CHANGE IN CONTROL AGREEMENT
                                                                 EXHIBIT 10.23
 
 
 
 
                                                         August 16, 2001
 
 
 
 
PERSONAL & CONFIDENTIAL
Mr. W. Lee Nutter
Chairman, President and
  Chief Executive Officer
Rayonier Inc.
50 North Laura Street
Jacksonville, FL  32202
 
                CHANGE IN CONTROL AGREEMENT FOR W. LEE NUTTER
 
Dear Mr. Nutter:
 
Rayonier Inc., a North Carolina corporation (the "Company"), considers it
essential to the best interests of its stockholders to foster the continued
employment of key management personnel. In this connection, the Board of
Directors of the Company (the "Board") recognizes that the possibility of a
change in ownership or control of the Company may result in the departure or
distraction of such personnel to the detriment of the Company and its
stockholders. You, in particular, as Chairman, President and Chief Executive
Officer, are a skilled and dedicated executive with important management
responsibilities and talents, and as such, the Company believes that its best
interests will be served if you are encouraged to remain with the Company. The
Company has determined that your ability to perform your responsibilities and
utilize your talents for the benefit of the Company, and the Company's ability
to retain you as an employee, will be significantly enhanced if you are
provided with fair and reasonable protection from the risks of a change in
ownership or control of the Company. To address this concern in part, the
Company adopted the Supplemental Senior Executive Severance Plan (the "Plan"),
under which you are entitled to certain benefits. (Terms not otherwise defined
herein have the same meaning as in the Plan.) The Company believes that in
your circumstances as the senior executive officer of the Company, the
benefits of the Plan are not alone sufficient and, accordingly, in order to
induce you to remain in the employ of the Company, you and the Company agree
as follows:
 
1.     Term of Agreement
 
       (a)     Generally - Except as provided in Section 1(b) hereof, (i) this
       Change in Control Agreement (this "Agreement") shall be effective as of
       the date and year first above written, and (ii) commencing on January
       1, 2002, and each January 1 thereafter, this Agreement shall be
       automatically extended for one additional year unless, not later than
       September 30th of the preceding year, either party to this Agreement
       gives notice to the
 
 
 
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Mr. W. Lee Nutter                                               August 16, 2001
 
       other that the Agreement shall not be extended under this Section 1(a);
       provided, however, that no such notice by the Company shall be
       effective if a Change in Control shall have occurred prior to the date
       of such notice.
 
       (b)     Upon a Change in Control - If a Change in Control shall have
       occurred at any time during the period in which this Agreement is
       effective, this Agreement shall continue in effect for (i) the
       remainder of the month in which the Change in Control occurred and (ii)
       a term of 60 months beyond the month in which such Change in Control
       occurred (such entire period hereinafter referred to as the "Protected
       Period").
 
2.     Change in Control
 
       (a)     A "Change in Control" for purposes of this Agreement shall be
       deemed to have occurred if, during the term of this Agreement, a Change
       in Control has been deemed to have occurred under the Plan.
 
       (b)     Employee Covenants You agree that, subject to the terms and
       conditions of this Agreement, in the event of a Potential Change in
       Control, you will remain in the employ of the Company until the
       earliest of (i) a date which is 180 days from the occurrence of such
       Potential Change in Control, (ii) the termination of your employment by
       reason of Disability (as defined herein) or (iii) the date on which you
       first become entitled under this Agreement to receive the benefits
       provided in Section 3(b) hereof. For this purpose, a "Potential Change
       in Control" shall be deemed to have occurred if: (i) the Company enters
       into an agreement, the consummation of which would result in the
       occurrence of a Change in Control; (ii) any Person (including the
       Company) publicly announces an intention to take or to consider taking
       actions which if consummated would constitute a Change in Control; or
       (iii) the Board adopts a resolution to the effect that, for purposes of
       this Agreement, a Potential Change in Control has occurred.
 
       (c)     Company Covenant Regarding Change in Control - In the event of
       a Change in Control, the Company shall forthwith deposit in the trust
       established by that certain Trust Agreement for the Rayonier Inc.
       Supplemental Senior Executive Pay Plan and for the Change in Control
       Agreement for W. Lee Nutter authorized by the Compensation and
       Management Development Committee on July 20, 2001 (the "Trust") cash in
       an amount sufficient to provide for payment of the cash amounts
       specified in Section 3(b)(i). The Trust is irrevocable and provides
       that the Company may not, directly or indirectly, use or recover any
       assets of the Trust until such time as all obligations which
       potentially could arise hereunder have been settled and paid in full,
       subject only to the claims of creditors of the Company in the event of
       insolvency or bankruptcy of the Company.
 
