EXHIBIT 10.6
Conformed Copy
EMPLOYMENT AND CONSULTING AGREEMENT
This EMPLOYMENT AND CONSULTING AGREEMENT (this "Agreement") is made and
entered into as of this 22nd day of October, 1997, by and among U.S. Timberlands
Services Company, L.L.C., a Delaware limited liability company (the "Company"),
U.S. Timberlands Company, L.P., a Delaware limited partnership ("UST"), New
Services (as defined below), a Delaware limited liability company, and ▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇ ("▇▇▇▇▇▇▇▇").
W I T N E S S E T H
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WHEREAS, a new limited partnership, UST, has been formed and a new limited
liability company, to be re-named "U.S. Timberlands Service Company, L.L.C."
("New Services"), has been formed to serve as the general partner of UST and as
the managing member of certain affiliated limited liability companies (together
with any subsidiary entities, the "UST Group") and upon the initial public
offering of the units representing limited partner interests in UST (the "IPO"),
New Services will assume the obligations of the Company hereunder as more fully
described in Section 12.2; and
WHEREAS, ▇▇▇▇▇▇▇▇ brings over 25 years of responsible management experience
in the timberlands and forest products business, and has developed valuable
knowledge and contacts useful to the UST Group; and,
WHEREAS, ▇▇▇▇▇▇▇▇ has played an important role in making and operating
acquisitions on behalf of the UST Group including implementing new procedures
and strategies for operations and marketing, and providing proprietary
information for the purpose of developing the UST Group business; and,
WHEREAS, the Company desires to employ ▇▇▇▇▇▇▇▇ as its President and Chief
Executive Officer and, upon the occurrence of certain events, to engage ▇▇▇▇▇▇▇▇
as a consultant after ▇▇▇▇▇▇▇▇' termination of employment, and ▇▇▇▇▇▇▇▇ desires
to accept such employment and such contingent consulting agreement, on the terms
and conditions set forth in this Agreement;
WHEREAS, to induce ▇▇▇▇▇▇▇▇ to accept such employment, UST desires to
guarantee the performance by the Company of its obligations hereunder,
NOW, THEREFORE, in consideration of the foregoing premises and the mutual
covenants hereinafter set forth, the parties agree as follows:
Section 1. Employment
The Company hereby employs ▇▇▇▇▇▇▇▇, and ▇▇▇▇▇▇▇▇ hereby accepts
employment with the Company, on the terms and conditions set forth in this
Agreement.
Section 2. Term
Subject to the provisions of Section 6, ▇▇▇▇▇▇▇▇' employment by the
Company under this Agreement shall be for a term (the "Employment Term")
commencing on the date hereof and expiring on the earlier of December 31, 2002
or the date ▇▇▇▇▇▇▇▇ ceases to be an officer as provided in Section 3.1.
Section 3. ▇▇▇▇▇▇▇▇' Duties
3.1 Duties. ▇▇▇▇▇▇▇▇ shall hold the position of the Company's President
and Chief Executive Officer. Subject to the control of the board of directors
or other governing body of the Company (the "Board"), and any limitations set
forth in the operating agreement of the Company attached hereto as Exhibit A, as
amended from time to time in accordance with the terms thereof (the "Company
Agreement"), and in the agreements of limited partnership of the partnerships
and the operating agreements of the limited liability companies within the UST
Group, ▇▇▇▇▇▇▇▇ shall, in general, supervise and control all the day-to-day
business and affairs of the Company and the UST Group. Should ▇▇▇▇▇▇▇▇ desire
at any time to nominate the Chief Operating Officer of the Company to assume the
office of President, and should the Board approve such nomination, upon such
promotion of the Chief Operating Officer, ▇▇▇▇▇▇▇▇ shall cease to be an officer
or employee of the Company and shall assume the position and duties of a Vice
Chairman of the Board, a non-officer position.
