Document:

EXHIBIT 10.8

 

EMPLOYMENT AGREEMENT

 

THIS AGREEMENT is made and entered into this 10th day
of December, 2003, by and between BOISE CASCADE OFFICE PRODUCTS CORPORATION, a
Delaware corporation (“Boise Office Solutions”), and GARY PETERSON (the “Executive”).

 

R E C I T A L S :

 

WHEREAS, Boise Cascade Corporation (“Parent”) and
OfficeMax, Inc. (“OfficeMax”), entered into an Agreement and Plan of Merger,
dated July 13, 2003 (the “Merger”), whereby Parent acquired OfficeMax and is
integrating its operations with Boise Office Solutions, Parent’s office
products distribution business (“Combined Enterprise”); and

 

WHEREAS, Executive and OfficeMax entered into a Letter
Agreement, dated February 16, 2000, regarding the Executive’s employment
with OfficeMax as President and Chief Operating Officer (“Letter Agreement”);
and

 

WHEREAS, Executive and OfficeMax entered into an
Executive Severance Agreement, dated June 24, 2003, wherein certain
provisions of the Letter Agreement were amended and modified (“Executive
Severance Agreement”); and

 

WHEREAS, for the purposes of this Agreement, Boise
Office Solutions acknowledges that there has been a “Change in Control” as that
term is defined in the Executive Severance Agreement; and

 

WHEREAS, Boise Office Solutions desires Executive to
provide services to the Combined Enterprise, and Executive desires to provide
such services to the Combined Enterprise, on the terms specified herein; and

 

WHEREAS, Boise Office Solutions and Executive
acknowledge that there will be some period of time before OfficeMax and Boise
Office Solutions will be integrated and combined, and, therefore, references to
employment with the Combined Enterprise shall be deemed to include Executive’s
employment with OfficeMax after the Closing Date (as defined below), such that
reference to the Combined Enterprise shall mean OfficeMax as applicable at the
relevant period in time; and

 

WHEREAS, Boise Office Solutions and Executive mutually
desire to agree upon the terms of Executive’s employment with the Combined
Enterprise and, in addition thereto, agree to certain benefits of employment.

 

NOW, THEREFORE, the parties agree as follows:

 

 

1.                                       Term
of Agreement.  Upon the Effective
Date (as defined below), this Agreement amends and supersedes, by deleting them
in their entirety, the Letter Agreement and the Executive Severance Agreement,
which shall be completely null and void. 
This Agreement shall be effective upon the Closing Date (as that term is
defined in the Agreement and Plan of Merger) of the Merger (“Effective Date”)
and shall continue in effect for a period of 36 months following the Effective
Date (“Term”), at which time this Agreement shall expire by its terms and have
no further force or effect; provided, however, that any
confidentiality, nonsolicitation, and/or noncompete obligations binding on the
Executive, including those set forth in Section 8, shall continue
to be binding on him in accordance with their terms.  Notwithstanding anything to the contrary
stated herein, this Agreement shall terminate prior to the date set forth above
without any further acts by either party upon (a) termination of the
Executive’s employment for Cause or Disability (each as respectively defined in
Section 5); (b) termination of the Executive’s employment due
to Executive’s death or by the Executive for other than Good Reason (as defined
in Section 5); or (c) completion by Boise Office Solutions of
all of its obligations if benefits shall become payable hereunder; provided,
however, that any confidentiality, nonsolicitation, and/or noncompete
obligations binding on the Executive, including those set forth in Section 8,
shall continue to be binding on him in accordance with their terms.

 

2.                                       Title
and Duties.  Executive shall be the “President,
Retail” and shall report directly to Chris Milliken, the CEO of the Combined
Enterprise or his successor with responsibility for all superstore retail
operations and logistics for the Combined Enterprise or any of its present or
future office products subsidiaries or affiliates as Boise Office Solutions may
direct.  The Executive shall perform such
duties, compatible with the Executive’s position, as the CEO may reasonably
require.

 

3.                                       Compensation.

 

(a)                                  Base
Salary.  Base annual salary shall be
no less than $675,000/year (“Base Salary”) during the Term, payable at the
times established by Boise Office Solutions from time to time as the normal
salary payment interval for its employees, subject to the Executive’s rights
set forth in Section 5(c), should Executive’s Base Salary be
reduced during the Term.

 

(b)                                 Annual
and Long-Term Incentives.  Annual and
long-term incentives, if any, shall be payable to Executive from time to time
in accordance with the terms of such plans applicable to the Combined
Enterprise, which include, without limitation, the 2003 Boise Incentive and
Performance Plan, as amended (copies of which have been provided to Executive)
(“Bonus Programs”), which are established and maintained by Combined Enterprise
or Parent on behalf of the Combined Enterprise during the Term.  Executive’s annual target bonus under such
Bonus Programs shall not be less than 65% of his Base Salary during the
Term.  The Combined Enterprise may
modify, including termination of, any Bonus Program from time to time.  If a Bonus Program is modified or terminated,
Executive shall be treated consistent with the treatment afforded the other
Senior Executives of the Combined Enterprise under such modified or terminated
Bonus Program, or any Bonus Program that replaces such

 

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modified or terminated Bonus Program. 
For the purposes of this Agreement, Senior Executives shall mean the
senior managers of the Combined Enterprise reporting to the CEO and including
the CEO.  No payout is guaranteed under
any Bonus Program, and payouts, if any, are strictly governed by the terms of
each such program.

 

(c)                                  Retention
Incentive.  In consideration of
Executive’s employment with the Combined Enterprise, a retention incentive of
$2,500,000 shall be paid to Executive (“Retention Incentive”) under the terms
stated in this Section 3(c). 
Subject to set-off against the payments as set forth in Section 6(d),
partial payments of the Retention Incentive will be made in the form of a
lump-sum cash payment at the end of the applicable 12 months,
24 months, and 36 months (measured from the Effective Date) as
follows:

 

	
  Period of

  Employment

  	
   

  	
  Lump-Sum Cash

  Payment

  	
   

  
	
  12 months

  	
   

  	
  $

  	
  500,000

  	
   

  
	
  24 months

  	
   

  	
  $

  	
  500,000

  	
   

  
	
  36 months

  	
   

  	
  $

  	
  1,500,000

  	
   

  

 

Payment of the Retention Incentive shall be due only if Executive
remains employed with the Combined Enterprise throughout the relevant 12, 24,
or 36-month period.  Payment will be made
within 15 days of such partial Retention Incentive becoming due.

 

4.                                       Location
of Employment.  Position and function
shall be initially based in Cleveland, Ohio. 
At a yet undetermined time (but no sooner than 12 months following
the Effective Date), headquarters for the superstore retail operations may be
relocated to Itasca, Illinois, and Executive may be asked to relocate to the
Itasca area.  If so, relocation benefits
according to Boise Office Solutions policy will be provided.

 

5.                                       Termination
of Employment.  The Executive shall
be entitled to the benefits provided under Section 6 upon the
Executive’s “Qualifying Termination” (as defined herein) during the 24-month
period following the Effective Date (the “Protection Period”) or the 12-month
period following the Protection Period, as applicable.  For purposes hereof, a “Qualifying
Termination” shall mean (i) a termination of Executive’s employment by
Boise Office Solutions for any reason other than for Cause or Disability or due
to the Executive’s death, (ii) a material adverse alteration in Executive’s
duties and responsibilities as such duties and responsibilities are described
in Section 2, which shall be deemed a constructive termination for
purposes of this Agreement, or (iii) the Executive’s termination of
employment for “Good Reason” (as defined in this Section 5).

 

(a)                                  Disability.  If the Executive is absent from duties with
the Combined Enterprise on a full-time basis for eighteen consecutive months
due to a physical or mental incapacity, and the Executive has not returned to
the full-time performance of the Executive’s duties with thirty (30) days after
written Notice of Termination (as defined below) is given to the Executive by
Boise Office Solutions, such termination

 

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shall be considered to be termination by Boise Office Solutions for “Disability”
for purposes of this Agreement.

 

(b)                                 Cause.  Boise Office Solutions may terminate the
Executive’s employment for Cause.  For
purposes of this Agreement only, Boise shall have “Cause” to terminate the
Executive’s employment hereunder only on the basis of (i) a violation of any
policy of Boise Office Solutions or the Combined Enterprise that causes
material injury to either or both of Boise Office Solutions or the Combined
Enterprise; (ii) an act of fraud, embezzlement, theft, or any other material
violation of law that interferes with Executive’s ability to perform Executive’s
duties and responsibilities for the Combined Enterprise; (iii) intentional
damage to material assets of either or both of Boise Office Solutions or the
Combined Enterprise; (iv) wrongful engagement in any competitive activity that
would constitute a breach of the duty of loyalty to Boise Office Solutions or
the Combined Enterprise; (v) wrongful disclosure of confidential
information of Parent, Boise Office Solutions and/or Combined Enterprise; (vi)
wrongful failure or refusal to perform, or gross negligence in the performance
of, Executive’s duties and responsibilities for the Combined Enterprise; (vii)
making unauthorized comments to the media regarding Parent, Boise Office
Solutions, and/or the Combined Enterprise; or (viii) a material violation of
Boise Office Solutions’ Standards of Business Conduct Policy, as updated from
time to time, a current copy of which is attached.

 

(c)                                  Good
Reason.  The Executive shall be
entitled to terminate the Executive’s employment for Good Reason if a Good
Reason event occurs during the Protection Period.  For purposes of this Agreement only, “Good
Reason” shall exist if any of the following occur without the Executive’s
express prior written consent:

 

(i)                                     A
reduction in either the Executive’s annual rate of Base Salary or level of
participation in any Bonus Program for which he is eligible (other than part of
a salary reduction or changes in Bonus Programs generally imposed on all Senior
Executives of the Combined Enterprise);

 

(ii)                                  An
elimination or reduction of Executive’s participation in any benefit plan
generally available to Senior Executives of the Combined Enterprise, unless the
Combined Enterprise continues to offer Executive benefits substantially similar
to those made available by such plan, provided, however, that a
change to a plan in which Senior Executives of the Combined Enterprise
generally participate, including termination of any such plan, if it does not
result in a proportionately greater reduction in the rights of, or benefits to,
Executive as compared with the other Senior Executives of the Combined
Enterprise or is required by law or a technical change, will not be deemed to
be Good Reason;

 

(iii)                               Failure of any successor
(whether direct or indirect, by purchase of stock or assets, merger,
consolidation, or otherwise) to the Combined Enterprise to assume Boise Office
Solutions’ obligations under this Agreement; or

 

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(iv)                              Other
than as contemplated and provided for in Section 4, a transfer of
Executive’s principal business office to a location outside of the area where
the function for which Executive is responsible is performed.

 

The Executive will be deemed to have waived his rights
relating to circumstances constituting Good Reason if he has not provided to
Boise Office Solutions a written Notice of Termination within ninety (90) days
following his knowledge of circumstances constituting Good Reason.

 

(d)                                 Notice
of Termination.  Any purported
termination of the Executive by Boise Office Solutions or by the Executive
shall be communicated by written Notice of Termination to the other party in
accordance with Section 10. 
For purposes of this Agreement only, a “Notice of Termination” shall
mean a notice that indicates the specific termination provision in this
Agreement relied upon and the facts, if any, supporting application of such
provision.

