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EXHIBIT 10.E.7
PLUM CREEK MANAGEMENT COMPANY, L.P.
MANAGEMENT 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 the "PLUM CREEK
MANAGEMENT COMPANY, L.P. MANAGEMENT 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 bonus in the form of cash and 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 goals of improving current operating
profitability and attaining appreciation in the value of the Units. Cash bonus
payments and the transfer of Units under this Plan will reward participating
executives with incentive compensation and 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 current
and 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
January 1, 1994 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 Unit Portion Account.
(b) "Average Price" of a Unit for any date means the
average price, excluding commissions, paid by the Trustee per Unit
purchased during the 90-day period beginning on such date relating to
the Shadow Units credited to the Participant's Account pursuant to
Section 6.2 or Section 6.3, whichever is applicable. In the event
that the Trustee does not purchase any Units during such 90-day
period, then the "Average Price" of a Unit means the average Market
Price of a Unit during such 90-day period. Subject to Section 10, it
is intended that the Trustee will purchase the Units relating to the
Shadow Units credited to the Participant's Account pursuant to Section
6.2 or Section 6.3, whichever is applicable, as soon as reasonably
practicable following the commencement of such 90-day period.
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(c) "Base Salary" means the regular salary accrued during
the Plan Year, including any salary reduction contributions made to
any plan maintained by the Company or any Related Company pursuant to
Section 125 or Section 401(k) of the Code.
(d) "Beneficiary" means the person or entity determined
to be a Participant's beneficiary pursuant to Section 16.
(e) "Board" means the Board of Directors of PC Advisory
Corp. I.
(f) "Bonus" means the amount of the incentive award
earned under the Plan for a Plan Year as determined by the Committee
pursuant to Section 5.5.
(g) "Bonus Percentage" means the percentage of the
Participant's Base Salary for the Plan Year that may be earned as a
Bonus with respect to the achievement of a goal established as part of
the Participant's Performance Objectives.
(h) "Cash Portion" means that portion of the
Participant's Bonus which shall be paid in cash following the end of
the Plan Year in which it has been earned by the Participant.
(i) "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 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
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 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 described above 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.
(j) "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.
(k) "Code" means the Internal Revenue Code of 1986, as
amended from time to time.
(l) "Committee" means a committee of two or more Board
members appointed by the Board.
(m) "Distribution Date" means the date a Partnership
Distribution is paid to the unitholders.
(n) "Effective Date" means January 1, 1994.
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(o) "ERISA" means the Employee Retirement Income Security
Act of 1974, as amended from time to time.
(p) "Exchange Act" means the Securities Exchange Act of
1934, as amended from time to time.
(q) "Incentive Plans" means the Plan, the Plum Creek
Management Company, L.P. Long-Term 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.
(r) "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.
(s) "Participant" means an executive employee of the
Company selected for participation in the Plan for the Plan Year by
the Committee pursuant to Section 4 or a current or former executive
employee of the Company or a Related Company who was selected for
participation in the Plan in a preceding Plan Year and who has any
rights under the Plan.
(t) "Partnership Distributions" means cash distributions
of the Partnership with respect to the Units, including all ordinary
and extraordinary cash distributions.
(u) "Performance Objectives" means the performance
criterion comprised of quantitative and qualitative goals established
by the Committee with respect to each Participant and utilized by the
Committee in determining the Participant's Bonus, if any, for the Plan
Year.
(v) "Performance Period" means, with respect to the Unit
Portion of a Bonus converted into Shadow Units, the period ending on
the third anniversary of the end of the Plan Year with respect to
which the Bonus was earned.
(w) "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.
(x) "Permissive Retirement" means a Participant's
termination of employment with the Company and any Related Company,
other than by reason of death or Disability, in accordance with any
retirement policy established by the Committee and then in effect or
designated by the Committee in writing as a Permissive Retirement.
(y) "Plan" means the Plum Creek Management Company, L.P.
Management Incentive Plan, as set forth herein and as amended from
time to time.
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(z) "Plan Year" means the Partnership's fiscal year.
(aa) "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.
(ab) "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.
(ac) "Securities Act" means the Securities Act of 1933, as
amended from time to time.