3.2 Performance of Duties. ▇▇▇▇▇▇▇▇ shall perform ▇▇▇▇▇▇▇▇' duties and
responsibilities as President and Chief Executive Officer during the Company's
normal business hours and at all other times reasonably necessary to comply with
the terms and conditions of this Agreement. ▇▇▇▇▇▇▇▇ shall devote the time and
attention required to the performance of ▇▇▇▇▇▇▇▇' duties and responsibilities
as President and Chief Executive Officer for and on behalf of the Company on the
terms set forth in this Section 3.2. In addition, ▇▇▇▇▇▇▇▇ may from time to
time serve as a consultant to and/or as a member of the board of directors of
other entities, provided that the Board in good faith determines that such
activities do not unreasonably interfere with the business of the Company and
the UST Group and the performance of ▇▇▇▇▇▇▇▇' duties hereunder. The parties
acknowledge that ▇▇▇▇▇▇▇▇ currently serves as a board member or advisory member
of various civic and charitable organizations and may continue to participate in
these activities; provided, however, that such continued participation shall in
no event be deemed a violation the limitations of the first two sentences of
this Section 3.2 unless and until ▇▇▇▇▇▇▇▇ shall have been notified in writing
thereof and afforded a reasonable opportunity to cure the violation.
3.3 Principal Place of Employment. ▇▇▇▇▇▇▇▇' principal place of
employment and consulting shall be at Bandon, Oregon. The Company shall provide
▇▇▇▇▇▇▇▇, at such location, for so long as the Company needs an office at such
location, with a private office, secretarial services and such other facilities
and support services as are appropriate to the position of President and Chief
Executive Officer or a Vice Chairman of the Board, as the case may be, and
necessary or appropriate in the performance of ▇▇▇▇▇▇▇▇' duties as the President
and Chief Executive Officer or a Vice Chairman; provided, that the Company shall
be under no obligation to maintain an office at Bandon,
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Oregon for any period subsequent to December 31, 1998; further provided, the
Company shall, in lieu of maintaining such an office, reimburse ▇▇▇▇▇▇▇▇ for his
clerical, professional and other expenses reasonably incurred in prosecution of
the Company's business, as other expenses are reimbursed at Section 4.4 below.
Section 4. Compensation and Other Benefits
▇▇▇▇▇▇▇▇ shall be entitled to receive from the Company the following
compensation and benefits for the services to be rendered by ▇▇▇▇▇▇▇▇ hereunder:
4.1 Salary and Bonuses.
(a) During the Employment Term, the Company shall pay ▇▇▇▇▇▇▇▇ an annual
base salary of $450,000, payable in equal installments during the year in
accordance with the Company's customary practices for senior executives ("Base
Salary"). The amount of ▇▇▇▇▇▇▇▇' Base Salary may be increased from time to
time by the Board, and, once increased, such higher amount shall become the Base
Salary for all purposes of this Agreement and may not thereafter be reduced. The
Company shall also pay to ▇▇▇▇▇▇▇▇, to the extent earned, an annual cash bonus,
not to exceed 100% of Base Salary, which shall be based on the performance of
▇▇▇▇▇▇▇▇ and the UST Group's business as determined annually by the Compensation
Committee of the Board in its discretion. The Company shall have the right to
deduct and withhold from ▇▇▇▇▇▇▇▇' compensation all taxes and charges that are
currently or that hereafter may be required by law to be so deducted and
withheld.
The Company shall establish a program whereby ▇▇▇▇▇▇▇▇ may, at his option,
defer receipt of any or all of the Base Salary and bonuses otherwise payable to
him under this Agreement. Any amounts so deferred shall be placed in a "rabbi"
trust, with a bank or other financial institution reasonably satisfactory to
▇▇▇▇▇▇▇▇, as trustee, providing the maximum security to ▇▇▇▇▇▇▇▇ without causing
the constructive receipt of income for federal income tax purposes and
distributed, together with interest or other earnings thereon, according to a
payment schedule to be designated by ▇▇▇▇▇▇▇▇.
(b) Notwithstanding the foregoing however, if ▇▇▇▇▇▇▇▇ ceases to be an
officer as provided in Section 3.1, ▇▇▇▇▇▇▇▇ shall thereafter, except as
provided below for consultant services, be entitled only to receive such meeting
fees and other benefits, if any, as the Company provides to the members of the
Board who are not also employees of the Company; provided that ▇▇▇▇▇▇▇▇ shall
continue to retain his current ownership of (a) all subordinated units
representing limited partner interests in UST issued to him at the closing of
the IPO, (b) his 10% member interest in New Services, subject to the provisions
of the Company Agreement, and (c) the Unit Options awarded to him under the U.S.