 

(e)                                  Date
of Termination; Dispute Concerning Termination.  “Date of Termination” shall mean (i) if the
Executive’s employment is terminated for Disability, thirty (30) days after
Notice of Termination is given (provided that Executive has not returned to the
performance of the Executive’s duties on a full-time basis during such thirty
(30) day period); or (ii) if the Executive’s employment is terminated by Boise
Office Solutions for any reason other than Disability or by the Executive for
any reason, the date specified in the Notice of Termination (which, in the case
of a termination by Boise Office Solutions shall be not less than thirty (30)
days, and in the case of a termination by the Executive shall not be more than
sixty (60) days, respectively, from the date such Notice of Termination if
given); or (iii) if the Executive dies, his date of death (without any requirement
that a Notice of Termination be provided); provided, however,
that if the party receiving such Notice of Termination notifies the other party
within thirty (30) days after the date such Notice of Termination is given that
a dispute exists concerning the termination, the Date of Termination shall be
the date on which the dispute is finally resolved, either by mutual written
agreement of the parties or by a binding arbitration award referred to in Section 14;
and provided, further, that the Date of Termination shall be
extended by a notice of dispute only if such notice is given in good faith and
the party giving such notice shall pursue the resolution of such dispute with
reasonable diligence.  Boise Office Solutions
shall continue to pay the Executive the Executive’s full compensation in effect
when the notice giving rise to the dispute was given and continue the Executive
as a participant in all compensation, benefit and insurance plans in which the
Executive participated, according to their terms and conditions, when the
Notice of Termination was given (ignoring any reductions that gave rise to Good
Reason) until the dispute is finally resolved in accordance with this Section.
Amounts paid under this Section shall be offset against or reduce any
other amounts due under this Agreement. 
In addition, for purposes of determining whether any Qualifying
Termination has occurred during the Protection Period, the date of Notice of
Termination is given pursuant to this Section shall be deemed the date of
the Executive’s Qualifying Termination.

 

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6.                                       Compensation
Upon Termination.

 

(a)                                  Salary
and Other Compensation of Benefits. 
If the Executive’s employment is terminated during the Protection
Period, Boise Office Solutions shall pay the Executive’s Base Salary through
the Date of Termination at the rate in effect at the time the Notice of
Termination is given, together with all compensation and benefits to which the
Executive is entitled through the Date of Termination under the terms of this
Agreement, including any due but unpaid Retention Incentive payments (subject
to setoff as set forth herein in Section 6(d)), or any other compensation
or benefit plan, program or arrangement, or Bonus Program maintained by the
Combined Enterprise or its affiliates during such period (ignoring, if
applicable, any reduction that gave rise to Good Reason).

 

(b)                                 Disability.  During any period that Executive fails to
perform the Executive’s duties hereunder as a result of mental or physical
incapacity, the Executive shall continue to receive the Executive’s Base Salary
at the rate then in effect and continue to participate in all benefit plans and
Bonus Programs until the Executive’s employment is terminated pursuant to Section 5(a).  Thereafter, the Executive’s benefits shall be
determined in accordance with the insurance and other benefit programs and
Bonus Programs then applicable to the Executive.

 

(c)                                  Cause;
Voluntary Termination of Employment Without Good Reason.  If the Executive’s employment is terminated
for Cause or the Executive voluntarily terminates employment without Good
Reason, Boise Office Solutions shall pay the Executive only the Executive’s
Base Salary through the Date of Termination at the rate in effect at the time
Notice of Termination is given, together with other compensation and benefits
to which the Executive is entitled, if any, under the terms of this Agreement,
including any due but unpaid Retention Incentive payments, or any other compensation
or benefits plan, program or arrangement, or Bonus Programs maintained by the
Combined Enterprise and applicable to the Executive, and Boise Office Solutions
shall have no further obligations to the Executive under this Agreement.

 

(d)                                 Qualifying
Termination.  If the Executive’s
employment is terminated in a Qualifying Termination during the Protection
Period, then the Executive shall be entitled to the following benefits:

 

(i)                                     In
lieu of any further salary payments to the Executive for periods subsequent to
the Date of Termination or other severance benefits, Boise Office Solutions
shall pay to the Executive a lump sum payment of $3,300,000 (three million,
three hundred thousand dollars) minus all previously paid and due but unpaid Retention
Incentive payments (such due but unpaid Retention Incentive payments to be paid
pursuant to Section 6(a));

 

(ii)                                  Payment
under the Bonus Programs, if any, of a pro rata portion of amounts due
according to the terms of each plan for the award period during which the Date
of Termination occurs, notwithstanding that the Bonus Programs may 

 

6

 

not provide for pro rata awards. 
Such pro rata portion shall be determined by multiplying the
aggregate amount, if any, that would have been payable under the terms of each
plan, if Executive had remained employed under this Agreement for the entire
award period by a fraction, the numerator of which is the number of days during
the award period that Executive was employed and the denominator of which is the
number of days in the award period (the “Partial Year Fraction”); and

 

(iii)                               $10,000 for tax and
financial planning services.

 

To be eligible to receive benefits under this Section 6(d),
the Executive shall be required to execute and deliver a valid, binding, and
irrevocable general release in substantially the form attached hereto as
Exhibit A (which Boise Office Solutions shall deliver to the Executive promptly
after the date of his Qualifying Termination). 
The payments provided for in this Section 6(d) shall be made
not later than the date the release described above becomes binding and
irrevocable under applicable law; provided, however, that, if the
amounts of such payments cannot be finally determined on or before such day,
Boise Office Solutions shall pay to the Executive on such day an estimate, as
determined in good faith by Boise Office Solutions, of the minimum amount of
such payments to which the Executive is clearly entitled, and shall pay the
remainder of such payments (together with interest at the rate provided in Section 1274(b)(2)(B)
of the Internal Revenue Code of 1986, as amended (the “Code”), as soon as the
amount thereof can be determined, but in no event later than the thirtieth (30th)
day after the Date of Termination.  If
the amount finally determined to be due to the Executive is less than the estimated
payment previously paid to Executive, the Executive shall repay to Boise Office
Solutions, within five (5) business days following the time that the amount of
the reduction of the payment due is finally determined, the portion of the
payment attributable to the reduction (together with interest at the rate
provided in Section 1274(b)(2)(B) of the Code).  When payments are made under this Section,
Boise Office Solutions shall provide Executive with a written statement setting
forth the manner in which such payments were calculated and the basis for such
calculations, including, without limitation, any opinions or other advice Boise
Office Solutions has received from outside counsel, auditors, or consultants
(and any such written opinions or advice shall be attached to the statement).

 

(e)                                  Involuntary
Termination after the Protection Period.

 

(i)                                     If
the Executive’s employment is terminated in a Qualifying Termination after
the Protection Period, but before the end of the 27th month of the
Term, then Executive shall be entitled to the following benefits:

 

(1)                                  In
lieu of any severance payments and as a pro rata payment of any Retention
Incentive, a lump sum of $1,100,000 (one million one hundred thousand dollars).  Boise Office Solutions shall have no further
obligations under Section 3(c); and

 

7

 

(2)                                  Payment
under the Bonus Programs, if any, of (A) amounts to which the Executive is
entitled, if any, through the Date of Termination according to the terms of
each plan for any prior award periods, plus (B) a pro rata portion of
amounts due according to the terms of each plan for the award period during
which the Date of Termination occurs, notwithstanding that the Bonus Programs may
not provide for pro rata awards. Such pro rata portion shall be
determined by multiplying the aggregate amount, if any, that would have been
payable under the terms of each plan, if Executive had remained employed under
this Agreement for the entire award period by the Partial Year Fraction.

 

(ii)                                  If
the Executive’s employment is terminated in a Qualifying Termination after the
end of the 27th month, but before the end of the Term, then
Executive shall be entitled to the following benefits:

 

(1)                                  Severance
in accordance with the severance policy applicable to all Senior Executives of
the Combined Enterprise;

 

(2)                                  A
pro rata portion (based on the number of full months passed of the applicable
calendar year up to the Date of Termination) of any unpaid Retention Incentive
remaining.  Boise Office Solutions shall
have no further obligations under Section 3(c); and

 

(3)                                  Payment
under the Bonus Programs, if any, of (A) amounts to which the Executive is
entitled, if any, through the Date of Termination according to the terms of
each plan for any prior award periods, plus (B) a pro rata portion of
amounts due according to the terms of each plan for the award period during
which the Date of Termination occurs, notwithstanding that the Bonus Programs
may not provide for pro rata awards. Such pro rata portion shall be
determined by multiplying the aggregate amount, if any, that would have been
payable under the terms of each plan, if Executive had remained employed under
this Agreement for the entire award period by the Partial Year Fraction.

 

To be eligible to receive benefits under this Section 6(e),
the Executive shall be required to execute and deliver a valid, binding, and
irrevocable general release in substantially the form attached hereto as
Exhibit A (which Boise Office Solutions shall deliver to the Executive promptly
after the date of Executive’s termination of employment).  The payments provided for in this Section 6(e)
shall be made not later than the date the release described above becomes
binding and irrevocable under applicable law.

 

(f)                                    Insurance
Benefits.  If the Executive’s
employment is terminated in a Qualifying Termination during the Protection
Period, Boise Office Solutions shall maintain in full force and effect for the
24 months following such termination all life insurance, disability insurance,
accidental death and dismemberment insurance, dental coverage, and medical
coverage in which the Executive and the Executive’s dependents participated
immediately before the Date of Termination, on the same cost-

 

8

 

sharing basis that applied to the Executive immediately prior to the
Executive’s Date of Termination.  If such
participation (or a particular type of coverage) under any such plan or
arrangement shall be barred, Boise Office Solutions shall provide the Executive
with benefits, at the same after-tax cost to the Executive, that are
substantially similar to those the Executive and the Executive’s dependents would
have otherwise received under this Section. 
If the Executive, as the result of the Qualifying Termination during the
Protection Period, elects to convert his Long-Term Disability Insurance, if
any, to a personal policy maintained by the carrier used by Boise Office
Solutions (not greater than the coverage in effect immediately prior to the
Qualifying Termination), Boise Office Solutions shall reimburse the Executive
for any premiums paid during the applicable period following the Qualifying
Termination.  If the Executive’s
employment is terminated after the Protection Period, but during the Term,
Boise Office Solutions shall have no obligations under this Section 6(f),
but Executive shall be entitled to receive such benefits for which Executive is
enrolled, in accordance with the terms of such plan.

 

(g)                                 Death.  In the event of the Executive’s death, Boise
Office Solutions shall have no further obligations to the Executive under this
Agreement, but the Executive’s estate shall be entitled to receive death
benefits under Boise Office Solutions’ benefit plans and arrangements as may be
applicable to the Executive.

 

(h)                                 Mitigation.  The Executive shall not be required to
mitigate the amount of any payment provided for in Sections 6(c), (d),
(e), and (f) by seeking other employment or otherwise, nor shall the amount
of any payment or benefit provided for in Sections 6(c), (d), or (e)
be reduced by any compensation earned by the Executive as the result of
employment by another employer after the Date of Termination, or
otherwise.  Benefits otherwise receivable
by the Executive pursuant to Section 6(f) shall be reduced to the
extent comparable benefits are actually received by the Executive during the
period Section 6(f) shall be applicable, and any such benefits actually
received by the Executive shall be reported to Boise Office Solutions.

 

7.                                       Excise
Taxes.  The following provisions
shall apply to any excise tax imposed under Section 4999 of the Code (or
its successor) (the “Excise Tax”) as a result of payments due under Section 6(d):

 

(a)                                  Subject
to Section 7(b) below, if it shall be determined that any payment
or distribution by Boise Office Solutions to or for the benefit of the
Executive, whether paid or payable or distributed or distributable as a result
of payments due under Section 6(d) (a ”Payment”), would
constitute an “excess parachute payment” within the meaning of Section 280G
of the Code, Boise Office Solutions shall pay the Executive an additional
amount (the “Gross-Up Payment”), such that the net amount retained by the
Executive after deduction of any Excise Tax, and any federal, state, and local
income tax; employment tax; excise tax; and other tax imposed upon the Gross-Up
Payment, shall be equal to the Payment.

 

(b)                                 Notwithstanding
Section 7(a), and notwithstanding any other provisions of this
Agreement to the contrary, if the net after-tax benefit to the Executive

 

9

 

of receiving the Gross-Up Payment does not exceed the Safe Harbor
Amount (as defined below) by more than 10% (as compared to the net after-tax
benefit to the Executive resulting from elimination of the Gross-Up Payment and
reduction of the Payments to the Safe Harbor Amount), then (i) Boise Office
Solutions shall not pay the Executive the Gross-Up Payment; and (ii) the
provisions of Section 7(c) below shall apply.  The term “Safe Harbor Amount” means the
maximum dollar amount of parachute payments that may be paid to the Executive
under Section 280G of the Code without imposition of an Excise Tax under Section 4999
of the Code.

