Exhibit 10.1
INDEMNIFICATION AGREEMENT
This Indemnification Agreement (the
“Agreement”), is dated as of
,
20 between Potlatch Corporation, a Delaware
corporation (the “Corporation”), and
(“Indemnitee”).
W I T N E S S E T H:
WHEREAS, Indemnitee is either a
member of the board of directors of the Corporation (the
“Board of Directors”), a member of the board of
managers or board of directors of a wholly-owned subsidiary of the
Corporation, an officer of the Corporation or an officer of a
wholly-owned subsidiary of the Corporation, or one or more of such
positions, and in such capacity or capacities, or otherwise as an
Agent (as hereinafter defined) of the Corporation, is performing a
valuable service for the Corporation; and
WHEREAS, the Corporation is aware
that competent and experienced persons are increasingly reluctant
to serve as directors or officers of corporations or other business
entities unless they are protected by comprehensive indemnification
and liability insurance, due to increased exposure to litigation
costs and risks resulting from their service to such entities, and
because the exposure frequently bears no reasonable relationship to
the compensation of such directors and officers; and
WHEREAS, the Board of Directors of
the Corporation has concluded that, to retain and attract talented
and experienced individuals to serve or continue to serve as
officers, directors or managers of the Corporation or its
subsidiaries, and to encourage such individuals to take the
business risks necessary for the success of the Corporation, it is
necessary for the Corporation contractually to indemnify directors
and officers and to assume for itself to the fullest extent
permitted by law expenses and damages in connection with claims
against such officers, directors or managers in connection with
their service to the Corporation; and
WHEREAS, Section 145 of the
General Corporation Law of Delaware (the “DGCL”), under
which the Corporation is organized, empowers the Corporation to
indemnify by agreement its officers, directors, employees and
agents, and persons who serve, at the request of the Corporation,
as directors, officers, employees or agents of other corporations
or enterprises, and expressly provides that the indemnification
provided by the DGCL is not exclusive; and
WHEREAS, the Corporation desires and
has requested the Indemnitee to serve or continue to serve as a
director, officer or agent of the Corporation or one or more of its
subsidiaries free from undue concern for claims for damages arising
out of or related to such services to the Corporation;
and
WHEREAS, Indemnitee is willing to
serve, continue to serve and to take on additional service for or
on behalf of the Corporation on the condition that he or she be
indemnified as herein provided; and
WHEREAS, it is intended that
Indemnitee shall be paid promptly by the Corporation all amounts
necessary to effectuate in full the indemnity provided
herein:
NOW, THEREFORE, in consideration of
the premises and the covenants in this Agreement, and of Indemnitee
serving or continuing to serve the Corporation or one or more of
its subsidiaries as an Agent and intending to be legally bound
hereby, the parties hereto agree as follows:
1. Services by Indemnitee .
Indemnitee agrees to serve or continue to serve (a) as a
director or an officer of the Corporation, or as a manager,
director or employee of a wholly-owned subsidiary of the
Corporation, or one or more of such positions, so long as
Indemnitee is duly appointed or elected and qualified in accordance
with the applicable provisions of the certificate of incorporation
and bylaws of the Corporation, and until such time as Indemnitee
resigns or fails to stand for election or is removed from
Indemnitee’s position, or (b) otherwise as an Agent of
the Corporation. Indemnitee may from time to time also perform
other services at the request or for the convenience of, or
otherwise benefiting the Corporation or one or more of its
subsidiaries. Indemnitee may at any time and for any reason resign
or be removed from such position (subject to any other contractual
obligation or other obligation imposed by operation of law), in
which event the Corporation shall have no obligation under this
Agreement to continue Indemnitee in any such position.
2. Indemnification of
Indemnitee . Subject to the limitations set forth herein and
particularly in Section 6 hereof, the Corporation shall
indemnify Indemnitee as follows:
(a) The Corporation shall, with
respect to any Proceeding (as hereinafter defined), indemnify
Indemnitee to the fullest extent permitted by applicable law or as
such law may from time to time be amended (but, in the case of any
such amendment, only to the extent such amendment permits the
Corporation to provide broader indemnification rights than the law
permitted the Corporation to provide before such amendment). The
right to indemnification conferred herein shall be presumed to have
been relied upon by Indemnitee in serving or continuing to serve
the Corporation as an Agent and shall be enforceable as a contract
right. Without in any way diminishing the scope of the
indemnification provided by this Section 2(a), the rights of
indemnification of Indemnitee shall include but shall not be
limited to those rights hereinafter set forth.