Timberlands Company 1997 Long-Term Incentive Plan (the "LTIP"), subject to the
terms of the LTIP. ▇▇▇▇▇▇▇▇ agrees to make himself available to the Company to
provide, upon reasonable request, consulting services of the nature ▇▇▇▇▇▇▇▇ is
qualified to perform by reason of ▇▇▇▇▇▇▇▇' background, knowledge and
experience. As consideration for being available to provide such consulting
services, ▇▇▇▇▇▇▇▇ shall be entitled to receive an annual retainer of $25,000,
payable in equal quarterly installments of $6,250 on each January 2, April 1,
July 1 and October 1. Upon the presentation of invoices, in a form reasonably
satisfactory to the Company, from ▇▇▇▇▇▇▇▇ for such consulting services, the
Company shall also pay ▇▇▇▇▇▇▇▇ at the rate of $200 per hour for
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the consulting services rendered, up to a maximum of $1,600 for any one day,
and shall reimburse ▇▇▇▇▇▇▇▇ for all reasonable expenses incurred by ▇▇▇▇▇▇▇▇ in
performing such consulting services. The consulting agreement described herein
shall terminate at the effective date of the ▇▇▇▇▇▇▇▇' removal, resignation or
retirement from the Board or upon his Death or becoming Disabled (the
"Consulting Term"). During the term of such consultancy, ▇▇▇▇▇▇▇▇ agrees to
present to the Board for consideration proposed acquisitions that meet the
Board's criteria prior to presenting such proposed acquisitions to any other
person. The Board will have a 30-day period in which to exercise its right of
first refusal and an additional 120 days thereafter either to consummate the
acquisition or enter into a binding agreement with respect thereto.
4.2 Long Term Incentive Plan. During the Employment Term and Consulting
Term, ▇▇▇▇▇▇▇▇ shall be entitled to participate in the LTIP on the terms and
conditions set forth therein. Concurrently with the IPO, ▇▇▇▇▇▇▇▇ will be
granted Unit Options (as defined in the LTIP) pursuant to the LTIP in an amount
equal to 12.5% of the number of Unit Options initially available to be granted
under the LTIP and substantially in the form of the grant agreement attached
hereto as Attachment A.
4.3 Participation in Benefit Plans. During the Employment Term, ▇▇▇▇▇▇▇▇
shall be eligible to participate in all employee benefit plans and arrangements
now in effect or which may hereafter be established that are generally
applicable to other senior executives of the Company, including, without
limitation, all life, group insurance, and medical and dental care plans and all
disability, retirement, 401(k) and other employee benefit plans of the Company,
as long as any such plan or arrangement remains generally applicable to other
senior executives of the Company. ▇▇▇▇▇▇▇▇ shall also be entitled to the same
vacation benefits as are generally available to senior executives of the
Company, provided in any case that ▇▇▇▇▇▇▇▇ shall have a minimum of four weeks'
vacation per year.
4.4 Reimbursement of Expenses. The Company shall reimburse ▇▇▇▇▇▇▇▇ for
reasonable expenses incurred by ▇▇▇▇▇▇▇▇ in the performance of ▇▇▇▇▇▇▇▇' duties
hereunder (including as set forth in the second proviso to Section 3.3) in
accordance with the policy of the Company for reimbursement of expenses as
adopted by the Board from time to time and generally applicable to all senior
executives of the Company. ▇▇▇▇▇▇▇▇ shall furnish the Company with the
supporting documentation required under the Company's policy in connection with
the reimbursement of such expenses.
Section 5. Membership on the Board
▇▇▇▇▇▇▇▇ shall be entitled to membership on the Board in accordance with
the terms of the Company Agreement as in effect on the date the Company
Agreement is first executed.