(ad) "Shadow Unit" means the right of a Participant to
receive a Unit to be transferred (if not forfeited) pursuant to the
terms of the Plan upon the expiration of the Performance Period.
(ae) "Trust" means any trust established in connection
with the Plan.
(af) "Trustee" means the trustee of the Trust.
(ag) "Unit Portion" means that portion of the
Participant's Bonus which shall be converted to Shadow Units and
credited to the Participant's Account.
(ah) "Unit Portion Account" means a book account
maintained by the Company with respect to each Bonus earned by a
Participant under the Plan reflecting the aggregate of the number of
Shadow Units to which the Unit Portion of the Bonus was converted
pursuant to Section 6.2 and the number of additional Shadow Units
credited to the Participant for subsequent Partnership Distributions
pursuant to Section 6.3.
(ai) "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.
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
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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.
3.3 Cost. The Plan is maintained by the Company for
administrative convenience. The expense and cost of funding the benefits shall
be borne by the Company. All other costs associated with the Plan, including
the cost of administration, shall be borne by the Partnership.
SECTION 4 - ELIGIBILITY AND PARTICIPATION
4.1 Eligibility. Eligibility for participation in the Plan for
the purpose of earning a Bonus for the Plan Year will be limited to those
senior executive employees who, by the nature and scope of their position, are
materially responsible for the management, growth, and success of the
Partnership. Participation in the Plan for the purpose of earning a Bonus for
each Plan Year shall be determined by the Committee in its sole discretion.
Eligible senior executives selected for participation by the Committee shall be
notified of their selection as soon as practicable.
4.2 Partial Plan Year Participation. The Committee may select an
eligible senior executive to participate for the remaining portion of the Plan
Year following the date the Committee establishes as the effective date for
such Participant's participation in the Plan. In such a case, the
Participant's Bonus for the Plan Year shall be determined by the Committee
based upon the portion of Participant's Base Salary for the Plan Year accrued
on and after the effective date of the Participant's participation in the Plan.
4.3 No Right to Participate. No provision contained in this Plan
may be interpreted or construed to grant, and no action taken by the Committee
will grant, any Participant who was eligible for a Bonus in a previous Plan
Year or who continues to participate because of a Bonus earned with respect to
a previous Plan Year, or any other eligible senior executive at any time, a
right to be selected for participation for a Bonus in a current or future Plan
Year. Nothing contained in this Section 4.3 shall affect any rights any
executive may have pursuant to any separate written agreement.
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SECTION 5 - DETERMINATION OF BONUS
5.1 Performance Objectives. At the beginning of each Plan Year
or, in the case of a senior executive selected for participation during the
Plan Year pursuant to Section 4.2, as soon as practicable after the executive's
selection for participation, the Committee shall establish Performance
Objectives for each Participant participating for the purpose of earning a
Bonus under the Plan for the Plan Year, including quantitative goals and
qualitative goals. Quantitative goals shall be based in whole or in part upon
measurements of the Company's, the Partnership's or a Related Company's
financial or operational performance and may vary in relation to a
Participant's duties or responsibilities. It is expected that quantitative
goals will emphasize operating income, cash flow and free cash flow, or other
quantitative measurements which have considerable bearing upon such financial
measurements and may be significantly influenced by the Participant's
managerial performance. Qualitative goals shall be based upon the achievement
of immediate goals or the accomplishment of tasks assigned to the Participant
which may or may not affect the Company's, the Partnership's or a Related
Company's current financial performance, but are considered to have tactical
significance in the Company's strategic plan to maximize the Partnership's
overall financial performance. The Committee shall communicate to each
Participant the Performance Objectives established for the Participant for the
Plan Year and the Bonus Percentages assigned to each established goal as soon
as practicable.
5.2 Assignment of Bonus Percentages. With respect to each
quantitative goal and each qualitative goal established as part of the
Performance Objectives for a Participant for the Plan Year, the Committee shall
assign a Bonus Percentage that shall be earned by the Participant if the
respective goal is attained. The Committee may provide that a portion of the
Bonus Percentage assigned to a goal may be earned by the Participant if the
respective goal is not completely attained based upon either a schedule
prescribed by the Committee or a determination made by the Committee in its
sole discretion based on the Participant's performance with respect to the
goal. The sum of Bonus Percentages assigned to all goals established as part
of the Participant's Performance Objectives established for the Plan Year shall
not exceed 100%.
