Exhibit 10.21


FORM OF INDEMNITY
AGREEMENT


This
Indemnity Agreement (“Agreement”) is made and entered into as of [DATE] by and
between PLUM CREEK
TIMBER COMPANY, INC., a Delaware corporation
(the “Company”), and [NAME OF OFFICER/DIRECTOR] (the “Agent”).


WHEREAS,
it is essential to the Company to attract and retain as directors and officers
the most capable persons reasonably available;


WHEREAS,
the Agent is a director and/or officer of the Company;


WHEREAS,
both the Company and Agent recognize the increased risk of litigation and other
claims being asserted against directors and/or officers of public companies in
today’s environment;


WHEREAS,
basic protection against undue risk of personal liability of directors and
officers in the past has been provided to a significant extent through
insurance coverage providing reasonable protection at reasonable cost; but
substantial changes in the marketplace for such insurance has made it
increasingly difficult to obtain such insurance;


WHEREAS,
the current difficulty in obtaining adequate insurance and uncertainties
relating to indemnification have increased the risk of being unable to attract
and retain such persons;


WHEREAS,
the Board of Directors of the Company has determined that the inability to
attract and retain such persons would be detrimental to the best interests of
the Company and its stockholders and that the Company should seek to assure
such persons that there will be increased certainty of such protection in the
future;


WHEREAS,
in recognition of the need for corporations to be able to induce capable and
responsible persons to accept positions as directors and/or members of
management of business corporations, Delaware law authorizes corporations to
indemnify and advance certain expenses to their directors and officers, and
further authorizes corporations to purchase and maintain insurance for the
benefit of their directors and officers;


WHEREAS,
the Certificate of Incorporation and By-laws of the Company require the Company
to indemnify and advance expenses to its directors and officers to the fullest
extent permitted by law and the Agent has been serving and continues to serve
as a director or officer of the Company in part in reliance on such Certificate
of Incorporation and By-laws; and


WHEREAS,
in recognition of the need to provide the Agent with the ability to resist and
defend against unjustified and deficient claims, and with substantial
protection against personal liability arising from such claims, the increasing
difficulty in obtaining satisfactory director and officer liability insurance
coverage and the Agent’s reliance on the Company’s Certificate of Incorporation
and By-laws in order to procure the Agent’s continued service as a director
and/or officer of the Company and to enhance the Agent’s ability to serve the
Company in an effective manner, and in order to provide such ability and
protection pursuant to express contract rights (intended to be enforceable
irrespective of, among other things, any amendment to the Company’s Certificate
of Incorporation or By-laws, any change in the composition of the Company’s
Board of Directors or any change-in-control or business combination transaction
relating to the Company), the Company wishes to provide in this Agreement for
the indemnification of and the advancement of Expenses (as defined in Section
1) to the Agent to the fullest extent (whether partial or complete) permitted
by law and 


 


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as set forth in this Agreement and
for the continued coverage of the Agent under the Company’s directors’ and
officers’ liability insurance policies.


 


NOW,
THEREFORE, in consideration of tine foregoing recitals and the mutual
agreements set forth herein, the parties hereby agree as follows:


