Document:

EX-10.3

Exhibit 10.3

ESCROW AGREEMENT

This ESCROW AGREEMENT, dated as of January 10, 2005 (this “Agreement”), by and among
Genetronics Biomedical Corporation, a Delaware corporation (the “Company”), the Purchasers set
forth on the execution pages hereof (the “Purchasers”) and Computershare Trust Company of Canada,
as escrow agent (the “Escrow Agent”). Capitalized terms used in this Agreement and not otherwise
defined herein shall have the respective meanings set forth in the Purchase Agreement (as defined
below).

W I T N E S S E T H

WHEREAS, pursuant to the Securities Purchase Agreement of even date herewith (the “Purchase
Agreement”) by and among the Company and the Purchasers, the Purchasers have agreed to acquire an
aggregate of 1,540,123 Shares of Common Stock from the Company, upon the terms and subject to the
conditions set forth in the Purchase Agreement;

WHEREAS, the Purchase Agreement provides that the Company is to deposit with the Escrow Agent
an aggregate of 1,540,123 Shares of Common Stock (the “Escrow Shares”) against delivery of the
Purchasers’ Investment Amounts upon the terms and subject to the conditions set forth in this
Agreement;

WHEREAS, the Purchase Agreement provides that the Purchasers promise to pay the Company, or
its registered assignees, the principal sum of $6,237,500.00 or such lessor amount as shall equal
the outstanding principal amount, upon the terms and subject to the conditions set forth in Note
(the “Investment Amount”);

WHEREAS, on the date of the Purchase Agreement, each Purchaser paid a non-refundable amount
equal to twenty percent (20%) of its Investment Amount by wire transfer to the Company and a duly
executed full recourse promissory note (the “Note”) representing the remaining eighty percent (80%)
of its Investment Amount, against delivery to the Escrow Agent of certificates representing the
Escrow Shares;

WHEREAS, the Company delivered the Escrow Shares to the Escrow Agent against delivery of such
Purchaser’s Investment Amount;

WHEREAS, the Escrow Shares delivered to the Escrow Agent shall be held by the Escrow Agent
until such time as all outstanding principal due under such Purchaser’s Note has been paid in full,
which shall be no later than September 30, 2005, unless paid earlier pursuant to the default
provisions set forth in Section 3 of the Note or pursuant to the mandatory prepayment provisions in
Section 4 of the Note (collectively, the “Due Date”);

WHEREAS, the Escrow Agent shall disburse the Escrow Shares pursuant to the terms of this
Agreement.

WHEREAS, the Escrow Agent is willing to act as Escrow Agent, upon the express terms and
subject to the express conditions of this Agreement;

AGREEMENT

NOW, THEREFORE, in consideration of the foregoing and other good and valuable consideration,
the parties hereby agree as follows:

1. Appointment of Escrow Agent. The Company and the Purchasers hereby appoint the Escrow
Agent to act as agent on their behalf pursuant to this Agreement and the Escrow Agent hereby
consents to its appointment in such capacity on the terms and conditions of this Agreement.

2. Deposit of Escrow Shares. The Company shall deposit with the Escrow Agent the Escrow
Shares. The Escrow Shares shall be held by the Escrow Agent for the benefit of the Company and the
Purchasers in accordance with the terms and conditions of the Purchase Agreement and this
Agreement.

3. Release of Escrow Shares. Subject to any of the other provisions of this Agreement
including, without limitation, Section 4.1 below, the Escrow Agent is hereby authorized to disburse
all or part of the Escrow Shares to the Purchasers upon receipt of and in accordance with joint
written instructions signed by the Company and the Purchasers, at any time on or prior to the Due
Date. In the event that the Escrow Agent does not receive such instructions, with respect to the
disbursement of all or any part of the Escrow Shares, by 5:00 p.m. California time on the Due Date,
any Shares constituting such non-disbursed portion of the Escrow Shares shall be automatically
cancelled and the certificates representing such Shares shall be returned to the Company without
any further action or instruction by the Company or any other parties hereto.

Notwithstanding any other provision contained herein, the Company agrees that it will provide,
within a commercially reasonable period of time, the Escrow Agent with written notice of either of
the following:

(a) prepayment of the Note in accordance with its terms including, without limitation, the
default provisions set forth in Section 3 of the Note and the mandatory prepayment
provisions in Section 4 of the Note; and

(b) the failure of a Purchaser to pay his, her or its, as the case may be, Investment Amount
in full by the Due Date,

upon receipt of which the Escrow Agent will act, without any further action or direction from any
of the other parties hereto, in accordance with the instructions provided to it by the Company,
which may include without limitation, the following:

(a) instructions directing the Escrow Agent to automatically cancel the certificates
representing such Purchaser’s Escrow Shares that remain in Escrow and immediately return
such certificates to the Company; or

(b) instructions directing the Escrow Agent to release to such Purchaser such portion of the
Purchaser’s Escrow Shares from Escrow.