(b) The Corporation shall indemnify
Indemnitee if Indemnitee is or was a party or is threatened to be
made a party to any Proceeding (other than an action by or in the
right of the Corporation) by reason of the fact that Indemnitee is
or was an Agent of the Corporation, or any subsidiary of the
Corporation, or by reason of the fact that Indemnitee is or was
serving at the request of the Corporation as an Agent of another
corporation, partnership, joint venture, trust or other enterprise,
against Expenses (as hereinafter defined) or Liabilities (as
hereinafter defined), actually and reasonably incurred by
Indemnitee in connection with such Proceeding if Indemnitee acted
in good faith and in a manner Indemnitee reasonably believed to be
in or not opposed to the best interests of the Corporation, and,
with respect to any criminal action or proceeding, had no
reasonable cause to believe Indemnitee’s conduct was
unlawful.
(c) The Corporation shall indemnify
Indemnitee if Indemnitee was or is a party or is threatened to be
made a party to any Proceeding by or in the right of the
Corporation or any subsidiary of the Corporation to procure a
judgment in its favor by reason of the fact that Indemnitee is or
was an Agent of the Corporation, or any subsidiary of the
Corporation, or by
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reason of the fact that Indemnitee is or was
serving at the request of the Corporation as an Agent of another
corporation, partnership, joint venture, trust or other enterprise,
against Expenses and, to the fullest extent permitted by law,
Liabilities if Indemnitee acted in good faith and in a manner
Indemnitee reasonably believed to be in or not opposed to the best
interests of the Corporation, except that no indemnification shall
be made in respect of any claim, issue or matter as to which
Indemnitee shall have been adjudged to be liable to the Corporation
unless and only to the extent that the Court of Chancery of the
State of Delaware or the court in which such action or suit was
brought shall determine upon application that, despite the
adjudication of liability but in view of all the circumstances of
the case, Indemnitee is fairly and reasonably entitled to indemnity
for such expenses which the Court of Chancery of the State of
Delaware or such other court shall deem proper.
3. Advancement of Expenses .
All reasonable Expenses incurred by or on behalf of Indemnitee
(including costs of enforcement of this Agreement) shall be
advanced from time to time by the Corporation to Indemnitee within
thirty (30) days after the receipt by the Corporation of a
written request for an advance of Expenses, whether prior to or
after final disposition of a Proceeding (except to the extent that
there has been a Final Adverse Determination (as hereinafter
defined) that Indemnitee is not entitled to be indemnified for such
Expenses), including without limitation any Proceeding brought by
or in the right of the Corporation. The written request for an
advancement of any and all Expenses under this paragraph shall
contain reasonable detail of the Expenses incurred by Indemnitee.
In the event that such written request shall be accompanied by an
affidavit of counsel to Indemnitee to the effect that such counsel
has reviewed such Expenses and that such Expenses are reasonable in
such counsel’s view, then such expenses shall be deemed
reasonable in the absence of clear and convincing evidence to the
contrary. By execution of this Agreement, Indemnitee shall be
deemed to have made whatever undertaking as may be required by law
at the time of any advancement of Expenses with respect to
repayment to the Corporation of such Expenses. In the event that
the Corporation shall breach its obligation to advance Expenses
under this Section 3, the parties hereto agree that
Indemnitee’s remedies available at law would not be adequate
and that Indemnitee would be entitled to specific
performance.
4. Presumptions and Effect of
Certain Proceedings . Upon making a request for
indemnification, Indemnitee shall be presumed to be entitled to
indemnification under this Agreement and the Corporation shall have
the burden of proof to overcome that presumption in reaching any
contrary determination. The termination of any Proceeding by
judgment, order, settlement, arbitration award or conviction, or
upon a plea of nolo contendere or its equivalent shall not affect
this presumption or, except as determined by a final judicial
decision adverse to Indemnitee from which there is no further right
to appeal, establish a presumption with regard to any factual
matter relevant to determining Indemnitee’s rights to
indemnification hereunder. If the person or persons so empowered to
make a determination pursuant to Section 5 hereof shall have
failed to make the requested determination within the period
provided for in Section 5, a determination that Indemnitee is
entitled to indemnification shall be deemed to have been
made.
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5. Procedure for Determination of
Entitlement to Indemnification .