1.  Indemnification
and Advancement of Expenses. Subject
to Section 5, the Company agrees that (i) if the Agent is made a party,
or is threatened to be made a party, to any action, suit or proceeding, whether
civil, criminal, arbitrative, administrative or investigative, pursuant to any
alternative dispute mechanism or other, and whether made pursuant to federal,
state or other laws, by reason of the fact that he or she is or was an officer,
employee, director, agent, fiduciary or representative of the Company or is or
was serving at the request of the Company as an officer, director, employee,
director, partner, agent, fiduciary or representative of another trust,
corporation, limited liability company, partnership, joint venture or other
entity or enterprise, including service with respect to employee benefit plans,
whether or not the basis of such Proceeding is the Agent’s alleged action in an
official capacity while serving as an officer, director, employee, fiduciary,
partner, agent or representative (a “Proceeding”), or (ii) if any claim, demand,
request, threat, discovery request, inquiry, investigation, or request for
testimony or information is made, or threatened to be made, (whether or not
relating to any event or occurrence prior to the date hereof) that arises out
of or relates to the Agent’s service in any of the foregoing capacities (a
“Claim”, and together with a “Proceeding”, an “Indemnifiable Action”), then the
Agent shall promptly be indemnified and held harmless by the Company to the
fullest extent legally permitted or authorized by the Certificate of
Incorporation or By-laws of the Company, against any and all costs, expenses,
liabilities and losses (including, without limitation, reasonable and
documented attorneys’ fees, experts’ fees, witness fees, court costs, retainers,
transcript fees, duplicating costs, printing and binding costs, telephone
charges, postage, delivery service fees, judgments, interest, expenses of
investigation, penalties, fines, ERISA excise taxes or penalties, and amounts
paid or to be paid in settlement and all other costs, expenses and other
amounts paid or payable in connection with investigating, defending, being a
witness in or participating in (including on appeal), or preparing to
investigate, defend, be a witness in or participate in (including on appeal),
any Indemnifiable Action) paid or payable by the Agent in connection therewith
(“Expenses”). In connection with any such Indemnifiable Action, the Company
shall, at the Agent’s option,  pay all
Expenses on behalf of the Agent directly to any service provider or vendor
within five (5) business days of receipt by the Company of a proper invoice
reasonably detailing the Expenses.  If
the Agent does not choose to have the Company pay Expenses directly to such
service providers or vendors consistent with the foregoing, then in connection
with any such Indemnifiable Action, the Company shall either  advance to the Agent funds in an amount
sufficient to pay all Expenses,  reimburse
the Agent for all Expenses actually paid by the Agent, or advance to the Agent
all Expenses payable by the Agent in each case within five (5) business days
after receipt by the Company from the Agent of a written request for such
payment, advancement or reimbursement, provided that  the Agent shall repay, without interest, any
amounts actually advanced to the Agent that, at the final disposition of the
Indemnifiable Action to which the advance related, were in excess of amounts
paid or payable by the Agent in respect of Expenses related to, arising out of
or resulting from such Indemnifiable Action. 
In connection with any such payment, advance or reimbursement, the Agent
undertakes and agrees to repay any amounts paid, advanced or reimbursed by the
Company in respect of Expenses relating to, arising out of or resulting from
any Indemnifiable Action in respect of which it shall have been determined,
following the final disposition of such Indemnifiable Action and in accordance
with Section 5, that the Agent is not entitled to indemnification  hereunder; it being understood and agreed
that the foregoing shall satisfy any requirement that the Agent provide the
Company with an undertaking to repay any advancement of Expenses prior to the
payment, advancement or reimbursement thereof by the Company .  Notwithstanding the foregoing, the Agent will
not be indemnified against Claims against the Agent arising due to violations
of Section 16 under the Securities Exchange Act of 1934.  Indemnification shall be made from the
legally available assets of the Company and no shareholder of the Company shall
be personally liable to the Agent under this Agreement.  If the Agent is entitled under any provision
of this Agreement to indemnification by the Company for some or a portion of
any Expenses but not for all of the total amount thereof, the Company shall
nevertheless indemnify the Agent for the portion thereof to which the Agent is
entitled.


2.    Indemnification
Procedures. To obtain
indemnification under this Agreement in respect of an Indemnifiable Action, the
Agent shall submit to the Company a written request therefore, including a
brief description (based upon information then available to the Agent) of such
Indemnifiable Action.  If, at the time of
the receipt of such request, the Company has D&O Insurance (as defined in
Section 9) in effect under 


 


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which coverage for such Indemnifiable Action is
potentially available, the Company shall give prompt written notice of such
Indemnifiable Action to the applicable insurers in accordance with the
procedures set forth in the applicable policies.  The Company shall provide to the Agent a copy
of such notice delivered to the applicable insurers, and copies of all
subsequent correspondence between the Company and such insurers regarding the
Indemnifiable Action, in each case substantially concurrently with the delivery
or receipt thereof by the Company.  The
failure by the Agent to timely notify the Company of any Indemnifiable Action
shall not relieve the Company from any liability hereunder unless, and only to
the extent that, the Company did not otherwise learn of such Indemnifiable
Action and such failure results in forfeiture by the Company of substantial
defenses, rights or insurance coverage.


