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EXHIBIT 10.E.6
PLUM CREEK MANAGEMENT COMPANY, L.P.
LONG-TERM INCENTIVE PLAN
SECTION 1 - ESTABLISHMENT, PURPOSE, AND EFFECTIVE DATE
1.1 Establishment of Plan. Plum Creek Management Company, L.P., a
Delaware limited partnership (the "Company") hereby establishes this 28th day
of January, 1994 the "PLUM CREEK MANAGEMENT COMPANY, L.P. LONG-TERM INCENTIVE
PLAN" (the "Plan") for the benefit of certain executives of the Company.
Subject to the terms and conditions provided herein, the Plan provides for
rewarding participating executives with a transfer of Units (as defined herein)
representing an ownership interest in the Plum Creek Timber Company, L.P. (the
"Partnership").
1.2 Purpose. The purpose of the Plan is to help retain the
services of participating executives, to align their interests with the
interests of the partners of the Partnership, and to encourage participating
executives to increase operating profitability, allocate capital wisely, and
generate cash with the ultimate goal of attaining appreciation in the value of
the Units. Transfers of Units under this Plan will reward participating
executives with ownership interests in the Partnership for which the Company
serves as general partner and to which it provides management support through
the efforts of the participating executives of the Company. This Plan is
intended to be an unfunded "bonus program" within the meaning of the United
States Code of Federal Regulations Section 2510.3-2(c) and is maintained
primarily for the purpose of providing long-term incentives to a select group
of management or highly compensated employees.
1.3 Effective Date of Plan. The Plan shall be effective as of
October 1, 1993 upon the approval of the Board of Directors of PC Advisory
Corp. I (the "Board"), the general partner of PC Advisory Partners I, L.P.,
which serves as a general partner of the Company, which serves as the general
partner of the Partnership.
SECTION 2 - DEFINITIONS
2.1 Definitions. When used in the Plan, the following terms shall
have the meanings specified below:
(a) "Account" means a Participant's Reinvested
Distribution Account and Unit Appreciation Account.
(b) "Base Unit Value" means, with respect to Unit
Appreciation Rights granted as of the Effective Date, the amount of
$20 and, with respect to Unit Appreciation Rights granted after the
Effective Date, the amount established by the Committee pursuant to
Section 5.1(b).
(c) "Beneficiary" means the person or entity determined
to be a Participant's beneficiary pursuant to Section 16.
(d) "Board" means the Board of Directors of PC Advisory
Corp. I.
(e) "Cause" means, when used in the phrase "for Cause" or
"without Cause" in connection with a termination of employment, that
the termination is evidenced by a resolution
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adopted in good faith by at least two-third (2/3rds) of the members
of the Board who are not employees of the Company or the Partnership,
that the Participant
(i) willfully and continually failed
substantially to perform the Participant's duties with the
Company or a Related Company (other than a failure resulting
from the Participant's incapacity due to physical or mental
illness) which failure continued for a period of at least 30
days after a written notice of demand for substantial
performance has been delivered to the Participant specifying
the manner in which the Participant has failed substantially
to perform the Participant's duties, or
(ii) willfully engaged in conduct which is
demonstrably and materially injurious to the Company or a
Related Company, monetarily or otherwise;
provided no termination of the Participant's employment shall be for
Cause set forth in clause (ii) above until there shall have been
delivered to the Participant a copy of a written notice setting forth
that the Participant was guilty of the conduct set forth in clause
(ii) and specifying the particulars thereof in detail, and the
Participant shall have been provided an opportunity to be heard by the
Board (with the assistance of the Participant's counsel if the
Participant so desires). No act, nor failure to act, on the
Participant's part, shall be considered "willful" unless the
Participant acted, or failed to act, with an absence of good faith and
without a reasonable belief that such action or failure to act was in
the best interest of the Company or a Related Company.
Notwithstanding anything contained in this Plan to the contrary, no
failure to perform by the Participant after notice of termination is
given to the Participant shall constitute Cause.
(f) "Change in Control" shall be deemed to occur at such
time as Mr. John H. Scully and Mr. William E. Oberndorf no longer
control, either individually or in the aggregate, the Company.
(g) "Code" means the Internal Revenue Code of 1986, as
amended from time to time.
(h) "Committee" means a committee of two or more Board
members appointed by the Board.
(i) "Distribution Date" means the date a Partnership
Distribution is paid to the unitholders.
(j) "Effective Date" means October 1, 1993.
(k) "ERISA" means the Employee Retirement Income Security
Act of 1974, as amended from time to time.
(l) "Exchange Act" means the Securities Exchange Act of
1934, as amended from time to time.
(m) "Good Reason" means the occurrence of any of the
following events or conditions:
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(i) a change in the Participant's status or
responsibilities (including reporting responsibilities) which
represents a substantial reduction of the status or
responsibilities as in effect immediately prior thereto; the
assignment to the Participant of any duties or
responsibilities which are inconsistent with such status or
responsibilities; or any removal of the Participant from or
failure to reappoint or reelect the Participant to a position
of responsibility, except in connection with the termination
of the Participant's employment for Cause, Permanent
Disability, as a result of death, or by the Participant for
other than Good Reason;
(ii) a reduction in the Participant's annual base
salary;
(iii) the failure by the Company or a Related Company
to provide the Participant with benefits substantially equal
(in terms of aggregate benefit levels and reward
opportunities) to those provided under the employee benefit
plans, programs and practices as in effect on the Effective
Date;
(iv) any material breach by the Company of any
provision of this Plan; and
(v) any purported termination of the Participant's
employment for Cause by the Company or a Related Company, as
the case may be, which does not otherwise comply with the
terms of this Plan.
Good Reason should not be inferred from a mere change in title or
position or because the exigencies of competition, changes in business
climate and opportunities presented in the marketplace may require a
Participant to undertake new roles and tasks or to travel or move in
order to best further the interests of the Company or any Related
Company.
(n) "Incentive Plans" means the Plan, the Plum Creek
Management Company, L.P. Management Incentive Plan, the Plum Creek
Management Company, L.P. Key Employee Long-Term Incentive Plan and any
other incentive plan maintained by the Company and designated by the
Committee as an Incentive Plan.
