DIRECTORS INDEMNIFICATION AGREEMENT
AGREEMENT, effective as of ___________, 199___, 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 heretofore 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 market-
place for such insurance, it has become increasingly more diffi-
cult 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 Indem-
nitee'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 ex-
penses to Indemnitee to the full extent permitted by law and as
set forth in this Agreement and, to the extent insurance is main-
tained, 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 hereto agree as follows:
1. Certain Definitions:
(a) Change in Control: shall mean a Change in Control
of a nature that would be required to be reported in response to
Item 6(e) of Schedule 14A of Regulation 14A promulgated under the
Securities Exchange Act of 1934, as amended ("Exchange Act"), or
any successor provisions, whether or not the Company is then
subject to such reporting requirement; provided that, without
limitation, such 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 (not
including in the securities beneficially owned by such Person any
securities acquired directly from the Company or its affiliates
other than in connection with the acquisition by the Company or
its affiliates of a business) 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; 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 two-thirds (2/3) 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 stockholders of the Company approve a
merger or consolidation of the Company with any other corporation
or approve the issuance of voting securities of the Company in
connection with a merger or consolidation of the Company (or any
direct or indirect subsidiary of the Company) pursuant to
applicable stock exchange requirements, other than (a) a merger
or consolidation which would result in 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), in combination with the
ownership of any trustee or other fiduciary holding securities
under an employee benefit plan of the Company, 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 (not including in the
securities Beneficially Owned by such Person any securities
acquired directly from the Company or its subsidiaries other than
in connection with the acquisition by the Company or its
subsidiaries of a business) 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; or
(iv) The stockholders of the Company approve a
plan of complete liquidation or dissolution of the Company or 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 for purposes of this Agreement 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 (a) 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; (b) 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 (c) 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 Indem-
xxxxx 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 partici-
pating 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, em-
ployee, 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) 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; 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 per-
mitted 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 Indem-
xxxxx 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 two 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 condi-
tion 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 Indem-
xxxxx 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 condi-
tion 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 theretofore paid, provided,
however, that 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 deter-
mination 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 such 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 Xxxxxxxxxx-Xxxxxxx Law
Directory; and (iv) not otherwise have performed services for the
Company within the last ten 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. Such 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, penal-
ties, 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 two 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 indem-
nification 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 compe-
tent 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 (includ-
ing attorneys' fees) and, if requested by Indemnitee, shall
(within two 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 Indem-
nifiable Events and/or (ii) recovery under any directors' liabil-
ity 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 judg-
ment, order, settlement (whether with or without court approval),
or conviction, or upon a plea of nolo contendere or its equiva-
lent, 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 Corpora-
tion 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 Agree-
ment, it is the intent of the parties hereto that Indemnitee
shall enjoy by this Agreement the greater benefits so afforded by
such change.
9. Liability Insurance. To the extent the Company main-
tains 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 Indem-
xxxxx, Indemnitee's spouse, heirs, executors, or personal or
legal representatives after the expiration of two 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 two-year period, provided, however, that
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 hereto. 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 hereto and their respective successors, assigns, includ-
ing any direct or indirect successor by purchase, merger, con-
solidation, 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 con-
tinue 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: Xxxxxx X. Xxxxx
Title: Chairman of the Board &
Chief Executive Officer
INDEMNITEE
_______________________________
[Name]