4. Escrow Agent.

4.1 Duties of Escrow Agent.

(a) The Escrow Agent shall treat the Escrow Shares with such degree of care as it treats it
own similar property. It is agreed that the duties of the Escrow Agent are only such as are herein
specifically provided, and the Escrow Agent shall have no other duties, implied or otherwise. The
Escrow Agent’s duties are as a depository only, and the Escrow Agent shall incur no responsibility
or liability whatsoever; except for its willful misconduct or gross negligence. The Escrow Agent
may consult with counsel of its choice and shall not be responsible or liable for any action taken,
suffered or omitted to be taken by it in good faith in accordance with the advice of such counsel
(subject to the exception set forth above in the prior sentence). Except where the terms of this
Agreement expressly refer thereto, the Escrow Agent shall not be bound in any way by any of the
terms of the Purchase Agreement or any other agreement to which one or more of, the Company or the
Purchasers are parties, whether or not the Escrow Agent has knowledge thereof, and the Escrow Agent
shall not in any way be required to determine whether or not the Purchase Agreement or any other
agreement has been complied with by the Company or the Purchasers or any other party thereto.

(b) As security for the due and punctual performance of any and all obligations to the Escrow
Agent hereunder, now or hereafter arising, the Company and the Purchasers, individually and
collectively, hereby pledge, assign and grant to the Escrow Agent a continuing security interest
in, and a lien on, the Escrow Shares and all distributions thereon or additions thereto. The
security interest of the Escrow Agent shall at all times be valid, perfected and enforceable by the
Escrow Agent against the Company, the Purchasers and all third parties in accordance with the terms
of this Agreement. If any fees, expenses or costs incurred by, or any obligations owed to, the
Escrow Agent hereunder are not promptly paid when due, the Escrow Agent may reimburse itself
therefore from the Escrow Shares and may sell, convey or otherwise dispose of any investment of the
Escrow Shares for such purpose.

4.2 Reliance by Escrow Agent on Written Notices. The Escrow Agent may conclusively rely
and shall be fully authorized and protected in relying upon any written notice, demand,
certificate, advice, opinion or document which it, in good faith believes to be genuine. Set forth
on the execution page hereto are the names of the persons authorized to act for each of the parties
under this Agreement. The Escrow Agent may conclusively rely on and shall be authorized and fully
protected in acting or failing to act upon this written, facsimile or electronically delivered
instructions of those persons set out on the execution page hereto or by certification of an
officer of a party with respect to any matter relating to the Escrow Agent acting as the Escrow
Agent.

4.3 Risk to Escrow Agent. None of the provisions of this Agreement shall require the Escrow
Agent to expend or risk its own funds or otherwise to incur any liability, financial or otherwise,
in the performance of any of its duties hereunder, or in the exercise of any of its rights or
powers if it shall have reasonable grounds for believing that repayment of such funds or
indemnification satisfactory to it against such risk or liability is not assured to it. In no
event shall the Escrow Agent be liable (i) for any consequential, punitive or special damages, (ii)
for the acts or omissions of its nominees, correspondents, designees, subagents or sub custodians,
or (iii) for an amount in excess of the value of the Escrow Shares, valued as of the date of
deposit. The Escrow Agent shall not incur any liability for not performing any act or fulfilling
any duty, obligation or responsibility hereunder by reason of any occurrence beyond the control of
the Escrow Agent (including but not limited to any act or provision of any present or future law or
regulation or governmental or telex or other wire or communication facility.

4.4 No Investigation by Escrow Agent. The Escrow Agent shall not be required or bound to
make any investigation into the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, entitlement order, approval or other paper
or document.

4.5 Escrow Agent’s Execution of Power. The Escrow Agent may execute any of the powers
hereunder or perform any duties hereunder either directly or by or through agents, attorneys,
custodians, or nominees appointed with due care, and shall not be responsible or liable for any
willful misconduct or gross negligence on the part of any agent, attorney, custodian or nominee so
appointed as finally determined by a non-appealable order of a court of competent jurisdiction.

4.6 Legal Proceedings. The Escrow Agent shall not be required to take notice of any
default or to take any action with respect to such default involving any expense or liability,
unless notice in writing of such default is formally given to The Manager, Corporate Trust
Department, of the Escrow Agent and unless it is indemnified and funded, in a manner satisfactory
to it, against such expense or liability.

4.7 Escrow Agent Reporting. Notwithstanding anything to the contrary herein, except as
required by law, in no event shall the Escrow Agent be under a duty to file any reports or withhold
or deduct any amounts in respect of taxes due for payments made pursuant to this Agreement.