(o) "Market Price" means with respect to a Unit, the
closing reported sales price, regular way, per Unit on the New York
Stock Exchange Composite Tape, or if Units are not then traded on such
stock exchange, the principal national securities exchange on which
Units are then traded, or if not so traded, the highest bid quotation
on the over-the-counter market as reported by the National Quotations
Bureau, or any similar organization, on any relevant date, or if not
so reported, as determined by the Committee in a manner consistently
applied.
(p) "Participant" means an executive employee of the
Company designated as a Participant pursuant to Section 4.1 or
Section 4.2 or a former executive employee of the Company or a
Related Company who has any rights under the Plan.
(q) "Partnership Distributions" means cash distributions
of the Partnership with respect to the Units, including all ordinary
and extraordinary cash distributions.
(r) "Performance Period" means the period beginning on
the Effective Date and ending on December 31, 1998.
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(s) "Permanent Disability" means a condition that results
in the Participant's being totally disabled, whether due to physical
or mental causes, to the extent that the Participant is prevented from
engaging in further employment with the Company or any Related Company
and the Participant's condition is likely to be permanent and
continuous during the remainder of the Participant's life, as
determined by the Committee, upon the basis of medical evidence.
(t) "Plan" means the Plum Creek Management Company, L.P.
Long-Term Incentive Plan, as set forth herein and as amended from time
to time.
(u) "Realization Event" means the first to occur of (i)
the expiration of the Performance Period, (ii) the occurrence of a
Change in Control, (iii) the Participant's termination of employment
with the Company and any Related Company as a result of the
Participant's Permanent Disability, (iv) the termination of the
Participant's employment with the Company and any Related Company
either voluntarily by the Participant for Good Reason or involuntarily
by the employer without Cause, or (v) the Participant's death.
(v) "Reinvested Distribution Account" means a book
account maintained by the Company with respect to each Participant
reflecting the number of Shadow Units credited to the Participant with
respect to Partnership Distributions.
(w) "Related Companies" means the Partnership, Plum Creek
Manufacturing, L.P., and Plum Creek Marketing, Inc., but not the
Company, and any other entity owned, directly or indirectly, now or in
the future, by the Partnership to the extent of 50% or more.
(x) "Revocation Event" means a determination by the Board
in its sole discretion that any of the following has occurred or is
likely to occur:
(i) a determination by the Department of Labor or
a court of competent jurisdiction that the assets of the Trust
are subject to Part 4 of Subtitle B of Title I of ERISA or
(ii) a determination by the Internal Revenue
Service or a court of competent jurisdiction that any amount
deposited in the Trust is taxable to any Participant or
Beneficiary prior to the distribution to the Participant or
Beneficiary of such amount.
(y) "Securities Act" means the Securities Act of 1933, as
amended from time to time.
(z) "Shadow Unit" means the right of a Participant to
receive Units to be transferred (if not forfeited) pursuant to the
terms of the Plan upon the occurrence of a Realization Event.
(aa) "Termination of Employment" means ceasing to be an
Employee of either the Company or a Related Company for any reason.
(ab) "Trust" means any trust established in connection
with the Plan.
(ac) "Trustee" means the trustee of the Trust.
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(ad) "Unit Appreciation Account" means a book account
maintained by the Company with respect to each Participant reflecting
the number of Shadow Units credited to the Participant with respect to
the attainment of one or more of the Unit Value targets established
pursuant to Section 5.2.
(ae) "Unit Appreciation Right" means the right of the
Participant to be credited pursuant to Section 5.3 with Shadow Units
upon the attainment of Unit Value targets.
(af) "Units" means the depositary units representing
limited partner interests in the Partnership, or such other
substituted units as may replace them pursuant to Section 13 hereof.
(ag) "Unit Value" on any date means, with respect to a
Unit Appreciation Right, the arithmetic sum of the Market Price of a
Unit on such date and the value of all Partnership Distributions paid
on or after the later of January 1, 1994 and the date of grant of the
Unit Appreciation Right and on or before the date on which the Unit
Value is determined. For the purpose of determining Unit Value, the
Market Price on any day that Units are not traded shall be the Market
Price on the first preceding day that Units were traded.
Any terms defined in the Partnership Agreement have the same meaning in this
Plan as in the Partnership Agreement.
SECTION 3 - ADMINISTRATION
3.1 Administration. The Committee shall be responsible for the
administration of the Plan. The Committee, by majority action thereof, is
authorized to interpret and construe any provision of the Plan, to determine
eligibility and benefits under the Plan, to prescribe, amend, and rescind rules
and regulations relating to the Plan, to adopt such forms as it may deem
appropriate for the administration of the Plan, to provide for conditions and
assurances deemed necessary or advisable to protect the interests of the
Company, and to make all other determinations necessary or advisable for the
administration of the Plan, but only to the extent not contrary to the express
provisions of the Plan. Determinations, interpretations, or other actions made
or taken by the Committee under the Plan shall be final and binding for all
purposes and upon all persons. Committee decisions shall be made by a majority
of its members present at a meeting (which meeting may be held by telephone) at
which a quorum is present. Any decision reduced to writing and signed by all
members of the Committee shall be fully effective as if it had been made at a
meeting duly held.
3.2 Indemnification of Committee. The Company and the Partnership
shall indemnify each member of the Committee (which, for purposes of this
Section 3.2, includes any employee of the Company or a Related Company to whom
the Committee has delegated any responsibility in the administration of the
Plan) against any and all claims, losses, damages, expenses, including counsel
fees incurred by the Committee, and any liability, including any amounts paid
in settlement with the Company's approval, arising from the member's or the
Committee's determination, action or failure to act, except when the same is
judicially determined to be attributable to the gross negligence or willful
misconduct of such member. The right of indemnity described in the preceding
sentence shall be conditioned upon (i) the timely receipt of notice by the
Company of any claim asserted against the Committee member, which notice, in
the event of a lawsuit, shall be given within ten (10) days after receipt by
the Committee member, and (ii) the timely receipt by the Company of an offer
from the Committee member of an opportunity to participate in the settlement or
defense of such claim.
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3.3 Cost. Although the Plan is maintained by the Company for
administrative convenience, all expenses and costs associated with the Plan,
including the cost of administration and the cost of funding the benefits to be
provided by the Plan, shall be borne by the Partnership. All economic benefits
and burdens will accrue to and be incurred by the Partnership, and the Company
shall have no opportunity to profit from the operation of the Plan.
SECTION 4 - ELIGIBILITY AND PARTICIPATION
4.1 Participants on Effective Date. The Participants in the Plan
on the Effective Date shall be those executives designated in Section 5.1(a).