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Mr. W. Lee Nutter                                               August 16, 2001
 
 
 
3.     Termination
 
       (a)     Termination by You Without Good Reason, or by Reason of Death
       or Disability - If during the Protected Period your employment by the
       Company is terminated by you without Good Reason, or because of your
       death or Disability, the Company shall be relieved of its obligation to
       make any payments to you other than (i) its payment of amounts
       otherwise accrued and owing but not yet paid and (ii) any amounts
       payable under then-existing employee benefit programs at the time such
       amounts are due.
 
       (b)     Termination by the Company or by You for Good Reason - If
       during the Protected Period your employment by the Company is
       terminated by the Company for any reason or by you for Good Reason, you
       shall be entitled to the compensation and benefits described in this
       Section 3(b). If your employment by the Company is terminated prior to
       a Change in Control at the request of a Person engaging in a
       transaction or series of transactions that would result in a Change in
       Control, the Protected Period shall commence upon the subsequent
       occurrence of a Change in Control, your actual termination shall be
       deemed a termination occurring during the Protected Period and covered
       by this Section 3(b), your Date of Termination shall be deemed to have
       occurred immediately following the Change in Control, and Notice of
       Termination shall be deemed to have been given by the Company
       immediately prior to your actual termination. Your continued employment
       shall not constitute consent to, or a waiver of rights with respect to,
       any circumstances constituting Good Reason hereunder. The compensation
       and benefits provided under this Section 3(b) are as follows:
 
              (i)     The Company shall pay you five million dollars
              ($5,000,000), no later than the fifth day following the Date of
              Termination, and you shall receive all other amounts to which
              you are entitled under any compensation or benefit plan of the
              Company, at the time such payments are due.
 
              (ii)    The "Cash Portion," as such term is defined in the Plan,
              to which you become entitled, if any, under the Plan shall be
              reduced on a dollar-for-dollar basis by the amounts paid
              pursuant to Section 3(b)(i).
 
       (c)    Excise Tax - In the event you become entitled to any amounts
       payable in connection with a Change in Control (whether or not such
       amounts are payable pursuant to this Agreement) (the "Severance
       Payments"), if any of such Severance Payments are subject to the tax
       (the "Excise Tax") imposed by Section 4999 of the Code (or any similar
       federal, state or local tax that may hereafter be imposed), the Company
       shall pay to you at the time specified in Section 3(d) hereof an
       additional amount (the "Gross-Up Payment") such that the net amount
       retained by you, after deduction of any Excise Tax on the Total
       Payments (as hereinafter defined) and any federal, state and local
       income tax and Excise Tax upon the payment provided for by this Section
       3(c), shall be equal to the Total Payments. For purposes of determining
       whether any of the Severance Payments will be subject to the Excise Tax
       and the amount of such Excise Tax: (i) any other payments or
 
 
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Mr. W. Lee Nutter                                               August 16, 2001
 
 
       benefits received or to be received by you in connection with a Change
       in Control or your termination of employment (whether pursuant to the
       terms of this Agreement or any other plan, arrangement or agreement
       with the Company, any Person whose actions result in a Change in
       Control or any Person affiliated with the Company or such Person)
       (which, together with the Severance Payments, constitute the "Total
       Payments") shall be treated as "parachute payments" within the meaning
       of Section 280G(b)(2) of the Code, and all "excess parachute payments"
       within the meaning of Section 280G(b)(1) of the Code shall be treated
       as subject to the Excise Tax, unless in the opinion of
       nationally-recognized tax counsel selected by you such other payments
       or benefits (in whole or in part) do not constitute parachute payments,
       or such excess parachute payments (in whole or in part) represent
       reasonable compensation for services actually rendered within the
       meaning of Section 280G(b)(4) of the Code in excess of the base amount
       within the meaning of Section 280G(b)(3) of the Code, or are otherwise
       not subject to the Excise Tax; (ii) the amount of the Total Payments
       which shall be treated as subject to the Excise Tax shall be equal to
       the lesser of (A) the total amount of the Total Payments and (B) the
       amount of excess parachute payments within the meaning of Section
       280G(b)(1) of the Code (after applying Section 3(c)(i) hereof); and
       (iii) the value of any non-cash benefits or any deferred payments or
       benefit shall be determined by a nationally-recognized accounting firm
       selected by you in accordance with the principles of Sections
       280G(d)(3) and (4) of the Code. For purposes of determining the amount
       of the Gross-Up Payment, you shall be deemed to pay federal income
       taxes at the highest marginal rate of federal income taxation in the
       calendar year in which the Gross-Up Payment is to be made and state and
       local income taxes at the highest marginal rate of taxation in the
       state and locality of your residence on the Date of Termination, net of
       the maximum reduction in federal income taxes which could be obtained
       from deduction of such state and local taxes. In the event that the
       Excise Tax is subsequently determined to be less than the amount taken
       into account hereunder at the time of termination of your employment,
       you shall repay to the Company within ten days after the time that the
       amount of such reduction in Excise Tax is finally determined the
       portion of the Gross-Up Payment attributable to such reduction (plus
       the portion of the Gross-Up Payment attributable to the Excise Tax and
       federal and state and local income tax imposed on the Gross-Up Payment
       being repaid by you if such repayment results in a reduction in Excise
       Tax and/or federal and state and local income tax deduction) plus
       interest on the amount of such repayment at the rate provided in
       Section 1274(b)(2)(B) of the Code. In the event that the Excise Tax is
       determined to exceed the amount taken into account hereunder at the
       time of the termination of your employment (including by reason of any
       payment the existence or amount of which cannot be determined at the
       time of the Gross-Up Payment), the Company shall make an additional
       gross-up payment in respect of such excess within ten days after the
       time that the amount of such excess is finally determined.
 
