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EXHIBIT 10.2
STRATEGIC TIMBER TRUST, INC.
DIRECTOR INDEMNIFICATION AGREEMENT
THIS AGREEMENT is made on this _____ day of ____________ 1999, by and
between Strategic Timber Trust, Inc., a Georgia corporation ("STT"), and the
undersigned ("Director").
WITNESSETH:
WHEREAS, Director is currently serving or intends to serve as a
director of STT and in such capacity performs a valuable service for STT;
WHEREAS, the Georgia Business Corporation Code, as now in effect or
hereafter amended (the "GBCC") as well as STT's Bylaws (the "Bylaws")
specifically provide that the indemnification provided thereunder is not
exclusive of any other rights with respect to indemnification or otherwise to
which those seeking indemnification may be entitled under any contract or
resolution approved or ratified by the shareholders by a majority of the votes
entitled to be cast;
WHEREAS, the GBCC and the Bylaws contemplate that contracts may be
entered into between STT and its directors with respect to indemnification of
such directors;
WHEREAS, in order to encourage Director to continue his service or
begin to serve as a director of STT, STT has determined and agreed to enter into
this Agreement with Director;
NOW, THEREFORE, in consideration of Director's service or continued
service to STT as a director from and after the date hereof, the parties hereby
agree as follows:
1. INDEMNITY OF DIRECTOR. STT shall defend, hold harmless and
indemnify Director to the full extent permitted by the provisions of the GBCC,
as currently in effect or as it may hereafter be amended, or by the provisions
of any other applicable statute authorizing or permitting such indemnification,
whether currently in effect or hereafter adopted.
2. INSURANCE POLICIES.
(a) STT represents that it has purchased and presently maintains a
policy of directors' and officers' liability insurance ("D&O Insurance") with
____________________ in the amount of $______________. Subject to the provisions
of Section 2(b) hereof, for so long as Director shall continue in such capacity
and thereafter if Director shall then be subject to any threatened, pending or
completed action, suit or proceeding (whether civil, criminal, administrative or
investigative), by reason of
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the fact that Director was a director of STT, STT will use reasonable
efforts to maintain in effect for the benefit of Director one or more
policies of D&O Insurance providing coverage comparable to that
presently in effect.
(b) STT shall not be required to maintain said policy or
policies of D&O Insurance in effect if said insurance is not reasonably
available or if, in the reasonable business judgment of the then
directors of STT, the premium cost for such insurance is
disproportionate to the amount or extent of coverage.
3. ADDITIONAL INDEMNITY. Subject to the provisions of Section 4
hereof and without limiting the Bylaws, STT shall defend, hold harmless and
indemnify Director:
(a) in any threatened, pending or completed action, suit
or proceeding, whether civil, criminal, administrative or investigative
(other than an action, suit or proceeding by or in the right of STT),
by reason of the fact that he is or was a director of STT, or is or was
serving at the request of STT as a director, officer, partner, trustee,
employee, or agent of another domestic or foreign corporation,
partnership, joint venture, trust, employee benefit plan or other
entity, against expenses (including attorneys' fees), judgments, fines
and amounts paid in settlement actually and reasonably incurred by him
in connection with such action, suit or proceeding, if he conducted
himself in good faith and reasonably believed: (i) in the case of
conduct in his official capacity, that such conduct was in the best
interests of STT; (ii) in all other cases, that such conduct was at
least not opposed to the best interests of STT; and (iii) in the case
of any criminal proceeding, that he had no reasonable cause to believe
such conduct was unlawful. The termination of any action, suit or
proceeding by judgment, order, settlement, or conviction, or upon a
plea of nolo contendere or its equivalent is not, of itself,
determinative that Director met the standard of conduct under this
Section 3(a); and
(b) in any threatened, pending or completed action, suit
or proceeding by or in the right of STT to procure a judgment in its
favor, by reason of the fact he is or was a director of STT or is or
was serving at the request of STT as a director, officer, partner,
trustee, employee, or agent of another domestic or foreign corporation,
partnership, joint venture, trust, employee benefit plan or other
entity, against expenses (including attorneys' fees), judgments, fines
and amounts paid in settlement actually and reasonably incurred by him
in connection with such action, suit or proceeding, if he acted in a
manner he believed in good faith to be in or not opposed to the best
interests of STT. The termination of any action, suit or proceeding by
judgment, order or settlement shall not, of itself, create a
presumption that Director did not act in a manner which he believed in
good faith to be in or not opposed to the best interests of STT.
4. LIMITATIONS ON ADDITIONAL INDEMNITY. No indemnity pursuant to
Section 3 hereof shall be paid by STT:
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(a) to the extent it would reduce or eliminate any
payments under any D&O Insurance covering Director;
(b) to the extent of any liability for which Director is
indemnified pursuant to Sections 1 and 2 of this Agreement or pursuant
to any D&O Insurance carried by STT;
(c) on account of any claim against Director for an
accounting of profits made from the purchase or sale of securities of
STT pursuant to the provisions of Section 16(b) of the Securities
Exchange Act of 1934 and amendments thereto or the similar provisions
of any other applicable law;
(d) on account of any claim against Director arising out
of the trading of STT stock while possessing material non-public
information, whether pursuant to the Xxxxxxx Xxxxxxx Sanctions Act of
1984 or otherwise;
(e) if a final judgment or other final adjudication by a
court having jurisdiction in the matter shall determine that such
indemnity is not lawful;
(f) in respect to remuneration paid to Director if a
final judgment or other final adjudication by a court having
jurisdiction in the matter shall determine that such remuneration was
not lawful;
(g) for any appropriation, in violation of his duties, of
any business opportunity of STT;
(h) for acts or omissions which involve intentional
misconduct or a knowing violation of law;
(i) for unlawful distributions as set forth in GBCC s.