4.2 Participants Designated by the Committee. The Committee may,
in its sole discretion, designate one or more of the senior executives of the
Company to be a Participant in the Plan effective as of such date as the
Committee in its sole discretion shall specify.
SECTION 5 - ALLOCATION OF UNIT APPRECIATION RIGHTS AND CREDITING OF
SHADOW UNITS
5.1 Unit Appreciation Rights. A grant of a Unit Appreciation
Right entitles the Participant to receive a benefit in an amount determined by
reference to the appreciation in the value of a Unit over the Base Unit Value
assigned to the Unit Appreciation Right and in the form of Units to be
transferred to the Participant (if not forfeited pursuant to Section 6)
pursuant to the terms of the Plan. The right to receive Units with respect to
Unit Appreciation Rights granted under the Plan in accordance with the terms
and conditions of the Plan is reflected by Shadow Units credited to the
Participant's Account.
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(a) Original Grants. Pursuant to the Committee's
determination, Unit Appreciation Rights shall be granted as of the
Effective Date to the Participants listed below in the amount
indicated below:
Unit Appreciation
Participant Rights Granted
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Rick R. Holley 525,000
Charles P. Grenier 375,000
Robert E. Manne 375,000
James A. Kraft 225,000
Pursuant to the Committee's determination, the Base Unit Value with
respect to Unit Appreciation Rights granted pursuant to this Section
5.1(a) shall be $20.00. The Unit Appreciation Rights granted pursuant
to this Section 5.1(a) shall be conditioned upon the Committee's
written determination prior to June 30, 1994 that such grants have
been made in compliance with Rule 16b-3 promulgated under Section
16(b) of the Exchange Act or any comparable or successor rule or
regulatory requirement.
(b) Subsequent Grants. Unit Appreciation Rights may be
granted to Participants by the Committee, in its sole discretion,
provided that the total of all Unit Appreciation Rights granted
pursuant to this Section 5.1 and not cancelled pursuant to Section 6
shall not exceed 2,000,000. Although the Committee may grant
additional Unit Appreciation Rights pursuant to this Section 5.1(b) to
a Participant who received a grant on the Effective Date pursuant to
Section 5.1(a), it is not presently expected or intended that the
Committee will make such a grant. The Base Unit Value with respect to
Unit Appreciation Rights granted pursuant to this Section 5.1(b) shall
be established by the Committee in its sole discretion at the time of
the grant.
5.2 Unit Appreciation Rights Triggered by Unit Value Targets. On
the later of January 1, 1994 or when the Unit Value equals or exceeds, in turn,
one of the value targets established with respect to Unit Appreciation Rights
pursuant to this Section 5.2 for 75 calendar days during any 90 consecutive
calendar day period beginning on the first trading day the Unit Value equals or
exceeds the applicable value target, a percentage of the Unit Appreciation
Rights granted shall be triggered.
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(a) Value Targets for Original Unit Appreciation Right
Grants. The following table sets forth five Unit Value targets for
all original grants of Unit Appreciation Rights pursuant to Section
5.1(a) and the percentage of such Unit Appreciation Rights triggered
with respect to that Unit Value target:
Percentage of
Unit Unit Appreciation
Target Value Target Rights Triggered
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First $23.00 10%
Second $26.45 15%
Third $30.42 20%
Fourth $34.98 25%
Fifth $40.23 30%
(b) Value Targets for Subsequent Unit Appreciation Right
Grants. The Committee in its sole discretion shall establish at the
time of the grant of Unit Appreciation Rights pursuant to Section
5.1(b) one or more Unit Value targets and the percentage of such Unit
Appreciation Rights triggered with respect to each Unit Value target.
5.3 Shadow Units Credited to Unit Appreciation Account. The
Company shall establish a Unit Appreciation Account for each Participant
granted Unit Appreciation Rights pursuant to Section 5.1. The Participant's
Unit Appreciation Account shall reflect the number of Shadow Units credited to
the Participant as a result of Unit Appreciation Rights triggered by the
attainment of Unit Value targets. The number of Shadow Units credited to the
Participant's Unit Appreciation Account upon the attainment of a Unit Value
target with respect to Unit Appreciation Rights granted to the Participant
shall be determined by
(a) multiplying (i) the excess of the dollar amount of
the fifth Unit Value target over the Base Unit Value for the Unit
Appreciation Rights granted to the Participant by (ii) the number of
Unit Appreciation Rights granted to the Participant which are
triggered by the Unit Value target attained, and
(b) dividing the product obtained in (a) above by the
dollar amount of the fifth Unit Value target for the Unit Appreciation
Rights granted to the Participant.
If a Participant has been granted Unit Appreciation Rights pursuant to more
than one grant, the number of Shadow Units determined pursuant to this Section
5.3 shall be determined and credited separately with respect to each grant of
Unit Appreciation Rights. In the case of Unit Appreciation Rights granted by
the Committee pursuant to Section 5.1(b), the dollar amount of the highest Unit
Value target established for the Unit Appreciation Rights by the Committee
pursuant to Section 5.2(b) shall be substituted for the fifth Unit Value target
in applying Section 5.3(a)(i) and (b) to determine the number of Shadow Units
in the Participant's Unit Appreciation Account.
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5.4 Shadow Units Credited to Reinvested Distribution Account. The
Company shall establish a Reinvested Distribution Account for each Participant
who has Shadow Units credited to his Account under the Plan. The purpose of
the Reinvested Distribution Account is to provide the Participant with an
additional benefit under the Plan equal to the value of the benefit the
Participant would receive from Partnership Distributions if the Participant was
the unitholder of the Units which are reflected in the form of Shadow Units
credited to the Participant's Account. On the Distribution Date of any
Partnership Distribution, Shadow Units shall be credited to the Participant's
Reinvested Distribution Account in an amount equal to
(a) the product of the Shadow Units credited to the
Participant's Account as of the Distribution Date and the amount of
the Partnership Distribution determined on a per Unit basis, divided
by
(b) the Market Price of a Unit on the Distribution Date.
5.5 Examples. Examples of calculations with respect to
Participants' Accounts pursuant to the rules provided by this Section 5 are set
forth in Appendix A.
