BOISE CASCADE OFFICE PRODUCTS CORPORATION
DEFERRED COMPENSATION AND BENEFITS TRUST
THIS AGREEMENT made as of January 30, 1996, by and between
BOISE CASCADE OFFICE PRODUCTS CORPORATION (the "Company") and
AMERICAN NATIONAL BANK AND TRUST COMPANY OF CHICAGO (the
"Trustee");
R E C I T A L S:
WHEREAS, the Company has adopted the nonqualified deferred
compensation and other Plans listed in Appendix A;
WHEREAS, the Company has incurred or expects to incur
liability under the terms of such Plans with respect to the
individuals participating in such Plans;
WHEREAS, the Company wishes to establish a trust pursuant to
this Agreement (the "Trust") and to contribute to the Trust
assets that shall be held therein, subject to the claims of the
Company's creditors in the event of the Company's Insolvency, as
herein defined, until paid to Plan participants and their
beneficiaries in such manner and at such times as specified in
the Plans;
WHEREAS, it is the intention of the parties that this Trust
shall constitute an unfunded arrangement and shall not affect the
status of the Plans as unfunded plans maintained for the purpose
of providing deferred compensation for a select group of
management or highly compensated employees for purposes of
Title I of the Employee Retirement Income Security Act of 1974;
and
WHEREAS, it is the intention of the Company to make
contributions to the Trust to provide itself with a source of
funds to assist it in the meeting of its liabilities under the
Plans;
NOW, THEREFORE, the parties do hereby establish the Trust
and agree that the Trust shall be comprised, held, and disposed
of as follows:
Section 1. Establishment Of Trust.
(a) The Company hereby deposits with Trustee in trust
$1,000, which shall become the principal of the Trust to be held,
administered, and disposed of by Trustee as provided in this
Trust Agreement.
(b) The Trust hereby established is revocable by the
Company; it shall become irrevocable upon a Change in Control, as
defined herein.
(c) The Trust is intended to be a grantor trust, of which
the Company is the grantor, within the meaning of subpart E,
part I, subchapter J, chapter 1, subtitle A of the Internal
Revenue Code of 1986, as amended, and shall be construed
accordingly.
(d) The principal of the Trust, and any earnings thereon,
shall be held separate and apart from other funds of the Company
and shall be used exclusively for the uses and purposes of Plan
participants and general creditors as herein set forth. Plan
participants and their beneficiaries shall have no preferred
claim on, or any beneficial ownership interest in, any assets of
the Trust. Any rights created under the Plans and this Trust
Agreement shall be mere unsecured contractual rights of Plan
participants and their beneficiaries against the Company. Any
assets held by the Trust will be subject to the claims of the
Company's general creditors under federal and state law in the
event of Insolvency, as defined in Section 3(a) herein.
(e) Upon a Potential Change in Control as defined herein,
the Company shall, as soon as possible but in no event longer
than 10 business days following the Potential Change in Control,
make a contribution to the Trust in an amount that is sufficient
to pay each Plan participant or beneficiary the benefits when due
to which Plan participants or their beneficiaries would be
entitled pursuant to the terms of the Plans as of the date on
which the Potential Change in Control occurred (the "Funding
Amount"). Such contribution shall be irrevocable, except as
provided in Section 1(f) below, and shall become irrevocable upon
the occurrence of a Change in Control as defined herein.
(f) In the event the Company delivers the Funding Amount to
the Trustee upon a Potential Change in Control, the corpus of the
Trust less the original $1,000 funding amount shall be returned
to the Company one year after the date of the delivery of the
Funding Amount unless a Change in Control shall have occurred
during such one year period. If another Potential Change in
Control occurs after the Funding Amount has been returned to the
Company as provided in this Section 1(f), the Company shall again
deliver the Funding Amount to the Trustee in accordance with
Section 1(e).
Section 2. Payments to Plan Participants and Their
Beneficiaries.