5.3 Adjustment of Performance Objectives and Bonus Percentages.
During the Plan Year, the Committee shall have the right to adjust the
Performance Objectives established for a Participant and the Bonus Percentage
assigned to any goal if the Committee determines in its sole discretion that
external changes or other unanticipated business conditions have either
materially affected the desirability or significance of the established goals
or unduly influenced the attainability of the established goals. Quantitative
goals may be adjusted up or down, qualitative goals may be enhanced or
diminished, goals may be eliminated, additional or substitute goals may be
established, and the Bonus Percentage assigned to any goal may be increased or
reduced; provided that after any adjustment made by the Committee pursuant to
this Section 5.3, the sum of the Bonus Percentages assigned to all the goals
comprising a Participant's Performance Objectives for the Plan Year shall not
exceed 100%.
5.4 Determination of Bonus Percentage Earned. As soon as
reasonably practicable after the end of each Plan Year, the Committee shall
determine the aggregate Bonus Percentage earned by each Participant who is
actively employed by the Company or a Related Company on the last day of the
Plan Year or who terminated employment with the Company or a Related Company
during the Plan Year by reason of death, Permanent Disability or Permissive
Retirement. The Committee shall determine the amount of the Bonus Percentage
earned with respect to each quantitative goal and each qualitative goal
established as part of the Participant's Performance Objectives. If the
Committee determines that a goal was not attained because of unanticipated
conditions not within the Participant's control, the Committee
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may in its sole discretion consider the Participant to have earned all or a
portion of the Bonus Percentage assigned such goal based upon the Committee's
assessment of the Participant's performance with respect to such goal.
5.5 Final Bonus Determination. The Bonus of each Participant who
is employed by the Company or Related Company on the last day of the Plan Year
or who terminated employment with the Company or Related Company during the
Plan Year either by reason of death, Permanent Disability or Permissive
Retirement shall be equal to the Participant's Base Salary for the Plan Year
multiplied by the aggregate Bonus Percentage, determined by the Committee
pursuant to Section 5.4. A Participant who is not actively employed with the
Company or a Related Company on the last day of the Plan Year and who did not
terminate employment with the Company or a Related Company during the Plan Year
by reason of death, Permanent Disability, or Permissive Retirement shall not be
entitled to a Bonus for the Plan Year. The Committee, in its sole discretion,
may accelerate the determination pursuant to Section 5.4 and this Section 5.5
of the Bonuses of all Participants in the event a Change in Control occurs
during the Plan Year or the Bonus of any Participant who has terminated
employment during the Plan Year by reason of death, Permanent Disability, or
Permissive Retirement and may then accelerate payment of the Cash Portion or
the Unit Portion of the Bonus or Bonuses so determined pursuant to Section 6.1
or Section 7, respectively.
SECTION 6 - CASH AND UNIT PORTIONS OF BONUS
6.1 Cash and Unit Portions. One-half (50%) of the Bonus
determined with respect to each Participant, referred to as the Cash Portion,
shall be paid in cash following the end of the Plan Year at such time or times
as the Committee shall determine. The Committee, in its sole discretion, may
accelerate any payment to be made either with respect to a Participant who has
terminated employment by reason of death, Permanent Disability, or Permissive
Retirement or in the event a Change in Control occurs. The remaining one-half
(50%) of each Participant's Bonus, referred to as the Unit Portion, shall be
converted into Shadow Units to be credited to the Participant's Unit Portion
Account established with respect to the Bonus earned for the Plan Year. Units
as reflected by such Shadow Units credited to the Participant's Unit Portion
Account shall be transferred to the Participant (if not forfeited pursuant to
Section 6.4) at the time and in the manner provided by Section 7 and Section
11.