SECTION 6 - CANCELLATIONS AND FORFEITURES
6.1 Cancellation of Unit Appreciation Rights. The Unit
Appreciation Rights granted to a Participant shall be cancelled upon the
occurrence of a Realization Event or a forfeiture pursuant to Section 6.2 with
respect to the Participant. Upon the cancellation of a grant of Unit
Appreciation Rights, the right of a Participant to have Shadow Units credited
to his Account with respect to such Unit Appreciation Rights upon the
attainment of Unit Value targets not previously attained shall be forfeited;
provided the Committee, in its sole discretion, may provide (although it is not
presently expected or intended that the Committee will exercise such authority)
that all or a portion of the Unit Appreciation Rights granted to a Participant
shall not be cancelled upon the occurrence of a Realization Event described in
Section 2.1 (u) and that the Participant shall continue to be entitled to have
all or a portion of the Shadow Units credited to the Participant's Account
pursuant to Section 5.3 and 5.4 and shall continue to participate in the Plan
in accordance with the provisions of the Plan subject to such additional terms
and conditions as the Committee, in its sole discretion, may require. Any Unit
Appreciation Rights cancelled in accordance with this Section 6.1 shall,
subject to Section 8, be available again to be used in connection with a
subsequent grant pursuant to Section 5.1(b) at any time prior to the end of the
Performance Period.
6.2 Forfeiture of Shadow Units. A Participant shall forfeit any
Shadow Units credited to the Participant's Account and any related transfer of
Units to be made under this Plan if, prior to the occurrence of a Realization
Event, the Participant's employment with the Company and any Related Company is
terminated either by the employer for Cause or by the Participant without Good
Reason.
SECTION 7 - TRANSFER OF UNITS
Upon the occurrence of a Realization Event with respect to the
Participant, the Company shall transfer or cause to be transferred to the
Participant a number of Units equal to the number of whole Shadow Units then
credited to the Participant's Account, including any Shadow Units credited to
the Participant's Reinvested Distribution Account for subsequent Partnership
Distributions pursuant to Section 5.4, less any withholding pursuant to Section
14.
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SECTION 8 - DURATION OF PLAN
Subject to Section 15 and Section 17, the Plan shall remain in effect
until December 31, 1998.
SECTION 9 - UNITS SUBJECT TO PLAN
Unit Appreciation Rights shall be granted under the Plan with respect
to a maximum of 2,000,000 Units, subject to the subsequent grant of previously
granted Unit Appreciation Rights after cancellation pursuant to Section 6.1 and
subject to any adjustment that may be made in connection with an event
described in Section 13. The number of Units transferred under the Plan shall
be subject to increase by the number of Shadow Units credited to Participants'
Reinvested Distribution Accounts and shall also be subject to any adjustment
that may be made in connection with an event described in Section 13.
SECTION 10 - FUNDING OF THE PLAN
Although the Company may cause Units that are subject to be
transferred pursuant to the terms of the Plan or are otherwise reserved and
other funds reserved for use under the Plan and other Incentive Plans to be
held under a grantor trust agreement, the Plan is unfunded. Benefits under the
Plan shall be paid from the general assets of the Company. A Trust, which
shall be intended to be a "grantor trust" within the meaning of section 671 of
the Code, shall be established pursuant to a trust agreement, to assist the
Company in meeting its obligations under the Incentive Plans. Such trust
agreement shall provide that the Trust may invest in Units. Nothing contained
in this Plan and no action taken pursuant to the provisions of this Plan shall
create or be construed to create a trust of any kind, or a fiduciary
relationship between the Company, the Partnership, the Board (or any of its
members), or the Committee (or any of its members) and any Participant, any
Beneficiary, or any other person. Although the Company may establish an
accounting reserve with respect to future payments under the Plan, no reserve
or set aside amounts shall imply any rights of any Participant therein. Any
reserve or set aside shall be fully subject to the claims of the Company's
creditors to the same extent as the general assets of the Company. To the
extent that any person acquires a right to receive Units from the Company under
this Plan, such right shall be no greater than the right of any unsecured
general creditor of the Company. Nothing contained in this Plan shall be
construed to give any Participant an ownership interest in, or the right to
receive distributions from the Partnership with respect to any Shadow Units
credited to the Participant's Account or any Units subject to a transfer
related to such Shadow Units until such Units have been transferred to the
Participant pursuant to the terms of the Plan.
The trust agreement creating the Trust shall contain procedures
substantially to the following effect which may be revised to the extent deemed
desirable by the Company for the purpose of ensuring that Participants will not
be in constructive receipt of income or incur an economic benefit for federal
income tax purposes because of the adoption or maintenance of the Trust:
(a) The Trustee shall cease payment of benefits to
Participants and their Beneficiaries if the Company is Insolvent. The
Company shall be considered "Insolvent" for purposes of this trust
agreement if (i) the Company is unable to pay its debts as they become
due, or (ii) the Company is subject to a pending proceeding as a
debtor under the United States Bankruptcy Code.
(b) At all times during the continuance of this Trust,
the principal and income of the Trust shall be subject to claims of
general creditors of the Company under federal and state law as set
forth below.
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(c) The Board and the Chief Executive Officer of the
Company shall have the duty to inform the Trustee in writing of the
Company's Insolvency. If a person claiming to be a creditor of the
Company alleges in writing to the Trustee that the Company has become
Insolvent, the Trustee shall determine whether the Company is
Insolvent and, pending such determination, the Trustee shall
discontinue payment of benefits to Participants or their
Beneficiaries.
(d) Unless the Trustee has actual knowledge of the
Company's Insolvency, or has received notice from the Company or a
person claiming to be a creditor alleging that the Company is
Insolvent, the Trustee shall have no duty to inquire whether the
Company is Insolvent. The Trustee may in all events rely on such
evidence concerning the Company's solvency as may be furnished to the
Trustee and that provides the Trustee with a reasonable basis for
making a determination concerning the Company's solvency.
(e) If at any time the Trustee has determined that the
Company is Insolvent, the Trustee shall discontinue payments to
Participants or their Beneficiaries and shall hold the assets of the
Trust for the benefit of the Company's general creditors. Nothing in
the trust agreement shall in any way diminish any rights of
Participants or their Beneficiaries to pursue their rights as general
creditors of the Company with respect to benefits due under the
Incentive Plans or otherwise.
(f) The Trustee shall resume the payment of benefits to
Participants or their Beneficiaries in accordance with the provisions
of the trust agreement only after the Trustee has determined that the
Company is not Insolvent (or is no longer Insolvent).