       (d)     Time of Payment - The payments provided for in Sections 3(b)(i)
       hereof shall be made not later than the fifth day following the Date of
       Termination; provided, however, that if the amount of such payments
       cannot be finally determined on or before such day, the Company shall
       pay to you on such day an estimate, as determined in good faith by the
       Company, of the minimum amount of such payments and shall pay the
       remainder of such
 
 
 
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Mr. W. Lee Nutter                                               August 16, 2001
 
 
       payments (together with interest at the rate provided in Section
       1274(b)(2)(B) of the Code) as soon as the amount thereof can be
       determined but in no event later than the thirtieth day after the Date
       of Termination. In the event that the amount of the estimated payments
       exceeds the amount subsequently determined to have been due, such
       excess shall constitute a loan by the Company to you, payable on the
       fifteenth day after the demand by the Company (together with interest
       at the rate provided in Section 1274(b)(2)(B) of the Code).
 
       (e)     Notice - During the Protected Period, any purported termination
       of your employment by the Company or by you shall be communicated by
       written Notice of Termination to the other party hereto.
 
       (f)     Certain Definitions - Except as otherwise indicated in this
       Agreement, all definitions in this Section 3(f) shall be applicable
       during the Protected Period only.
 
              (i)     Disability - "Disability" shall mean your absence from
              the full-time performance of your duties with the Company for
              six consecutive months as a result of your incapacity due to
              physical or mental illness or disability, after reasonable
              accommodation as required by law, and within 30 days after
              written Notice of Termination is thereafter given you shall not
              have returned to the full-time performance of your duties.
 
              (ii)    Good Reason - "Good Reason" shall have the same meaning
              as under the Plan.
 
              (iii)   Notice of Termination - "Notice of Termination" shall
              mean notice indicating the specific termination provision in
              this Agreement relied upon and setting forth in reasonable
              detail the facts and circumstances claimed to provide a basis
              for termination of your employment under the provision so
              indicated.
 
              (iv)    Date of Termination - "Date of Termination" shall mean
              (A) if your employment is terminated for Disability, 30 days
              after Notice of Termination is given (provided that you shall
              not have returned to the full-time performance of your duties
              during such 30-day period) or (B) if your employment is
              terminated for any other reason, the date specified in the
              Notice of Termination (which, in the case of a termination for
              Cause, shall not be less than 30 days from the date such Notice
              of Termination is given and, in the case of a termination for
              Good Reason, shall not be less than 15 nor more than 60 days
              from the date such Notice of Termination is given).
 
              (v)     Person - "Person" or "Persons" means an individual,
              partnership, corporation, limited liability company, trust,
              estate, unincorporated association, syndicate, joint venture or
              organization, or a government or any department or agency
              thereof.
 
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Mr. W. Lee Nutter                                               August 16, 2001
 
4.     Mitigation - You shall not be required to mitigate the amount of
       payment provided for under this Agreement by seeking other employment
       or otherwise, nor shall the amount of payment or benefit provided for
       under this Agreement be reduced by any compensation earned by you as
       the result of employment by another employer, by retirement benefits,
       by offset against any amount claimed to be owed by you to the Company,
       or otherwise.
 
5.     Costs of Proceedings - The Company shall pay all costs and expenses,
       including all attorneys' fees and disbursements, of the Company and, at
       least monthly, in connection with any legal proceedings, whether or not
       instituted by the Company or you, relating to the interpretation or
       enforcement of any provision of this Agreement; provided that if you
       instituted the proceeding and a finding (no longer subject to appeal)
       is entered that you instituted the proceeding in bad faith, you shall
       pay all of your costs and expenses, including attorneys' fees and
       disbursements.  The Company shall pay prejudgment interest on any money
       judgment obtained by you as a result of such proceeding, calculated at
       the prime rate as published in the Wall Street Journal  from time to
       time from the date that payment should have been made to you under this
       Agreement.
 