Section 6. Termination
6.1 Termination by the Company Without Cause. The Company may terminate
▇▇▇▇▇▇▇▇' employment as President and Chief Executive Officer other than for
Cause or ▇▇▇▇▇▇▇▇ becoming Disabled (as such terms are defined below) at any
time during the Employment Term if the Board determines, in its sole discretion,
that the continued employment of ▇▇▇▇▇▇▇▇ is not in the continued
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interests of the Company. In the event the Company terminates ▇▇▇▇▇▇▇▇'
employment pursuant to this Section 6.1, then ▇▇▇▇▇▇▇▇ shall be paid on
termination, (i) any unpaid Base Salary earned hereunder prior to the
termination date, (ii) all unused vacation time accrued by ▇▇▇▇▇▇▇▇ as of the
termination date in accordance with the Company's vacation policy for senior
executives, (iii) all unpaid amounts of compensation in which ▇▇▇▇▇▇▇▇ is vested
as of the termination date under any and all incentive compensation plans or
programs of the Company, (iv) any expenses in respect of which ▇▇▇▇▇▇▇▇ has
requested, and is entitled to, reimbursement in accordance with Section 4.4, (v)
a prorated bonus for the year of such termination calculated based on the bonus
being equal to 100% of Base Salary, and (vi) an amount equal to the amount of
Base Salary that ▇▇▇▇▇▇▇▇ would receive if ▇▇▇▇▇▇▇▇' employment had continued
without change through the remainder of the Term or for 12 months, whichever is
less, (items (i) through (iv) above being the "Earned Amounts").
6.2 Termination by the Company for Cause. The Company may terminate this
Agreement at any time, in the discretion of the Board, in the event of (i) any
conviction of ▇▇▇▇▇▇▇▇ for a felony, (ii) any material breach by ▇▇▇▇▇▇▇▇ of a
material written agreement between ▇▇▇▇▇▇▇▇ and the Company or the UST Group,
including this Agreement, (iii) any breach caused by ▇▇▇▇▇▇▇▇ of the Company
Agreement, the limited partnership agreement of any member of the UST Group, or
the charter or bylaws of any corporation within the UST Group, provided that
▇▇▇▇▇▇▇▇ had prior written notice of such agreement or other document and any
amendment thereto (including a copy of the full text thereof) and provided
further that such breach has a material adverse effect on the Company, (iv) any
willful conduct by ▇▇▇▇▇▇▇▇ materially injurious to the Company or the UST Group
or their respective businesses, (v) any willful failure by ▇▇▇▇▇▇▇▇ to comply
with any material policies, procedures, or directives of the Board, provided
that, ▇▇▇▇▇▇▇▇ shall first be given notice from the Board of such failure and
such failure shall not have been cured within 10 days after such notice or, if
such failure is not capable of being cured within 10 days, ▇▇▇▇▇▇▇▇ shall not
have commenced and be diligently pursuing in good faith efforts to cure such
default, or (vi) any fraud, misappropriation of funds, embezzlement, or other
similar acts of misconduct by ▇▇▇▇▇▇▇▇ with respect to the Company or the UST
Group. In the event the Company terminates ▇▇▇▇▇▇▇▇' employment pursuant to
this Section 6.2 for Cause, then ▇▇▇▇▇▇▇▇ shall be paid on termination the
Earned Amounts. For purposes of this Agreement, no act or failure to act on
▇▇▇▇▇▇▇▇' part shall be deemed "willful" unless done, or omitted to be done, in
bad faith or without the reasonable belief that the act or failure to act was in
the best interests of the Company or the UST Group. Any act or failure to act
on the basis of authority given by resolution duly adopted by the Board or on
the basis of advice given by legal counsel for the Company shall be conclusively
presumed to have been done, or omitted to be done, in good faith and in the best
interests of the Company or the UST Group. No termination of ▇▇▇▇▇▇▇▇'
employment shall be for Cause unless such termination shall have been authorized
in advance by a resolution adopted by the Board and delivered to ▇▇▇▇▇▇▇▇,
following a meeting of the Board at which ▇▇▇▇▇▇▇▇ (together with his counsel)
shall have been afforded a reasonable opportunity to refute the purported
grounds for termination for Cause.
6.3 Termination Upon Death or Disability of ▇▇▇▇▇▇▇▇. This Agreement
shall terminate upon the death of ▇▇▇▇▇▇▇▇, or upon ▇▇▇▇▇▇▇▇ becoming Disabled
(as defined below). In the event of a termination of this Agreement pursuant to
this Section 6.3, ▇▇▇▇▇▇▇▇ (or ▇▇▇▇▇▇▇▇' estate, if applicable) shall be paid on
termination the Earned Amounts. For purposes of this Agreement, "Disabled"
shall mean that ▇▇▇▇▇▇▇▇ shall have qualified for and be receiving benefits
under the
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Company's long-term disability insurance plan or, if there is no such plan, that
▇▇▇▇▇▇▇▇ shall have qualified for and be receiving disability benefits under the
federal Social Security Act.
