Supplemental Early Retirement Plan

Exhibit 10.38


BOISE PAPER HOLDINGS, L.L.C.


SUPPLEMENTAL EARLY RETIREMENT PLAN

FOR CERTAIN ELECTED OFFICERS


(Effective February 22, 2008)


BOISE PAPER HOLDINGS, L.L.C.

SUPPLEMENTAL EARLY RETIREMENT PLAN

FOR CERTAIN ELECTED OFFICERS


ARTICLE I - PURPOSE OF THE PLAN


The purpose of the Boise Paper Holdings, L.L.C. Supplemental Early Retirement Plan (the " Plan" ) is to facilitate the orderly succession of Elected Officers with continuity of management by providing additional Early Retirement Benefits for the Elected Officers.


ARTICLE II - DEFINITIONS


2.1 " Board ." The term Board shall mean the Board of Directors of Boise.


2.2 " Boise." The term Boise shall mean Boise Inc., ultimate parent company of Boise Paper Holdings, L.L.C.


2.3 " Change in Control ." A Change in Control shall be deemed to have occurred if:


(a) Any Person is or becomes the Beneficial Owner, directly or indirectly, of securities of Boise representing 35% or more of either the then outstanding shares of common stock of Boise or the combined voting power of Boise' s then outstanding securities; provided, however, if such Person acquires securities directly from Boise, such securities shall not be included unless such Person acquires additional securities which, when added to the securities acquired directly from Boise, exceed 35% of Boise' s then outstanding shares of common stock or the combined voting power of Boise' s then outstanding securities, and provided further that any acquisition of securities by any Person in connection with a transaction described in Section 2.3(c)(i) shall not be deemed to be a Change in Control; or


(b) During any 24-month period, the following individuals cease for any reason to constitute at least a majority of the number of directors then serving: individuals who, on the effective date hereof, constitute the Board 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) whose appointment or election by the Board or nomination for election by Boise' s stockholders was approved by a vote of at least 2/3rds of the directors then still in office who either were directors on the effective date hereof or whose appointment, election, or nomination for election was previously so approved (the " Continuing Directors" ); or


(c) The consummation of a merger or consolidation of Boise with any other corporation other than (i) a merger or consolidation which would result in both (a) Continuing Directors continuing to constitute at least a majority of the number of directors of the combined entity immediately following consummation of such merger or consolidation, and (b) the voting securities of Boise 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) more than 50% of the combined voting power of the voting securities of Boise 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 (or similar transaction) in which no Person is or becomes the Beneficial Owner, directly or indirectly, of securities of Boise representing 35% or more of either the then outstanding shares of common stock of Boise or the combined voting power of Boise' s then outstanding securities; provided that securities acquired directly from Boise shall not be included unless the Person acquires additional securities which, when added to the securities acquired directly from Boise, exceed 35% of Boise' s then outstanding shares of common stock or the combined voting power of Boise' s then outstanding securities; and provided further that any acquisition of securities by any Person in connection with a transaction described in Section 2.3(c)(i) shall not be deemed to be a Change in Control; or


(d) The Shareholders of Boise approve a plan of complete liquidation or dissolution of Boise or the consummation of an agreement for the sale or disposition by Boise of all or substantially all of Boise' s assets, other than a sale or disposition by Boise of all or substantially all of Boise' s assets to an entity, more than 50% 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 immediately prior to such sale.


For purposes of this Section, " Beneficial Owner" shall have the meaning set forth in Rule 13d-3 under the Exchange Act, and " 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 " Person" shall not include (i) Boise or any of its subsidiaries, (ii) a trustee or other fiduciary holding securities under an employee benefit plan of Boise or any of its subsidiaries, (iii) an underwriter temporarily holding securities pursuant to an offering of such securities, (iv) a corporation owned, directly or indirectly, by the Shareholders of Boise in substantially the same proportions as their ownership of stock of Boise, (v) an individual, entity or group that is permitted to and does report its beneficial ownership of securities of Boise on Schedule 13G under the Exchange Act (or any successor schedule), provided that if the individual, entity or group later becomes required to or does report its ownership of Boise' s securities on Schedule 13D under the Exchange Act (or any successor schedule), then the individual, person or group shall be deemed to be a Person as of the first date on which the individual, person or group becomes required to or does report its ownership on Schedule 13D or (vi) any Exempt Person. For purposes of this definition, " Exempt Person" means (i) Forest Products Holdings, L.L.C. or (ii) Madison Dearborn. " Madison


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Dearborn" means Madison Dearborn Partners, L.L.C. and any investment fund controlled by or under common control with Madison Dearborn Partners, L.L.C., and any officer, director or employee of such persons, or any trust, corporation, partnership or other entity controlled by such persons or any combination of these identified relationships.


2.3 " Closing Date ." February 22, 2008.


2.4 " Committee ." The Compensation Committee of the Board.


2.5 " Company ." Boise Paper Holdings, L.L.C., a limited liability company organized and existing under the laws of the state of Delaware, or its successor or successors.


2.6 " Competitor ." Any business, foreign or domestic, which is engaged, at any time relevant to the provisions of this Plan, in the manufacture, sale, or distribution of products, or in the providing of services, in competition with products manufactured, sold, or distributed, or services provided, by the Company or any subsidiary, partnership, or joint venture of the Company. The determination of whether a business is a Competitor shall be made by the Company' s General Counsel, in his or her sole discretion.


2.7 Construction . Except to the extent preempted by federal law, this Plan shall be construed according to the laws of the state of Idaho. The words " hereof," " herein," " hereunder" and other similar compounds of the word " here" shall mean and refer to the entire Plan, not to any particular provision or section.


2.8 " Deferred Compensation and Benefits Trust ." The irrevocable trust (the " DCB Trust" ) which may be established by the Company with an independent trustee for the benefit of persons entitled to receive payments or benefits hereunder, the assets of which will be subject to claims of the Company' s creditors in the event of bankruptcy or insolvency.


2.9 " Early Retirement ." The termination of employment of an Elected Officer prior to hi ...