Contains 1999/2000 revisions to change-in-control language.
DIRECTORS INDEMNIFICATION AGREEMENT
AGREEMENT, effective as of ___________, 200___, between BOISE CASCADE
CORPORATION, a Delaware corporation (the 'Company'), and
_____________________ (the 'Indemnitee').
WHEREAS, it is essential to the Company to retain and attract as
directors the most capable persons available;
WHEREAS, Indemnitee is a director of the Company;
WHEREAS, both the Company and Indemnitee recognize the increased risk
of litigation and other claims being asserted against directors of public
companies in today's environment;
WHEREAS, basic protection against undue risk of personal liability of
directors previously has been provided through insurance coverage
providing reasonable protection at reasonable cost, and Indemnitee has
relied on the availability of such coverage; but as a result of
substantial changes in the marketplace for such insurance, it has become
increasingly more difficult to obtain such insurance on terms providing
reasonable protection at reasonable cost;
WHEREAS, the Bylaws of the Company require the Company to indemnify
and advance expenses to its directors to the full extent permitted by law,
and the Indemnitee has been serving and continues to serve as a director
of the Company in part in reliance on such Bylaws;
WHEREAS, in recognition of Indemnitee's need for substantial
protection against personal liability in order to enhance Indemnitee's
continued service to the Company in an effective manner, any inadequacy of
the Company's director liability insurance coverage, and Indemnitee's
reliance on the aforesaid Bylaws and in part to provide Indemnitee with
specific contractual assurance that the protection promised by such Bylaws
will be available to Indemnitee (regardless of, among other things, any
amendment to or revocation of such Bylaws or any change in the composition
of the Company's board of directors or acquisition transaction relating to
the Company), the Company wishes to provide in this Agreement for the
indemnification of and the advancing of expenses to Indemnitee to the full
extent permitted by law and as set forth in this Agreement and, to the
extent insurance is maintained, for the continued coverage of Indemnitee
under the Company's directors' liability insurance policies;
NOW, THEREFORE, in consideration of the premises and of Indemnitee's
continuing to serve the Company directly, or at its request with another
enterprise, and intending to be legally bound hereby, the parties agree as
follows:
1. CERTAIN DEFINITIONS:
(a) A CHANGE IN CONTROL: shall be deemed to have occurred
if:
(i) Any Person is or becomes the Beneficial Owner,
directly or indirectly, of securities of the Company representing 20% or
more of either the then outstanding shares of common stock of the Company
or the combined voting power of the Company's then outstanding securities;
provided, however, if such Person acquires securities directly from the
Company, such securities shall not be included unless such Person acquires
additional securities which, when added to the securities acquired
directly from the Company, exceed 20% of the Company's then outstanding
shares of common stock or the combined voting power of the Company's then
outstanding securities, and provided further that any acquisition of
securities by any Person in connection with a transaction described in
Subsection 1(a)(iii)(a) shall not be deemed to be a Change in Control of
the Company; or
(ii) The following individuals cease for any reason
to constitute at least 66 2/3% of the number of directors then serving:
individuals who, on the 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 the Company) whose appointment or election by the Board or
nomination for election by the Company'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 date hereof or whose appointment, election, or
nomination for election was previously so approved (the 'Continuing
Directors'); or
(iii) The consummation of a merger or consolidation
of the Company (or any direct or indirect subsidiary of the Company) with
any other corporation other than (a) a merger or consolidation which would
result in both (i) continuing directors continuing to constitute at least
66 2/3% of the number of directors of the combined entity immediately
following consummation of such merger or consolidation, and (ii) the voting
securities of the Company 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) at least 66 2/3% of the combined voting power of the voting
securities of the Company or such surviving entity or any parent thereof
outstanding immediately after such merger or consolidation, or (b) a merger
or consolidation effected to implement a recapitalization of the Company
(or similar transaction) in which no Person is or becomes the Beneficial
Owner, directly or indirectly, of securities of the Company representing
20% or more of either the then outstanding shares of common stock of the
Company or the combined voting power of the Company's then outstanding
securities; provided, however, if such Person acquires securities directly
from the Company, such securities shall not be included unless such Person
acquires additional securities which, when added to the securities acquired
directly from the Company, exceed 20% of the Company's then outstanding
shares of common stock or the combined voting power of the Company's then
outstanding securities, and provided further that any acquisition of
securities by any Person in connection with a transaction described in
Subsection 1(a)(iii)(a) shall not be deemed to be a Change in Control of
the Company; or
(iv) The stockholders of the Company approve a plan
of complete liquidation or dissolution of the Company or the consummation
of an agreement for the sale or disposition by the Company of all or
substantially all of the Company's assets, other than a sale or
disposition by the Company of all or substantially all of the Company'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 the Company immediately prior to such
sale.