14-2-832 (or any successor provision); or
(j) for any transaction from which he received an
improper personal benefit.
5. NOTIFICATION AND DEFENSE OF CLAIM.
(a) Promptly after receipt by Director of notice of the
commencement of any action, suit or proceeding, Director will, if a
claim in respect thereto is to be made against STT under this
Agreement, notify STT of the commencement thereof, but the failure to
so notify STT will not relieve it from any liability which it may have
to Director otherwise than under this Agreement. With respect to any
such action, suit or proceeding as to which Director so notifies STT:
(i) STT will be entitled to participate therein
at its own expense; and
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(ii) except as otherwise provided below, to the
extent that it may wish, STT may assume the defense thereof.
(b) After notice from STT to Director of its election to
assume the defense thereof, STT will not be liable to Director under
this Agreement or otherwise for any legal or other expenses
subsequently incurred by Director in connection with the defense
thereof other than reasonable costs of investigation or as otherwise
provided below. Director shall have the right to employ counsel of his
choosing in such action, suit or proceeding but the fees and expenses
of such counsel incurred after notice from STT of its assumption of the
defense thereof shall be at the expense of Director unless (i) the
employment of counsel by Director has been authorized in writing by
STT, (ii) STT and Director shall have reasonably concluded that there
may be a conflict of interest between STT and Director in the conduct
of the defense of such action, or (iii) STT shall not in fact have
employed counsel to assume the defense of such action, in each of which
cases the reasonable fees and expenses of Director's counsel shall be
paid by STT.
(c) STT shall not be liable to Director under this
Agreement for any amounts paid in settlement of any threatened or
pending action, suit or proceeding without its prior written consent.
STT shall not settle any such action, suit or proceeding in any manner
which would impose any penalty or limitation on Director without
Director's prior written consent. Neither STT nor Director will
unreasonably withhold his or its consent to any proposed settlement.
6. PREPAYMENT OF EXPENSES. Unless Director otherwise elects,
expenses incurred in defending any civil or criminal action, suit or proceeding
will be paid by STT in advance of the final disposition of such action, suit or
proceeding upon receipt of a written agreement from Director in form and
substance satisfactory to STT (i) affirming the Director's good faith belief
that his conduct does not constitute behavior of the kind described in Sections
4(c) through (j) of this Agreement, and (ii) agreeing to repay any advances if
it shall be ultimately determined that he is not entitled to be indemnified by
STT under this Agreement.
7. CONTINUATION OF INDEMNITY. All agreements and obligations of
STT contained in this Agreement shall continue during the period Director is a
member of the Board of Directors of STT and shall continue thereafter so long as
Director shall be subject to any threatened, pending or completed action, suit
or proceeding, whether civil, criminal, administrative or investigative, by
reason of the fact that Director was a director of STT, or is or was serving at
the request of STT as a director, officer, partner, trustee, employee, or agent
of another domestic or foreign corporation, partnership, joint venture, trust,
employee benefit plan or other enterprise.
8. ALLOWANCE FOR COMPLIANCE WITH SEC REQUIREMENTS. Director
acknowledges that the Securities and Exchange Commission ("SEC") has expressed
the opinion that indemnification of directors and officers from liabilities
under the Securities Act of 1933 (the "Act") is against public policy and
therefore unenforceable. Director hereby agrees
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that it will not be a breach of this Agreement for STT to agree with the SEC in
connection with the registration for sale of any stock or other securities of
STT from time to time that, in the event a claim for indemnification against
such liabilities (other than the payment by STT of expenses incurred or paid by
a director or officer of STT in the successful defense of any action, suit or
proceeding) is asserted in connection with such stock or other securities being
registered, STT will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of competent jurisdiction
the question of whether or not such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue. Director further agrees that such submission to a court of competent
jurisdiction shall not be a breach of this Agreement.
9. RELIANCE. STT has entered into this Agreement in order to
induce Director to serve or continue as a member of the Board of Directors of
STT, and acknowledges that Director is relying upon this Agreement with respect
thereto.
10. SEPARABILITY. Each of the provisions of this Agreement is a
separate and distinct agreement and independent of the others, so that if any
provision hereof shall be held to be invalid or unenforceable for any reason,
such invalidity or unenforceability shall not affect the validity or
enforceability of the other provisions hereof.
11. GOVERNING LAW; ASSIGNMENT; BINDING EFFECT; AMENDMENT AND
TERMINATION; GENDER.
(a) This Agreement shall be governed by and construed in
accordance with the laws of the State of Georgia applicable to
agreements made and to be performed entirely within such State.
(b) Neither this Agreement nor any rights or obligations
hereunder shall be assigned or transferred by Director.
(c) This Agreement shall be binding upon Director and
upon STT, its successors and assigns, including successors by merger or
consolidation, and shall inure to the benefit of Director, his heirs,
personal representatives and permitted assigns and to the benefit of
STT, its successors and assigns.
(d) No amendment, modification or termination of this
Agreement shall be effective unless in writing signed by both parties
hereto.
(e) References herein to the male gender herein shall
include references to the female gender.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
and as of the day and year first above written.
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STRATEGIC TIMBER TRUST, INC.
By:
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Name:
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Title:
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[NAME OF DIRECTOR], Director