4.8 Fees of Escrow Agent. The Company and the Purchasers severally covenant and agree to
pay to the Escrow Agent from time to time, and the Escrow Agent shall be entitled to, the fees and
expenses set forth on Schedule 1 and will further pay or reimburse the Escrow Agent upon its
request for all reasonable expenses, disbursements and advances incurred or made by the Escrow
Agent in accordance with any of the provisions hereof or any other documents executed in connection
herewith (including the reasonable compensation and the reasonable expenses and disbursements of
its counsel and of all persons not regularly in its employ), which related expenses, disbursements
and advances shall be paid by the requesting party, as set forth therein. All fees and amounts
payable to the Escrow Agent under this Section 4.8 shall be payable fifty percent (50%) by the
Company and fifty percent (50%) by the Purchasers. The obligations of the Company and the
Purchasers under this Section 4.8 to compensate the Escrow Agent and to pay or reimburse the Escrow
Agent for reasonable expenses, disbursements and advances shall survive the satisfaction and
discharge of this Agreement or the earlier resignation or removal of the Escrow Agent.

4.9 Indemnification of the Escrow Agent. Without limiting any protection or indemnity of
the Escrow Agent under any other provision hereof, or otherwise at law, every party to this
Agreement hereby agrees to jointly and severally indemnify and hold harmless the Escrow Agent, its
directors, officers, employees, and agents, and all of their respective representatives, heirs,
successors and assigns (collectively the “Indemnified Parties”) from and against any and all
liabilities, losses, damages, penalties, claims, actions, suits, costs, expenses and disbursements,
including reasonable legal or advisor fees and disbursements, of whatever kind and nature which may
at any time be imposed on, incurred by or asserted against the Indemnified Parties in connection
with the performance of the Escrow Agent’s duties and obligations hereunder, other than such
liabilities, losses, damages, penalties, claims, actions, suits, costs, expenses and disbursements
arising by reason of the gross negligence or fraud of the Escrow Agent. This provision shall
survive the resignation or removal of the Escrow Agent, or the termination of this Agreement. The
Escrow Agent shall not be under any obligation to prosecute or to defend any action or suit in
respect of the relationship which, in the opinion of its counsel, may involve it in expense or
liability, unless the parties hereto shall, so often as required, furnish the Escrow Agent with
satisfactory indemnity and funding against such expense or liability.

4.10 Successor to Escrow Agent. Any corporation or other entity whatsoever into which the
Escrow Agent may be merged or converted or with which it may be consolidated, any corporation or
other entity whatsoever resulting from any merger, conversion or consolidation to which the Escrow
Agent shall be a party or any corporation or other entity whatsoever succeeding to the business of
the Escrow Agent shall be the successor of the Escrow Agent hereunder with the execution or filing
of any paper with any party hereto except where an instrument of transfer or assignment is required
by law to effect such succession.

4.11 Resignation of Escrow Agent. If the Escrow Agent at any time, in its sole discretion,
deems it necessary or advisable to resign as the Escrow Agent hereunder, it may do so by giving
prior written notice of such event to the Company and the Purchasers and thereafter delivering the
Escrow Shares to any other escrow agent mutually agreed upon by the Company and the Purchasers as
notified to the Escrow Agent in writing, and if no such escrow agent shall be designated by the
Company and the Purchasers within sixty (60) calendar days of such written notice, then the Escrow
Agent shall seek the appointment of its successor as prescribed by the clerk or other proper
officer of a court of competent jurisdiction located within the State of California to the extent
permitted by law (any such successor to the Escrow Agent, whether designated by the Company and the
Purchasers or pursuant to the clause above or otherwise, is hereinafter referred to as the
“Successor Agent”). The costs and expenses (including reasonable attorney’s fees and expenses)
incurred by the Escrow Agent in connection with such proceeding for the appointment of a Successor
Agent shall be paid by, and be deemed a joint and several obligation of the Company and the
Purchasers, the Company and the Purchasers may, at any time after the date hereof, upon thirty (30)
days prior written notice to the Escrow Agent agree in writing to appoint a Successor Agent for the
resigning or removed Escrow Agent, whereupon the Escrow Agent shall deliver the Escrow Shares to
such Successor Agent as provided below. The fees of any Successor Agent shall be borne severally
by the Company and the Purchasers. Upon receipt of the identity of the Successor Agent, the Escrow
Agent shall either deliver the Escrow Agent’s fees, costs and expenses or other obligations owed to
the Escrow Agent, or hold such Escrow Shares (or any portion thereof), pending distribution, until
all such fees, costs and expense or other obligations are paid. Upon delivery of the Escrow Shares
to the Successor Agent, (i) the Escrow Agent shall be discharged from any and all responsibility or
liability with respect to the Escrow Shares (except as otherwise provided herein) and (ii) all
references herein to the “Escrow Agent” shall, where applicable, be deemed to include such
Successor Agent and such Successor Agent shall thereafter become the Escrow Agent for all purposes
of this Agreement.

4.12 Refusal to Act. The Escrow Agent shall retain the right not to act and shall not be
liable for refusing to act if, due to a lack of information or for any other reason whatsoever, the
Escrow Agent, in its sole judgment, determines that such act might cause it to be in non-compliance
with any applicable anti-money laundering or anti-terrorist legislation, regulation or guideline.
Further, should the Escrow Agent, in its sole judgment, determine at any time that its acting under
this Agreement has resulted in its being in non-compliance with any applicable anti-money
laundering or anti-terrorist legislation, regulation or guideline, then it shall have the right to
resign on 10 days written notice to the other parties to this Agreement, provided (i) that the
Escrow Agent’s written notice shall describe the circumstances of such non-compliance; and (ii)
that if such circumstances are rectified to the Escrow Agent’s satisfaction within such 10 day
period, then such resignation shall not be effective.