The Company shall be entitled to assume the defense of any Proceeding in
which the Agent has been made a defendant and which the Agent seeks
indemnification under this Agreement. Notwithstanding the foregoing, if the
Agent reasonably determines that there may be a conflict between the positions
of the Company or the other parties to the proceeding that are indemnified by
the Company and not represented by separate counsel (the “Other Indemnified
Parties”) and the Agent in connection with any such Proceeding, or if the Agent
otherwise reasonably concludes that representation of both the Company or the
Other Indemnified Parties and the Agent by the same counsel would be inappropriate (e. g., due to actual
or potential differing interests between them), or if the Proceeding involves
the Agent, but neither the Company nor any other Indemnified Party, and the
Agent reasonably withholds consent to being represented by the counsel selected
by the Company, then counsel selected by the Agent shall conduct the defense of
the Agent to the extent reasonably determined by such counsel to be necessary
to protect the interests of the Agent, and the Company shall indemnify the
Agent therefor to the extent otherwise permitted hereunder. If the Company
shall not have elected to assume the defense of any such Proceeding for the Agent
within thirty (30) days after receiving notice written thereof from the Agent,
the Company shall be deemed to have waived any right it might otherwise have to
assume such defense.  The Company shall
not be liable to the Agent under this Agreement for any amounts paid in
settlement of any threatened or pending Indemnifiable Action affected without
the Company’s prior written consent.  The
Company shall not, without the prior written consent of the Agent, effect any
settlement of any threatened or pending Indemnifiable Action which the Agent is
or could have been a party unless such settlement solely involves the payment
of money and includes a complete and unconditional release of the Agent from
all liability on any claims that are the subject matter of such Indemnifiable
Action.  Neither the Company nor the
Agent shall unreasonably withhold its consent to any proposed settlement; provided
that the Agent may withhold consent to any settlement that does not provide a
complete and unconditional release of the Agent.


 


3.   Indemnification for Additional Expenses. 
Without limiting the generality or effect of the foregoing,
the Company shall indemnify and hold harmless the Agent against and, if
requested by the Agent, shall reimburse the Agent for, or advance to the Agent,
within five business days of such request, any and all Expenses paid or payable
by the Agent or which the Agent determines are reasonably likely to be paid or
payable by the Agent in connection with any Claim or Proceeding made,
instituted or conducted by the Agent for (a) indemnification or reimbursement
or advance payment of Expenses by the Company under any provision of this
Agreement, or under any other agreement or provision of the Company’s
Certificate of Incorporation or By-laws now or hereafter in effect relating to
Indemnifiable Actions, and/or (b) recovery under any D&O Insurance (as
defined in Section 9) now or hereafter maintained by the Company, regardless in
each case of whether the Agent ultimately is determined to be entitled to such
indemnification, reimbursement, advance or insurance recovery, as the case may
be, referred to in clause (a) or (b) of this sentence; provided, however,
that the Agent shall return, without interest, any such advance of Expenses (or
portion thereof) which remains unspent at the final disposition of the Claim or
Proceeding to which the advance related.


 


4.   Period of Limitations.  No
legal action shall be brought and no cause of action shall be asserted by or in
the right of the Company against the Agent, the Agent’s spouse, assigns, heirs,
devisees, executors, administrators or personal or legal representatives after
the expiration of two years from the date of the facts which gave rise to such
cause of action, and any claim or cause of action of the Company 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.


 


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5.    Determination of Right to Indemnification.


 


(a)               To the extent that the Agent
shall have been successful on the merits or otherwise in defense of any
Indemnifiable Action or any portion thereof or in defense of any issue or
matter therein, including, without limitation, dismissal with or without
prejudice, the Agent shall be indemnified against all Expenses relating to,
arising out of or resulting from such Indemnifiable Action or portion thereof
or issue or matter therein in accordance with Section 1 and no Standard of
Conduct Determination (as defined below in Section 5(b)) shall be required.


 


(b)               To the extent that the provisions
of Section 5(a) are inapplicable to an Indemnifiable Action that shall have
been finally disposed of, there has been no Change of Control pursuant to
Section 5(f) and there has been no Potential Change of Control pursuant to
Section 5(g), any determination of whether the Agent has satisfied any applicable
standard of conduct under Delaware law that is a legally required condition
precedent to indemnification of the Agent hereunder against Expenses relating
to, arising out of or resulting from such Indemnifiable Action (a “Standard of
Conduct Determination”) shall be made at the election of the Agent,  (i) by a majority vote of directors of the
Company who are not and were not a party to the Claim or Proceeding in respect
of which indemnification is sought by the Agent (“Disinterested Directors”),
even if less than a quorum of the Board of Directors or, if such Disinterested
Directors so direct, by a majority vote of a committee of Disinterested
Directors designated by a majority vote of all Disinterested Directors, (ii) by
Independent Counsel (as defined below in Section 5(f)) in a written opinion
addressed to the Board of Directors, a copy of which shall be delivered to the
Agent or (iii) by a panel of three arbitrators, one of whom is selected by the
Agent, another of whom is selected by the Company and the last of whom is
selected by the first two arbitrators so selected.  The Agent will cooperate with the person or
persons making such Standard of Conduct Determination, including providing to
such person or persons, upon reasonable advance request, any documentation or
information which is not privileged or otherwise protected from disclosure and
which is reasonably available to the Agent and reasonably necessary to such
determination.  The Company shall
indemnify and hold harmless the Agent against and, if requested by the Agent,
shall reimburse the Agent for, or advance to the Agent, within five business
days of such request, any and all costs, expenses and other amounts (including
attorneys’ and experts’ fees and expenses) paid or payable by the Agent in so
cooperating with the person or persons making such Standard of Conduct
Determination.


