereunder. Your Other Parachute Payment will
        include (without limitation) the Present Value, measured as of the Change
        in
        Control, of the aggregate Option Parachute Payment attributable to your Options
        (if any).

       

      Partnership
        Agreement
        means
        the Amended and Restated Limited Partnership Agreement of Pope Resources,
        A
        Delaware Limited Partnership, as amended through the date of this letter
        agreement and as hereafter amended or restated at any time.

       

      Plan
        means
        (i) the Company’s Unit Option Plan adopted in 1997, as amended or restated
        from time to time, and (ii) any successor equity incentive plan
        subsequently implemented by the Company.

       

      Pope
        Family
        means
        the lineal descendants or spouses of George A. Pope, Jr. and Harriet Brownell,
        any present or former spouse of such persons, any lineal descendants of such
        spouses or former spouses, any estate of any of the foregoing persons, any
        trust
        in which the foregoing persons collectively have all of the beneficial interests
        as income beneficiaries or remaindermen, and any corporation, partnership,
        or
        other entity in which any one or more of such persons or entities own all
        of the
        interests.

       

      Present
        Value means
        the
        value, determined as of the date of the Change in Control, of any payment
        in the
        nature of compensation to which you become entitled in connection with the
        Change in Control or the subsequent Involuntary Termination of your employment,
        including (without limitation) the Option Parachute Payment attributable
        to your
        Options and your Severance Payment under Part Two of this letter agreement.
        The
        Present Value of each such payment shall be determined in accordance with
        the
        provisions of Code Section 280G(d)(4), utilizing a discount rate equal to
        one
        hundred twenty percent (120%) of the applicable Federal rate in effect at
        the
        time of such determination, compounded semi-annually to the effective date
        of
        the Change in Control.

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      Severance
        Payment means
        the
        severance payment to which you may become entitled under Part Two in the
        event
        of your Involuntary Termination following a Change in Control; subject, however,
        to the dollar limitations of Part Three.

       

      Termination
        for Cause means
        a
        termination of your employment occasioned by reason of your having engaged
        in
        fraud or in any other intentional misconduct adversely affecting the business
        reputation of the Company in a material manner.

       

      Transfer
        shall
        mean the sale, transfer, or disposition of all or substantially all of the
        Assets in a single transaction or group of related transactions, but shall
        not
        include the sale, transfer, or disposition of any of the Assets in the ordinary
        course of business.

       

      Unit
        means a
        unit of interest in the Company acquired or issued pursuant to the Partnership
        Agreement.

       

      PART
        TWO —
        CHANGE IN CONTROL BENEFITS

       

      Upon
        the
        Involuntary Termination of your employment within eighteen (18) months following
        a Change in Control, you will become entitled to receive the special severance
        benefits provided in this Part Two.

       

      	1.  	
               Severance
                Payment.

            

       

      If
        your
        Involuntary Termination occurs within the first eighteen (18) months after
        the
        Change in Control, then you will be entitled to a Severance Payment in an
        aggregate amount equal to (i) two (2) times your Base Salary plus
        (ii) your target bonus for the fiscal year of the Company in which such
        Involuntary Termination occurs. The Severance Payment will be made to you
        in a
        lump sum payment within ninety (90) days after your Involuntary
        Termination.

       

      The
        Severance Payment will be subject to the Company’s collection of applicable
        federal and state income and employment withholding taxes.

       

      In
        the
        event your employment terminates by reason of your death or disability or
        your
        Termination for Cause, you will not be entitled to receive any Severance
        Payment
        or other benefits under this letter agreement.

       

      	2.  	
               Option
                Acceleration.

            

       

      Your
        outstanding Options will (to the extent not then otherwise fully exercisable)
        automatically accelerate to the extent so provided in the Plan so that each
        such
        accelerated Option will become fully vested and immediately exercisable for
        the
        total number of Units at the time subject to that Option. Each such accelerated
        Option, together with all your other vested Options, will remain exercisable
        for
        fully-vested Units until the earlier of (i) the expiration date of the
        original option term for such Option or (ii) the end of the one (1) year
        period measured from the date of your Involuntary Termination (notwithstanding
        any provisions of the Plan that would provide for only a 90-day
        period).

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      	3.  	
               Additional
                Benefits.

            

       

      a.  Health
        Care Coverage.

       

      The
        Company will, at its expense, provide you and your eligible dependents with
        continued health care coverage under the Company’s medical/dental plan until the
        earlier of (i) eighteen (18) months after the date of your Involuntary
        Termination or (ii) the first date that the you are covered under another
        employer’s health benefit program which provides substantially the same level of
        benefits without exclusion for pre-existing medical conditions. The coverage
        so
        provided you and your eligible dependents will be in full and complete
        satisfaction of the continued health care coverage to which you or your eligible
        dependents would otherwise, at your own expense, be entitled under Code Section
        4980B by reason of your termination of employment, and neither you nor your
        eligible dependents will accordingly be entitled to any additional period
        of
        health care coverage under Code Section 4980B as a result of your termination
        of
        employment.