4.13 Waiver or Modification to Agreement.  The Escrow Agent shall not be bound by any
notice, claim or demand with respect to, or any waiver, modification, amendment, termination or
rescission of this Agreement, unless received by it in writing, and signed by the parties hereto
and if its duties herein are affected, unless it shall have given its prior written consent
thereto.

4.14 Validity of Claim. The Escrow Agent shall not be required to make any determination
or decision with respect to the validity of any claim made by any party or of any denial thereof
but shall be entitled to rely conclusively on the terms hereof and the documents tendered to it in
accordance with the terms hereof. Notwithstanding the foregoing, in the event of any disagreement
between any of the parties to this Agreement, or between them or either of them and any other
person, resulting in demands or adverse claims being made in connection with or for any asset
involved herein or affected hereby, the Escrow Agent shall be entitled, at its discretion, to
refuse to comply with any demands or claims on it, as long as such disagreement shall continue, and
in so refusing the Escrow Agent may make no delivery or other disposition of any asset involved
herein or affected hereby, and in so doing the Escrow Agent shall not be or become liable in any
way or to any person or party for its failure or refusal to comply with such conflicting demands or
adverse claims, and it shall be entitled to continue so to refrain from acting and so to refuse to
act until the right of person or party shall have been finally adjudicated in a court assuming and
having jurisdiction on the asset involved herein or affected hereby, or all differences shall have
been adjusted by agreement and the Escrow Agent shall have been notified thereof in writing signed
by all persons and parties interested.

5. Miscellaneous.

5.1 Construction: Interpretation. The heading contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or interpretation of this
Agreement, Article, Section, schedule, exhibit, recital and party references are to this Agreement
unless otherwise stated. No party, nor its counsel, shall be deemed the drafter of this Agreement
for purposes of construing the provisions of this Agreement, and all provisions of this Agreement
shall be construed in accordance with their fair meaning and not strictly for or against any party.

5.2 Amendments and Modifications. No party hereto shall be bound by any modification,
amendment, termination, cancellation, rescission or replacement of this Agreement unless the same
shall be in writing and signed by it

5.3 Notices. All notices and other communication hereunder shall be in writing and shall
be effective when actually received by the party to which such notice is sent (which in the case of
the Escrow Agent is its Corporate Trust Department), as follows:

	 	 	 	 	 
	If to Company, to:	 	Copy to:
	 	 	(Which shall not
	 	 	constitute notice)
	 
	 	Thomas Poletti, Esq.

	Genetronics Biomedical Corporation
	 	Kirkpatrick & Lockhart Nicholson

	11199 Sorrento Valley Road
	 	Graham LLP

	San Diego, CA 92121
	 	10100 Santa Monica Boulevard
	Tel: (858) 597-6006
	 	7th Floor
	Fax: (858) 597-0451
	 	Los Angeles, CA  90067

	Attn: Peter Kies
	 	Tel: (310) 552-5000

	Chief Financial Officer
	 	Fax: (310) 552-5001

	If to Purchasers, to:
	 	Copy to:
	 
	 	(Which shall not
	 
	 	constitute notice)
	If to Escrow Agent, to:
	 	Copy to:
	 
	 	(Which shall not
	 
	 	constitute notice)
	Computershare Trust Company of Canada
	 	Genetronics Biomedical Corporation

	510 Burrard Street, 3rd Floor
	 	11199 Sorrento Valley Road
	Vancouver, British Columbia
	 	San Diego, CA  92121

	V6C 3B9
	 	Attention: Peter Kies

	Attention: Manager, Corporate Trust
	 	Chief Financial Officer

	Tel: 604-661-9400
	 	Tel: (858) 597-6006

	Fax: 604-661-9403
	 	Fax: (858) 597-0451

or to such other address as the person to whom notice is being given may have previously
furnished to the other parties in writing in the manner set forth above.

5.4 Assignment. Subject to Section 4.10, neither this Agreement nor any of the rights,
interests or obligation hereunder shall be assigned by any party (whether by operation of law or
otherwise) without the prior written consent of the Company, the Purchasers and the Escrow Agent;
provided that either the Company or the Purchasers may assign its rights to any affiliate, but no
such assignment shall relieve the assignor of its obligations hereunder. This Agreement shall be
binding upon, inure to the benefit of and be enforceable by the parties and their respective
successor and permitted assigns.

5.5 Termination of Agreement. This Agreement shall terminate upon the mutual written
express agreement of the Company and the Purchasers. In any event, this Agreement shall terminate
when all the Escrow Shares have been cancelled or delivered according to the terms of this
Agreement.