(g) Provided that there are sufficient assets, if the
Trustee discontinues the payment of benefits from the Trust pursuant
to subsection (e) and subsequently resumes such payments, the first
payment following such discontinuance shall include the aggregate
amount of all payments due to Participants or their Beneficiaries
under the terms of the Incentive Plans for the period of such
discontinuance, less the aggregate amount of any payments made to
Incentive Plan participants or their beneficiaries by the Company in
lieu of the payments provided for hereunder during any such period of
discontinuance.
SECTION 11 - TRANSFERS OF UNITS AND PAYMENTS UNDER THE PLAN
(a) Within 30 business days after the occurrence of a
Realization Event, the Company shall deliver or cause to be delivered
to the Participant certificates for a number of Units equal to the
whole number of such Shadow Units credited to such Participant's
Account as of the Realization Event and cash with respect to any
fractional Shadow Unit credited to such Participant's Account in an
amount equal to the product of such fraction and the Market Price of a
Unit on the date the Realization Event occurs.
(b) The Plan's principal purpose is to provide
Participants with a continuing long-term investment in the
Partnership. In order to accomplish that principal purpose, it is
imperative that a Participant's rights under the Plan generally be
required to remain in the form of Shadow Units credited to the
Participant's Account until the occurrence of a Realization Event with
respect to the Participant. Accordingly, in the event that a court of
competent jurisdiction finally determines that the Company is
obligated to distribute to a Participant, Beneficiary or any other
person certificates for any Units reflecting Shadow Units credited to
a Participant's Account prior to the
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occurrence of a Realization Event with respect to the Participant or
the Committee determines the distribution of such certificates is
appropriate, the certificates so distributed to such Participant,
Beneficiary or other person shall be restricted as to transferability
until the date that a Realization Event would have occurred with
respect to the Participant had they not been distributed to the
Participant, Beneficiary or other person and remained subject to the
Plan, and each such Unit certificate shall bear the following legend:
The transferability of this certificate and the Units
represented hereby are subject to the restrictions, terms and
conditions (including forfeiture and restrictions against
transfer) applicable to the Shadow Units to which the Units
represented by this certificate relate, all as contained in
the Plum Creek Management Company, L.P. Long-Term Incentive
Plan. A copy of the Plan is on file in the office of the Plum
Creek Management Company; 999 Third Avenue, Suite 2300;
Seattle, Washington 98104.
(c) To further promote and ensure the accomplishment of
the Plan's principal purpose of providing Participants with a
continuing long-term investment in the Partnership, each Participant
will generally be required to retain until Termination of Employment
at least fifty percent (50%) of the after-tax benefit provided under
the Plan as reflected by the Shadow Units credited to the
Participant's Account in a long-term investment in the Partnership in
the form of Units transferred to the Participant pursuant to this
Plan. Accordingly, a percentage of the Units transferred pursuant to
this Plan shall be restricted as to transferability until the
Participant's Termination of Employment equal to fifty percent (50%)
of the excess of one hundred percent (100%) over the highest marginal
combined federal and applicable state individual income tax rate, and
the certificates for such Units shall bear such legend as the
Committee shall in its sole discretion deem appropriate to reflect
such restriction on transferability. The Committee may in its sole
discretion modify or choose not to impose the requirement of this
Section 11(c) at any time with respect to one or more Participants or
with respect to one or more grants of Unit Appreciation Rights as it
may deem appropriate.
SECTION 12 - SECURITIES MATTERS
(a) Subject to Section 11, the Partnership shall use its
best efforts to assure that any securities distributed to Participants
hereunder are marketable at the time of distribution, including, to
the extent required under applicable law, effecting the registration
pursuant to the Securities Act of any Units to be distributed
hereunder or effecting similar compliance under any state laws.
Notwithstanding anything herein to the contrary, the Partnership shall
not be obligated to cause to be issued or delivered any certificates
evidencing Units awarded pursuant to the Plan unless and until the
Partnership is advised by its counsel that the issuance and delivery
of such certificates is in compliance with all applicable laws,
regulations of governmental authority and the requirements of the New
York Stock Exchange and any other securities exchange on which Units
are traded. The Committee may require, as a condition of the issuance
and delivery of certificates evidencing Units pursuant to the terms
hereof, that the recipient of such Units make such covenants,
agreements and representations, and that such certificates bear such
legends, as the Committee, in its sole discretion, deems necessary or
desirable.
(b) Without limitation on the Committee's powers pursuant
to this Section 12, to the extent required by Rule 16b-3 promulgated
under Section 16(b) of the Exchange Act or by any comparable or
successor exemption under which the Committee believes it is
appropriate for the Plan to qualify, the Committee may (i) restrict a
Participant's ability to sell Units distributed to such Participant
pursuant to this Plan until the expiration of 6 months (or such other
period as the Committee deems appropriate) after the date as of which
the Shadow Units relating thereto were credited to the Participant's
Account, (ii) in lieu of distributing Units with respect to Shadow
Units that were credited to a Participant's Account within 6 months
(or such other period as the
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13
Committee deems appropriate) after the date as of which the Shadow
Units relating thereto were credited to the Participant's Account,
(ii) in lieu of distributing Units with respect to Shadow Units that
were credited to a Participant's Account within 6 months (or such
other period as the Committee deems appropriate) prior to the
respective Realization Event, distribute a cash amount equal to the
Market Price of such Units as of the Realization Event, or (iii)
impose such other conditions on the exercise of any election under
the Plan or in connection with any distribution under the Plan as
the Committee deems appropriate.
SECTION 13 - ADJUSTMENT OF ACCOUNTS IN CERTAIN EVENTS
(a) Unless the Committee otherwise determines, a
Participant's Account shall be adjusted to reflect any securities,
cash and other property received with respect to Units equal in number
to the Shadow Units credited to such Participant's Account as a result
of any Unit distribution or split, recapitalization, extraordinary
distribution, merger, consolidation, combination or exchange of Units
or similar change or any other event that the Committee, in its sole
discretion, deems appropriate. The purpose of this adjustment is to
treat Participants as if they were unitholders of Units with respect
to the number of Shadow Units credited to their Accounts. However,
the Committee may convert any securities, cash or other property that
would have been received in respect of Units into an equivalent number
of Shadow Units to be credited to the Participant's Account, or may
provide that any security received in respect of Units shall be
substituted for Units under the Plan.