       

      b.  Unpaid
        Benefits

       

      You
        will
        receive an immediate lump sum payment of all unpaid vacation days which you
        have
        accrued through the date of your Involuntary Termination.

       

      PART
        THREE —
        LIMITATION ON BENEFITS

       

      	1.  	
               Parachute
                Limit.

            

       

      Except
        to
        the limited extent (if any) provided under Paragraph 4(a) below, the aggregate
        Present Value (measured as of the Change in Control) of the benefits to which
        you become entitled under Part Two at the time of your Involuntary Termination
        (namely the Severance Payment, the Option Parachute Payment attributable
        to your
        Options and your Health Care Continuation) will in no event exceed in amount
        the
        difference between (i) 2.99 times your Average Compensation and (ii) the
        Present
        Value, measured as of the Change in Control, of all Other Parachute Payments
        to
        which you are entitled.

       

      Accordingly,
        except as otherwise provided under Paragraph 4(a) below, your Options will
        not
        accelerate and no Severance Payment will be made to you pursuant to this
        letter
        agreement, to the extent the Present Value as of the Change in Control of
        (1).the aggregate Option Parachute Payment attributable to your Options plus
        (II) your Severance Payment plus (III) your Health Care Continuation would,
        when
        added to the Present Value of your Other Parachute Payments, exceed 2.99
        times
        your Average Compensation (the “Parachute Limit”).

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      	2.  	
               Resolution
                Procedure.

            

       

      For
        purposes of the foregoing Parachute Limit, the following provisions will
        be in
        effect:

       

      a.  In
        the
        event there is any disagreement between you and the Company as to whether
        one or
        more payments to which you become entitled in connection with either the
        Change
        in Control or your subsequent Involuntary Termination constitute Option
        Parachute Payments or Other Parachute Payments or as to the determination
        of the
        Present Value thereof, such dispute will be resolved as follows:

       

      (i)  In
        the
        event temporary, proposed or final Treasury Regulations in effect at the
        time
        under Code Section 280G (or applicable judicial decisions) specifically address
        the status of any such payment or the method of valuation therefore, the
        characterization afforded to such payment by the Regulations (or such decisions)
        will, together with the applicable valuation methodology, be
        controlling.

       

      (ii)  In
        the
        event Treasury Regulations (or applicable judicial decisions) do not address
        the
        status of any payment in dispute, the matter will be submitted for resolution
        to
        independent counsel mutually acceptable to you and the Company (“Independent
        Counsel”). The resolution reached by Independent Counsel will be final and
        controlling; provided, however, that if in the judgment of Independent Counsel
        the status of the payment in dispute can be resolved through the obtainment
        of a
        private letter ruling from the Internal Revenue Service, a formal and proper
        request for such ruling will be prepared and submitted by Independent Counsel,
        and the determination made by the Internal Revenue Service in the issued
        ruling
        will be controlling. All expenses incurred in connection with the retention
        of
        Independent Counsel and (if applicable) the preparation and submission of
        the
        ruling request shall be shared equally by you and the Company.

       

      (iii)  In
        the
        event Treasury Regulations (or applicable judicial decisions) do not address
        the
        appropriate valuation methodology for any payment in dispute, the Present
        Value
        thereof will, at the Independent Counsel’s election, be determined through an
        independent third-party appraisal, and the expenses incurred in obtaining
        such
        appraisal shall be shared equally by you and the Company.

       

      	3.  	
               Status
                of Benefits.

            

       

      a.  No
        Severance Payment will be made to you under Part Two of this letter agreement
        until the Present Value of the Option Parachute Payment attributable to your
        Options has been determined and the status of any payments in dispute under
        Paragraph 2 above has been resolved in accordance therewith. However, you
        will
        be permitted to exercise your Options at any time during the one (1) year
        (or
        shorter) period immediately following your Involuntary Termination.

       

      b.  Once
        the
        requisite determinations under Paragraph 2 have been made, then to the extent
        the aggregate Present Value, measured as of the Change in Control, of (1)
        the
        Option Parachute Payment attributable to your Options (or installments thereof)
        plus (2) your Severance Payment would, when added to the Present Value of
        all
        your Other Parachute Payments exceed the Parachute Limit, your Severance
        Payment
        will be accordingly reduced.

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      	4.  	
               Overriding
                Limitations.

            

       

      a.  Notwithstanding
        any provision to the contrary set forth in the preceding provisions of this
        Part
        Three, the aggregate Present Value of your Severance Payment and the Option
        Parachute Payment attributable to your Options will not be reduced below
        that
        amount (if any) which, when added to the Present Value of all the Other
        Parachute Payment to which you are entitled, would nevertheless qualify as
        reasonable compensation for past services within the standards established
        under
        Code Section 280G(b)(4)(B).