(a) The Company shall deliver to the Trustee a schedule
(the "Payment Schedule") that indicates the amounts payable in
respect of each Plan participant (and his or her beneficiaries),
that provides a formula or other instructions acceptable to
Trustee for determining the amounts so payable, the form in which
such amount is to be paid (as provided for or available under the
Plans), and the time of commencement for payment of such amounts.
Except as otherwise provided herein, the Trustee shall make
payments to the Plan participants and their beneficiaries in
accordance with such Payment Schedule. The Trustee shall make
provision for the reporting and withholding of any federal,
state, or local taxes that may be required to be withheld with
respect to the payment of benefits pursuant to the terms of the
Plans and shall pay amounts withheld to the appropriate taxing
authorities or determine that such amounts have been reported,
withheld, and paid by the Company.
(b) The entitlement of a Plan participant or his or her
beneficiaries to benefits under the Plans shall be determined by
the Company or such party as it shall designate under the Plans,
and any claim for such benefits shall be considered and reviewed
under the procedures set out in the Plans.
(c) The Company may make payment of benefits directly to
Plan participants or their beneficiaries as they become due under
the terms of the Plans. The Company shall notify the Trustee of
its decision to make payment of benefits directly prior to the
time amounts are payable to participants or their beneficiaries.
In addition, if the principal of the Trust, and any earnings
thereon, are not sufficient to make payments of benefits in
accordance with the terms of the Plans, the Company shall make
the balance of each such payment as it becomes due. The Trustee
shall notify the Company where principal and earnings are not
sufficient to make payments when due. If, at any time and from
time to time after the date of a Change in Control, the Trustee
so notifies the Company that assets of the Trust are not, in the
Trustee's judgment, sufficient to pay benefits under the Plans
when due, the Company will deliver to the Trustee an amount (in
cash or immediately marketable securities) sufficient in the
Trustee's judgment to pay all such benefits under the Plans. The
Trustee may retain the services of a qualified actuary or
actuarial firm to assist in the determination of whether Trust
assets are sufficient to pay benefits when due and in the
determination of the amount to be delivered by the Company to the
Trustee under this section.
Section 3. Trustee Responsibility Regarding Payments to
Trust Beneficiary When the Company Is Insolvent.
(a) The Trustee shall cease payment of benefits to Plan
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, (ii) the Company is subject to a pending
proceeding as a debtor under the United States Bankruptcy Code,
or (iii) the Company is determined to be insolvent by a court of
competent jurisdiction in such matters.
(b) At all times during the continuance of this Trust, as
provided in Section 1(d) hereof, 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.
(1) The Board of Directors 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 Plan participants or their beneficiaries.
(2) 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.
(3) If at any time the Trustee has determined that the
Company is Insolvent, the Trustee shall discontinue payments to
Plan participants or their beneficiaries and shall hold the
assets of the Trust for the benefit of the Company's general
creditors. Nothing in this Trust Agreement shall in any way
diminish any rights of Plan participants or their beneficiaries
to pursue their rights as general creditors of the Company with
respect to benefits due under the Plans or otherwise.
(4) The Trustee shall resume the payment of benefits
to Plan participants or their beneficiaries in accordance with
Section 2 of this Trust Agreement only after the Trustee has
determined that the Company is not Insolvent (or is no longer
Insolvent).
(c) Provided that there are sufficient assets, if the
Trustee discontinues the payment of benefits from the Trust
pursuant to Section 3(b) hereof and subsequently resumes such
payments, the first payment following such discontinuance shall
include the aggregate amount of all payments due to Plan
participants or their beneficiaries under the terms of the Plans
for the period of such discontinuance, less the aggregate amount
of any payments made to Plan participants or their beneficiaries
by the Company in lieu of the payments provided for hereunder
during any such period of discontinuance.
Section 4. Payments to the Company. Except as provided in
Section 3 hereof, after the Trust has become irrevocable, the
Company shall have no right or power to direct the Trustee to
return to the Company or to divert to others any of the Trust
assets before all payment of benefits have been made to Plan
participants and their beneficiaries pursuant to the terms of the
Plans.