6.4 Voluntary Resignation for Good Reason. ▇▇▇▇▇▇▇▇ may resign ▇▇▇▇▇▇▇▇'
employment as President and Chief Executive Officer of the Company at any time
and, if such resignation is for "Good Reason", ▇▇▇▇▇▇▇▇ shall be entitled to the
same payments and benefits that ▇▇▇▇▇▇▇▇ would receive under Section 6.1 if
▇▇▇▇▇▇▇▇' employment were being terminated by the Company other than for Cause
or ▇▇▇▇▇▇▇▇ becoming Disabled. "Good Reason" shall mean any one or more of the
following: (i) failure of UST to complete its IPO on or before March 31, 1998;
(ii) failure of the Company to appoint or re-appoint ▇▇▇▇▇▇▇▇ to the office of
President and Chief Executive Officer (excluding in the circumstances described
in Section 3.1); (iii) failure of the Company's members to elect or re-elect
▇▇▇▇▇▇▇▇ to the Board; (iv) failure of the Company, by act, omission, amendment
to the instruments governing its organization and operation or otherwise, to
vest in ▇▇▇▇▇▇▇▇ the position, duties and responsibilities contemplated by this
Agreement; (v) failure by the Company to pay when due any portion of the
compensation payable to ▇▇▇▇▇▇▇▇ hereunder; (vi) any material breach by the
Company of any material provision of this Agreement; (vii) on or following a
Change of Control (as such term is defined in the Company's LTIP, as the same
may be amended from time to time), either ▇▇▇▇▇▇▇▇ is assigned any duties or
responsibilities materially inconsistent with, or diminished from, ▇▇▇▇▇▇▇▇'
duties and responsibilities with the Company and the UST Group immediately prior
to the Change of Control, or, ▇▇▇▇▇▇▇▇' status, duties, responsibilities, titles
or offices with the Company and the UST Group are materially diminished from
those in effect immediately prior to the Change of Control, as determined in the
good faith opinion of ▇▇▇▇▇▇▇▇; or (viii) ▇▇▇▇▇▇▇▇, on the basis of a
certificate of a medical doctor mutually acceptable to the Company and ▇▇▇▇▇▇▇▇,
becomes unable to properly discharge his duties and responsibilities as
President and Chief Executive Officer of the Company due to the substantial
deterioration of his physical or mental health and gives the Company 30 days
prior written notice of his resignation; provided, however, Good Reason shall
exist with respect to a matter described in (ii) through (vii) above that is
capable of being corrected by the Company only if such matter is not corrected
by the Company within a 30-day period following its receipt of written notice of
such matter from ▇▇▇▇▇▇▇▇, and in no event shall a termination by ▇▇▇▇▇▇▇▇
occurring more than 60 days following any such written notice or the event
described in (i) above be for Good Reason.
Section 7. Covenant Not to Compete; Confidentiality
7.1 Noncompetition. Unless granted written permission by the Board and
subject to any further restrictions contained in the agreements of limited
partnership within the UST Group, while employed by the Company or a member of
the Board and for a period of 12 months after the termination of such employment
or membership on the Board, ▇▇▇▇▇▇▇▇ covenants that ▇▇▇▇▇▇▇▇ shall not (i) own
(as a proprietor, partner, or stockholder of greater than one percent of
outstanding equity securities, interests or otherwise) an interest in, or (ii)
participate (as an officer, director, or in any other capacity) in the
management, operation, or control of, or (iii) perform services as or act in the
capacity of any employee, independent contractor, consultant, or agent of any
enterprise which engages in one or more of the following activities in a state
in which the Company or the UST Group is then conducting business and in which
the Company or the UST Group commenced conducting business prior to the
commencement of such activities therein by ▇▇▇▇▇▇▇▇:
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(a) acquisition, exchange, operation or sale of timber-producing real
property or rights to harvest timber, a principal purpose of which is
producing logs or other forest products;
(b) harvesting of timber other than harvesting which is incidental to
the ownership or operation of real property not owned or operated for a
principal purpose of producing logs or other forest products;
(c) sale, exchange or purchase of logs other than sales, exchanges or
purchases which are incidental to the ownership or operation of real
property not owned or operated for a principal purpose of producing logs or
other forest products;
(d) manufacture, marketing or sale of manufactured, engineered, or
substitute wood products to the extent such products compete with products
produced by the Company or any member of the UST Group; or
(e) any and all other activities relating to the United States forest
products industry to the extent such activities compete with activities of
the Company or any member of the UST Group.