6.2 Conversion of Unit Portion into Shadow Units. The Company
shall maintain a Unit Portion Account for each Bonus earned by a Participant to
reflect the Units to which the Participant is entitled with respect to such
Bonus. The Unit Portion of each Participant's Bonus for the Plan Year shall be
converted into Shadow Units to be credited to the Participant's Unit Portion
Account as of the last day of the Plan Year in an amount of Shadow Units equal
to
(a) the amount of the Unit Portion of the Participant's
Bonus, divided by
(b) the Average Price of a Unit for the date the Cash
Portion of the Bonus is paid to the Participant.
6.3 Shadow Units Credited for Subsequent Partnership
Distributions. The purpose of crediting Shadow Units for subsequent
Partnership Distributions is to provide the Participant with an additional
benefit with respect to each Bonus earned under the Plan equal to the value of
the benefit the Participant would have received from Partnership Distributions
if the Participant was the unitholder of the Units reflected by the Shadow
Units credited to the Participant's Unit Portion Account and reinvested the
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Partnership Distributions received in additional Units. On the Distribution
Date of any Partnership Distribution, Shadow Units shall be credited to each
Unit Portion Account maintained with respect to the Participant in an amount
equal to
(a) the product of the Shadow Units credited to the
Participant's Unit Portion Account as of the Distribution Date and the
amount of the Partnership Distribution determined on a per Unit basis,
divided by
(b) the Average Price of a Unit for the Distribution Date.
6.4 Forfeiture of Shadow Units. A Participant shall forfeit any
Shadow Units credited to a Participant's Unit Portion Account and any related
transfer of Units to be made under this Plan if, prior to the expiration of the
Performance Period, the Participant's employment with the Company and any
Related Company is terminated by the employer for Cause. Any Shadow Unit
cancelled in accordance with this Section 6.4 shall, subject to Section 8, be
available again to be credited to a Participant's Unit Portion Account pursuant
to Section 6.2.
SECTION 7 - TRANSFER OF UNITS
Upon the expiration of the Performance Period with respect to the
Shadow Units credited to the Participant's Unit Portion Account attributable to
the Bonus earned by the Participant for a Plan Year, 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 Unit Portion
Account attributable to the Bonus earned by the Participant for such Plan Year,
including any Shadow Units credited to the Participant's Unit Portion Account
for subsequent Partnership Distributions pursuant to Section 6.3, less any
withholding pursuant to Section 14. The Committee, in its sole discretion, may
accelerate any payment to be made either with respect to a Participant who has
terminated employment by reason of death, Permanent Disability or Permissive
Retirement or in the event a Change in Control occurs.
SECTION 8 - DURATION OF PLAN
The Plan shall remain in effect until terminated by the Board.
SECTION 9 - UNITS SUBJECT TO PLAN
The aggregate number of Units available to Participants because of
Bonuses earned under the Plan may not exceed 800,000, subject to the subsequent
grant of previously granted Shadow Units after forfeiture pursuant to Section
6.4 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'
Accounts with respect to Partnership Distributions pursuant to Sections 6.3 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
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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.
(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
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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 expiration of the
Performance Period with respect to Shadow Units attributable to the
Bonus earned by a Participant for any Plan Year, 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 as of
the expiration of the Performance Period 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 Performance Period expires.
(b) The principal purpose of the Unit Portion of a
Participant's Bonus under the Plan is to provide the Participant 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 with respect to the Unit Portion
of any Bonus earned generally be required to remain in the form of
Shadow Units until the expiration of the Performance Period with
respect to the Shadow Units attributable to any Bonus. 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 Unit Portion Account prior to
the expiration of the Performance Period 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 the Performance Period would have
expired with respect to such Shadow Units had the certificates 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. Management 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.
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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 Committee deems appropriate) prior to the
expiration of the respective Performance Period, distribute a cash
amount equal to the Market Price of such Units as of the expiration of
the Performance Period, 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
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Incentive Plans and the number of Shadow Units credited to the
Accounts of Participants 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 and the Shadow Units credited to
the Participant's Account under this Plan 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.
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:
(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
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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.
No amendment or termination shall be made that would impair the rights of any
Participant in 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
Shadow Units credited to the Participant's Account 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 aggregate 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, a number of Units equal to the number of Shadow Units
reflected in the Participant's Account. 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.
SECTION 18 - RIGHTS OF EMPLOYMENT
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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.
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Date
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