Section 5. Investment Authority.
(a) In no event may the Trustee invest in securities
(including stock or rights to acquire stock) or obligations
issued by the Company, other than a de minimis amount held in
common investment vehicles in which the Trustee invests. All
rights associated with assets of the Trust shall be exercised by
the Trustee or the person designated by the Trustee, and shall in
no event be exercisable by or rest with Plan participants.
(b) The Company shall have the right at any time, and from
time to time in its sole discretion, to substitute assets of
equal fair market value for any asset held by the Trust. This
right is exercisable by the Company in a nonfiduciary capacity
without the approval or consent of any person in a fiduciary
capacity.
Section 6. Disposition of Income. During the term of this
Trust, all income received by the Trust, net of expenses and
taxes, shall be accumulated and reinvested.
Section 7. Accounting by the Trustee. The Trustee shall
keep accurate and detailed records of all investments, receipts,
disbursements, and all other transactions required to be made,
including such specific records as shall reasonably be requested
by the Company. Within 30 days following the close of each
calendar year and within 30 days after the removal or resignation
of the Trustee, the Trustee shall deliver to the Company a
written account of its administration of the Trust during such
year or during the period from the close of the last preceding
year to the date of such removal or resignation, setting forth
all investments, receipts, disbursements, and other transactions
effected by it, including a description of all securities and
investments purchased and sold with the cost or net proceeds of
such purchases or sales (accrued interest paid or receivable
being shown separately), and showing all cash, securities, and
other property held in the Trust at the end of such year or as of
the date of such removal or resignation, as the case may be.
Section 8. Responsibility of the Trustee.
(a) The Trustee shall act with the care, skill, prudence,
and diligence under the circumstances then prevailing that a
prudent person acting in like capacity and familiar with such
matters would use in the conduct of an enterprise of a like
character and with like aims, provided, however, that the Trustee
shall incur no liability to any person for any action taken
pursuant to a direction, request, or approval given by the
Company which is contemplated by, and in conformity with, the
terms of the Plans or this Trust and is given in writing by the
Company. In the event of a dispute between the Company and a
party, the Trustee may apply to a court of competent jurisdiction
to resolve the dispute.
(b) If the Trustee undertakes or defends any litigation
arising in connection with this Trust, the Company agrees to
indemnify the Trustee against the Trustee's costs, expenses, and
liabilities (including, without limitation, attorneys' fees and
expenses) relating thereto and to be primarily liable for such
payments. If the Company does not pay such costs, expenses, and
liabilities in a reasonably timely manner, the Trustee may obtain
payment from the Trust.
(c) The Trustee may consult with legal counsel (who may
also be counsel for the Company generally) with respect to any of
its duties or obligations hereunder.
(d) The Trustee may hire agents, accountants, actuaries,
investment advisors, financial consultants, or other
professionals to assist it in performing any of its duties or
obligations hereunder.
(e) The Trustee shall have, without exclusion, all powers
conferred on the Trustee by applicable law, unless expressly
provided otherwise herein, provided, however, that if an
insurance policy is held as an asset of the Trust, the Trustee
shall have no power to name a beneficiary of the policy other
than the Trust, to assign the policy (as distinct from conversion
of the policy to a different form) other than to a successor
Trustee, or to loan to any person the proceeds of any borrowing
against such policy.
(f) Notwithstanding the provisions of Section 8(e) above,
the Trustee may loan to the Company the proceeds of any borrowing
against an insurance policy held as an asset of the Trust.
(g) Notwithstanding any powers granted to the Trustee
pursuant to this Trust Agreement or to applicable law, the
Trustee shall not have any power that could give this Trust the
objective of carrying on a business and dividing the gains
therefrom, within the meaning of section 301.7701-2 of the
Procedure and Administrative Regulations promulgated pursuant to
the Internal Revenue Code.