 

(c)                                  The
provisions of this Section 7(c) shall apply only if Boise Office
Solutions is not required to pay the Executive a Gross-Up Payment as a result
of Section 7(b) above.  If
Boise Office Solutions is not required to pay the Executive a Gross-Up Payment
as a result of the provisions of Section 7(b), Boise Office
Solutions will apply a limitation on the Payment amount as set forth below (a “Parachute
Cap”) as follows:  The aggregate present
value of the Payments under Section 6(d) of this Agreement (“Agreement
Payments”) shall be reduced (but not below zero) to the Reduced Amount.  The “Reduced Amount” shall be an amount
expressed in present value which maximizes the aggregate present value of the
Agreement Payments without causing any Payment to be subject to the limitation
of deduction under Section 280G of the Code.  For purposes of this Section 7, “present
value” shall be determined in accordance with Section 280G(d)(4) of the
Code.

 

(d)                                 If
the Excise Tax is subsequently determined to be less than the amount taken into
account hereunder at the time of termination of the Executive’s employment (or
such other time as is hereinafter described), the Executive shall repay to
Boise Office Solutions, at the time that the amount of such reduction in Excise
Tax is finally determined, the portion of the Gross-Up Payment attributable to
such reduction (plus that portion of the Gross-Up Payment attributable to the
Excise Tax and federal, state, or local income tax imposed on the Gross-Up
Payment being repaid by the Executive to the extent that such repayment results
in a reduction in Excise Tax or a federal, state, or local income or employment
tax deduction).  If the Excise Tax
exceeds the amount taken into account hereunder (including by reason of any
payment the existence or amount of which cannot be determined at the time of
the Gross-Up Payment), Boise Office Solutions shall make an additional Gross-Up
Payment in respect of such excess (plus any interest, penalties, or additions
payable by the Executive with respect to such excess) at the time that the
amount of such excess is finally determined. 
The Executive and Boise Office Solutions shall each reasonably cooperate
with the other in connection with any administrative or judicial proceedings
concerning the existence or amount of liability for Excise Tax with respect to
the total Payment.

 

(e)                                  Except
as set forth in the next sentence, all determinations to be made under this Section 7
shall be made by the nationally recognized independent public accounting firm
used by Boise Office Solutions immediately prior to the Date of Termination (“Accounting
Firm”), which Accounting Firm shall provide its determinations and any
supporting calculations to Boise Office Solutions and the Executive within ten

 

10

 

days of the Executive’s Date of Termination.  The value of any noncompetition covenant
applicable to the Executive shall be determined by independent appraisal by a
nationally recognized business valuation firm selected by Boise Office
Solutions, and a portion of the Payments shall, to the extent of that appraised
value, be specifically allocated as reasonable compensation for such
noncompetition covenant and shall not be treated as a parachute payment.  If any Gross-Up Payment is required to be
made, Boise Office Solutions shall make the Gross-Up Payment within ten days
after receiving the Accounting Firm’s calculations.  Any such determination by the Accounting Firm
shall be binding upon Boise Office Solutions and the Executive.

 

(f)                                    All
of the fees and expenses of the Accounting Firm in performing the
determinations referred to in this Section 7 shall be borne solely
by Boise Office Solutions.

 

8.                                       Confidentiality,
Nonsolicitation and Covenant Not to Compete.  For the purposes of this Section 8,
the term “Boise” shall include Boise Cascade Corporation (which shall include
Boise Office Solutions) and the Combined Enterprise (which shall include
OfficeMax), as well as their affiliates and subsidiaries.

 

(a)                                  Confidentiality.  Boise
and/or the Combined Enterprise shall provide Executive with certain
confidential information and trade secrets (“Confidential Information”).  Confidential Information includes, without
limitation, the names, addresses, price lists, purchasing histories, and
requirements of customers and potential customers; location, region, and
company financial reports; sales and service manuals and bulletins; cost
information and patterns; floor plans and drawings of facilities; marketing
strategies; acquisition and expansion plans; and other similar
information.  Confidential Information
shall also include, without limitation, all letters, memoranda, notes, tables,
spreadsheets, and other similar documents, whether in hard copy or electronic
form, created or generated by or on behalf of Executive using the information,
or any part thereof, described in the previous sentence.  Notwithstanding the definition of
Confidential Information as set forth above, Confidential Information shall not
include information that is or becomes generally available to the public other
than as a result of a prohibited disclosure by Executive.  Executive recognizes that such information is
the Confidential Information and trade secrets of Boise and/or the Combined
Enterprise and agrees not to divulge such information to any person, firm, or
institution, except as such disclosure is a necessary part of a bona fide
merchandise sale negotiation with an actual or potential customer.  Further, upon termination of employment with
the Combined Enterprise, Executive will continue to treat Confidential
Information as private and privileged, and will not, either for Executive’s own
purposes or as an employee of or for the benefit of any other entity or person,
use such information or disclose it to any person, firm, or institution.

 

(b)                                 Return of Property.  On
termination of Executive’s employment with the Combined Enterprise, Executive
will immediately surrender, in good condition, all (a) Confidential
Information; and (b) all letters, notes, memoranda, program design
specifications, and all other similar items which relate to customers or
potential customers of Boise and/or the Combined Enterprise that Executive
obtained from

 

11

 

Boise’s and/or the Combined Enterprise’s
files or databases, are supplied to Executive by Boise and/or the Combined
Enterprise, or generated by Executive from Boise’s and/or the Combined
Enterprise’s data and that are in Executive’s possession, custody, or control
wherever located, including all reproductions or copies of such materials,
whether in hard copy or electronic form; and (c) all tangible property of Boise
and/or the Combined Enterprise, including, but not limited to, computers, handheld
electronic devices, cellular telephones, briefcases, samples, merchandise, and
furniture.

 

(c)                                  Nonsolicitation.  For a period beginning on the Effective Date
and ending 12 months from the Date of Termination for whatever reason,
Executive agrees that he shall not directly or indirectly for Executive’s
benefit or on behalf of any other party (other than Boise and/or the Combined Enterprise):

 

(i)                                     Solicit or attempt to solicit any customer of
the Combined Enterprise for the purpose of selling or distributing office
supplies, paper, office furniture, computer consumables, or related office
products or services.  For purposes
hereof, a customer of the Combined Enterprise shall mean any person or business
to whom the Combined Enterprise sold or distributed office supplies, paper,
office furniture, computer consumables, or related office products and services
during the last two years Executive was employed by the Combined Enterprise.

 

(ii)                                  Solicit or discuss potential employment
opportunities with any employee of Boise and/or the Combined Enterprise (other
than for opportunities with Boise and/or the Combined Enterprise) or induce or
attempt to induce any employee of Boise and/or the Combined Enterprise to leave
the employ of Boise and/or the Combined Enterprise, or in any way interfere
with the relationship between Boise and/or the Combined Enterprise and any
employee thereof without the prior express written consent of Boise
Office Solutions.

 

(iii)                               Offer, hire, or cause to be offered or hired
any person who was employed by Boise and/or the Combined Enterprise at any time
during the 12 months prior to the termination of Executive’s employment
with the Combined Enterprise.

 

(iv)                              Induce or attempt to induce any supplier, or
other business relation of Boise and/or the Combined Enterprise to cease doing
business with Boise and/or the Combined Enterprise or in any way interfere with
the relationship between any such supplier or business relation and Boise
and/or the Combined Enterprise (including, without limitation, making any
negative statements or communications about Boise and/or the Combined
Enterprise).

 

(d)                                 Covenant
Not to Compete.  Executive
acknowledges that as a key management employee, Executive will be involved on a
high level in the development, implementation, and management of the Combined
Enterprise’s business strategies and plans that by virtue of Executive’s unique
and sensitive position and special background, employment of Executive by a
competitor of the Combined Enterprise

 

12

 

represents a serious competitive danger to the Combined Enterprise, and
the use of Executive’s talent and knowledge and information about the Combined
Enterprise’s business strategies and plans can and would constitute a valuable
competitive advantage over the Combined Enterprise.  In view of the foregoing, Executive agrees
that for a period of 12 months after termination of Executive’s employment with
the Combined Enterprise, whether such termination is voluntary or involuntary
(or for a period of 12 months after a final judgment or injunction enforcing
this covenant), Executive will not, directly or indirectly, own, manage,
control, or participate in the ownership, management, or control of, or be
employed or engaged by, or otherwise rendered service to, Staples, Office Depot
(or any combination of Staples and Office Depot), or any other office products
superstore retail chain, or any other business entity or person engaged in the
sale or distribution of office supplies, paper, office furniture, computer
consumables, or related office products or services in the Territory (as
defined below); provided, however, that the ownership of not more
than one (1%) of the equity of any publicly traded business entity will not be
deemed a violation of this covenant.  For
purposes hereof, the Territory shall be all of North America, Australia, New
Zealand, and wherever the Combined Enterprise has operations as of the Date of
Termination.

 

(e)                                  Enforcement.  Executive
expressly agrees and understands that the breach of this Section 8
will cause immediate, irreparable, and immeasurable injury to Boise, and
therefore agrees that in addition to any other rights Boise has in order to
enforce this Section 8, Boise shall be entitled to injunctive relief
without bond or other security by any competent court to enjoin and restrain
the breach of this Section 8.

 

(f)                                    Severability.  In
case any one or more of the terms contained in Section 8(c)(i), (ii),
or (iii) or in Section 8(c) shall for any reason become invalid,
illegal, or unenforceable, such invalidity, illegality, or unenforceability
shall not affect any other terms herein, but such terms shall be deemed deleted
and such deletion shall not affect the validity of the other terms of this Section 8.  In addition, if any one or more of the terms
contained in Section 8(c)(i), (ii), or (iii) or in Section 8(c)
shall for any reason be held by a court of competent jurisdiction to be
excessively broad or unreasonable with regard to duration, scope, or area, the
terms shall be construed in a manner to enable it to be enforced to the maximum
extent permitted by applicable law, and any such court shall have the power to
modify such term.

 

(g)                                 No Further Obligations of Boise.  If
the Executive violates any provision of this Section 8, then the
obligation of Boise Office Solutions to make any Retention Incentive payments due following such violation,
or any payments due under the terms of Sections 6(d), 6(e), or 6(f)
following such violation, will terminate, and Executive will not be entitled to
any such future payments, provided that with respect to a violation of any
provision of Sections 8(b) and 8(c), Executive is given notice of
such violation, and such violation is not cured by Executive within 15 days
after the date of such notice.

 

13

 

9.                                       Successors;
Binding Agreement.

 

(a)                                  Boise
Office Solutions shall require any successor (whether direct or indirect, by
purchase, merger, consolidation, or otherwise) to all or substantially all of
the business and/or assets of the Combined Enterprise, by agreement in form and
substance satisfactory to the Executive, to expressly assume and agree to
perform this Agreement in the same manner and to the same extent that Boise Office
Solutions would be required to perform it if no such succession had taken
place.  Failure of Boise Office Solutions
to obtain such assumption and agreement prior to the effectiveness of any such
succession shall be a breach of this Agreement and shall entitle the Executive
to compensation from Boise Office Solutions in the same amount and on the same
terms as the Executive would be entitled hereunder if the Executive had
terminated the Executive’s employment for Good Reason, except that for the
purposes of implementing the foregoing, the date of which any such succession
becomes effective shall be deemed the Date of Termination.

 

(b)                                 This
Agreement shall inure to the benefit of and be enforceable by the Executive’s
personal or legal representatives, executors, administrators, successors,
heirs, distributes, devisees, and legatees. 
If the Executive dies while any amount is still payable, all such
amounts shall be paid in accordance with the terms of this Agreement to the
Executive’s devisee, legatee, or other designee, or if there shall be no such
designee, to the Executive’s estate.