6.     Successors; Binding Agreement
 
       (a)     The Company shall require any successor (whether direct or
       indirect, by purchase, merger, consolidation or otherwise) to all or
       substantially all of the business and/or assets of the Company to
       expressly assume and agree to perform this Agreement in the same manner
       and to the same extent that the Company would be required to perform it
       if no such succession had taken place. As used in this Agreement,
       "Company" shall mean the Company as hereinbefore defined and any
       successor to its business and/or assets as aforesaid which assumes and
       agrees to perform this Agreement by operation of law, or otherwise.
 
       (b)     This Agreement shall inure to the benefit of and be enforceable
       by you and your personal or legal representatives, executors,
       administrators, successors, heirs, distributees, devisees and legatees.
       In the event of your death, all amounts otherwise payable to you
       hereunder shall, unless otherwise provided herein, be paid in
       accordance with the terms of this Agreement to your devisee, legatee or
       other designee or, if there is no such designee, to your estate.
 
7.     Notice - Notices and all other communications provided for in this
       Agreement shall be in writing and shall be deemed to have been duly
       given when (a) personally delivered or (b) mailed by United States
       certified or registered mail, return receipt requested, postage
       prepaid, addressed to the respective addresses set forth on the first
       page of this Agreement; provided that all notice to the Company shall
       be directed to the attention of the Board with a copy to the General
       Counsel of the Company, or to such other address as either party may
       have furnished to the other in writing in accordance herewith, except
       that notice of change of address shall be effective only upon receipt.
 
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Mr. W. Lee Nutter                                               August 16, 2001
 
 
 
8.     Miscellaneous - No provision of this Agreement may be modified, waived
       or discharged unless such waiver, modification or discharge is agreed
       to in writing and signed by you and such officer as may be designated
       by the Board.  No waiver by either party hereto at any time of any
       breach by the other party hereto of, shall be deemed a waiver of
       similar or dissimilar provisions or conditions at the time or in
       compliance with, any condition or provision of this Agreement to be
       performed by such other party at any prior or subsequent time.  The
       validity, interpretation, construction and performance of this
       Agreement shall be governed by the laws of the State of North Carolina
       without regard to its conflicts of law principles.  All references to
       sections of the Exchange Act or the Code shall be deemed also to refer
       to any successor provisions to such sections.  Any payments provided
       for hereunder shall be paid net of any applicable withholding required
       under federal, state or local law.  The obligations of the Company
       under this Agreement shall survive the expiration of this Agreement to
       the extent necessary to give effect to this Agreement.
 
9.     Validity - The invalidity or unenforceability of any provision of this
       Agreement shall not affect the validity or enforceability of any other
       provision of this Agreement, which shall remain in full force and
       effect.
 
10.    Counterparts - This Agreement may be executed in counterparts, each of
       which shall be deemed to be an original but all of which together will
       constitute one and the same instrument.
 
11.    Entire Agreement - This Agreement, together with the Plan and the Trust
       and the Legal Resources Trust and Certain Related Expenses authorized
       by the Compensation and Development Committee on July 20, 2001 set
       forth the entire agreement of the parties hereto in respect of the
       subject matter contained herein and during the term of this Agreement
       supersedes the provisions of all prior agreements, promises, covenants,
       arrangements, communications, representations or warranties, whether
       oral or written, by any officer, employee or representative of any
       party hereof with respect to the subject matter contained herein.  No
       agreements or representations, oral or otherwise, express or implied,
       with respect to the subject matter hereof have been made by either
       party which are not expressly set forth in this Agreement.
       Notwithstanding anything to the contrary in this Agreement, the
       procedural provisions of this Agreement shall apply to all benefits
       payable as a result of a Change in Control (or other change in control)
       under any employee benefit plan, agreement, program, policy or
       arrangement of the Company.
 
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Mr. W. Lee Nutter                                               August 16, 2001
 
 
 
This Agreement was approved and authorized by the Board of Directors of the
Company on July 20, 2001. If this letter sets forth our agreement on the
subject matter hereof, kindly sign and return to the Company the enclosed copy
of this letter, which will then constitute our agreement on this subject.
 
                                           RAYONIER INC.
 
 
 
                                           By:
                                               ------------------------------
                                               John P. O'Grady
                                               Its:  Senior Vice President,
                                                     Administration
 
 
Agreed to this _____ day of August, 2001.
 
 
 
-------------------------------
           W. Lee Nutter