Section 9. Compensation and Expenses of the Trustee. The
Company shall pay all administrative fees and expenses of the
Trust. If not so paid, the fees and expenses shall be paid from
the Trust.
Section 10. Resignation and Removal of the Trustee.
(a) The Trustee may resign at any time by written notice to
the Company, which shall be effective 60 days after receipt of
such notice unless the Company and the Trustee agree otherwise.
(b) The Trustee may be removed by the Company on 30 days'
notice or upon shorter notice accepted by the Trustee.
(c) Upon a Change in Control, as defined herein, the
Trustee may not be removed by the Company for five years
following the Change in Control.
(d) If the Trustee resigns within five years of a Change in
Control, as defined herein, the Trustee shall select a successor
Trustee in accordance with the provisions of Section 11(b) hereof
prior to the effective date of the Trustee's resignation or
removal.
(e) Upon resignation or removal of the Trustee and
appointment of a successor Trustee, all assets shall subsequently
be transferred to the successor Trustee. The transfer shall be
completed within 90 days after receipt of notice of resignation,
removal, or transfer, unless the Company extends the time limit.
(f) If the Trustee resigns or is removed, a successor shall
be appointed, in accordance with Section 11 hereof, by the
effective date of resignation or removal under paragraphs (a)
or (b) of this section. If no such appointment has been made,
the Trustee may apply to a court of competent jurisdiction for
appointment of a successor or for instructions. All expenses of
the Trustee in connection with the proceeding shall be allowed as
administrative expenses of the Trust.
Section 11. Appointment of Successor.
(a) If the Trustee resigns or is removed in accordance with
Section 10(a) or (b) hereof, the Company may appoint any third
party, such as a bank trust department or other party that may be
granted corporate trustee powers under state law, as a successor
to replace the Trustee upon resignation or removal. The
appointment shall be effective when accepted in writing by the
new Trustee, who shall have all of the rights and powers of the
former Trustee, including ownership rights in the Trust assets.
The former Trustee shall execute any instrument necessary or
reasonably requested by the Company or the successor Trustee to
evidence the transfer.
(b) If the Trustee resigns pursuant to the provisions of
Section 10(d) hereof and selects a successor Trustee, the Trustee
may appoint any third party such as a bank trust department or
other party that may be granted corporate trustee powers under
state law. The appointment of a successor Trustee shall be
effective when accepted in writing by the new Trustee. The new
Trustee shall have all the rights and powers of the former
Trustee, including ownership rights in Trust assets. The former
Trustee shall execute any instrument necessary or reasonably
requested by the successor Trustee to evidence the transfer.
(c) The successor Trustee need not examine the records and
acts of any prior Trustee and may retain or dispose of existing
Trust assets, subject to Sections 7 and 8 hereof. The successor
Trustee shall not be responsible for, and the Company shall
indemnify and defend the successor Trustee from, any claim or
liability resulting from any action or inaction of any prior
Trustee or from any other past event or any condition existing at
the time it becomes successor Trustee.
Section 12. Amendment or Termination.
(a) This Trust Agreement may be amended by a written
instrument executed by the Trustee and the Company.
Notwithstanding the foregoing, no such amendment shall conflict
with the terms of the Plans or shall make the Trust revocable or
otherwise adversely affect the rights of any participants and
beneficiaries under the Plans, after the Trust has become
irrevocable in accordance with Section 1(b) hereof.
(b) The Trust shall not terminate until the date on which
Plan participants and their beneficiaries are no longer entitled
to benefits pursuant to the terms of the Plans unless sooner
revoked in accordance with Section 1(b) hereof. Upon termination
of the Trust, any assets remaining in the Trust shall be returned
to the Company.
(c) Upon written approval of participants or beneficiaries
entitled to payment of benefits pursuant to the terms of the
Plans, the Company may terminate this Trust prior to the time all
benefit payments under the Plans have been made. All assets in
the Trust at termination shall be returned to the Company.