 

10.                                 Notice.  For the purpose of this Agreement, notices
and all other communications provided for in this Agreement shall be in writing
and shall be deemed to have been duly given when delivered or mailed by United
States certified mail, return receipts requested, postage prepaid as follows:

 

	
  If, to the Executive:

  	
  Gary Peterson

  
	
   

  	
  438 Club Drive

  
	
   

  	
  Aurora, OH 44202

  
	
   

  	
   

  
	
  If, to Boise Office Solutions:

  	
  Boise Cascade Office

  
	
   

  	
  Products Corporation

  
	
   

  	
  Attention: CEO

  
	
   

  	
  150 Pierce Road

  
	
   

  	
  Itasca, IL 60143-1594

  
	
   

  	
   

  
	
  With copy to:

  	
  Boise Cascade Corporation

  
	
   

  	
  Attention: General Counsel

  
	
   

  	
  1111 West Jefferson Street

  
	
   

  	
  P.O. Box 50

  
	
   

  	
  Boise, ID 83728

  

 

or to such other address as either party may have furnished to the
other in writing in accordance herewith, except that notice of change of
address shall be effective only upon receipt.

 

14

 

11.                                 Miscellaneous.  By accepting, and as a condition to accepting,
benefits payable under Sections 6(d), 6(e), or 6(f), the Executive
agrees to waive, and will be deemed to have waived, for the Term any right or
entitlement to severance or termination benefits related to the Executive’s
termination of employment under any other severance or termination plan,
policy, program, or arrangement, including, without limitation, the Letter
Agreement and the Executive Severance Agreement.  For the avoidance of doubt, the waiver
described in the preceding sentence shall apply only during the Term and only
to severance or termination benefits payable to the Executive under any such
plan, policy, program, or arrangement (including the Letter Agreement and the
Executive Severance Agreement).  In
addition, by executing this Agreement, the Executive hereby amends and
supersedes the Letter Agreement and the Executive Severance Agreement by
deleting them in their entirety.  That
is, after the execution of this Agreement, the Letter Agreement and the
Executive Severance Agreement are void and have no further force or
effect.  In no event shall the Executive
be entitled to duplicative payments or benefits under this Agreement and any
other severance or termination plan, policy, program, or arrangement of Boise
Office Solutions, its Parent, or their subsidiaries or affiliates.  No provision of this Agreement may be
modified, waived, or discharged, unless such waiver, modification, or discharge
is agreed to in writing and signed by the Executive and such officer as may be
specifically designated by Boise Cascade Corporation’s Board of Directors.  No waiver by either party hereto at any time
of any breach by the other party hereof, or compliance with, any condition or
provision of this Agreement to be performed by such other party shall be deemed
a waiver of similar or dissimilar provisions or conditions at the same or at
any prior or subsequent time.  No
agreement or representations, oral or otherwise, express or implied, with
respect to the subject matter hereof have been made by either party which are
not expressly set forth in this Agreement. 
The validity, interpretation, construction, and performance of this
Agreement shall be governed by the laws of the state of Ohio (regardless of the
law which may be applicable under principles of conflicts of law).

 

12.                                 Validity.  The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity or the enforceability
of any other provision of this Agreement, which shall remain in full force and
effect.

 

13.                                 Counterparts.  This Agreement may be executed in several
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument.

 

14.                                 Arbitration.  Any dispute or controversy arising under or
in connection with this Agreement shall be settled exclusively by
arbitration in Cleveland, Ohio, in accordance with the rules of (but not
necessarily appointed by) the American Arbitration Association then in effect,
except as provided herein.  Judgment may
be entered on the arbitrator’s award in any court having jurisdiction,
provided, however, that the Executive shall be entitled to seek specific
performance of the Executive’s right to be paid until the Date of Termination
during the pendency of any dispute or controversy arising under or in
connection with this Agreement.  No such
arbitration proceedings shall be commenced or conducted until at least 60 days
after the parties in good faith shall have

 

15

 

attempted to resolve such dispute by mutual agreement; and the parties
hereby agree to endeavor in good faith to resolve any dispute by mutual
agreement.  If mutual agreement cannot be
attained, any disputing party, by written notice to the other (“Arbitration
Notice”) may commence arbitration proceedings. 
Such arbitration shall be conducted before a panel of three arbitrators,
one appointed by each party within 30 days after the date of the Arbitration
Notice, and one chosen within 60 days after the date of the Arbitration Notice
by the town arbitrators appointed by the disputing parties.  Any Cleveland, Ohio, court of competent
jurisdiction shall appoint any arbitrator that has not been appointed within
such time periods.  Judgment may include
costs and attorneys’ fees and may be entered in any court of competent
jurisdiction.

 

15.                                 No
Guaranty of Employment.  Neither this
Agreement nor any action taken hereunder shall be construed as giving the
Executive a right to be retained as an employee of the Combined Enterprise. 
Boise Office Solutions and/or
the Combined Enterprise shall be entitled to terminate the Executive’s
employment at any time, subject to providing the benefits herein specified in
accordance with the terms hereof.  The
Executive is free to resign from employment at any time, and Boise Office
Solutions and/or the Combined
Enterprise is free, subject to the terms of this Agreement, to terminate
the Executive’s employment at any time and for any reason.

 

16.                                 Waiver.  Executive acknowledges and confirms his
previous waiver of any rights he may have had to benefits payable under Section 6(e)
of OfficeMax, Inc.’s Annual Incentive Plan.

 

17.                                 Acknowledgement
that the Terms of Employment do not Constitute “Good Reason.”  By executing this Agreement, Executive
acknowledges and agrees that the terms and conditions of employment, or any
other term or condition provided in this Agreement, do not constitute “Good
Reason” as that term is defined in Executive Severance Agreement and that no
condition of “Good Reason” has occurred.

 

18.                                 Confidentiality.  Executive agrees that the terms of this
Agreement are strictly confidential and that he may not disclose the existence
of this Agreement, its term, or the amounts to be paid hereunder, to other
individuals or entities, unless such terms are or become generally available to
the public other than as a result of a prohibited disclosure by Executive.  This prohibition does not preclude disclosure
to Executive’s financial, tax, or legal advisors, or spouse provided that
Executive first advises and cautions any of the above individuals that the
existence and terms of this Agreement are confidential and are not to be
disclosed, and further that Executive obtains agreement from such individuals
that they will abide by this confidentiality provision.

 

16

 

IN WITNESS WHEREOF, Boise Office Solutions and the
Executive have caused this Agreement to be executed as of the date first
written above.

 

	
   

  	
  BOISE CASCADE OFFICE

  
	
   

  	
  PRODUCTS CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
  /s/ Gary Peterson

  	
   

  	
  By

  	
  /s/ Christopher C. Milliken

  	
   

  
	
  Gary Peterson

  	
  Its

  	
  President & CEO

  	
   

  
					

 

17

 

EXHIBIT A

 

FORM OF

SETTLEMENT AGREEMENT AND
RELEASE

 

THIS SETTLEMENT AGREEMENT AND RELEASE (“Release”) is
made and entered into by and between                                 
(“Executive”) and BOISE CASCADE OFFICE PRODUCTS CORPORATION [or other
Participating Employer] (“Employer”) in connection with Executive’s separation
of employment with Employer, effective                           
(“Separation Date”).

 

In consideration of the mutual promises and releases
contained herein and other good and valuable consideration as set forth herein,
it is hereby agreed as follows:

 

1.                                       In
full and final settlement of any claims and demands for relief which may be
asserted by Executive against Employer, its parent, predecessors, successors
and assigns, and the employees, current and former directors, officers, agents,
attorneys, and representatives of same, Employer will pay Executive a lump sum
equal to                     ,
subject to applicable tax and withholdings, which amount equals the cash
severance benefits payable under the Employment Agreement dated                       ,
2003, by and between Executive and Employer (the “Employment Agreement”).  Executive agrees that such payment
constitutes the exclusive payments due to Executive from Employer, except as
specifically provided in Section 2 below. 
Executive shall receive such payment as soon as practicable after this
Release becomes irrevocable.

 

2.                                       Notwithstanding
anything to the contrary contained herein, Executive and Employer agree and
acknowledge that Executive is not waiving his rights to payment of:

 

(a)                                  Payment
of Executive’s salary, wage payments, sales bonuses or commissions, and/or
reimbursable business expenses due as of the Separation Date, subject to
applicable taxes and withholdings.

 

(b)                                 Payment
of Executive’s accrued but unused Your Time Off as of the Separation Date,
subject to applicable taxes and withholdings.

 

(c)                                  Payment
of Benefits accrued as of the Separation Date under any “employee benefit plan”
within the meaning of the Employee Retirement Income Security Act of 1974, as
amended; provided, however, that as a condition to accepting the
benefits payable under Section 1 above, Executive agrees to waive, and is
deemed to have waived, any right or entitlement to severance or termination
benefits related to Executive’s termination of employment under any other
severance or termination plan, policy, program, or arrangement.

 

(d)                                 Executive’s
rights with respect to indemnification and directors’ and officers’ insurance
coverage under Parent’s corporate governance documents and directors’ and
officers’ liability insurance coverage.

 

 

3.                                       Executive
hereby expressly agrees and acknowledges that any and all claims and demands
for relief, of whatever nature or kind, including attorneys’ fees, costs, and
expenses, which Executive ever had or now has against Employer, its
predecessors, successors, current and former employees, directors, officers,
assigns, agents, attorneys and representatives, or affiliates, which arose out
of or relate in any way to Executive’s employment with or separation from
employment with Employer and/or its predecessors, shall be forever waived,
released, or discharged, including, but not limited to, (i) any claims under
the Fair Labor Standards Act, 29 U.S.C. Section 201, et seq.; the
Employee Retirement Income Security Act, 29 U.S.C. Section 1001, et
seq.; the Family and Medical Leave Act, 29 U.S.C. Section 2601, et
seq.; the Age Discrimination in Employment Act, 29 U.S.C. Section 621,
et seq.; Title VII of the Civil Rights Act of 1991, 42 U.S.C.
Sections 1981 and 1981a; the American with Disabilities Act, 42 U.S.C. Section 12100,
et seq.; [add references to applicable state or local laws]; and any
federal, state, or local laws prohibiting employment discrimination; (ii)
claims relating to harassment, breach of contract or wrongful discharge, or
breach of express or implied covenants; and (iii) claims arising from any legal
restrictions on Employer’s right to terminate its employees.

 

4.                                       Executive
represents and agrees that he has not relied on any statements by Employer
regarding his rights under the various federal and state laws prohibiting discrimination
in the workplace and that he is hereby advised, cautioned, warned, recommended,
encouraged, and provided the opportunity to discuss all aspects of the Release
with counsel of his own choosing, and that he has carefully read the Release,
and that he is voluntarily and of his own free will and without any duress of
any kind or nature entering into the Release.

 

5.                                       Executive
acknowledges the receipt and sufficiency of the consideration adequate to
support this Release in general, and in particular, the Executive’s releases of
rights set forth in paragraphs 2 and 3 hereto, since the Executive is receiving
benefits under paragraph 1 that the Executive would otherwise not have been
entitled to receive.

 

6.                                       Executive
and Employer further expressly agree and understand that the Severance
Agreement and Release constitute the complete and entire agreement of the
parties with respect to the subject matter hereof, and that any other promises,
inducements, representations, warranties, or agreements with respect to the
subject matter hereof have been superseded hereby and are not intended to
survive the Release, provided that any confidentiality, nonsolicitation and/or
noncompete obligations binding on Executive shall continue to be binding on him
in accordance with their terms.  No
amendment or modification of the Release shall be effective unless set forth in
writing and signed by both the Executive and a duly authorized officer of
Employer.

 

7.                                       Executive
and Employer agree that all matters relative to the construction and
interpretation of this Release shall be construed and interpreted in accordance
with the laws of the state of Ohio.