The non-competition restrictions set forth in this Section 7.1 shall not apply
in the event of a termination of this Agreement pursuant to Section 6.1 or 6.4,
nor, in the event of ▇▇▇▇▇▇▇▇' termination due to ▇▇▇▇▇▇▇▇ becoming Disabled in
accordance with Section 6.3, shall they apply following ▇▇▇▇▇▇▇▇ ceasing to be
Disabled unless the Company offers to re-employ ▇▇▇▇▇▇▇▇ on terms and
conditions at least as favorable as those set forth in this Agreement.
7.2 Confidentiality. ▇▇▇▇▇▇▇▇ acknowledges that in the course of
▇▇▇▇▇▇▇▇' employment by the Company, including as a member of the Board
following employment, if applicable, ▇▇▇▇▇▇▇▇ will be furnished and have access
to certain information concerning the business, financial condition, operations,
assets and liabilities of the Company and the UST Group that is confidential or
proprietary in nature. All such information (irrespective of the form of
communication) is hereinafter collectively referred to as the "Information."
Until the later to occur of (i) the date of termination of ▇▇▇▇▇▇▇▇' employment
hereunder or (ii) the date of ▇▇▇▇▇▇▇▇' resignation or removal from the Board,
and for a period of 12 months thereafter, ▇▇▇▇▇▇▇▇ agrees to keep the
Information confidential and agrees that ▇▇▇▇▇▇▇▇ will use the Information
solely for the purpose of performing ▇▇▇▇▇▇▇▇' duties hereunder or as a member
of the Board or as otherwise authorized by the Company. This Agreement shall be
inoperative as to such portions of the Information which (a) are or become
generally available to the public other than as a result of a disclosure by
▇▇▇▇▇▇▇▇ in violation of this Agreement, (b) become available to ▇▇▇▇▇▇▇▇ on a
non-confidential basis from a source other than the Company or the UST Group
that is not bound by an obligation of confidentiality to such entity or
entities, or (c) are required to be disclosed by an order or decree of a court
or other tribunal of competent jurisdiction, provided the Company is given
prompt notice of, and the opportunity to contest disclosure under, such order or
decree. Upon termination of this Agreement, ▇▇▇▇▇▇▇▇ will return the
Information furnished by the Company or the UST Group and any documents that
contain, reflect, or are based upon, in whole or in part, the Information.
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7.3 Equitable Relief. ▇▇▇▇▇▇▇▇ acknowledges and agrees that it would be
difficult to measure damage to the Company or the UST Group from any breach by
▇▇▇▇▇▇▇▇ of Section 7.1 or 7.2 and that monetary damages would be an inadequate
remedy for any such breach. Accordingly, ▇▇▇▇▇▇▇▇ agrees that if ▇▇▇▇▇▇▇▇ shall
breach Section 7.1 or 7.2, the Company shall be entitled, in addition to all
other remedies it may have at law or in equity, to an injunction or other
appropriate orders or equitable relief to restrain any such breach, without
showing or proving any actual damage sustained by the Company or the UST Group.
▇▇▇▇▇▇▇▇ further agrees to waive any requirement for the securing or posting of
any bond in connection with such remedies.
7.4 ▇▇▇▇▇▇▇▇' Acknowledgment. ▇▇▇▇▇▇▇▇ hereby expressly acknowledges and
agrees that (i) the restrictions and obligations set forth in and imposed by
this Section 7 will not prevent ▇▇▇▇▇▇▇▇ from obtaining gainful employment in
▇▇▇▇▇▇▇▇' field of expertise or cause ▇▇▇▇▇▇▇▇ undue hardship, and (ii) in view
and consideration of the substantial benefits ▇▇▇▇▇▇▇▇ will receive from the
Company pursuant to this Agreement and the Company Agreement, the restrictions
and obligations imposed on ▇▇▇▇▇▇▇▇ under this Section 7 are reasonable and
necessary to protect the legitimate business interests of the Company and its
members and the UST Group.