       

      b.  The
        limitations of this Part Three will in all events be interpreted in such
        manner
        as to avoid the imposition of excise taxes under Code Section 4999, and the
        disallowance of deductions under Code Section 280G(a), with respect to any
        of
        the benefits paid pursuant to Part Two of this letter agreement. This provision
        will apply as if Code Section 4999 and Code Section 280G(a) and the related
        provisions of the Code and Treasury Regulations are applicable to this Agreement
        and to payments to be made to you as a result of your Involuntary Termination
        following a Change of Control, notwithstanding the technical inapplicability
        of
        such law and regulations to the Company as a result of its organization and
        structure, and all provisions of this Agreement shall be construed, interpreted,
        and applied as if such laws and regulations were applicable.

       

      PART
        FOUR —
        MISCELLANEOUS PROVISIONS

       

      	1.  	
               Termination
                for Cause.

            

       

      Should
        your termination of employment constitute a Termination for Cause, then the
        Company will only be required to pay you (i) any unpaid compensation earned
        for
        services previously rendered through the date of such termination and (ii)
        any
        accrued but unpaid vacation benefits or sick days, and no benefits will be
        payable to you under Part Two of this letter agreement.

       

      	2.  	
               Death.

            

       

      Should
        you die before receipt of one or more Severance Payment to which you become
        entitled under Part Two of this letter agreement, then those payment or payments
        will be made to the executors or administrators of your estate. Should you
        die
        before you exercise all your outstanding Options, then such Options may be
        exercised, within twelve (12) months after your death, by the executors or
        administrators of your estate or by persons to whom the Options are transferred
        pursuant to your will or in accordance with the laws of inheritance. In no
        event, however, may any such Option be exercised after the specified expiration
        date of the option term.

       

      	3.  	
               General
                Creditor Status.

            

       

      The
        payments and benefits to which you become entitled hereunder will be paid,
        when
        due, from the general assets of the Company, and no trust fund, escrow
        arrangement or other segregated account will be established as a funding
        vehicle
        for such payment. Accordingly, your right (or the right of the personal
        representatives or beneficiaries of your estate) to receive any payments
        or
        benefits hereunder will at all times be that of a general creditor of the
        Company and will have no priority over the claims of other general
        creditors.

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

      	4.  	
               Indemnification.

            

       

      The
        indemnification provisions for Officers and Directors under the Company Bylaws
        will (to the maximum extent permitted by law) be extended to you, during
        the
        period following your Involuntary Termination, with respect to any and all
        matters, events or transactions occurring or effected during your employment
        with the Company.

       

      	5.  	
               Miscellaneous.

            

       

      This
        letter agreement will be binding upon the Company, its successors and assigns
        (including, without limitation, the surviving entity in any Change in Control)
        and is to be construed and interpreted under the laws of the State of
        Washington. This letter may only be amended by written instrument signed
        by you
        and an authorized officer of the Company. If any provision of this letter
        agreement as applied to you or the Company or to any circumstance should
        be
        adjudged by a court of competent jurisdiction to be void or unenforceable
        for
        any reason, the invalidity of that provision will in no way affect (to the
        maximum extent permissible by law) the application of such provision under
        circumstances different from those adjudicated by the court, the application
        of
        any other provision of this letter agreement, or the enforceability or
        invalidity of this letter agreement as a whole. Should any provision of this
        letter agreement become or be deemed invalid, illegal or unenforceable in
        any
        jurisdiction by reason of the scope, extent or duration of its coverage,
        then
        such provision will be deemed amended to the extent necessary to conform
        to
        applicable law so as to be valid and enforceable or, if such provision cannot
        be
        so amended without materially altering the intention of the parties, then
        such
        provision will be stricken and the remainder of this letter agreement will
        continue in full force and effect.

       

      	6.  	
               No
                Employment or Service Contract.

            

       

      Nothing
        in this letter agreement is intended to provide you with any right to continue
        in the employ of the Company for any period of specific duration or interfere
        with or otherwise restrict in any way your rights or the rights of the Company
        (or any subsidiary), which rights are hereby expressly reserved by each,
        to
        terminate your employment at any time for any reason whatsoever, with or
        without
        cause.

       

      	7.  	
               Attorney
                Fees.

            

       

      In
        the
        event legal proceeding should be initiated by you or by the Company with
        respect
        to any controversy, claim or dispute relating to the interpretation or
        application of the provisions of this letter agreement or any benefits payable
        hereunder, the prevailing party in such proceedings will be entitled to recover
        from the losing party reasonable attorney fees and costs incurred in connection
        with such proceedings or in the enforcement or collection of any judgment
        or
        award rendered in such proceedings. For purposes of this provision, the
        prevailing party means the party determined by the court to have most nearly
        prevailed in the proceedings, even if that party does not prevail in all
        matters, and does not necessarily mean the party in whose favor the judgment
        is
        actually rendered.