 

19

 

[8.                                   Executive
represents and agrees that he has been provided a period of 21 days to
consider the terms of this Release and has been advised that, once executed,
this Release may be revoked by Executive within seven days of execution.]

 

[Alternative paragraph (8), as appropriate:

8.                                       Executive
represents and agrees that he has been provided a period of 45 days to
consider the terms of this Release and has been advised that, once executed,
this Release may be revoked by Executive within seven days of execution.]

 

9.                                       Employer
is obligated to make the payments described in Section 1 above only
providing the following conditions are met:

 

(a)                                  The
seven-day revocation period under Section 8 expires without Executive
revoking this Release;

 

(b)                                 Executive
resigns as an officer of Employer;

 

10.                                 Executive
agrees not to disclose the terms of this Release to any person, except under
the circumstances described in this Release.

 

11.                                 This
Release shall not become effective or enforceable until the eighth day after
delivery of an executed copy by the Executive to the Employer, at which point
it shall be effective and enforceable.

 

 

	
   

  	
   

  	
   

  	
   

  
	
  WITNESS

  	
  Name of Executive

  
	
  Date

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  BOISE CASCADE OFFICE

  
	
   

  	
    PRODUCTS CORPORATION

  
	
   

  	
  [or other Participating Employer]

  
	
   

  	
   

  
	
   

  	
   

  
	
  Date

  	
   

  	
   

  	
  By

  	
   

  	
   

  
	
   

  	
  Title

  	
   

  	
   

  
								

 

20EXHIBIT 10.9

 

EMPLOYMENT AGREEMENT

 

THIS AGREEMENT
is made and entered into this 10th day of December, 2003, by and between BOISE
CASCADE OFFICE PRODUCTS CORPORATION, a Delaware corporation (“Boise Office
Solutions”), and PHILLIP P. DEPAUL (the “Executive”).

 

R E C I T A L S :

 

WHEREAS, Boise
Cascade Corporation (“Parent”) and OfficeMax, Inc. (“OfficeMax”), entered into
an Agreement and Plan of Merger, dated July 13, 2003 (the “Merger”),
whereby Parent acquired OfficeMax and is integrating its operations with Boise
Office Solutions, Parent’s office products distribution business (“Combined
Enterprise”); and

 

WHEREAS,
Executive and OfficeMax entered into a Severance Agreement, dated April 7,
2003, regarding the Executive’s employment with OfficeMax (“Prior Agreement”);
and

 

WHEREAS,
Executive and OfficeMax entered into an Executive Severance Agreement, dated June 24,
2003, wherein certain provisions of the Prior Agreement were amended and
modified (“Executive Severance Agreement”); and

 

WHEREAS, for
the purposes of this Agreement, Boise Office Solutions acknowledges that there
has been a “Change in Control” as that term is defined in the Executive
Severance Agreement; and

 

WHEREAS, Boise
Office Solutions desires Executive to provide services to the Combined Enterprise,
and Executive desires to provide such services to the Combined Enterprise, on
the terms specified herein; and

 

WHEREAS, Boise
Office Solutions and Executive acknowledge that there will be some period of
time before OfficeMax and Boise Office Solutions will be fully integrated and
combined, and, therefore, references to employment with the Combined Enterprise
shall be deemed to include Executive’s employment with OfficeMax after the
Closing Date (as defined below), and such references to the Combined Enterprise
shall mean both Boise Office Solutions and OfficeMax; and

 

WHEREAS, Boise
Office Solutions and Executive mutually desire to agree upon the terms of
Executive’s employment with the Combined Enterprise and, in addition thereto,
agree to certain benefits of employment.

 

NOW,
THEREFORE, the parties agree as follows:

 

 

1.                                       Term
of Agreement.  Upon the Effective
Date (as defined below), this Agreement amends and supersedes, by deleting them
in their entirety, the Prior Agreement and the Executive Severance Agreement,
which shall be completely null and void. 
This Agreement shall be effective upon the Closing Date (as that term is
defined in the Agreement and Plan of Merger) of the Merger (“Effective Date”)
and shall continue in effect for a period of 36 months following the
Effective Date (“Term”), at which time this Agreement shall expire by its terms
and have no further force or effect; provided, however, that any
confidentiality, nonsolicitation, and/or noncompete obligations binding on the
Executive, including those set forth in Section 8, shall continue
to be binding on him in accordance with their terms.  Notwithstanding anything to the contrary
stated herein, this Agreement shall terminate prior to the date set forth above
without any further acts by either party upon (a) termination of the
Executive’s employment for Cause or Disability (each as respectively defined in
Section 5); (b) termination of the Executive’s employment due
to Executive’s death or by the Executive for other than Good Reason (as defined
in Section 5); or (c) completion by Boise Office Solutions of
all of its obligations if benefits shall become payable hereunder; provided,
however, that any confidentiality, nonsolicitation, and/or noncompete
obligations binding on the Executive, including those set forth in Section 8,
shall continue to be binding on him in accordance with their terms.

 

2.                                       Title
and Duties.  Executive shall be the “
Senior Vice President, Planning and Control,” for the Combined Enterprise,
reporting to Chris Milliken, or his successor with responsibility for strategic
and financial planning, accounting, internal control, internal financial
reporting, and “dotted line” responsibility for security.  Executive will also serve on the Retirement
Funds Investment Committee for the Parent and the Real Estate Committee for the
Combined Enterprise.  The Executive shall
perform such duties, compatible with the Executive’s position, as may
reasonably be required.

 

3.                                       Compensation.

 

(a)                                  Base
Salary.  Base annual salary shall be
no less than $275,000/year (“Base Salary”) during the Term, payable at the
times established by Boise Office Solutions from time to time as the normal
salary payment interval for its employees, subject to the Executive’s rights
set forth in Section 5(c), should Executive’s Base Salary be
reduced during the Term.

 

(b)                                 Annual
and Long-Term Incentives.  Annual and
long-term incentives, if any, shall be payable to Executive from time to time
in accordance with the terms of such plans applicable to the Combined
Enterprise (collectively, “Bonus Programs”), which are established and
maintained by Combined Enterprise or Parent on behalf of the Combined
Enterprise during the Term.  Executive’s
annual target bonus under such Bonus Programs shall not be less than 50% of his
Base Salary during the Term.  The
Combined Enterprise may modify, including termination of, any Bonus Program
from time to time, and so long as such modifications are of general
applicability to all participants in such program, all such modifications shall
be applicable to Executive hereunder. 
Executive will be treated no less favorable than other similarly
situated executives of the Combined Enterprise. 
No payout is guaranteed under any

 

2

 

Bonus Program, and payouts, if
any, are strictly governed by the terms of each such program.

 

(c)                                  Retention
Incentive.  In consideration of
Executive’s employment with the Combined Enterprise, a retention incentive of
$195,000 shall be paid to Executive (“Retention Incentive”) under the terms
stated in this Section 3(c). 
Partial payments of the Retention Incentive will be made in the form of
a lump-sum cash payment at the end of the applicable 12 months,
24 months, and 36 months (measured from the Effective Date) as
follows:

 

	
  Period of

  Employment

  	
   

  	
  Lump-Sum Cash

  Payment

  	
   

  
	
  12 months

  	
   

  	
  $

  	
  39,000

  	
   

  
	
  24 months

  	
   

  	
  $

  	
  39,000

  	
   

  
	
  36 months

  	
   

  	
  $

  	
  117,000

  	
   

  

 

Payment of the Retention
Incentive shall be due only if Executive remains employed with the Combined
Enterprise throughout the relevant 12, 24, or 36-month period.  Payment will be made within 15 days of such
partial Retention Incentive becoming due.

 

4.                                       Location
of Employment.  Position and function
shall be initially based in Cleveland, Ohio. 
At a yet undetermined time (but no sooner than 12 months following the
Effective Date), the function may be relocated to Itasca, Illinois, and
Executive may be asked to relocate of the Itasca area.  If so, relocation benefits according to Boise
Office Solutions policy will be provided.

 

5.                                       Termination
of Employment.  The Executive shall
be entitled to the benefits provided under Section 6 upon the
Executive’s “Qualifying Termination” (as defined herein) during the 24-month
period following the Effective Date (the “Protection Period”).  For purposes hereof, a “Qualifying
Termination” shall mean (i) a termination of Executive’s employment by Boise
Office Solutions for any reason other than for Cause or Disability or due to
the Executive’s death, or (ii) the Executive’s termination of employment for
“Good Reason” (as defined in this Section 5).

 

(a)                                  Disability.  If the Executive is absent from duties with
the Combined Enterprise on a full-time basis for eighteen consecutive months
due to a physical or mental incapacity, and the Executive has not returned to
the full-time performance of the Executive’s duties within thirty (30) days
after written Notice of Termination (as defined below) is given to the
Executive by Boise Office Solutions, such termination shall be considered to be
termination by Boise Office Solutions for “Disability” for purposes of this
Agreement.

 

(b)                                 Cause.  Boise Office Solutions may terminate the
Executive’s employment for Cause.  For
purposes of this Agreement only, Boise shall have “Cause” to terminate the
Executive’s employment hereunder only on the basis of (i) a violation of any
policy of Boise Office Solutions or the Combined Enterprise that causes
material

 

3

 

injury to either or both of
Boise Office Solutions or the Combined Enterprise; (ii) an act of fraud,
embezzlement, theft, or any other material violation of law that interferes
with Executive’s ability to perform Executive’s duties and responsibilities for
the Combined Enterprise; (iii) intentional damage to material assets of either
or both of Boise Office Solutions or the Combined Enterprise; (iv) wrongful
engagement in any competitive activity that would constitute a breach of the
duty of loyalty to Boise Office Solutions or the Combined Enterprise; (v) wrongful
disclosure of confidential information of Parent, Boise Office Solutions and/or
Combined Enterprise; (vi) wrongful failure or refusal to perform, or gross
negligence in the performance of, Executive’s duties and responsibilities for
the Combined Enterprise; (vii) making unauthorized comments to the media
regarding Parent, Boise Office Solutions, and/or the Combined Enterprise; or
(viii) a material violation of Boise Office Solutions’ Standards of Business
Conduct Policy, as updated from time to time, a current copy of which is
attached.

 

(c)                                  Good
Reason.  The Executive shall be
entitled to terminate the Executive’s employment for Good Reason if a Good
Reason event occurs during the Protection Period.  For purposes of this Agreement only, “Good
Reason” shall exist if any of the following occur without the Executive’s
express prior written consent:

 

(i)                                     A
reduction in either the Executive’s annual rate of Base Salary or level of
participation in any Bonus Program for which he is eligible (other than part of
a salary reduction or changes in Bonus Programs generally imposed on all
executive officers of the Combined Enterprise);

 

(ii)                                  An
elimination or reduction of Executive’s participation in any benefit plan
generally available to executive officers of the Combined Enterprise, unless
the Combined Enterprise continues to offer Executive benefits substantially
similar to those made available by such plan, provided, however,
that a change to a plan in which executive officers of the Combined Enterprise
generally participate, including termination of any such plan, if it does not
result in a proportionately greater reduction in the rights of, or benefits to,
Executive as compared with the other executive officers of the Combined
Enterprise or is required by law or a technical change, will not be deemed to
be Good Reason;

 

(iii)                               Failure
of any successor (whether direct or indirect, by purchase of stock or assets,
merger, consolidation, or otherwise) to the Combined Enterprise to assume Boise
Office Solutions’ obligations under this Agreement; or

 

(iv)                              Other
than as contemplated and provided for in Section 4, a transfer of
Executive’s principal business office to a location outside of the area where
the function for which Executive is responsible is performed.

 

The Executive
will be deemed to have waived his rights relating to circumstances constituting
Good Reason if he has not provided to Boise Office Solutions a written Notice
of Termination within ninety (90) days following his knowledge of circumstances
constituting Good Reason.