Notwithstanding the foregoing, any event or
transaction which would otherwise constitute a Change in Control of the
Company (a 'Transaction') shall not constitute a Change in Control of the
Company if, in connection with the Transaction, the Indemnitee
participates as an equity investor in the acquiring entity or any of its
affiliates (the 'Acquiror'). For purposes of the preceding sentence, the
Indemnitee shall not be deemed to have participated as an equity investor
in the Acquiror by virtue of (i) obtaining beneficial ownership of any
equity interest in the Acquiror as a result of the grant to the Indemnitee
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, if
any, into incentive compensation awards of the Acquiror), on terms and
conditions substantially equivalent to those applicable to other directors
of the Company immediately prior to the Transaction, after taking into
account normal differences attributable to job responsibilities, title,
and the like; (ii) 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 the Company; or
(iii) having obtained an incidental equity ownership in the Acquiror prior
to and not in anticipation of the Transaction.
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 (i) the Company or any of its subsidiaries, (ii) a trustee or
other fiduciary holding securities under an employee benefit plan of the
Company or any of its subsidiaries, (iii) an underwriter temporarily
holding securities pursuant to an offering of such securities, or (iv) a
corporation owned, directly or indirectly, by the stockholders of the
Company in substantially the same proportions as their ownership of stock
of the Company.
(b) CLAIM: any threatened, pending, or completed action,
suit, or proceeding or any inquiry or investigation, whether conducted by
the Company or any other party, that Indemnitee in good faith believes
might lead to the institution of any such action, suit, or proceeding,
whether civil, criminal, administrative, investigative, or other.
(c) EXPENSES: include attorneys' fees and all other
costs, expenses, and obligations paid or incurred in connection with
investigating, defending, being a witness in, or participating in
(including on appeal) or preparing to defend, be a witness in, or
participate in any Claim relating to any Indemnifiable Event.
(d) INDEMNIFIABLE EVENT: any event or occurrence related
to the fact that Indemnitee is or was a director, employee, agent, or
fiduciary of the Company or is or was serving at the request of the
Company as a director, officer, employee, trustee, agent, or fiduciary of
another corporation, partnership, joint venture, employee benefit plan,
trust, or other enterprise or by reason of anything done or not done by
Indemnitee in any such capacity.
(e) 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 of the Company; (ii) the Company or any Person publicly announces
an intention to take or to consider taking actions which if consummated
would constitute a Change in Control of the Company; (iii) any Person
becomes the Beneficial Owner, directly or indirectly, of securities of the
Company representing 9.5% or more of either the then outstanding shares of
common stock of the Company or the combined voting power of the Company's
then outstanding securities, unless that Person has filed a schedule under
Section 13 of the Securities Exchange Act of 1934 and the rules and
regulations promulgated under Section 13, and that schedule (including any
and all amendments) indicates that the Person has no intention to
(a) control or influence the management or policies of the Company, or
(b) take any action inconsistent with a lack of intention to control or
influence the management or policies of the Company; or (iv) the Board
adopts a resolution to the effect that a Potential Change in Control of
the Company has occurred.
(f) REVIEWING PARTY: any appropriate person or body
consisting of a member or members of the Company's board of directors or
any other person or body appointed by the board (including the special,
independent counsel referred to in Section 3) who is not a party to the
particular Claim for which Indemnitee is seeking indemnification.