5.6 Representation. Each of the parties hereby represents and warrants (a) that this
Agreement has been duly authorized, executed and delivered on its behalf and constitutes its legal,
valid and binding obligation and (b) that the execution, delivery, and performance of this
Agreement by it does not violate any application law or regulation.

5.7 Third Party Representation. Each party to this Agreement hereby represents to the
Escrow Agent that any account to be opened by, or interest to held by the Escrow Agent in
connection with this Agreement, for or to the credit of such party, either (i) is not intended to
be used by or on behalf of any third party; or (ii) is intended to be used by or on behalf of a
third party, in which case such party hereto agrees to complete and execute forthwith a declaration
in the Escrow Agent’s prescribed form as to the particulars of such third party.

5.8 Other Miscellaneous Provisions.

(a) This Agreement may be executed simultaneously in counterparts, each of which shall be
deemed an original, but all of which together shall constitute one and the same instrument.

(b) Whenever under the terms hereof the time for giving a notice or performing an act falls
upon a Saturday, Sunday, or banking holiday, such time shall be extended to the next day on which
Escrow Agent is open for business.

(c) This Agreement shall be governed by and construed in accordance with the laws of the State
of California. Notwithstanding the foregoing, the performance or discharge by the Escrow Agent of
any of its rights, powers, duties or responsibilites under this Agreement shall be construed in
accordance with the laws of the Province of British Columbia and the federal laws of Canada
applicable therein. Each of the parties hereto hereby waives its right to trial by jury in any
such proceedings. To the extent that in any jurisdiction any party may be entitled to claim, for
itself or its assets, immunity from suit, execution, attachment (whether before or after judgment)
or other legal process, such party hereby irrevocably agrees not to claim, and hereby waives, such
immunity.

(d) No printed or other material in any language, including prospectuses, notices, reports,
and promotional material which mentions Computershare Trust Company of Canada by name or the
rights, powers, or duties of the Escrow Agent under this Agreement shall be issued by any other
parties hereto, or on such party’s behalf, without the prior written consent of the Escrow Agent.

(e) The Escrow Agent does not have any interest in the Escrow Shares but is serving as escrow
holder only and having only possession thereof. The Company and the Purchasers shall pay or
reimburse the Escrow Agent upon request for any transfer taxes or other taxes relating to the
Escrow Shares incurred in connection herewith and shall indemnify and hold harmless the Escrow
Agent for any amounts that it is obligated to pay in the way of such taxes. Any payments of income
in respect of the Escrow Shares shall be subject to withholding regulations then in force with
respect to United States taxes. The parties hereto will provide the Escrow Agent with the
appropriate form for tax I.D. number certifications.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK

THE NEXT PAGE IS THE SIGNATURE PAGE]

1

IN WITNESS WHEREOF, each of the parties has caused this Escrow Agreement to be executed by a
duly authorized officer as of the day and year first written above.

COMPANY

Genetronics Biomedical Corporation

By:      

Name: Avtar Dhillon

Title: President & Chief Executive Officer

PURCHASERS

By:     

Name:

Title:

Computershare Trust Company of Canada,

as Escrow Agent

By:     

Name:

Title:

2Short-Term Incentive Plan

Exhibit 10.3

 

 

LONGVIEW FIBRE COMPANY

 

SHORT-TERM INCENTIVE PLAN

 

 

SECTION 1. PURPOSE

The primary purpose of the Longview Fibre Company Short-Term Incentive Plan (the "Plan") is to enhance the ability of Longview Fibre Company (the "Company") and its subsidiaries and affiliates to attract, motivate and retain individuals of exceptional managerial talent on whom, in large measure, the sustained progress, growth and profitability of the Company depend.

 

SECTION 2. DEFINITIONS

Whenever used herein, the following terms will have the respective meanings set forth below, unless a different meaning is clearly required by the context:

	2.1	"Annual Base Salary" means an Eligible Employee's actual base salary for the Performance Period (earned while an Eligible Employee) and does not include any bonuses, commissions, reimbursements or other expense allowances, cash or non-cash fringe benefits, short-term or long-term incentive payments, hiring or relocation bonuses, pay in lieu of vacations, sick leave or any other special payments.

	2.2	"Award" means the amount to be paid at any given Award Level for a Performance Period.

	2.3	"Award Level" has the meaning set forth in 5.1.

 

	2.4	"Board" means the Board of Directors of the Company.