 

4

 

(d)                                 Notice
of Termination.  Any purported
termination of the Executive by Boise Office Solutions or by the Executive
shall be communicated by written Notice of Termination to the other party in
accordance with Section 10. 
For purposes of this Agreement only, a “Notice of Termination” shall
mean a notice that indicates the specific termination provision in this
Agreement relied upon and the facts, if any, supporting application of such
provision.

 

(e)                                  Date
of Termination; Dispute Concerning Termination.  “Date of Termination” shall mean (i) if the
Executive’s employment is terminated for Disability, thirty (30) days after
Notice of Termination is given (provided that Executive has not returned to the
performance of the Executive’s duties on a full-time basis during such thirty
(30) day period); or (ii) if the Executive’s employment is terminated by Boise
Office Solutions for any reason other than Disability or by the Executive for
any reason, the date specified in the Notice of Termination (which, in the case
of a termination by Boise Office Solutions shall be not less than thirty (30)
days, and in the case of a termination by the Executive shall not be more than
sixty (60) days, respectively, from the date such Notice of Termination if
given); or (iii) if the Executive dies, his date of death (without any
requirement that a Notice of Termination be provided); provided, however,
that if the party receiving such Notice of Termination notifies the other party
within thirty (30) days after the date such Notice of Termination is given that
a dispute exists concerning the termination, the Date of Termination shall be
the date on which the dispute is finally resolved, either by mutual written
agreement of the parties or by a binding arbitration award referred to in Section 14;
and provided, further, that the Date of Termination shall be
extended by a notice of dispute only if such notice is given in good faith and
the party giving such notice shall pursue the resolution of such dispute with
reasonable diligence.  Boise Office
Solutions shall continue to pay the Executive the Executive’s full compensation
in effect when the notice giving rise to the dispute was given and continue the
Executive as a participant in all compensation, benefit and insurance plans in
which the Executive participated, according to their terms and conditions, when
the Notice of Termination was given (ignoring any reductions that gave rise to
Good Reason) until the dispute is finally resolved in accordance with this
Section. Amounts paid under this Section shall be offset against or reduce
any other amounts due under this Agreement. 
In addition, for purposes of determining whether any Qualifying
Termination has occurred during the Protection Period, the date of Notice of
Termination is given pursuant to this Section shall be deemed the date of
the Executive’s Qualifying Termination.

 

6.                                       Compensation
Upon Termination.

 

(a)                                  Salary
and Other Compensation of Benefits. 
If the Executive’s employment is terminated during the Protection
Period, Boise Office Solutions shall pay the Executive’s Base Salary through
the Date of Termination at the rate in effect at the time the Notice of
Termination is given, together with all compensation and benefits to which the
Executive is entitled through the Date of Termination under the terms of any
compensation or benefit plan, program or arrangement, or Bonus Program
maintained

 

5

 

by the Combined Enterprise or
its affiliates during such period (ignoring, if applicable, any reduction that
gave rise to Good Reason).

 

(b)                                 Disability.  During any period that Executive fails to
perform the Executive’s duties hereunder as a result of mental or physical
incapacity, the Executive shall continue to receive the Executive’s Base Salary
at the rate then in effect and continue to participate in all benefit plans and
Bonus Programs until the Executive’s employment is terminated pursuant to Section 5(a).  Thereafter, the Executive’s benefits shall be
determined in accordance with the insurance and other benefit programs and
Bonus Programs then applicable to the Executive.

 

(c)                                  Cause;
Voluntary Termination of Employment Without Good Reason.  If the Executive’s employment is terminated
for Cause or the Executive voluntarily terminates employment without Good
Reason, Boise Office Solutions shall pay the Executive only the Executive’s
Base Salary through the Date of Termination at the rate in effect at the time
Notice of Termination is given, together with other compensation and benefits
to which the Executive is entitled, if any, under the terms of any compensation
or benefits plan, program or arrangement, or Bonus Programs maintained by the
Combined Enterprise and applicable to the Executive, and Boise Office Solutions
shall have no further obligations to the Executive under this Agreement.

 

(d)                                 Qualifying
Termination.  If the Executive’s
employment is terminated in a Qualifying Termination during the Protection
Period, then the Executive shall be entitled to the following benefits:

 

(i)                                     In
lieu of any further salary payments to the Executive for periods subsequent to
the Date of Termination or other severance benefits, Boise Office Solutions
shall pay to the Executive a lump sum payment of $445,000 (four hundred,
forty-five thousand dollars);

 

(ii)                                  Payment
under the Bonus Programs, if any is due according to the terms of each plan;
and

 

(iii)                               $10,000
for tax and financial planning services.

 

To be eligible
to receive benefits under this Section 6(d), the Executive shall be
required to execute and deliver a valid, binding, and irrevocable general
release in substantially the form attached hereto as Exhibit A (which Boise
Office Solutions shall deliver to the Executive promptly after the date of his
Qualifying Termination).  The payments
provided for in this Section 6(d) shall be made not later than the
date the release described above becomes binding and irrevocable under
applicable law; provided, however, that, if the amounts of such
payments cannot be finally determined on or before such day, Boise Office
Solutions shall pay to the Executive on such day an estimate, as determined in
good faith by Boise Office Solutions, of the minimum amount of such payments to
which the Executive is clearly entitled, and shall pay the remainder of such
payments (together with interest at the rate provided in Section 1274(b)(2)(B)
of

 

6

 

the Internal Revenue Code of
1986, as amended (the “Code”), as soon as the amount thereof can be determined,
but in no event later than the thirtieth (30th) day after the Date
of Termination.  If the amount finally
determined to be due to the Executive is less than the estimated payment
previously paid to Executive, the Executive shall repay to Boise Office
Solutions, within five (5) business days following the time that the amount of
the reduction of the payment due is finally determined, the portion of the
payment attributable to the reduction (together with interest at the rate
provided in Section 1274(b)(2)(B) of the Code).  When payments are made under this Section,
Boise Office Solutions shall provide Executive with a written statement setting
forth the manner in which such payments were calculated and the basis for such
calculations, including, without limitation, any opinions or other advice Boise
Office Solutions has received from outside counsel, auditors, or consultants
(and any such written opinions or advice shall be attached to the statement).

 

(e)                                  Involuntary
Termination after the Protection Period.

 

If the
Executive’s employment is terminated by Boise Office Solutions after the end of
the 24th month, but before the end of the Term for any reason other
than Cause or Disability, or due to the Executive’s death, then Executive shall
be entitled to the following benefits:

 

(1)                                  Severance
equal to one year’s annual salary at the current rate; and

 

(2)                                  Payment
under the Bonus Programs, if any is due according to the terms of each plan.

 

To be eligible
to receive benefits under this Section 6(e), the Executive shall be
required to execute and deliver a valid, binding, and irrevocable general
release in substantially the form attached hereto as Exhibit A (which Boise
Office Solutions shall deliver to the Executive promptly after the date of
Executive’s termination of employment). 
The payments provided for in this Section 6(e) shall be made
not later than the date the release described above becomes binding and
irrevocable under applicable law.

 

(f)                                    Insurance
Benefits.  If the Executive’s
employment is terminated in a Qualifying Termination during the Protection
Period, Boise Office Solutions shall maintain in full force and effect for the
24 months following such termination all life insurance, disability insurance,
accidental death and dismemberment insurance, dental coverage, and medical
coverage in which the Executive and the Executive’s dependents participated
immediately before the Date of Termination, on the same cost-sharing basis that
applied to the Executive immediately prior to the Executive’s Date of
Termination.  If such participation (or a
particular type of coverage) under any such plan or arrangement shall be
barred, Boise Office Solutions shall provide the Executive with benefits, at
the same after-tax cost to the Executive, that are substantially similar to
those the Executive and the Executive’s dependents would have otherwise
received

 

7

 

under this Section.  If the Executive, as the result of the
Qualifying Termination during the Protection Period, elects to convert his
Long-Term Disability Insurance, if any, to a personal policy maintained by the
carrier used by Boise Office Solutions (not greater than the coverage in effect
immediately prior to the Qualifying Termination), Boise Office Solutions shall
reimburse the Executive for any premiums paid during the applicable period
following the Qualifying Termination.  If
the Executive’s employment is terminated after the Protection Period, but
during the Term, Boise Office Solutions shall have no obligations under this Section 6(f),
but Executive shall be entitled to receive such benefits for which Executive is
enrolled, in accordance with the terms of such plan.

 

(g)                                 Death.  In the event of the Executive’s death, Boise
Office Solutions shall have no further obligations to the Executive under this
Agreement, but the Executive’s estate shall be entitled to receive death
benefits under Boise Office Solutions’ benefit plans and arrangements as may be
applicable to the Executive.

 

(h)                                 Mitigation.  The Executive shall not be required to
mitigate the amount of any payment provided for in Sections 6(c), (d),
(e), and (f) by seeking other employment or otherwise, nor shall the amount
of any payment or benefit provided for in Sections 6(c), (d), or (e)
be reduced by any compensation earned by the Executive as the result of
employment by another employer after the Date of Termination, or
otherwise.  Benefits otherwise receivable
by the Executive pursuant to Section 6(f) shall be reduced to the
extent comparable benefits are actually received by the Executive during the
period Section 6(f) shall be applicable, and any such benefits
actually received by the Executive shall be reported to Boise Office Solutions.

 

7.                                       Excise
Taxes.  The following provisions
shall apply to any excise tax imposed under Section 4999 of the Code (or
its successor) (the “Excise Tax”) as a result of payments due under Section 6(d):

 

(a)                                  Subject
to Section 7(b) below, if it shall be determined that any payment
or distribution by Boise Office Solutions to or for the benefit of the
Executive, whether paid or payable or distributed or distributable as a result
of payments due under Section 6(d) (a ”Payment”), would
constitute an “excess parachute payment” within the meaning of Section 280G
of the Code, Boise Office Solutions shall pay the Executive an additional
amount (the “Gross-Up Payment”), such that the net amount retained by the
Executive after deduction of any Excise Tax, and any federal, state, and local
income tax; employment tax; excise tax; and other tax imposed upon the Gross-Up
Payment, shall be equal to the Payment.

 

(b)                                 Notwithstanding
Section 7(a), and notwithstanding any other provisions of this
Agreement to the contrary, if the net after-tax benefit to the Executive of
receiving the Gross-Up Payment does not exceed the Safe Harbor Amount (as
defined below) by more than 10% (as compared to the net after-tax benefit to
the Executive resulting from elimination of the Gross-Up Payment and reduction
of the Payments to the Safe Harbor Amount), then (i) Boise Office Solutions
shall not pay the Executive the Gross-Up Payment; and (ii) the provisions of Section 7(c)
below shall

 

8

 

apply.  The term “Safe Harbor Amount” means the
maximum dollar amount of parachute payments that may be paid to the Executive
under Section 280G of the Code without imposition of an Excise Tax under Section 4999
of the Code.

 

(c)                                  The
provisions of this Section 7(c) shall apply only if Boise Office
Solutions is not required to pay the Executive a Gross-Up Payment as a result
of Section 7(b) above.  If
Boise Office Solutions is not required to pay the Executive a Gross-Up Payment
as a result of the provisions of Section 7(b), Boise Office
Solutions will apply a limitation on the Payment amount as set forth below (a
“Parachute Cap”) as follows:  The
aggregate present value of the Payments under Section 6(d) of this
Agreement (“Agreement Payments”) shall be reduced (but not below zero) to the
Reduced Amount.  The “Reduced Amount”
shall be an amount expressed in present value which maximizes the aggregate
present value of the Agreement Payments without causing any Payment to be
subject to the limitation of deduction under Section 280G of the
Code.  For purposes of this Section 7,
“present value” shall be determined in accordance with Section 280G(d)(4)
of the Code.