(g) VOTING SECURITIES: any securities of the Company
which vote generally in the election of directors.
2. BASIC INDEMNIFICATION ARRANGEMENT.
(a) In the event Indemnitee was, is, or becomes a party to
or witness or other participant in or is threatened to be made a party to
or witness or other participant in a Claim by reason of (or arising in
part out of) an Indemnifiable Event, the Company shall indemnify
Indemnitee to the fullest extent permitted by law as soon as practicable,
but in any event no later than 30 days after written demand is presented
to the Company, against any and all Expenses, judgments, fines, penalties,
and amounts paid in settlement (including all interest, assessments, and
other charges paid or payable in connection with or in respect of such
Expenses, judgments, fines, penalties, or amounts paid in settlement) of
such Claim. Notwithstanding anything in this Agreement to the contrary,
prior to a Change in Control, Indemnitee shall not be entitled to
indemnification pursuant to this Agreement in connection with any Claim
initiated by Indemnitee against the Company or any director or officer of
the Company unless the Company has joined in or consented to the
initiation of such Claim. If so requested by Indemnitee, the Company
shall advance (within 2 business days of such request) any and all
Expenses to Indemnitee (an 'Expense Advance').
(b) Notwithstanding the foregoing, (i) the obligations of
the Company under Section 2(a) shall be subject to the condition that the
Reviewing Party shall not have determined (in a written opinion, in any
case in which the special, independent counsel referred to in Section 3
hereof is involved) that Indemnitee would not be permitted to be
indemnified under applicable law; and (ii) the obligation of the Company
to make an Expense Advance pursuant to Section 2(a) shall be subject to
the condition that, if, when, and to the extent that the Reviewing Party
determines that Indemnitee would not be permitted to be so indemnified
under applicable law, the Company shall be entitled to be reimbursed by
Indemnitee (who hereby agrees to reimburse the Company) for all such
amounts previously paid; provided, however, if Indemnitee has commenced
legal proceedings in a court of competent jurisdiction to secure a
determination that Indemnitee should be indemnified under applicable law,
any determination made by the Reviewing Party that Indemnitee would not be
permitted to be indemnified under applicable law shall not be binding and
Indemnitee shall not be required to reimburse the Company for any Expense
Advance until a final judicial determination is made with respect thereto
(as to which all rights of appeal therefrom have been exhausted or
lapsed). If there has not been a Change in Control, the Reviewing Party
shall be selected by the board of directors, and if there has been a
Change in Control, the Reviewing Party shall be the special, independent
counsel referred to in Section 3 hereof. If there has been no
determination by the Reviewing Party or if the Reviewing Party determines
that Indemnitee substantively would not be permitted to be indemnified in
whole or in part under applicable law, Indemnitee shall have the right to
commence litigation in any court in the states of ____________ or Delaware
having subject matter jurisdiction thereof and in which venue is proper
seeking an initial determination by the court or challenging any such
determination by the Reviewing Party or any aspect thereof, and the
Company hereby consents to service of process and to appear in any such
proceeding. Any determination by the Reviewing Party otherwise shall be
conclusive and binding on the Company and Indemnitee.
3. CHANGE IN CONTROL. The Company agrees that if there is a
Change in Control of the Company (other than a Change in Control which has
been approved by a majority of the Company's board of directors who were
directors immediately prior to such Change in Control), then with respect
to all matters thereafter arising concerning the rights of Indemnitee to
indemnity payments and Expense Advances under this Agreement or any other
agreement or Company Bylaw now or hereafter in effect relating to Claims
for Indemnifiable Events, the Company shall seek legal advice only from
special, independent counsel selected by Indemnitee and approved by the
Company (which approval shall not be unreasonably withheld) ('Approved
Counsel'). The Approved Counsel shall (i) be located in New York City;
(ii) consist of 100 or more attorneys; (iii) be rated 'a v' by Martindale-
Hubbell Law Directory; and (iv) not otherwise have performed services for
the Company within the last 10 years (other than in connection with such
matters) or for the Indemnitee. The Approved Counsel may consult with
counsel admitted to the bar in the state of Delaware in connection with
all matters arising hereunder. The Approved Counsel, among other things,
shall render its written opinion to the Company and Indemnitee as to
whether and to what extent the Indemnitee would be permitted to be
indemnified under applicable law. The Company agrees to pay the
reasonable fees of the Approved Counsel referred to above and to fully
indemnify such counsel against any and all expenses (including attorneys'
fees), claims, liabilities, and damages arising out of or relating to this
Agreement or its engagement pursuant hereto.