Section 13. Miscellaneous.
(a) Any provision of this Trust Agreement prohibited by law
shall be ineffective to the extent of any such prohibition,
without invalidating the remaining provisions hereof.
(b) Benefits payable to Plan participants and their
beneficiaries under this Trust Agreement may not be anticipated,
assigned (either at law or in equity), alienated, pledged,
encumbered, or subjected to attachment, garnishment, levy,
execution, or other legal or equitable process.
(c) This Trust Agreement shall be governed by and construed
in accordance with the laws of the state of Delaware.
(d) For purposes of this Trust, "Potential Change in
Control" and "Change in Control" shall have the following
meanings:
A "Change in Control" shall be deemed to have occurred
if, at any time when Boise Cascade Corporation ("Boise Cascade")
owns more than 50% of the outstanding voting securities of the
Company, the event set forth in any one of the following
paragraphs shall have occurred:
(i) Any Person is or becomes the Beneficial Owner,
directly or indirectly, of securities of Boise Cascade (not
including in the securities beneficially owned by such Person any
securities acquired directly from Boise Cascade or its affiliates
other than in connection with the acquisition by Boise Cascade or
its affiliates of a business) representing 20% or more of either
the then outstanding shares of common stock of Boise Cascade or
the combined voting power of Boise Cascade's then outstanding
securities; or
(ii) The following individuals cease for any reason to
constitute at least 66 2/3% of the number of directors of Boise
Cascade then serving: individuals who, on the date hereof,
constitute the board of directors of Boise Cascade and any new
director (other than a director whose initial assumption of
office is in connection with an actual or threatened election
contest, including but not limited to a consent solicitation,
relating to the election of directors of Boise Cascade) whose
appointment or election by the board of directors of Boise
Cascade or nomination for election by Boise Cascade's
stockholders was approved by a vote of at least two-thirds (2/3)
of the directors of Boise Cascade then still in office who either
were directors of Boise Cascade on the date hereof or whose
appointment, election, or nomination for election was previously
so approved (the "Continuing Directors"); or
(iii) The stockholders of Boise Cascade approve a
merger or consolidation of Boise Cascade with any other
corporation or approve the issuance of voting securities of Boise
Cascade in connection with a merger or consolidation of Boise
Cascade (or any direct or indirect subsidiary of Boise Cascade)
pursuant to applicable stock exchange requirements, other than
(i) a merger or consolidation which would result in the voting
securities of Boise Cascade outstanding immediately prior to such
merger or consolidation continuing to represent (either by
remaining outstanding or by being converted into voting
securities of the surviving entity or any parent thereof), in
combination with the ownership of any trustee or other fiduciary
holding securities under an employee benefit plan of Boise
Cascade, at least 66 2/3% of the combined voting power of the
voting securities of Boise Cascade or such surviving entity or
any parent thereof outstanding immediately after such merger or
consolidation, or (ii) a merger or consolidation effected to
implement a recapitalization of Boise Cascade (or similar
transaction) in which no Person is or becomes the Beneficial
Owner, directly or indirectly, of securities of Boise Cascade
(not including in the securities Beneficially Owned by such
Person any securities acquired directly from Boise Cascade or its
subsidiaries other than in connection with the acquisition by
Boise Cascade or its subsidiaries of a business) representing 20%
or more of either the then outstanding shares of common stock of
Boise Cascade or the combined voting power of Boise Cascade's
then outstanding securities; or
(iv) The stockholders of Boise Cascade approve a plan
of complete liquidation or dissolution of Boise Cascade or an
agreement for the sale or disposition by Boise Cascade of all or
substantially all of Boise Cascade's assets, other than a sale or
disposition by Boise Cascade of all or substantially all of Boise
Cascade's assets to an entity, at least 66 2/3% of the combined
voting power of the voting securities of which are owned by
Persons in substantially the same proportions as their ownership
of Boise Cascade immediately prior to such sale.