	2.5	"Change in Control" means: 

	 	(a)	the acquisition by any person or group of persons (acting as a group), within the meaning of Section 13(d) or 14(d) of the Securities Exchange Act of 1934, as amended (the "Act"), or any comparable successor provisions, of Ownership of Company stock that, together with Company stock already held by such person, or group of persons, constitutes more than 50% of the total fair market value or the total voting power of the Company's stock, provided such person or group of persons did not previously own more than 50% of the total fair market value or the total voting power of the Company's stock; 

	 	(b)	the acquisition by any person or group of persons (acting as a group), within the meaning of Section 13(d) or 14(d) of the Act, or any comparable successor provisions, (or the acquisition by any such person or group of persons during the 12-month period ending on the date of the most recent such purchase or acquisition) of Ownership of Company stock that constitutes 35% or more of the total voting power of the Company's stock, provided such person, entity or group of persons or entities did not previously own 35% or more of the total voting power of the Company's stock;

	 	(c)	during any period of 12 consecutive months, individuals who at the beginning of such period constituted the Board cease for any reason to constitute at least a majority of such Board, unless the election of each new director, or his or her nomination for election by the Company's stockholders, was approved by a vote of a majority of the directors in office immediately prior to such election or nomination;

	 	(d)	the acquisition from the Company by any person or group of persons (acting as a group) who are not related to the Company, or the acquisition from the Company by any such person or group of persons during the 12-month period ending on the date of the most recent such acquisition, of assets of the Company that have a total gross fair market value equal to at least 40% of the total gross fair market value of all of the assets of the Company immediately prior to such acquisition or acquisitions. For this purpose, gross fair market value means the value of the Company's assets, or the value of the assets being disposed of, determined without regard to any liabilities associated with such assets.

	2.6	"Company" means Longview Fibre Company, a Washington corporation. 

	2.7	"Compensation Committee" means the Compensation Committee of the Board.

	2.8	"Disability" means a medically determinable physical or mental impairment that (a) prevents the Participant from engaging in any substantial gainful activity, which impairment can be expected to result in death or to last for a continuous period of not less than 12 months, or (b) can be expected to result in death or to last for a continuous period of not less than 12 months and that has resulted in the Participant receiving income replacement benefits for a period of not less than three months under the Company's long-term disability plan.

	2.9	"EBITDDA" means the Company's net income before income taxes plus interest expense and charges against income consisting of depreciation, depletion, amortization, write-off of goodwill and other intangibles, all determined in accordance with GAAP.

	2.10	"Eligible Employee" means an officer or other key employee of the Company, as determined by the Compensation Committee in its sole and absolute discretion.

	2.11	"Ownership" means actual and constructive ownership, as determined in accordance with Code Section 318(a). Stock underlying a vested option is considered owned by the individual who holds the vested option (and the stock underlying an unvested option is not considered owned by the individual who holds the unvested option); provided, however, that if a vested option is exercisable for stock that is not substantially vested (as defined in Treas. Reg. § 1.83-3(b) and (j)), the stock underlying such option is not treated as owned by the individual who holds the option.

	2.12	"Participant" means an Eligible Employee who is designated to participate in the Plan by the Compensation Committee.

	2.13	"Performance Period" means the one-year period that begins on November 1 and ends on the following October 31 or such other period as the Compensation Committee may designate. The first Performance Period shall begin on November 1, 2004 and shall end on October 31, 2005.

	2.14	"Plan" means the Longview Fibre Company Short-Term Incentive Plan, as set forth herein and as may be amended from time to time.

	2.15	"Reduction-in-Force" means the elimination of an employment position or positions by the Company due to (a) adverse business conditions of the Company or (b) a re-organization of the Company other than a Change in Control.

	2.16	"Retirement" means termination of employment with Company and its subsidiaries and affiliates after becoming eligible for early or normal retirement under the Employees' Pension Plan of Longview Fibre Company.

 

SECTION 3. ADMINISTRATION

The Plan shall be administered by the Compensation Committee, which shall have full power and authority to construe, interpret and administer the Plan. The Compensation Committee shall have full authority to make all eligibility, Award and other determinations necessary or appropriate for the proper administration of the Plan.

 

SECTION 4. ELIGIBILITY

The Compensation Committee will determine which Eligible Employees will be Participants in the Plan for a Performance Period; provided, however, that only individuals who are Eligible Employees as of the beginning of such Performance Period or who become Eligible Employees during such Performance Period may participate in the Plan for such Performance Period.

 

SECTION 5. AWARDS

	5.1	Setting Award Levels.For each Performance Period, the Compensation Committee shall establish three Award Levels (each, an "Award Level")—a Threshold Award Level, a Target Award Level and a Stretch Award Level—for each Participant, the amount of the Award that will be payable at each Award Level (or the formula by which such amount is determined), and the performance goals that must be met for the Participant to receive the Award at any given Award Level. The Threshold Award Level is the minimum level of achievement at which the Plan pays an Award; the Target Award Level is the desired level of achievement; and the Stretch Award Level is the level of achievement at which the maximum payout is earned. The amount of the Award at each Award Level and the performance goals that must be met to receive the Award at any given Award Level may be different for each Participant and, subject to the terms of the Plan, shall be within the complete and absolute discretion of the Compensation Committee.

	 	(a)	The performance goals for each Award Level shall be based on the EBITDDA for the Performance Period; provided, however, that the Compensation Committee may also include an individual performance modifier that can increase or decrease the Award to which a Participant would otherwise be entitled by up to 25%, based on the Participant's personal performance. Whether to establish an individual performance modifier for any Participant, the amount of the modifier, and the performance on which the modifier is based are within the sole and absolute discretion of the Compensation Committee.