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      Please
        indicate your acceptance of the foregoing provisions of this employment
        agreement by signing the enclosed copy of this agreement and returning it
        to the
        Company.

       

      POPE
        RESOURCES, A DELAWARE LIMITED PARTNERSHIP

       

      

      BY:_____________________________________________ 

      TITLE:
        __________________________________________ 

       

      

       

      ACCEPTANCE

       

      I
        hereby
        agree to all the terms and provisions of the foregoing letter agreement
        governing the special benefits to which I may become entitled in connection
        with
        certain changes in control or ownership of the Company.

       

      Signature:________________________________________
         

       

      Dated:___________________________________________Exhibit 10.30

    Exhibit
      10.30

      

       

      April
        13,
        2004

       

      Mr.
        _______________

      [Title]

      

       

      Dear
        ____________:

       

      We
        are
        pleased to inform you that the Board of Directors of Pope MGP, Inc., the
        General
        Partner of Pope Resources (the “Company”), has recently authorized and approved
        a special severance benefit program for you and other key executives. The
        purpose of this letter agreement is to set forth the terms and conditions
        of
        your benefit package and to explain the limitations which will govern the
        overall value of your benefits.

       

      This
        program is intended to be available to selected executives who are employed
        by
        the Company or any affiliate of the Company. Subsequent references to the
        “Company” in this letter shall be deemed to include affiliates, to the extent
        required by context, when they pertain directly to your own employment
        relationship, but references to the “Company” that do not pertain directly to
        that employment relationship shall be deemed to refer exclusively to Pope
        Resources and not to any affiliate.

       

      Your
        severance benefits will become payable in the event your employment terminates
        involuntarily within a specified time period following certain changes in
        ownership or control of the Company. To understand the full scope of your
        severance benefits, you should familiarize yourself with the definitional
        provisions of Part One of this letter agreement. The benefits comprising
        your
        severance package are detailed in Part Two, and the dollar limitations on
        the
        overall value of your benefit package are specified in Part Three. Part Four
        deals with ancillary matters affecting your severance arrangement. In any
        circumstance in which severance benefits become payable to you pursuant to
        this
        letter agreement, those benefits will be your sole and exclusive severance
        benefits to be paid to you by the Company as a result of your termination,
        and
        you will not be entitled to severance benefits under any other policy or
        program
        of the Company, unless the Board of Directors shall specifically approve
        such
        other severance benefits at that time.

       

      PART
        ONE —
        DEFINITIONS

       

      For
        purposes of this letter agreement, the following definitions will be in
        effect:

       

      Andrews
        Family
        means
        Emily T. Andrews, her parents, and Adolphus Andrews, Jr., and their lineal
        descendants, any present or former spouse of such persons, any lineal
        descendants of such spouses or former spouses, any estate of any of the
        foregoing persons, any trust in which the foregoing persons collectively
        have
        all of the beneficial interests as income beneficiaries or remaindermen,
        and any
        corporation, partnership, or other entity in which any one or more of such
        persons or entities own all of the interests.

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      Assets
        means
        all or substantially all of the assets of the Company and its affiliates,
        as
        they shall be held by the Company and its affiliates from time to time,
        including the assets of all divisions, segments, and business units in existence
        at such time.

       

      Average
        Compensation means
        the
        average of your W-2 wages from the Company for the five (5) calendar years
        (or
        such fewer number of calendar years of employment with the Company) completed
        immediately prior to the calendar year in which the Change of Control is
        effected. Any W-2 wages for a partial year of employment will be annualized,
        in
        accordance with the frequency which such wages are paid during such partial
        year, before inclusion in your Average Compensation. If any of your compensation
        from the Company during such five (5)-year or shorter period was not included
        in
        your W-2 wages for U.S. income tax purposes, either because you were not
        a U.S.
        citizen or resident or because such compensation was excludible from income
        as
        foreign earned income under Code Section 911, then such compensation will
        nevertheless be included in your Average Compensation to the same extent
        as if
        it were part of your W-2 wages.

       

      Base
        Salary means
        the
        annual rate of base salary in effect for you immediately prior to the Change
        in
        Control or (if greater) the annual rate of base salary in effect at the time
        of
        your Involuntary Termination.