4. ESTABLISHMENT OF TRUST. In the event of a Potential Change in
Control, the Company shall, upon written request by Indemnitee, create a
trust for the benefit of the Indemnitee and from time to time upon written
request of Indemnitee shall fund such trust to the extent permitted by law
in an amount sufficient to satisfy any and all Expenses reasonably
anticipated at the time of each such request to be incurred in connection
with investigating, preparing for, and defending any Claim relating to an
Indemnifiable Event, and any and all judgments, fines, penalties, and
settlement amounts of any and all Claims relating to an Indemnifiable
Event from time to time actually paid or claimed, reasonably anticipated,
or proposed to be paid. The amount or amounts to be deposited in the
trust pursuant to the foregoing funding obligation shall be determined by
the Reviewing Party in any case in which the special, independent counsel
referred to above is involved. The terms of such trust shall provide that
upon a Change in Control (i) the trust shall not be revoked or the
principal thereof invaded, without the written consent of the Indemnitee;
(ii) the trustee shall advance, within 2 business days of a request by the
Indemnitee, any and all Expenses to the Indemnitee (and the Indemnitee
hereby agrees to reimburse the trust under the circumstances under which
the Indemnitee would be required to reimburse the Company under
Section 2(b) of this Agreement); (iii) the trust shall continue to be
funded by the Company in accordance with the funding obligation set forth
above; (iv) the trustee shall promptly pay to the Indemnitee all amounts
for which the Indemnitee shall be entitled to indemnification pursuant to
this Agreement or otherwise; and (v) all unexpended funds in such trust
shall revert to the Company upon a final determination by the Reviewing
Party or a court of competent jurisdiction, as the case may be, that the
Indemnitee has been fully indemnified under the terms of this Agreement.
The trustee shall be chosen by the Indemnitee. Nothing in this Section 4
shall relieve the Company of any of its obligations under this Agreement.
5. INDEMNIFICATION FOR ADDITIONAL EXPENSES. The Company shall
indemnify Indemnitee against any and all expenses (including attorneys'
fees) and, if requested by Indemnitee, shall (within 2 business days of
such request) advance such expenses to Indemnitee, which are incurred by
Indemnitee in connection with any claim asserted against or action brought
by Indemnitee for (i) indemnification or advance payment of Expenses by
the Company under this Agreement or any other agreement or Company Bylaw
now or hereafter in effect relating to Claims for Indemnifiable Events
and/or (ii) recovery under any directors' liability insurance policies
maintained by the Company, regardless of whether Indemnitee ultimately is
determined to be entitled to such indemnification, advance expense
payment, or insurance recovery, as the case may be.
6. PARTIAL INDEMNITY, ETC. If Indemnitee is entitled under any
provision of this Agreement to indemnification by the Company for some or
a portion of the Expenses, judgments, fines, penalties, and amounts paid
in settlement of a Claim but not, however, for all of the total amount
thereof, the Company shall nevertheless indemnify Indemnitee for the
portion thereof to which Indemnitee is entitled. Moreover,
notwithstanding any other provision of this Agreement, to the extent that
Indemnitee has been successful on the merits or otherwise in defense of
any Claim relating in whole or in part to an Indemnifiable Event or in
defense of any issue or matter therein, including dismissal without
prejudice, Indemnitee shall be indemnified against all Expenses incurred
in connection therewith. In connection with any determination by the
Reviewing Party or otherwise as to whether Indemnitee is entitled to be
indemnified hereunder, the burden of proof shall be on the Company to
establish that Indemnitee is not so entitled.