 

(d)                                 If
the Excise Tax is subsequently determined to be less than the amount taken into
account hereunder at the time of termination of the Executive’s employment (or
such other time as is hereinafter described), the Executive shall repay to
Boise Office Solutions, at the time that the amount of such reduction in Excise
Tax is finally determined, the portion of the Gross-Up Payment attributable to
such reduction (plus that portion of the Gross-Up Payment attributable to the
Excise Tax and federal, state, or local income tax imposed on the Gross-Up
Payment being repaid by the Executive to the extent that such repayment results
in a reduction in Excise Tax or a federal, state, or local income or employment
tax deduction).  If the Excise Tax
exceeds the amount taken into account hereunder (including by reason of any
payment the existence or amount of which cannot be determined at the time of
the Gross-Up Payment), Boise Office Solutions shall make an additional Gross-Up
Payment in respect of such excess (plus any interest, penalties, or additions
payable by the Executive with respect to such excess) at the time that the
amount of such excess is finally determined. 
The Executive and Boise Office Solutions shall each reasonably cooperate
with the other in connection with any administrative or judicial proceedings
concerning the existence or amount of liability for Excise Tax with respect to
the total Payment.

 

(e)                                  Except
as set forth in the next sentence, all determinations to be made under this Section 7
shall be made by the nationally recognized independent public accounting firm
used by Boise Office Solutions immediately prior to the Date of Termination
(“Accounting Firm”), which Accounting Firm shall provide its determinations and
any supporting calculations to Boise Office Solutions and the Executive within
ten days of the Executive’s Date of Termination.  The value of any noncompetition covenant
applicable to the Executive shall be determined by independent appraisal by a
nationally recognized business valuation firm selected by Boise Office
Solutions, and a portion of the Payments shall, to the extent of that appraised
value, be specifically allocated as reasonable compensation for such
noncompetition covenant and shall not

 

9

 

be treated as a parachute
payment.  If any Gross-Up Payment is
required to be made, Boise Office Solutions shall make the Gross-Up Payment
within ten days after receiving the Accounting Firm’s calculations.  Any such determination by the Accounting Firm
shall be binding upon Boise Office Solutions and the Executive.

 

(f)                                    All
of the fees and expenses of the Accounting Firm in performing the
determinations referred to in this Section 7 shall be borne solely
by Boise Office Solutions.

 

8.                                       Confidentiality,
Nonsolicitation and Covenant Not to Compete.  For the purposes of this Section 8,
the term “Boise” shall include Boise Cascade Corporation (which shall include
Boise Office Solutions) and the Combined Enterprise (which shall include
OfficeMax), as well as their affiliates and subsidiaries.

 

(a)                                  Confidentiality.  Boise and/or the Combined Enterprise shall
provide Executive with certain confidential information and trade secrets
(“Confidential Information”). 
Confidential Information includes, without limitation, the names,
addresses, price lists, purchasing histories, and requirements of customers and
potential customers; location, region, and company financial reports; sales and
service manuals and bulletins; cost information and patterns; floor plans and
drawings of facilities; marketing strategies; acquisition and expansion plans;
and other similar information.  Confidential
Information shall also include, without limitation, all letters, memoranda,
notes, tables, spreadsheets, and other similar documents, whether in hard copy
or electronic form, created or generated by or on behalf of Executive using the
information, or any part thereof, described in the previous sentence.  Notwithstanding the definition of
Confidential Information as set forth above, Confidential Information shall not
include information that is generally available to the public other than as a
result of a prohibited disclosure by Executive. 
Executive recognizes that such information is the Confidential
Information and trade secrets of Boise and/or the Combined Enterprise and
agrees not to divulge such information to any person, firm, or institution, except
as such disclosure is a necessary part of a bona fide merchandise sale
negotiation with an actual or potential customer, or otherwise in connection
with his duties and responsibilities as an executive of the Combined Enterprise
and except as may be required by law. 
Further, upon termination of employment with the Combined Enterprise,
Executive will continue to treat Confidential Information as private and
privileged, and will not, either for Executive’s own purposes or as an employee
of or for the benefit of any other entity or person, use such information or
disclose it to any person, firm, or institution.

 

(b)                                 Return
of Property.  On termination of
Executive’s employment with the Combined Enterprise, Executive will immediately
surrender, in good condition, all (a) Confidential Information; and (b)
all letters, notes, memoranda, program design specifications, and all other
similar items which relate to customers or potential customers of Boise and/or
the Combined Enterprise that Executive obtained from Boise’s and/or the
Combined Enterprise’s files or databases, are supplied to Executive by Boise
and/or the Combined Enterprise, or generated by Executive from Boise’s and/or
the Combined Enterprise’s data and that are in Executive’s possession, custody,

 

10

 

or control wherever located,
including all reproductions or copies of such materials, whether in hard copy
or electronic form; and (c) all tangible property of Boise and/or the Combined
Enterprise, including, but not limited to, computers, handheld electronic
devices, cellular telephones, briefcases, samples, merchandise, and furniture.

 

(c)                                  Nonsolicitation.  For a period beginning on the Effective Date
and ending 12 months from the Date of Termination for whatever reason,
Executive agrees that he shall not directly or indirectly for Executive’s
benefit or on behalf of any other party (other than Boise and/or the Combined
Enterprise):

 

(i)                                     Solicit
or attempt to solicit any customer of the Combined Enterprise for the purpose
of selling or distributing office supplies, paper, office furniture, computer
consumables, or related office products or services.  For purposes hereof, a customer of the
Combined Enterprise shall mean any person or business to whom the Combined
Enterprise sold or distributed office supplies, paper, office furniture,
computer consumables, or related office products and services during the last
two years Executive was employed by the Combined Enterprise.

 

(ii)                                  Solicit
or discuss potential employment opportunities with any employee of Boise and/or
the Combined Enterprise (other than for opportunities with Boise and/or the
Combined Enterprise) or induce or attempt to induce any employee of Boise
and/or the Combined Enterprise to leave the employ of Boise and/or the Combined
Enterprise, or in any way interfere with the relationship between Boise and/or
the Combined Enterprise and any employee thereof without the prior express
written consent of Boise Office Solutions.

 

(iii)                               Offer,
hire, or cause to be offered or hired any person who was employed by Boise
and/or the Combined Enterprise at any time during the 12 months prior to
the termination of Executive’s employment with the Combined Enterprise.

 

(iv)                              Induce
or attempt to induce any supplier, or other business relation of Boise and/or
the Combined Enterprise to cease doing business with Boise and/or the Combined
Enterprise or in any way interfere with the relationship between any such
supplier or business relation and Boise and/or the Combined Enterprise
(including, without limitation, making any negative statements or
communications about Boise and/or the Combined Enterprise).

 

(d)                                 Covenant
Not to Compete.  Executive
acknowledges that as a key management employee, Executive will be involved on a
high level in the development, implementation, and management of the Combined
Enterprise’s business strategies and plans that by virtue of Executive’s unique
and sensitive position and special background, employment of Executive by a
competitor of the Combined Enterprise represents a serious competitive danger
to the Combined Enterprise, and the use of Executive’s talent and knowledge and
information about the Combined Enterprise’s business strategies and plans can
and would constitute a valuable competitive

 

11

 

advantage over the Combined
Enterprise.  In view of the foregoing,
Executive agrees that for a period of 12 months after termination of
Executive’s employment with the Combined Enterprise, whether such termination
is voluntary or involuntary (or for a period of 12 months after a final
judgment or injunction enforcing this covenant), Executive will not, directly
or indirectly, own, manage, control, or participate in the ownership,
management, or control of, or be employed or engaged by, or otherwise rendered
service to, Staples, Office Depot (or any combination of Staples and Office
Depot), or any other office products superstore retail chain, or any other
business entity or person engaged in the sale or distribution of office
supplies, paper, office furniture, computer consumables, or related office
products or services in the Territory (as defined below); provided, however,
that the ownership of not more than one (1%) of the equity of any publicly traded
business entity will not be deemed a violation of this covenant.  For purposes hereof, the Territory shall be
all of North America, Australia, New Zealand, and wherever the Combined
Enterprise has operations as of the Date of Termination.

 

(e)                                  Enforcement.  Executive expressly agrees and understands
that the breach of this Section 8 will cause immediate,
irreparable, and immeasurable injury to Boise, and therefore agrees that in
addition to any other rights Boise has in order to enforce this Section 8,
Boise shall be entitled to injunctive relief without bond or other security by
any competent court to enjoin and restrain the breach of this Section 8.

 

(f)                                    Severability.  In case any one or more of the terms
contained in Section 8(c)(i), (ii), or (iii) or in Section 8(c)
shall for any reason become invalid, illegal, or unenforceable, such
invalidity, illegality, or unenforceability shall not affect any other terms
herein, but such terms shall be deemed deleted and such deletion shall not
affect the validity of the other terms of this Section 8.  In addition, if any one or more of the terms
contained in Section 8(c)(i), (ii), or (iii) or in Section 8(c)
shall for any reason be held by a court of competent jurisdiction to be
excessively broad or unreasonable with regard to duration, scope, or area, the
terms shall be construed in a manner to enable it to be enforced to the maximum
extent permitted by applicable law, and any such court shall have the power to
modify such term.

 

(g)                                 No
Further Obligations of Boise.  If the
Executive violates any provision of this Section 8, then the
obligation of Boise Office Solutions to make any Retention Incentive payments
or any payments due under the terms of Sections 6(d), 6(e), or 6(f)
will terminate, and Executive will not be entitled to any such payments.

 

9.                                       Successors;
Binding Agreement.

 

(a)                                  Boise
Office Solutions shall be entitled to assign this Agreement to a successor
without Executive’s consent.  Boise
Office Solutions shall require any successor (whether direct or indirect, by
purchase, merger, consolidation, or otherwise) to all or substantially all of
the business and/or assets of the Combined Enterprise, by agreement in form and
substance satisfactory to the Executive, to expressly assume and agree to
perform this Agreement in the same manner and to the same extent that Boise
Office Solutions would be required to perform it if no such succession had
taken

 

12

 

place.  Failure of Boise Office Solutions to obtain
such assumption and agreement prior to the effectiveness of any such succession
shall be a breach of this Agreement and shall entitle the Executive to
compensation from Boise Office Solutions in the same amount and on the same
terms as the Executive would be entitled hereunder if the Executive had
terminated the Executive’s employment for Good Reason, except that for the
purposes of implementing the foregoing, the date of which any such succession
becomes effective shall be deemed the Date of Termination.

 

(b)                                 This
Agreement shall inure to the benefit of and be enforceable by the Executive’s
personal or legal representatives, executors, administrators, successors,
heirs, distributes, devisees, and legatees. 
If the Executive dies while any amount is still payable, all such
amounts shall be paid in accordance with the terms of this Agreement to the
Executive’s devisee, legatee, or other designee, or if there shall be no such
designee, to the Executive’s estate.

 

10.                                 Notice.  For the purpose of this Agreement, notices
and all other communications provided for in this Agreement shall be in writing
and shall be deemed to have been duly given when delivered or mailed by United
States certified mail, return receipts requested, postage prepaid as follows:

 

	
  If, to the
  Executive:

  	
  Phillip P.
  DePaul

  
	
   

  	
  Last home
  address shown

  
	
   

  	
  on Boise
  records

  
	
   

  	
   

  
	
  If, to Boise
  Office Solutions:

  	
  Boise
  Cascade Office

  
	
   

  	
    Products
  Corporation

  
	
   

  	
  Attention:
  CEO

  
	
   

  	
  150 Pierce
  Road

  
	
   

  	
  Itasca, IL
  60143-1594

  
	
   

  	
   

  
	
  With copy
  to:

  	
  Boise
  Cascade Corporation

  
	
   

  	
  Attention:
  General Counsel

  
	
   

  	
  1111 West
  Jefferson Street

  
	
   

  	
  P.O. Box 50

  
	
   

  	
  Boise, ID
  83728

  

 

or to such other address as
either party may have furnished to the other in writing in accordance herewith,
except that notice of change of address shall be effective only upon receipt.