Notwithstanding the foregoing, any event or transaction
which would otherwise constitute a Change in Control (a
"Transaction") shall not constitute a Change in Control if, in
connection with the Transaction, a Participant participates as an
equity investor in the acquiring entity or any of its affiliates
(the "Acquiror"). For purposes of the preceding sentence, a
Participant shall not be deemed to have participated as an equity
investor in the Acquiror by virtue of (1) obtaining beneficial
ownership of any equity interest in the Acquiror as a result of
the grant to a Participant of an incentive compensation award
under one or more incentive plans of the Acquiror (including but
not limited to the conversion in connection with the Transaction
of incentive compensation awards of the Company or Boise Cascade
into incentive compensation awards of the Acquiror), on terms and
conditions substantially equivalent to those applicable to other
executives of the Company or Boise Cascade immediately prior to
the Transaction, after taking into account normal differences
attributable to job responsibilities, title, and the like;
(2) obtaining beneficial ownership of any equity interest in the
Acquiror on terms and conditions substantially equivalent to
those obtained in the Transaction by all other stockholders of
Boise Cascade; or (3) having obtained an incidental equity
ownership in the Acquiror prior to and not in anticipation of the
Transaction.
A "Potential Change in Control" shall be deemed to have
occurred if, at any time when Boise Cascade owns more than 50% of
the outstanding voting securities of the Company: (1) Boise
Cascade enters into an agreement, the consummation of which would
result in the occurrence of a Change in Control of Boise Cascade;
(2) Boise Cascade or any Person publicly announces an intention
to take or to consider taking actions which if consummated would
constitute a Change in Control of Boise Cascade; (3) any Person
becomes the Beneficial Owner, directly or indirectly, of
securities of Boise Cascade representing 9.5% or more of either
the then outstanding shares of common stock of Boise Cascade or
the combined voting power of Boise Cascade's then outstanding
securities; or (4) the Board adopts a resolution to the effect
that a Potential Change in Control has occurred.
For purposes of this section, "Beneficial Owner" shall
have the meaning set forth in Rule 13d-3 under the Securities
Exchange Act of 1934, as amended (the "Exchange Act").
For purposes of this section, "Person" shall have the
meaning given in Section 3(a)(9) of the Exchange Act, as modified
and used in Sections 13(d) and 14(d) thereof, except that such
term shall not include (1) Boise Cascade or any of its
subsidiaries, (2) a trustee or other fiduciary holding securities
under an employee benefit plan of Boise Cascade or any of its
subsidiaries, (3) an underwriter temporarily holding securities
pursuant to an offering of such securities, or (4) a corporation
owned, directly or indirectly, by the stockholders of Boise
Cascade in substantially the same proportions as their ownership
of stock of Boise Cascade.
Section 14. Effective Date. The effective date of this
Trust Agreement shall be January 30, 1996.
IN WITNESS WHEREOF, the parties have executed this Agreement
as of the date first written above.
BOISE CASCADE OFFICE PRODUCTS
CORPORATION
By: ______________________________
Carol B. Moerdyk
Title: Senior Vice President and
Chief Financial Officer and
Treasurer
AMERICAN NATIONAL BANK AND TRUST
COMPANY OF CHICAGO
By: ______________________________
Title: ___________________________
Appendix A
1. Boise Cascade Office Products Corporation Split-Dollar Life
Insurance Plan
2. Boise Cascade Office Products Corporation Key Executive
Performance Plan
3. Boise Cascade Office Products Corporation Early Retirement
Plan for Executive Officers
4. Boise Cascade Office Products Corporation Supplemental
Pension Plan
5. Executive Officer Severance Agreements
6. Boise Cascade Office Products Corporation Key Executive
Deferred Compensation Plan
7. Boise Cascade Office Products Corporation 1995 Executive
Officer Deferred Compensation Plan
8. Boise Cascade Office Products Corporation 1995 Key Executive
Deferred Compensation Plan