       

      Change
        in Control means:

       

      (i) any
        event
        or circumstance that results in persons other than Controlling Persons
        collectively being In Control of MGP and/or EGP unless, prior to the occurrence
        of such event or circumstance, the Assets shall have been transferred
        exclusively to Controlling Persons and/or to entities of which Controlling
        Persons collectively are In Control; or

       

      (ii) an
        event
        or circumstance that results in MGP and/or EGP collectively ceasing to act
        as
        the sole General Partners and the Managing General Partner of the Company
        and to
        have the sole and exclusive right to direct, manage, and conduct the business
        of
        the Company unless, prior to the occurrence of such event or circumstance,
        the
        Assets shall have been transferred exclusively to Controlling Persons and/or
        to
        entities of which Controlling Persons collectively are In Control;
        or

       

      (iii) the
        Transfer of the Assets to any person or persons who are not Controlling Persons
        and/or to any entity or entities of which Controlling Persons collectively
        are
        not In Control; or

       

      (iv) any
        merger or consolidation in which Controlling Persons collectively are not
        In
        Control of the surviving or resulting entity unless, prior to the occurrence
        of
        such event or circumstance, the Assets shall have been transferred exclusively
        to Controlling Persons and/or to entities of which Controlling Persons
        collectively are In Control; or

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      (v) the
        dissolution and/or liquidation of the Company that results in ownership or
        control of the Assets by any persons who are not Controlling Persons and/or
        by
        any entity or entities of which Controlling Persons collectively are not
        In
        Control.

       

      Code
        means
        the
        Internal Revenue Code of 1986, as amended.

       

      Controlling
        Persons
        means
        members of the Andrews Family and members of the Pope Family,
        collectively.

       

      EGP
        means
        Pope EGP, a Delaware corporation and a standby general partner of the
        Company.

       

      Fair
        Market Value means,
        with respect to any Units subject to any of your Options, the closing selling
        price per Unit on the date in question, as reported on the Nasdaq National
        Market System. If there is no reported sale of Units on such date, then the
        closing selling price on the Nasdaq National Market System on the next preceding
        day for which there does exists such quotation will be determinative of Fair
        Market Value.

       

      Health
        Care Coverage means
        the
        continued health care coverage to which you and your eligible dependents
        may
        become entitled under Part Two of this letter agreement upon the Involuntary
        Termination of your employment.

       

      In
        Control
        means
        owning, and having the present and continuing right to exercise control over,
        a
        majority of the voting power of, and right to exercise control over management
        of, any entity, which right is not subject to any material limitations,
        qualifications, or exceptions (whether temporary or permanent) in excess
        of
        those applicable on the date of this letter agreement to the interests of
        the
        Controlling Persons in MGP and EGP.

       

      Involuntary
        Termination means
        the
        termination of your employment with the Company:

       

      
        	 	
                ■

              	
                involuntarily
                  upon your discharge or dismissal (other than a Termination for
                  Cause),
                  or

              

      

       

      
        	 	
                ■

              	
                voluntarily
                  upon your resignation following (I) a change in your position with
                  the
                  Company which materially reduces your duties or level of responsibility,
                  (II) a 20% or more reduction in your level of compensation (including
                  base
                  salary, fringe benefits and target bonus under any incentive performance
                  plan) or (III) a change in your place of employment which is more
                  than
                  fifty (50) miles from your place of employment prior to the Change
                  in
                  Control, provided and only if such change or reduction is effected
                  without
                  your written concurrence.

              

      

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      In
        no
        event shall an Involuntary Termination be deemed to occur should your employment
        terminate by reason of your death or disability.

       

      MGP
        means
        Pope MGP, Inc., a Delaware corporation and the Managing General Partner of
        the
        Company.

       

      Option
        means
        any
        option granted to you under the Plan which is outstanding at the time of
        the
        Change in Control or upon your subsequent Involuntary Termination.

       

      Option
        Parachute Payment means,
        with respect to any Option, the portion of that Option deemed to be a parachute
        payment under Code Section 280G and the Treasury Regulations issued thereunder.
        The portion of such Option which is categorized as an Option Parachute Payment
        will be calculated in accordance with the valuation provisions established
        under
        Code Section 280G and the applicable Treasury Regulations and will include
        an
        appropriate dollar adjustment to reflect the lapse of your obligation to
        remain
        in the Company’s employ as a condition to the vesting of the accelerated
        installment. In no event, however, will the Option Parachute Payment
        attributable to any Option (or accelerated installment) exceed the spread
        (the
        excess of the Fair Market Value of the accelerated option Units over the
        option
        exercise price payable for those Units) existing at the time of
        acceleration.

       

      Other
        Parachute Payment means
        any
        payment in the nature of compensation (other than the benefits to which you
        become entitled under Part Two of this letter agreement) which are made to
        you
        in connection with the Change in Control and which accordingly qualify as
        parachute payments within the meaning of Code Section 280G(b)(2) and the
        Treasury Regulations issued thereunder. Your Other Parachute Payment will
        include (without limitation) the Present Value, measured as of the Change
        in
        Control, of the aggregate Option Parachute Payment attributable to your Options
        (if any).

       

      Partnership
        Agreement
        means
        the Amended and Restated Limited Partnership Agreement of Pope Resources,
        A
        Delaware Limited Partnership, as amended through the date of this letter
        agreement and as hereafter amended or restated at any time.

       

      Plan
        means
        (i) the Company’s Unit Option Plan adopted in 1997, as amended or restated
        from time to time, and (ii) any successor equity incentive plan
        subsequently implemented by the Company.