Section 8. Indemnification
(a) During the Employment Term and thereafter if ▇▇▇▇▇▇▇▇ is a member
of the Board and for a period of six years thereafter, the Company shall cause
▇▇▇▇▇▇▇▇ to be covered by and named as an insured under any policy or contract
of insurance obtained by it to insure its directors and officers against
personal liability for acts or omissions in connection with service as an
officer or director of the Company or service in other capacities at the request
of the Company. The coverage provided to ▇▇▇▇▇▇▇▇ pursuant to this Section 8
shall be of a scope and on terms and conditions at least as favorable as the
coverage (if any) provided to any other officer or director of the Company.
(b) To the maximum extent permitted under applicable law, during the
Employment Term and thereafter if ▇▇▇▇▇▇▇▇ is a member of the Board and for
a period of six years thereafter, the Company shall indemnify ▇▇▇▇▇▇▇▇ against
and hold ▇▇▇▇▇▇▇▇ harmless from any costs, liabilities, losses and exposures to
the fullest extent and on the most favorable terms and conditions that similar
indemnification is offered to any director or officer of the Company.
Section 9. Representations and Warranties
9.1 By ▇▇▇▇▇▇▇▇. ▇▇▇▇▇▇▇▇ represents and warrants to the Company that
(i) ▇▇▇▇▇▇▇▇ is under no contractual or other restriction or obligation which
would prevent the performance of ▇▇▇▇▇▇▇▇' duties hereunder or interfere with
the rights of the Company hereunder and (ii) this Agreement has been duly
executed and delivered by ▇▇▇▇▇▇▇▇, is the legal, valid and binding obligation
of ▇▇▇▇▇▇▇▇, and is enforceable against ▇▇▇▇▇▇▇▇ in accordance with its terms,
except that no representation or warranty is made with respect to the provisions
of Section 7.
9.2 By the Company. The Company represents and warrants to ▇▇▇▇▇▇▇▇ that
(i) it has all requisite limited liability company power and authority to
execute, deliver and perform this Agreement, (ii) all necessary proceedings of
the Company have been duly taken to authorize the
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execution, delivery and performance of this Agreement, and (iii) this Agreement
has been duly authorized, executed and delivered by the Company, is the legal,
valid and binding obligation of the Company, and is enforceable against the
Company in accordance with its terms.
Section 10. Life Insurance
If requested by the Company, ▇▇▇▇▇▇▇▇ shall submit to such physical
examinations by a physician and otherwise take such actions and execute and
deliver such documents as may be reasonably necessary to enable the Company to
obtain life insurance on the life of ▇▇▇▇▇▇▇▇ for the benefit of the Company,
but in no event shall ▇▇▇▇▇▇▇▇' failure to qualify for such coverage, as a
result of the outcome of the medical examination or otherwise, be grounds for a
termination of ▇▇▇▇▇▇▇▇' employment.
Section 11. Notices
Any notice given pursuant to this Agreement shall be in writing and shall
be deemed given on the earlier of the date (i) the notice is personally
delivered to the party to be notified, (ii) that is three days after the notice
is mailed, postage prepaid, certified with return receipt requested, addressed
as follows, or at such other address as a party may from time to time designate
by notice to the other party, (iii) the notice is delivered at the party's
address via courier service, or (iv) the notice is received by fax or
telecopier:
To the Company: U.S. Timberlands Services Company, L.L.C.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ - ▇▇▇▇▇ ▇▇-▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇. ▇▇▇▇▇
Facsimile No: (▇▇▇) ▇▇▇-▇▇▇▇
To ▇▇▇▇▇▇▇▇: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Route 2, Box 2244
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Section 12. General Provisions
12.1 Remedies on Default. In the event either party breaches this
Agreement, the other party shall be entitled to pursue all remedies available at
law or in equity. Except as otherwise provided herein, in the event this
Agreement is breached by either party, the non-breaching party shall not
terminate this Agreement without notice and a reasonable opportunity to cure
such breach.