(a) Whenever Indemnitee believes
that Indemnitee is entitled to indemnification pursuant to this
Agreement, Indemnitee shall submit a written request for
indemnification to the Corporation. Any request for indemnification
shall include sufficient documentation or information reasonably
available to Indemnitee for the determination of entitlement to
indemnification. In any event, Indemnitee shall submit
Indemnitee’s claim for indemnification within a reasonable
time, not to exceed five (5) years after any judgment, order,
settlement, dismissal, arbitration award, conviction, acceptance of
a plea of nolo contendere or its equivalent, or final
determination, whichever is the later date for which Indemnitee
requests indemnification. The Corporate Secretary or other
appropriate officer of the Corporation shall, promptly upon receipt
of Indemnitee’s request for indemnification, advise the Board
of Directors in writing that Indemnitee has made such request.
Determination of Indemnitee’s entitlement to indemnification
shall be made not later than sixty (60) days after the
Corporation’s receipt of Indemnitee’s written request
for such indemnification, provided that any request for
indemnification for Liabilities, other than amounts paid in
settlement, shall have been made after a determination thereof in a
Proceeding. If it is so determined that the Indemnitee is entitled
to indemnification, and Indemnitee has already paid the
Liabilities, reimbursement to the Indemnitee shall be made within
ten (10) days after such determination; otherwise, the
Corporation shall pay the Liabilities on behalf of Indemnitee if
and when Indemnitee becomes legally obligated to make
payment.
(b) The Corporation shall be
entitled to select the decision-making authority by which
Indemnitee’s entitlement to indemnification will be heard;
provided, however, that if there has been a Change in Control of
the Corporation, Independent Legal Counsel (as hereinafter defined)
shall determine whether Indemnitee is entitled to indemnification.
The decision-making authority shall be any one of the
following:
(i) the Disinterested Directors (as
hereinafter defined), by majority vote thereof, even though less
than a quorum;
(ii) a committee of Disinterested
Directors designated by majority vote of Disinterested Directors,
even though less than a quorum; or
(iii) Independent Legal Counsel,
whose determination shall be made in a written opinion.
6. Specific Limitations on
Indemnification . Notwithstanding anything in this Agreement to
the contrary, the Corporation shall not be obligated under this
Agreement to make any payment to Indemnitee with respect to any
Proceeding or to make any Expense Advance (and Indemnitee hereby
waives and relinquishes any right under this Agreement, the
certificate of incorporation and bylaws of the corporation or
otherwise to be indemnified and held harmless or to receive any
Expense Advance):
(a) To the extent that payment is
actually made to Indemnitee under any insurance policy, or is made
to Indemnitee by the Corporation or an affiliate otherwise than
pursuant to this Agreement. Notwithstanding the availability of
such insurance, Indemnitee also may claim indemnification from the
Corporation pursuant to this Agreement by assigning to the
Corporation any claims under such insurance to the extent
Indemnitee is paid by the Corporation;
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(b) Provided there has been no
Change in Control, for Liabilities in connection with Proceedings
settled without the Corporation’s consent, which consent,
however, shall not be unreasonably withheld;
(c) For profits made from the
purchase or sale by Indemnitee of securities of the Corporation
within the meaning of Section 16(b) of the Securities Exchange
Act of 1934, as amended (the “Exchange Act”), or
similar provisions of any state statutory or common law;
(d) To the extent it would be
otherwise prohibited by law, if so established by a final judicial
decision adverse to Indemnitee from which there is no further right
to appeal; or
(e) Commenced by Indemnitee (other
than a Proceeding commenced by Indemnitee to enforce
Indemnitee’s rights under this Agreement), unless the
commencement of such Proceeding was authorized by the Board of
Directors.
7. Fees and Expenses of
Independent Legal Counsel . The Corporation agrees to pay the
reasonable fees and expenses of Independent Legal Counsel should
such Independent Legal Counsel be retained to make a determination
of Indemnitee’s entitlement to indemnification pursuant to
Section 5(b) of this Agreement, and to fully indemnify such
Independent Legal Counsel against any and all expenses and losses
incurred by such Independent Legal Counsel arising out of or
relating to this Agreement or such Independent Legal
Counsel’s engagement pursuant hereto.
8. Remedies of Indemnitee
.
(a) In the event that (i) a
determination pursuant to Section 5 hereof is made that
Indemnitee is not entitled to indemnification, (ii) advances
of Expenses are not made pursuant to this Agreement,
(iii) payment has not been timely made following a
determination of entitlement to indemnification pursuant to this
Agreement, or (iv) Indemnitee otherwise seeks enforcement of
this Agreement, Indemnitee shall be entitled to a final
adjudication in the Court of Chancery