       

      Pope
        Family
        means
        the lineal descendants or spouses of George A. Pope, Jr. and Harriet Brownell,
        any present or former spouse of such persons, any lineal descendants of such
        spouses or former spouses, any estate of any of the foregoing persons, any
        trust
        in which the foregoing persons collectively have all of the beneficial interests
        as income beneficiaries or remaindermen, and any corporation, partnership,
        or
        other entity in which any one or more of such persons or entities own all
        of the
        interests.

       

      Present
        Value means
        the
        value, determined as of the date of the Change in Control, of any payment
        in the
        nature of compensation to which you become entitled in connection with the
        Change in Control or the subsequent Involuntary Termination of your employment,
        including (without limitation) the Option Parachute Payment attributable
        to your
        Options and your Severance Payment under Part Two of this letter agreement.
        The
        Present Value of each such payment shall be determined in accordance with
        the
        provisions of Code Section 280G(d)(4), utilizing a discount rate equal to
        one
        hundred twenty percent (120%) of the applicable Federal rate in effect at
        the
        time of such determination, compounded semi-annually to the effective date
        of
        the Change in Control.

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      Severance
        Payment means
        the
        severance payment to which you may become entitled under Part Two in the
        event
        of your Involuntary Termination following a Change in Control; subject, however,
        to the dollar limitations of Part Three.

       

      Termination
        for Cause means
        a
        termination of your employment occasioned by reason of your having engaged
        in
        fraud or in any other intentional misconduct adversely affecting the business
        reputation of the Company in a material manner.

       

      Transfer
        shall
        mean the sale, transfer, or disposition of all or substantially all of the
        Assets in a single transaction or group of related transactions, but shall
        not
        include the sale, transfer, or disposition of any of the Assets in the ordinary
        course of business.

       

      Unit
        means a
        unit of interest in the Company acquired or issued pursuant to the Partnership
        Agreement.

       

      PART
        TWO —
        CHANGE IN CONTROL BENEFITS

       

      Upon
        the
        Involuntary Termination of your employment within eighteen (18) months following
        a Change in Control, you will become entitled to receive the special severance
        benefits provided in this Part Two.

       

      	1.  	
               Severance
                Payment.

            

       

      If
        your
        Involuntary Termination occurs within the first eighteen (18) months after
        the
        Change in Control, then you will be entitled to a Severance Payment in an
        aggregate amount equal to (i) two (2) times your Base Salary plus
        (ii) your target bonus for the fiscal year of the Company in which such
        Involuntary Termination occurs. The Severance Payment will be made to you
        in a
        lump sum payment within ninety (90) days after your Involuntary
        Termination.

       

      The
        Severance Payment will be subject to the Company’s collection of applicable
        federal and state income and employment withholding taxes.

       

      In
        the
        event your employment terminates by reason of your death or disability or
        your
        Termination for Cause, you will not be entitled to receive any Severance
        Payment
        or other benefits under this letter agreement.

       

      	2.  	
               Option
                Acceleration.

            

       

      Your
        outstanding Options will (to the extent not then otherwise fully exercisable)
        automatically accelerate to the extent so provided in the Plan so that each
        such
        accelerated Option will become fully vested and immediately exercisable for
        the
        total number of Units at the time subject to that Option. Each such accelerated
        Option, together with all your other vested Options, will remain exercisable
        for
        fully-vested Units until the earlier of (i) the expiration date of the
        original option term for such Option or (ii) the end of the one (1) year
        period measured from the date of your Involuntary Termination (notwithstanding
        any provisions of the Plan that would provide for only a 90-day
        period).

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      	3.  	
               Additional
                Benefits.

            

       

      a.  Health
        Care Coverage.

       

      The
        Company will, at its expense, provide you and your eligible dependents with
        continued health care coverage under the Company’s medical/dental plan until the
        earlier of (i) eighteen (18) months after the date of your Involuntary
        Termination or (ii) the first date that the you are covered under another
        employer’s health benefit program which provides substantially the same level of
        benefits without exclusion for pre-existing medical conditions. The coverage
        so
        provided you and your eligible dependents will be in full and complete
        satisfaction of the continued health care coverage to which you or your eligible
        dependents would otherwise, at your own expense, be entitled under Code Section
        4980B by reason of your termination of employment, and neither you nor your
        eligible dependents will accordingly be entitled to any additional period
        of
        health care coverage under Code Section 4980B as a result of your termination
        of
        employment.

       

      b.  Unpaid
        Benefits

       

      You
        will
        receive an immediate lump sum payment of all unpaid vacation days which you
        have
        accrued through the date of your Involuntary Termination.