 

11.                                 Miscellaneous.  By accepting, and as a condition to
accepting, benefits payable under Sections 6(d), 6(e), or 6(f), the
Executive agrees to waive, and will be deemed to have waived, for the Term any
right or entitlement to severance or termination benefits related to the
Executive’s termination of employment under any other severance or termination
plan, policy, program, or arrangement, including, without limitation, the Prior
Agreement and the Executive Severance Agreement.  For the

 

13

 

avoidance of doubt, the waiver
described in the preceding sentence shall apply only during the Term and only
to severance or termination benefits payable to the Executive under any such
plan, policy, program, or arrangement (including the Prior Agreement and the
Executive Severance Agreement).  In
addition, by executing this Agreement, the Executive hereby amends and
supersedes the Prior Agreement and the Executive Severance Agreement by
deleting them in their entirety.  That
is, after the execution of this Agreement, the Prior Agreement and the
Executive Severance Agreement are void and have no further force or
effect.  In no event shall the Executive
be entitled to duplicative payments or benefits under this Agreement and any
other severance or termination plan, policy, program, or arrangement of Boise
Office Solutions, its Parent, or their subsidiaries or affiliates.  No provision of this Agreement may be modified,
waived, or discharged, unless such waiver, modification, or discharge is agreed
to in writing and signed by the Executive and such officer as may be
specifically designated by Boise Cascade Corporation’s Board of Directors.  No waiver by either party hereto at any time
of any breach by the other party hereof, or compliance with, any condition or
provision of this Agreement to be performed by such other party shall be deemed
a waiver of similar or dissimilar provisions or conditions at the same or at
any prior or subsequent time.  No
agreement or representations, oral or otherwise, express or implied, with
respect to the subject matter hereof have been made by either party which are
not expressly set forth in this Agreement. 
The validity, interpretation, construction, and performance of this Agreement
shall be governed by the laws of the state of Ohio (regardless of the law which
may be applicable under principles of conflicts of law).

 

12.                                 Validity.  The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity or the enforceability
of any other provision of this Agreement, which shall remain in full force and
effect.

 

13.                                 Counterparts.  This Agreement may be executed in several
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument.

 

14.                                 Arbitration.  Any dispute or controversy arising under or
in connection with this Agreement shall be settled exclusively by
arbitration in Cleveland, Ohio, in accordance with the rules of (but not necessarily
appointed by) the American Arbitration Association then in effect, except as
provided herein.  Judgment may be entered
on the arbitrator’s award in any court having jurisdiction, provided, however,
that the Executive shall be entitled to seek specific performance of the
Executive’s right to be paid until the Date of Termination during the pendency
of any dispute or controversy arising under or in connection with this
Agreement.  No such arbitration proceedings
shall be commenced or conducted until at least 60 days after the parties in
good faith shall have attempted to resolve such dispute by mutual agreement;
and the parties hereby agree to endeavor in good faith to resolve any dispute
by mutual agreement.  If mutual agreement
cannot be attained, any disputing party, by written notice to the other
(“Arbitration Notice”) may commence arbitration proceedings.  Such arbitration shall be conducted before a
panel of three arbitrators, one appointed by each party within 30 days after
the date of the Arbitration Notice, and one chosen within 60 days after the

 

14

 

date of the Arbitration Notice
by the two arbitrators appointed by the disputing parties.  Any Cleveland, Ohio, court of competent
jurisdiction shall appoint any arbitrator that has not been appointed within
such time periods.  Judgment may include
costs and attorneys’ fees and may be entered in any court of competent
jurisdiction.

 

15.                                 No
Guaranty of Employment.  Neither this
Agreement nor any action taken hereunder shall be construed as giving the
Executive a right to be retained as an employee of the Combined
Enterprise.  Boise Office Solutions
and/or the Combined Enterprise shall be entitled to terminate the Executive’s
employment at any time, subject to providing the benefits herein specified in
accordance with the terms hereof.  The
Executive is free to resign from employment at any time, and Boise Office
Solutions and/or the Combined Enterprise is free, subject to the terms of this
Agreement, to terminate the Executive’s employment at any time and for any
reason.

 

16.                                 Waiver.  Executive acknowledges and confirms his
previous waiver of any rights he may have had to benefits payable under Section 6(e)
of OfficeMax, Inc.’s Annual Incentive Plan.

 

17.                                 Acknowledgement
that the Terms of Employment do not Constitute “Good Reason.”  By executing this Agreement, Executive
acknowledges and agrees that the terms and conditions of employment, or any
other term or condition provided in this Agreement, do not constitute “Good
Reason” as that term is defined in Executive Severance Agreement and that no
condition of “Good Reason” has occurred.

 

18.                                 Confidentiality.  Executive agrees that the terms of this
Agreement are strictly confidential and that he may not disclose the existence
of this Agreement, its term, or the amounts to be paid hereunder, to other
individuals or entities.  This
prohibition does not preclude disclosure to Executive’s financial, tax, or
legal advisors, or spouse provided that Executive first advises and cautions
any of the above individuals that the existence and terms of this Agreement are
confidential and are not to be disclosed, and further that Executive obtains
agreement from such individuals that they will abide by this confidentiality
provision.

 

IN WITNESS
WHEREOF, Boise Office Solutions and the Executive have caused this Agreement to
be executed as of the date first written above.

 

	
   

  	
  BOISE
  CASCADE OFFICE

  
	
   

  	
  PRODUCTS
  CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
  /s/ Phillip
  P. DePaul

  	
   

  	
  By

  	
  /s/
  Christopher C. Milliken

  	
   

  
	
  Phillip
  DePaul

  	
  Its

  	
  President
  & CEO

  	
   

  
					

 

15

 

EXHIBIT A

 

FORM OF

SETTLEMENT AGREEMENT AND RELEASE

 

THIS
SETTLEMENT AGREEMENT AND RELEASE (“Release”) is made and entered into by and
between                  
(“Executive”) and BOISE CASCADE OFFICE PRODUCTS CORPORATION [or other
Participating Employer] (“Employer”) in connection with Executive’s separation
of employment with Employer, effective                           
(“Separation Date”).

 

In
consideration of the mutual promises and releases contained herein and other
good and valuable consideration as set forth herein, it is hereby agreed as
follows:

 

1.                                       In
full and final settlement of any claims and demands for relief which may be
asserted by Executive against Employer, its parent, predecessors, successors
and assigns, and the employees, current and former directors, officers, agents,
attorneys, and representatives of same, Employer will pay Executive a lump sum
equal to                     ,
subject to applicable tax and withholdings, which amount equals the cash
severance benefits payable under the Employment Agreement dated                       ,
2003, by and between Executive and Employer (the “Employment Agreement”).  Executive agrees that such payment constitutes
the exclusive payments due to Executive from Employer, except as specifically
provided in Section 2 below. 
Executive shall receive such payment as soon as practicable after this
Release becomes irrevocable.

 

2.                                       Notwithstanding
anything to the contrary contained herein, Executive and Employer agree and
acknowledge that Executive is not waiving his rights to:

 

(a)                                  Payment
of Executive’s salary, wage payments, sales bonuses or commissions, and/or
reimbursable business expenses due as of the Separation Date, subject to
applicable taxes and withholdings.

 

(b)                                 Payment
of Executive’s accrued but unused Your Time Off as of the Separation Date,
subject to applicable taxes and withholdings.

 

(c)                                  Payment
of Benefits accrued as of the Separation Date under any “employee benefit plan”
within the meaning of the Employee Retirement Income Security Act of 1974, as
amended; provided, however, that as a condition to accepting the
benefits payable under Section 1 above, Executive agrees to waive, and is
deemed to have waived, any right or entitlement to severance or termination
benefits related to Executive’s termination of employment under any other
severance or termination plan, policy, program, or arrangement.

 

(d)                                 Executive’s
rights with respect to indemnification and directors’ and officers’ insurance
coverage under Parent’s corporate governance documents and directors’ and
officers’ liability insurance coverage.

 

 

3.                                       Executive
hereby expressly agrees and acknowledges that any and all claims and demands
for relief, of whatever nature or kind, including attorneys’ fees, costs, and
expenses, which Executive ever had or now has against Employer, its
predecessors, successors, current and former employees, directors, officers,
assigns, agents, attorneys and representatives, or affiliates, which arose out
of or relate in any way to Executive’s employment with or separation from
employment with Employer and/or its predecessors, shall be forever waived,
released, or discharged, including, but not limited to, (i) any claims under
the Fair Labor Standards Act, 29 U.S.C. Section 201, et seq.; the
Employee Retirement Income Security Act, 29 U.S.C. Section 1001, et
seq.; the Family and Medical Leave Act, 29 U.S.C. Section 2601, et
seq.; the Age Discrimination in Employment Act, 29 U.S.C. Section 621,
et seq.; Title VII of the Civil Rights Act of 1991, 42 U.S.C.
Sections 1981 and 1981a; the American with Disabilities Act, 42 U.S.C. Section 12100,
et seq.; [add references to applicable state or local laws]; and any
federal, state, or local laws prohibiting employment discrimination; (ii)
claims relating to harassment, breach of contract or wrongful discharge, or
breach of express or implied covenants; and (iii) claims arising from any legal
restrictions on Employer’s right to terminate its employees.

 

4.                                       Executive
represents and agrees that he has not relied on any statements by Employer
regarding his rights under the various federal and state laws prohibiting
discrimination in the workplace and that he is hereby advised, cautioned,
warned, recommended, encouraged, and provided the opportunity to discuss all
aspects of the Release with counsel of his own choosing, and that he has
carefully read the Release, and that he is voluntarily and of his own free will
and without any duress of any kind or nature entering into the Release.

 

5.                                       Executive
acknowledges the receipt and sufficiency of the consideration adequate to
support this Release in general, and in particular, the Executive’s releases of
rights set forth in paragraphs 2 and 3 hereto, since the Executive is receiving
benefits under paragraph 1 that the Executive would otherwise not have been
entitled to receive.

 

6.                                       Executive
and Employer further expressly agree and understand that the Severance
Agreement and Release constitute the complete and entire agreement of the
parties with respect to the subject matter hereof, and that any other promises,
inducements, representations, warranties, or agreements with respect to the
subject matter hereof have been superseded hereby and are not intended to
survive the Release, provided that any confidentiality, nonsolicitation and/or
noncompete obligations binding on Executive shall continue to be binding on him
in accordance with their terms.  No
amendment or modification of the Release shall be effective unless set forth in
writing and signed by both the Executive and a duly authorized officer of
Employer.

 

7.                                       Executive
and Employer agree that all matters relative to the construction and
interpretation of this Release shall be construed and interpreted in accordance
with the laws of the state of Ohio.

 

17

 

[8.                                   Executive
represents and agrees that he has been provided a period of 21 days to
consider the terms of this Release and has been advised that, once executed,
this Release may be revoked by Executive within seven days of execution.]

 

[Alternative
paragraph (8), as appropriate:

8.                                       Executive
represents and agrees that he has been provided a period of 45 days to
consider the terms of this Release and has been advised that, once executed,
this Release may be revoked by Executive within seven days of execution.]

 

9.                                       Employer
is obligated to make the payments described in Section 1 above only
providing the following conditions are met:

 

(a)                                  The
seven-day revocation period under Section 8 expires without Executive
revoking this Release;

 

(b)                                 Executive
resigns as an officer of Employer;

 

10.                                 Executive
agrees not to disclose the terms of this Release to any person, except under
the circumstances described in this Release.

 

11.                                 This
Release shall not become effective or enforceable until the eighth day after
delivery of an executed copy by the Executive to the Employer, at which point
it shall be effective and enforceable.

 

 

	
   

  	
   

  	
   

  	
   

  
	
  WITNESS

  	
  Name of
  Executive

  
	
  Date

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  BOISE
  CASCADE OFFICE

  
	
   

  	
    PRODUCTS
  CORPORATION

  
	
   

  	
  [or other
  Employer]

  
	
   

  	
   

  
	
   

  	
   

  
	
  Date

  	
   

  	
   

  	
  By

  	
   

  	
   

  
	
   

  	
  Title

  	
   

  	
   

  
								

 

18

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