12.2 Assignment; Binding Effect. This Agreement shall be binding upon and
inure to the benefit of the Company and any successor of the Company, by merger
or otherwise. The parties understand and hereby acknowledge that upon the
consummation of the IPO and related transactions, the obligations of the Company
under this Agreement shall be assumed by New Services. The Company will require
any successor, other than New Services, which is already a party to this
Agreement, by agreement in form and substance reasonably acceptable to ▇▇▇▇▇▇▇▇,
to expressly assume and agree to perform this Agreement in the same manner and
to the same extent that the
9
Company would be required to perform it if no such succession had taken place
and following such assumption all references to the Company herein shall be
deemed to mean such successor, including New Services. Except as provided in the
preceding sentence, this Agreement, and the rights and obligations of the
parties hereunder, are personal and neither this Agreement, nor any right,
benefit, or obligation of either party hereto, shall be subject to voluntary or
involuntary assignment, alienation or transfer, whether by operation of law or
otherwise, without the prior written consent of the other party. Subject to the
foregoing, the provisions of this Agreement shall be binding upon and inure to
the benefit of the parties and their respective heirs, personal representatives,
administrators, successors, and permitted assigns.
12.3 Waiver. Failure of any party at any time to require performance of
any provision of this Agreement shall not limit such party's right to enforce
such provision, nor shall any waiver of any breach of any provision of this
Agreement constitute a waiver of any succeeding breach of such provision or a
waiver of such provision itself. No attempted or purported waiver of any
provision of this Agreement shall be effective unless set forth in writing and
signed by the party to be bound.
12.4 Amendment. This Agreement may not be modified or amended except by
the written agreement of the parties.
12.5 Severability. The agreements and covenants contained in this
Agreement are severable, and in the event any of the agreements and covenants
contained in this Agreement should be held to be invalid by any court or
tribunal of competent jurisdiction, this Agreement shall be interpreted as if
such invalid agreements and covenants were not contained herein; provided,
however, that if in any legal proceeding a court shall hold unenforceable the
covenants contained in Section 7 by reason of their extent or duration or
otherwise, any such covenant shall be reduced in scope to the extent required by
law and enforced in its reduced form.
12.6 Integration. This Agreement contains the entire agreement and
understanding of the parties with respect to the employment of ▇▇▇▇▇▇▇▇ by the
Company and supersedes all prior and contemporaneous agreements (oral or
written) between them with respect to such subject matter.
12.7 Attorneys' Fees. If any legal action or other proceeding is brought
for the enforcement or interpretation of this Agreement, or because of an
alleged dispute or breach in connection with any of the provisions of this
Agreement, if ▇▇▇▇▇▇▇▇ is the successful or prevailing party, ▇▇▇▇▇▇▇▇ shall be
entitled to recover from the Company reasonable attorneys' fees and other costs
incurred by ▇▇▇▇▇▇▇▇ in connection with that action or proceeding, and in any
petition for appeal or review therefrom, in addition to any other relief to
which ▇▇▇▇▇▇▇▇ may be entitled.
12.8 Third Party Beneficiaries. This Agreement does not create, and shall
not be construed as creating, any rights enforceable by any person not a party
to this Agreement.
12.9 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Oregon.
12.10 Survival. In the event of termination of this Agreement by either
party, this Agreement shall become void and there shall be no liability on the
part of ▇▇▇▇▇▇▇▇ or the Company
10
except to the extent such termination results from the breach by a party hereto
of its obligations hereunder (in which case Section 12.1 shall apply); provided
that Sections 6.1, 6.2, 6.3, 6.4, 7, 8, 11, 12.7 and 12.11 shall survive the
termination of this Agreement.
12.11 UST Guaranty. UST hereby irrevocably and unconditionally guarantees
to ▇▇▇▇▇▇▇▇ the payment of all amounts and the performance of all other
obligations due from the Company in accordance with the terms of this Agreement
as and when due without requirement of presentment, demand of payment, protest
or notice of dishonor or nonpayment.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.
The Company: U.S. TIMBERLANDS SERVICES COMPANY, L.L.C.,
a Delaware limited liability company
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇
Title: Managing Director
UST: U.S. TIMBERLANDS COMPANY, L.P.
a Delaware limited partnership
By: New Services, L.L.C., as general partner
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇
Title: Chairman
New Services: NEW SERVICES, L.L.C.
a Delaware limited liability company
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇
Title: Chairman
▇▇▇▇▇▇▇▇: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
11