       

      PART
        THREE —
        LIMITATION ON BENEFITS

       

      	1.  	
               Parachute
                Limit.

            

       

      Except
        to
        the limited extent (if any) provided under Paragraph 4(a) below, the aggregate
        Present Value (measured as of the Change in Control) of the benefits to which
        you become entitled under Part Two at the time of your Involuntary Termination
        (namely the Severance Payment, the Option Parachute Payment attributable
        to your
        Options and your Health Care Continuation) will in no event exceed in amount
        the
        difference between (i) 2.99 times your Average Compensation and (ii) the
        Present
        Value, measured as of the Change in Control, of all Other Parachute Payments
        to
        which you are entitled.

       

      Accordingly,
        except as otherwise provided under Paragraph 4(a) below, your Options will
        not
        accelerate and no Severance Payment will be made to you pursuant to this
        letter
        agreement, to the extent the Present Value as of the Change in Control of
        (1).the aggregate Option Parachute Payment attributable to your Options plus
        (II) your Severance Payment plus (III) your Health Care Continuation would,
        when
        added to the Present Value of your Other Parachute Payments, exceed 2.99
        times
        your Average Compensation (the “Parachute Limit”).

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      	2.  	
               Resolution
                Procedure.

            

       

      For
        purposes of the foregoing Parachute Limit, the following provisions will
        be in
        effect:

       

      a.  In
        the
        event there is any disagreement between you and the Company as to whether
        one or
        more payments to which you become entitled in connection with either the
        Change
        in Control or your subsequent Involuntary Termination constitute Option
        Parachute Payments or Other Parachute Payments or as to the determination
        of the
        Present Value thereof, such dispute will be resolved as follows:

       

      (i)  In
        the
        event temporary, proposed or final Treasury Regulations in effect at the
        time
        under Code Section 280G (or applicable judicial decisions) specifically address
        the status of any such payment or the method of valuation therefore, the
        characterization afforded to such payment by the Regulations (or such decisions)
        will, together with the applicable valuation methodology, be
        controlling.

       

      (ii)  In
        the
        event Treasury Regulations (or applicable judicial decisions) do not address
        the
        status of any payment in dispute, the matter will be submitted for resolution
        to
        independent counsel mutually acceptable to you and the Company (“Independent
        Counsel”). The resolution reached by Independent Counsel will be final and
        controlling; provided, however, that if in the judgment of Independent Counsel
        the status of the payment in dispute can be resolved through the obtainment
        of a
        private letter ruling from the Internal Revenue Service, a formal and proper
        request for such ruling will be prepared and submitted by Independent Counsel,
        and the determination made by the Internal Revenue Service in the issued
        ruling
        will be controlling. All expenses incurred in connection with the retention
        of
        Independent Counsel and (if applicable) the preparation and submission of
        the
        ruling request shall be shared equally by you and the Company.

       

      (iii)  In
        the
        event Treasury Regulations (or applicable judicial decisions) do not address
        the
        appropriate valuation methodology for any payment in dispute, the Present
        Value
        thereof will, at the Independent Counsel’s election, be determined through an
        independent third-party appraisal, and the expenses incurred in obtaining
        such
        appraisal shall be shared equally by you and the Company.

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      	3.  	
               Status
                of Benefits.

            

       

      a.  No
        Severance Payment will be made to you under Part Two of this letter agreement
        until the Present Value of the Option Parachute Payment attributable to your
        Options has been determined and the status of any payments in dispute under
        Paragraph 2 above has been resolved in accordance therewith. However, you
        will
        be permitted to exercise your Options at any time during the one (1) year
        (or
        shorter) period immediately following your Involuntary Termination.

       

      b.  Once
        the
        requisite determinations under Paragraph 2 have been made, then to the extent
        the aggregate Present Value, measured as of the Change in Control, of (1)
        the
        Option Parachute Payment attributable to your Options (or installments thereof)
        plus (2) your Severance Payment would, when added to the Present Value of
        all
        your Other Parachute Payments exceed the Parachute Limit, your Severance
        Payment
        will be accordingly reduced.

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      	4.  	
               Overriding
                Limitations.

            

       

      a.  Notwithstanding
        any provision to the contrary set forth in the preceding provisions of this
        Part
        Three, the aggregate Present Value of your Severance Payment and the Option
        Parachute Payment attributable to your Options will not be reduced below
        that
        amount (if any) which, when added to the Present Value of all the Other
        Parachute Payment to which you are entitled, would nevertheless qualify as
        reasonable compensation for past services within the standards established
        under
        Code Section 280G(b)(4)(B).

       

      b.  The
        limitations of this Part Three will in all events be interpreted in such
        manner
        as to avoid the imposition of excise taxes under Code Section 4999, and the
        disallowance of deductions under Code Section 280G(a), with respect to any
        of
        the benefits paid pursuant to Part Two of this letter agreement. This provision
        will apply as if Code Section 4999 and Code Section 280G(a) and the related
        provisions of the Code and Treasury Regulations are applicable to this Agreement
        and to payments to be made to you as a result of your Involuntary Termination
        following a Change of Control, notwithstanding the technical inapplicability
        of
        such law and regulations to the Company as a result of its organization and
        structure, and all provisions of this Agreement shall be construed, interpreted,
        and applied as if such laws and regulations were applicable.