(b) In the event of any change in the number of Units
outstanding by reason of any Unit distribution or split,
recapitalization, extraordinary dividend, merger, consolidation,
combination or exchange of Units or similar change or any other event
that the Committee, in its sole discretion, deems appropriate, the
maximum aggregate number of Units subject to the Incentive Plans, the
number of Unit Appreciation Rights allocated under this Plan, the
number of Shadow Units credited to the Accounts of Participants, and
the amount of any target established under Section 5.2 shall be
appropriately adjusted by the Committee. In the event of any change
in the number of Units outstanding by reason of any other event or
transaction, the Committee may, but need not, make such adjustments in
the number and class of Units subject to the Incentive Plans, the
terms of Unit Appreciation Rights created and allocated under this
Plan and the Shadow Units credited to Participants' Accounts as the
Committee may deem appropriate.
(c) A Participant shall have no rights as a result of any
Unit distribution or split, recapitalization, extraordinary
distribution, merger, consolidation, combination or exchange of Units
or similar change, except as may be determined by the Committee
pursuant to this Section 13.
(d) The grants of Unit Appreciation Rights under Section
5.1(a) pursuant to the Committee's determination are based upon the
total Units outstanding on January 1, 1994, and no adjustment shall be
determined by the Committee pursuant to this Section 13 on account of
any Unit split or other transaction with respect to Units occurring
prior to January 1, 1994.
SECTION 14 - PAYROLL AND WITHHOLDING TAXES
All federal, state, local and other withholding tax requirements, if
any, attributable to a distribution shall be met pursuant to the following
procedures:
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14
(a) The Company and Related Companies shall have the
right to withhold from any cash amounts payable to a Participant
(including salary, bonus or any other amounts payable from the Company
or any Related Company to the Participant) an amount sufficient to
satisfy such federal, state, local and other withholding tax
requirements, prior to the delivery of any certificate or certificates
for such Units or other payments pursuant to the Plan.
(b) The Company or Related Company shall have the right
to require Participants to remit to the Company or Related Company in
cash an amount sufficient to satisfy such federal, state, local and
other withholding tax requirements, prior to the delivery of any
certificate or certificates for such Units or other payments pursuant
to the Plan.
(c) At the election of the Participant, to the extent
permitted by the Committee, the Participant shall deliver, or the
Company or Related Company (or, if a distribution is to be made from
the Trust, the Trustee) shall withhold, a number of such Units, the
Market Price of which on the date the Units are to be distributed to
the Participant is determined by the Committee to be sufficient to
satisfy the minimum federal, state, local and other withholding tax
requirements under applicable law.
(d) If a Participant is subject to Section 16(b) of the
Exchange Act, the Committee may prescribe such requirements or
limitations on the Participant's ability to elect the withholding
options contained in Section 14(c) as may be required by Rule 16b-3
promulgated under Section 16(b) of the Exchange Act or by any
comparable or successor exemption.
SECTION 15 - TERMINATION AND AMENDMENT
The Plan may be terminated with respect to any or all Participants at
any time by the Board. Subject to Section 11 hereof, in order to meet the
benefit obligations under the Plan upon such termination, the Company shall
deliver or cause to be delivered to each Participant with respect to whom the
Plan has been terminated a certificate for a number of Units equal to the whole
number of Shadow Units credited to such Participant's Account as of the date
the Plan was terminated and cash with respect to any fractional Shadow Units
credited to such Participant's Account, in an amount equal to the product of
such fraction and the Market Price of a Unit as of the date the Plan was
terminated. The Plan may be amended by the Board from time to time in any
respect; provided that if the Committee, in its sole discretion, deems it
appropriate or advisable to comply with Rule 16b-3 or any comparable or
successor rule or regulatory requirement, the approval of security holders
shall be necessary to adopt any amendment to the extent that the adoption of
such amendment without such approval would cause the Plan to no longer comply
with Rule 16b-3 or any comparable or successor rule or regulatory requirement;
and provided further that Section 5 of the Plan with respect to grants made as
of the Effective Date shall not be amended more than once every six months,
other than to comport with changes in the Code, ERISA, or other rules
thereunder. No amendment or termination shall be made that would impair the
rights of any Participant in any Unit Appreciation Right theretofore granted,
any Shadow Unit theretofore credited or any Unit theretofore transferred,
without such Participant's prior written consent; provided that the Company may
amend the Plan and the Trust from time to time in such a manner as may be
necessary to avoid having the trust agreement pursuant to which the Trust is
created, the Incentive Plans or the Trust being subject to ERISA and to avoid
the current taxation of the assets held in the trusts established in connection
with the Incentive Plans to Participants. Neither a Participant's incurring
any income tax liability nor the loss of an investment opportunity as a result
of the termination of the Plan shall be considered an impairment of the rights
of a Participant.
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SECTION 16 - BENEFICIARIES, PERMITTED TRANSFEREES, AND OTHER PAYEES
16.1 Designation of Beneficiary. Each Participant shall have the
right to designate in writing from time to time a Beneficiary by filing a
written notice of such designation with the Committee. A Participant's
designation of a Beneficiary may be revoked by filing with the Committee an
instrument of revocation or a later designation. Any designation or revocation
shall be effective when received by the Committee. In the event of the death
of a Participant, any payment required to be made hereunder to such Participant
shall be made to such Participant's Beneficiary. Unless the Participant's
Beneficiary designation provides otherwise, no person shall be entitled to
benefits upon the death of the Participant unless such person survives the
Participant. If the Beneficiary designated by a Participant does not survive
the Participant or if the Participant has not made a valid Beneficiary
designation, the Participant's Beneficiary shall be the Participant's estate.
No payment shall be made after the death of a Participant with respect to the
Participant's Account, unless the Committee shall have been furnished with such
evidence as the Committee may deem necessary to establish the validity of the
payment.
16.2 Nontransferability. Except as provided in Section 16.1, no
Unit Appreciation Rights allocated to Participants under the Plan, no Shadow
Units credited to the Participant's Accounts under the Plan, no Units subject
to transfer that have not yet been transferred to Participants pursuant to the
Plan, no interest in any trust that may hold Units for the purpose of meeting
the Company's obligations under the Incentive Plans, and no other interest or
right of a Participant under the Plan may be sold, transferred, pledged,
assigned, or otherwise alienated or hypothecated (except by will or by the laws
of descent and distribution), or in any manner be liable for or subject to the
debts, contracts, liabilities, engagements or torts of a Participant or
Beneficiary entitled thereto, or be subject to any lien, directly or
indirectly, by operation of law or otherwise, including execution, levy,
garnishment, attachment, and bankruptcy.