	 	(b)	Subject to Sections 5.1(a), 5.2 and 5.3, the Award at each Award Level shall be a dollar amount equal to such percentage of the Participant's Annual Base Salary for such Performance Period as the Compensation Committee, in its sole and absolute discretion, may determine.

	5.2	Safety Improvement Goal. For each Performance Period, the Compensation Committee may establish a safety improvement goal for the Company. If the Compensation Committee sets such a goal for a Performance Period, and such goal is not attained during such Performance Period, then no Awards will be paid for such Performance Period. Whether to establish a safety improvement goal, and the nature of that goal, are within the sole and absolute discretion of the Compensation Committee.

	5.3	Manufacturing Operations Profit Goal. For each Performance Period, the Compensation Committee may establish a manufacturing operations profit goal. If the Compensation Committee sets such a goal for a Performance Period, and such goal is not attained during such Performance Period, then any Award for such Performance Period to which a Participant may become entitled shall be reduced by 50%. Whether to establish a manufacturing operations profit goal, and the nature of that goal, are within the sole and absolute discretion of the Compensation Committee.

	5.4	Determination of Awards. As soon as reasonably practicable after the close of each Performance Period, the Compensation Committee will determine the amount of the Award, if any, to which a Participant is entitled for such Performance Period by determining (i) whether the EBITDDA for such Performance Period satisfied the performance goals for a particular Award Level, (ii) what, if any, individual performance modifier applies to the Participant, (iii) whether any safety improvement goal for such Performance Period has been met, and (iv) whether any manufacturing operations profit goal for such Performance Period has been met. 

	 	(a)	If a Participant ceases to be an Eligible Employee following the close of a Performance Period with respect to which he would otherwise be entitled to an Award, but prior to the payment of such Award, then such Participant shall remain entitled to receive such Award. 

	 	(b)	If a Participant ceases to be an Eligible Employee prior to the close of a Performance Period, then whether he or she is entitled to an Award for such Performance Period and the amount of any such Award shall be determined in accordance with Section 6.

	5.5	Payment of Awards. Except as otherwise provided in Section 8.2, Awards shall be paid in cash on or before the 90th day (or as soon as reasonably practicable thereafter) following the end of the applicable Performance Period and the completion of the Company's annual financial audit; provided, however, that in any event, Awards shall be paid no later than 21⁄2 months after the later of (a) the end of the Participant's taxable year in which the applicable Performance Period ends, and (b) the end of the Company's taxable year in which the applicable Performance Period ends. All Awards will be paid net of all taxes required by applicable federal, state, local or foreign law to be withheld therefrom.

	5.6	Adjustments. Notwithstanding anything herein to the contrary, the Compensation Committee may, after the determination of the Award Levels for a Performance Period, adjust the Award available at any or all Award Levels, and the performance goals and other criteria which must be satisfied to receive the Award at any or all Award Levels, to take into account changes in the law, including, without limitation, the American Jobs Creation Act of 2004, or in accounting or tax rules, and may otherwise make such adjustments as it deems necessary or appropriate to reflect the inclusion or exclusion of any extraordinary items, events or circumstances in order to avoid windfalls or hardships.

 

SECTION 6. TERMINATION OF EMPLOYMENT

	6.1	Termination of Employment or Service for Reasons Other than Retirement, Disability, Death or Reduction-in-Force. If a Participant's employment with the Company and its subsidiaries and affiliates terminates for any reason prior to the end of a Performance Period, other than one of the reasons set forth in Section 6.2, such Participant shall not be entitled to receive any Award or other consideration under the Plan with respect to such Performance Period, unless the Compensation Committee determines otherwise in its sole and absolute discretion. 

	6.2	Termination of Employment or Service by Reason of Retirement, Disability, Death or Reduction-in-Force. If a Participant's employment with the Company and its subsidiaries and affiliates terminates prior to the end of a Performance Period by reason of his or her Retirement, Disability or death or due to a Reduction-in-Force, such Participant will be eligible to receive an Award for such Performance Period if the requirements for receiving such Award are otherwise satisfied. The amount of any such Award will be the amount determined in accordance with Section 5.4 multiplied by a fraction, the numerator of which is the number of days during the Performance Period on which the Participant was an Eligible Employee and the denominator of which is the total number of days in such Performance Period. Any Award to which a Participant becomes entitled under this Section 6.2 shall be paid at the time specified in Section 5.5.

	6.3	Change in Status. In the event that during a Performance Period a Participant changes status from an Eligible Employee to a non-Eligible Employee, such Participant shall be eligible to receive an Award for such Performance Period if the Participant was an Eligible Employee for at least six months plus one day during the Performance Period and the requirements for receiving such Award are otherwise satisfied. The amount of any such Award will be the amount determined in accordance with Section 5.4 multiplied by a fraction, the numerator of which is the number of days during the Performance Period on which the Participant was an Eligible Employee and the denominator of which is the total number of days in such Performance Period. Any Award to which a Participant becomes entitled under this Section 6.3 shall be paid at the time specified in Section 5.5.