       

      PART
        FOUR —
        MISCELLANEOUS PROVISIONS

       

      	1.  	
               Termination
                for Cause.

            

       

      Should
        your termination of employment constitute a Termination for Cause, then the
        Company will only be required to pay you (i) any unpaid compensation earned
        for
        services previously rendered through the date of such termination and (ii)
        any
        accrued but unpaid vacation benefits or sick days, and no benefits will be
        payable to you under Part Two of this letter agreement.

       

      	2.  	
               Death.

            

       

      Should
        you die before receipt of one or more Severance Payment to which you become
        entitled under Part Two of this letter agreement, then those payment or payments
        will be made to the executors or administrators of your estate. Should you
        die
        before you exercise all your outstanding Options, then such Options may be
        exercised, within twelve (12) months after your death, by the executors or
        administrators of your estate or by persons to whom the Options are transferred
        pursuant to your will or in accordance with the laws of inheritance. In no
        event, however, may any such Option be exercised after the specified expiration
        date of the option term.

       

      	3.  	
               General
                Creditor Status.

            

       

      The
        payments and benefits to which you become entitled hereunder will be paid,
        when
        due, from the general assets of the Company, and no trust fund, escrow
        arrangement or other segregated account will be established as a funding
        vehicle
        for such payment. Accordingly, your right (or the right of the personal
        representatives or beneficiaries of your estate) to receive any payments
        or
        benefits hereunder will at all times be that of a general creditor of the
        Company and will have no priority over the claims of other general
        creditors.

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      	4.  	
               Indemnification.

            

       

      The
        indemnification provisions for Officers and Directors under the Company Bylaws
        will (to the maximum extent permitted by law) be extended to you, during
        the
        period following your Involuntary Termination, with respect to any and all
        matters, events or transactions occurring or effected during your employment
        with the Company.

       

      	5.  	
               Miscellaneous.

            

       

      This
        letter agreement will be binding upon the Company, its successors and assigns
        (including, without limitation, the surviving entity in any Change in Control)
        and is to be construed and interpreted under the laws of the State of
        Washington. This letter may only be amended by written instrument signed
        by you
        and an authorized officer of the Company. If any provision of this letter
        agreement as applied to you or the Company or to any circumstance should
        be
        adjudged by a court of competent jurisdiction to be void or unenforceable
        for
        any reason, the invalidity of that provision will in no way affect (to the
        maximum extent permissible by law) the application of such provision under
        circumstances different from those adjudicated by the court, the application
        of
        any other provision of this letter agreement, or the enforceability or
        invalidity of this letter agreement as a whole. Should any provision of this
        letter agreement become or be deemed invalid, illegal or unenforceable in
        any
        jurisdiction by reason of the scope, extent or duration of its coverage,
        then
        such provision will be deemed amended to the extent necessary to conform
        to
        applicable law so as to be valid and enforceable or, if such provision cannot
        be
        so amended without materially altering the intention of the parties, then
        such
        provision will be stricken and the remainder of this letter agreement will
        continue in full force and effect.

       

      	6.  	
               No
                Employment or Service Contract.

            

       

      Nothing
        in this letter agreement is intended to provide you with any right to continue
        in the employ of the Company for any period of specific duration or interfere
        with or otherwise restrict in any way your rights or the rights of the Company
        (or any subsidiary), which rights are hereby expressly reserved by each,
        to
        terminate your employment at any time for any reason whatsoever, with or
        without
        cause.

       

      	7.  	
               Attorney
                Fees.

            

       

      In
        the
        event legal proceeding should be initiated by you or by the Company with
        respect
        to any controversy, claim or dispute relating to the interpretation or
        application of the provisions of this letter agreement or any benefits payable
        hereunder, the prevailing party in such proceedings will be entitled to recover
        from the losing party reasonable attorney fees and costs incurred in connection
        with such proceedings or in the enforcement or collection of any judgment
        or
        award rendered in such proceedings. For purposes of this provision, the
        prevailing party means the party determined by the court to have most nearly
        prevailed in the proceedings, even if that party does not prevail in all
        matters, and does not necessarily mean the party in whose favor the judgment
        is
        actually rendered.

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      Please
        indicate your acceptance of the foregoing provisions of this employment
        agreement by signing the enclosed copy of this agreement and returning it
        to the
        Company.

       

      POPE
        RESOURCES, A DELAWARE LIMITED PARTNERSHIP

       

      

      BY:
        _____________________________________________ 

      TITLE:___________________________________________
         

       

      

       

      ACCEPTANCE

       

      I
        hereby
        agree to all the terms and provisions of the foregoing letter agreement
        governing the special benefits to which I may become entitled in connection
        with
        certain changes in control or ownership of the Company.

       

      Signature:________________________________________  

       

      Dated:___________________________________________

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