16.3 Incapacity of Participant or Beneficiary. If the Committee
finds that any Participant or Beneficiary to whom a payment is payable under
the Plan is unable to care for his or her affairs because of illness or
accident or is under a legal disability, any payment due (unless a prior claim
therefore shall have been made by a duly appointed legal representative), may
in the sole discretion of the Committee, be paid to the spouse, child, parent
or brother or sister of such Participant or Beneficiary. Any such payment
shall be a complete discharge of the obligations of the Company under the
provisions of the Plan.
SECTION 17 - EFFECT OF REVOCATION EVENT
Upon the occurrence of a Revocation Event, the Board may, in its sole
discretion, elect to terminate the Plan, the Trust, or any Participant's
Account. The Company shall, in its sole discretion, (a) pay to each
Participant whose Account is terminated, as soon as practicable after the date
of such termination, a lump sum in cash equal to the Market Price of a Unit
multiplied by the number of Shadow Units reflected in each Participant's
Account as of the date of such termination or (b) distribute to each
Participant whose Account is terminated, as soon as practicable after the date
of such termination, that number of Units that would have been distributable to
such Participant under the Plan upon the occurrence of a Realization Event with
respect to the Participant. If it is finally determined in a proceeding, which
the Company either controls or was offered the right to control and declines,
that the Participant has an interest in the Trust that is taxable to the
Participant notwithstanding any termination of such Participant's Account, the
Company shall pay or distribute the Participant's interest (whether or not the
Board has previously elected to terminate the Plan, the Trust or the
Participant's Account) in accordance with either (a) or (b) of the preceding
sentence.
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SECTION 18 - RIGHTS OF EMPLOYMENT
Nothing in this Plan shall interfere with or limit in any way the
right of the Company or any Related Company to terminate any Participant's
employment at any time, nor confer upon any Participant any right to continue
in the employ of the Company or any Related Company.
SECTION 19 - REQUIREMENTS OF LAW AND GOVERNING LAW
19.1 Requirements of Law. The transfer of Units under the Plan
shall be subject to all applicable laws, rules, and regulations, and to such
approvals by any governmental agencies or national securities exchanges as may
be required.
19.2 Governing Law. The Plan and all agreements under the Plan
shall be construed in accordance with and governed by the laws of the State of
Washington.
PLUM CREEK MANAGEMENT COMPANY, L.P.
___________________________________
___________________________________
Date
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APPENDIX A - EXAMPLES
1. If the Unit Value for 75 of the 90 calendar days during the period
beginning on January 31, 1994 and ending on May 1, 1994 is greater than or
equal to $23.00, then the first value target with respect to the Unit
Appreciation Rights granted to the initial Participants would be attained.
Assume that the 75th day that the Unit Value exceeds $23.00 is April 24, 1994,
then the number of Shadow Units in the Unit Appreciation Accounts of the
initial Participants determined as of April 24, 1994 would be calculated as
follows:
Divided
Participant Maximum Unit _ Base Unit x by x =
Value Target Value Total Max. Percentage Shadow Units in
= UARs Value Units Unit Appreciation
Maximum Target Triggered Account
Spread in Unit Value
Rick R. Holley $40.23 - $20 = $20.23 525,000 $40.23 10% 26,400.07
Charles P. Grenier $40.23 - $20 = $20.23 375,000 $40.23 10% 18,857.20
Robert E. Manne $40.23 - $20 = $20.23 375,000 $40.23 10% 18,857.20
James A. Kraft $40.23 - $20 = $20.23 225,000 $40.23 10% 11,314.32
2. Assume quarterly distributions of $.35 are paid on the last day of the
second month following each calendar quarter. No Shadow Units were
credited to any Participant's Reinvested Distribution Account with respect to
the February 28, 1994 distribution, as no Shadow Units were yet credited to any
Participant's Account on that date. Assume that the Market Price of a Unit on
May 31 and August 31, 1994, is $24 and $27, respectively, when the first and
second quarter dividends are paid. Shadow Units are credited to the
Reinvested Distribution Accounts of the initial Participants with respect to
the distribution on May 31, 1994 calculated as follows:
Divided
PARTICIPANT SHADOW UNITS CREDITED x by =
TO PARTICIPANT'S UNIT DISTRIBUTION MARKET SHADOW UNITS CREDITED TO
APPRECIATION ACCOUNT AMOUNT PRICE PARTICIPANT'S REINVESTED
DISTRIBUTION ACCOUNT
Rick R. Holley 26,400.07 $.35 $24 385.00
Charles P. Grenier 18,857.20 $.35 $24 275.00
Robert E. Manne 18,857.20 $.35 $24 275.00
James A. Kraft 11,314.32 $.35 $24 165.00
18
3. Additional Shadow Units are credited to Participants' Reinvested
Distribution Accounts with respect to the distribution on August 31, 1994
calculated as follows:
DIVIDED
PARTICIPANT SHADOW UNITS CREDITED TO UNIT X BY =
APPRECIATION ACCOUNT AND DISTRIBUTION MARKET ADDITIONAL SHADOW UNITS
REINVESTED DISTRIBUTION AMOUNT PRICE CREDITED TO REINVESTED
ACCOUNT DISTRIBUTION ACCOUNT
Rick R. Holley 26,400.07 + 385.00 = 26,785.07 $.35 $27 347.21
Charles P. Grenier 18,857.20 + 275.00 = 19,132.20 $.35 $27 248.01
Robert E. Manne 18,857.20 + 275.00 = 19,132.20 $.35 $27 248.01
James A. Kraft 11,314.32 + 165.00 = 11,479.32 $.35 $27 148.81
4. If the Unit Value for 75 of the 90 calendar days during the period
beginning on August 18, 1994 and ending on November 16, 1994 is greater than or
equal to $26.45, then the second value target with respect to Unit Appreciation
Rights granted to the initial Participants in the Plan would be attained.