7. NO PRESUMPTION. For purposes of this Agreement, the
termination of any claim, action, suit, or proceeding, by judgment, order,
settlement (whether with or without court approval), or conviction, or
upon a plea of nolo contendere or its equivalent, shall not create a
presumption that Indemnitee did not meet any particular standard of
conduct or have any particular belief or that a court has determined that
indemnification is not permitted by applicable law.
8. NONEXCLUSIVITY, ETC. The rights of the Indemnitee hereunder
shall be in addition to any other rights Indemnitee may have under the
Company's Bylaws or the Delaware General Corporation Law or otherwise. To
the extent that a change in the Delaware General Corporation Law (whether
by statute or judicial decision) permits greater indemnification by
agreement than would be afforded currently under the Company's Bylaws and
this Agreement, it is the intent of the parties that Indemnitee shall
enjoy by this Agreement the greater benefits so afforded by such change.
9. LIABILITY INSURANCE. To the extent the Company maintains an
insurance policy or policies providing directors' liability insurance,
Indemnitee shall be covered by such policy or policies, in accordance with
its or their terms, to the maximum extent of the coverage available for
any Company director.
10. PERIOD OF LIMITATIONS. No legal action shall be brought, and
no cause of action shall be asserted by or on behalf of the Company or any
affiliate of the Company against Indemnitee, Indemnitee's spouse, heirs,
executors, or personal or legal representatives after the expiration of
2 years from the date of accrual of such cause of action, and any claim or
cause of action of the Company or its affiliate shall be extinguished and
deemed released unless asserted by the timely filing of a legal action
within such 2-year period; provided, however, if any shorter period of
limitations is otherwise applicable to any such cause of action, such
shorter period shall govern.
11. AMENDMENTS, ETC. No supplement, modification, or amendment of
this Agreement shall be binding unless executed in writing by both of the
parties. No waiver of any of the provisions of this Agreement shall be
deemed or shall constitute a waiver of any other provisions hereof
(whether or not similar), nor shall such waiver constitute a continuing
waiver.
12. SUBROGATION. In the event of payment under this Agreement,
the Company shall be subrogated to the extent of such payment to all of
the rights of recovery of Indemnitee, who shall execute all papers
required and shall do everything that may be necessary to secure such
rights, including the execution of such documents necessary to enable the
Company effectively to bring suit to enforce such rights.
13. NO DUPLICATION OF PAYMENTS. The Company shall not be liable
under this Agreement to make any payment in connection with any claim made
against Indemnitee to the extent Indemnitee has otherwise actually
received payment (under any insurance policy, Bylaw, or otherwise) of the
amounts otherwise indemnifiable hereunder.
14. BINDING EFFECT, ETC. This Agreement shall be binding upon and
inure to the benefit of and be enforceable by the parties and their
respective successors, assigns, including any direct or indirect successor
by purchase, merger, consolidation, or otherwise to all or substantially
all of the business and/or assets of the Company, spouses, heirs, and
personal and legal representatives. This Agreement shall continue in
effect regardless of whether Indemnitee continues to serve as an officer
or director of the Company or of any other enterprise at the Company's
request.
15. SEVERABILITY. The provisions of this Agreement shall be
severable in the event that any of the provisions hereof (including any
provision within a single section, paragraph, or sentence) are held by a
court of competent jurisdiction to be invalid, void, or otherwise
unenforceable, and the remaining provisions shall remain enforceable to
the fullest extent permitted by law.
16. GOVERNING LAW. This Agreement shall be governed by and
construed and enforced in accordance with the laws of the state of
Delaware applicable to contracts made and to be performed in such state
without giving effect to the principles of conflicts of laws.
17. PRIOR AGREEMENTS. This Agreement shall supersede any and all
prior agreements executed by the Company and Indemnitee relating to the
subject matter hereof, and any and all such prior agreements shall be null
and void as of the effective date of this Agreement.
Executed as of the date first written above.
BOISE CASCADE CORPORATION
By ____________________________
Name: George J. Harad
Title: Chairman of the Board & Chief Executive Officer
INDEMNITEE
_______________________________
[Name]
Directors Indemnification Agreement - Boise Cascade Corp.
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