	6.4	Determinations of Compensation Committee Conclusive and Binding. Any determination as to whether and when there has been a termination of employment for purposes of the Plan and the cause of such termination shall be made by the Compensation Committee and its determination shall be conclusive and binding on all persons. 

	6.5	Effect of Leave of Absence or Reduction in Hours. The Compensation Committee shall have the discretion to determine the effect of a Company-approved leave of absence or a reduction in hours of employment or services on the issuance of Awards.

 

SECTION 7. NONASSIGNABILITY

Neither the Participant nor any other person shall have any right to sell, assign, transfer, pledge, anticipate, mortgage or otherwise encumber, transfer, hypothecate or convey in advance any of the benefits provided for under this Plan, and any attempt to do so shall be null and void. No part of the amounts payable shall, prior to actual payment, be subject to seizure or sequestration for the payment of any debts, judgments, alimony or separate maintenance owed by the Participant or any other person, nor be transferable by operation of law in the event of the Participant's or any person's bankruptcy or insolvency.

 

SECTION 8. CHANGE IN CONTROL

	8.1	General. Except as provided in Section 8.2, in the event of a Change in Control, Participants will be eligible to receive unearned Awards; provided, however, that:

	 	(a)	the Performance Period then underway will be deemed to end as of the end of the month immediately preceding the month in which the Change in Control occurs;

	 	(b)	the Awards multiplied by a fraction, the numerator of which is the number of months in the Performance Period up to the end of the month immediately preceding the month in which the Change in Control occurs and the denominator of which is the number of months that would have been in the Performance Period had the Change in Control not occurred;

	 	(c)	whether any Company and personal performance goals for such Performance Periods, any safety improvement goal for such Performance Period, and any manufacturing operations profit goal for such Performance Period have been satisfied shall be determined based on the performance levels attained as of the last day of the month immediately preceding the month in which the Change in Control occurs; and

	 	(d)	any Award payable under this Section 8.1 shall be paid at the time it would have been paid under Section 5.5 had the Change in Control not occurred.

	8.2	Exception. In the event of a dissolution or liquidation that occurs prior to completion of the Performance Period, no Awards or other consideration shall be payable for that Performance Period. 

 

SECTION 9. AMENDMENT AND TERMINATION

The Board may amend, suspend or terminate the Plan or any portion of the Plan at any time and in any way; provided, however, that shareholder approval shall be obtained for any amendment to the Plan if required by applicable law or regulation.

 

SECTION 10. GENERAL

	10.1	No Individual Rights. Nothing in the Plan or in any Award granted under the Plan shall be deemed to constitute an employment contract or confer or be deemed to confer on any Participant any right to continue in the employ of, or to continue any other relationship with, the Company or limit in any way the right of the Company to terminate a Participant's employment or other relationship at any time, with or without cause.

	10.2	Issuance of Awards. Notwithstanding any other provision of the Plan, the Company shall have no obligation to deliver any Awards under the Plan or make any other distribution of benefits under the Plan unless, in the opinion of the Company's counsel, such issuance, delivery or distribution would comply with all applicable laws (including, without limitation, the requirements of any state or federal securities laws or the laws of any state or foreign jurisdiction).

	10.3	Successors. The provisions of the Plan shall bind and inure to the benefit of the Company and its successors and assigns and the Participant and the Participant's beneficiaries.

	10.4	No Trust or Fund. The Plan is intended to constitute an "unfunded" plan. Nothing contained herein shall require the Company to segregate any monies or other property, or to create any trusts, or to make any special deposits for any amounts payable to any Participant, and no Participant shall have any rights that are greater than those of a general unsecured creditor of the Company.

	10.5	Severability. If any provision of the Plan or any Award is determined to be invalid, illegal or unenforceable in any jurisdiction, or as to any person, or would disqualify the Plan or any Award under any law deemed applicable by the Compensation Committee, such provision shall be construed or deemed amended to conform to applicable laws, or, if it cannot be so construed or deemed amended without, in the Compensation Committee’s determination, materially altering the intent of the Plan or the Award, such provision shall be stricken as to such jurisdiction, person or Award, and the remainder of the Plan and any such Award shall remain in full force and effect.

	10.6	Choice of Law. The Plan and all determinations made and actions taken pursuant hereto, to the extent not otherwise governed by the laws of the United States, shall be governed by the laws of the State of Washington without giving effect to principles of conflicts of law.

	10.7 	Term of Plan. The Plan shall have no fixed expiration date.

IN WITNESS WHEREOF, Longview Fibre Company has caused this Plan to be adopted on this 11th day of January, 2005.

LONGVIEW FIBRE COMPANY

By:  R. H. WOLLENBERG

        R. H. WOLLENBERG

Title: President, Chief Executive Officer and Chairman of the Board

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