Assume that the 75th day that the Unit Value exceeds $26.45 is November 9,
1994, then the number of additional Shadow Units credited to the Unit
Appreciation Accounts of each initial Participant and the aggregate Shadow
Units in the Unit Appreciation Accounts of each initial Participant as of
November 9, 1994 are calculated as follows:
DIVIDED
PARTICIPANT MAX. SPREAD X BY X = AGGREGATE SHADOW UNITS
IN UNIT TOTAL MAX. PERCENTAGE ADDITIONAL IN UNIT APPRECIATION
VALUE1 UARs VALUE UNITS SHADOW UNITS ACCOUNT
TARGET TRIGGERED IN UNIT
APPRECIATION
ACCOUNT
Rick R. Holley $20.23 525,000 $40.23 15% 39,600.11 26,400.07 + 39,600.11 = 66,000.18
Charles P. Grenier $20.23 375,00 $40.23 15% 28,285.79 18,857.20 + 28,285.79 = 47,142.99
Robert E. Manne $20.23 375,00 $40.23 15% 28,285.79 18,857.20 + 28,285.79 = 47,142.99
James A. Kraft $20.23 225,00 $40.23 15% 16,971.48 11,314.32 + 16,971.48 = 28,285.80
________________________
1 See Paragraph 1 for complete calculation.
2
19
5. After the foregoing events, the Accounts of the initial Participants in the
Plan as of November 9, 1994 would be as follows:
PARTICIPANT AGGREGATE SHADOW UNITS CREDITED + =
TO REINVESTED DISTRIBUTIONS AGGREGATE AGGREGATE
ACCOUNT SHADOW UNITS IN UNIT SHADOW UNITS
(MAY 31 AND AUGUST 31 CREDITS) APPRECIATION ACCOUNT
Rick R. Holley 385.00 + 347.21 = 732.21 66,000.18 66,732.39
Charles P. Grenier 275.00 + 248.01 = 523.01 47,142.99 47,666.00
Robert E. Manne 275.00 + 248.01 = 523.01 47,142.99 47,666.00
James A. Kraft 165.00 + 148.81 = 313.81 28,285.80 28,599.61
6. If the Unit Value for 75 of the 90 calendar days during a 90 consecutive
calendar day period is greater than or equal to $30.42, then the third value
target with respect to Unit Appreciation Rights granted to the initial
Participants in the Plan would be attained. The number of additional Shadow
Units credited to the Unit Appreciation Accounts of each initial Participant
and the aggregate Shadow Units in the Unit Appreciation Accounts of each
initial Participant, determined as of the 75th day that the Unit Value exceeds
$30.42, are calculated as follows:
DIVIDED
PARTICIPANT MAX. X BY X = AGGREGATE SHADOW
SPREAD TOTAL MAX. PERCENTAGE ADDITIONAL UNITS IN UNIT
IN UNIT UARs VALUE UNITS SHADOW APPRECIATION ACCOUNT
VALUE(2) TARGET TRIGGERED UNITS IN
UNIT
APPRECIATION
ACCOUNT
Rick R. Holley $20.23 525,00 $40.23 20% 52,800.15 66,000.18 + 52,800.15 = 118,800.33
Charles P. Grenier $20.23 375,00 $40.23 20% 37,714.39 47,142.99 + 37,714.39 = 84,857.38
Robert E. Manne $20.23 375,00 $40.23 20% 37,714.39 47,142.99 + 37,714.39 = 84,857.38
James A. Kraft $20.23 225,00 $40.23 20% 22,628.64 28,285.80 + 22,628.64 = 50,914.44
________________________
2 See Paragraph 1 for complete calculation.
3
20
7. If the Unit Value for 75 of the 90 calendar days during a 90 consecutive
calendar day period is greater than or equal to $34.98, then the fourth value
target with respect to Unit Appreciation Rights granted to the initial
Participants in the Plan would be attained. The number of additional Shadow
Units credited to the Unit Appreciation Accounts of each initial Participant
and the aggregate Shadow Units in the Unit Appreciation Accounts of each
initial Participant, determined as of the 75th day that the Unit Value exceeds
$34.98, are calculated as follows:
DIVIDED
PARTICIPANT MAX. X BY X = ()AGGREGATE SHADOW
SPREAD TOTAL MAX. PERCENTAGE ADDITIONAL UNITS IN UNIT
IN UNIT UARs VALUE UNITS SHADOW APPRECIATION ACCOUNT
VALUE(3) TARGET TRIGGERED UNITS IN
UNIT
APPRECIATION
ACCOUNT
Rick R. Holley $20.23 525,000 $40.23 25% 66,000.19 118,800.33 + 66,000.19 = 184,800.52
Charles P. Grenier $20.23 375,000 $40.23 25% 47,142.99 84,857.38 + 47,142.99 = 132,000.37
Robert E. Manne $20.23 375,000 $40.23 25% 47,142.99 84,857.38 + 47,142.99 = 132,000.37
James A. Kraft $20.23 225,000 $40.23 25% 28,285.79 50,914.44 + 28,285.79 = 79,200.23
8. If the Unit Value for 75 of the 90 calendar days during a 90 consecutive
calendar day period is greater than or equal to $40.23, then the fifth and
final value target with respect to Unit Appreciation Rights granted to the
initial Participants in the Plan would be attained. The number of additional
Shadow Units credited to the Unit Appreciation Accounts of each initial
Participant and the aggregate Shadow Units in the Unit Appreciation Accounts of
each initial Participant, determined as of the 75th day that the Unit Value
exceeds $40.23, are calculated as follows:
DIVIDED
PARTICIPANT MAX. X BY X = AGGREGATE SHADOW
SPREAD TOTAL MAX. PERCENTAGE ADDITIONAL UNITS IN UNIT
IN UNIT UARs VALUE UNITS SHADOW APPRECIATION ACCOUNT
VALUE(3) TARGET TRIGGERED UNITS IN
UNIT
APPRECIATION
ACCOUNT
Rick R. Holley $20.23 525,000 $40.23 30% 79,200.22 184,800.52 + 79,200.22 = 264,000.74
Charles P. Grenier $20.23 375,000 $40.23 30% 56,571.59 132,000.37 + 56,571.59 = 188,571.96
Robert E. Manne $20.23 375,000 $40.23 30% 56,571.59 132,000.37 + 56,571.59 = 188,571.96
James A. Kraft $20.23 225,000 $40.23 30% 33,942.95 79,200.23 + 33,942.95 = 113,143.18
________________________
3 See Paragraph 1 for complete calculation.
4