 


(c)               The Company shall use its
reasonable best efforts to cause any Standard of Conduct Determination required
under Section 5(b) to be made as promptly as practicable.  If (i) the person or persons empowered or
selected under Section 5 to make the Standard of Conduct Determination shall
not have made a determination within 30 days after the later of (A) receipt by
the Company of written notice from the Agent advising the Company of the final
disposition of the applicable Indemnifiable Action and (B) receipt by the
Company of written notice from the Agent notifying the Company of the Agent’s
choice of forum pursuant to Section 5(b) (the later of the events specified in
clause (A) and clause (B) being the 
“Notification Date”) and (ii) the Agent shall have fulfilled its
obligations set forth in the second sentence of Section 5(b), then the Agent
shall be deemed to have satisfied the applicable standard of conduct; provided
that such 30-day period may be extended for a reasonable time, not to exceed an
additional 30 days, if the person or persons making such determination in good
faith requires such additional time for the obtaining or evaluation of
documentation and/or information relating to such determination.


 


(d)               If the Agent shall be entitled to
indemnification hereunder against any Expenses under circumstances where (i) no
determination of whether the Agent has satisfied any applicable standard of
conduct under Delaware law is a legally required condition precedent to
indemnification of the Agent hereunder against such Expenses, or (ii) the Agent
has been determined or deemed pursuant to Section 5(b) or (c) to have satisfied
any applicable standard of conduct under Delaware law which is a legally
required condition precedent to indemnification of the Agent hereunder against
such Expenses, then the Company shall pay such expenses to the Agent, within
five business days after the later of (x) the Notification Date in respect of
the Indemnifiable Action or portion thereof to which such Expenses are related,
out of which such Expenses arose or from which such Expenses resulted and (y)
the earliest date on which the applicable criterion specified in clause (i) or
(ii) above shall have been satisfied.


 


(e)               If a Standard of Conduct
Determination is to be made by Independent Counsel pursuant to Section 5(b),
the Independent Counsel shall be selected by the Agent, and the Agent shall
give written notice to the Company advising it of the identity of the
Independent Counsel so selected.  The
Company may, within five business days after receiving written notice of
selection from the Agent, deliver to the Agent a written objection to such
selection; provided, however, that such objection may be asserted
only on the ground that the Independent Counsel so selected does not satisfy
the criteria set forth in the definition of “Independent Counsel” in Section
5(f), and the objection shall set forth 


 


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with particularity the
factual basis of such assertion.  Absent
a proper and timely objection, the person or firm so selected shall act as
Independent Counsel.  If such written objection
is properly and timely made and substantiated, (i) the Independent Counsel so
selected may not serve as Independent Counsel unless and until such objection
is withdrawn or a court has determined that such objection is without merit and
(ii) the Agent may, at its option, select an alternative Independent Counsel and
give written notice to the Company advising the Company of the identity of the
alternative Independent Counsel so selected, in which case the provisions of
the two immediately preceding sentences and clause (i) of this sentence shall
apply to such subsequent selection and notice. 
If applicable, the provisions of clause (ii) of the immediately
preceding sentence shall apply to successive alternative selections.  If no Independent Counsel that is permitted
under the foregoing provisions of this Section 5(e) to make the Standard of
Conduct Determination shall have been selected within 30 days after the Agent
gives its initial notice pursuant to the first sentence of this Section 5(e) or
the Company gives its initial notice pursuant to the second sentence of this
Section 5(e), as the case may be, either the Company or the Agent may petition
the Court of Chancery of the State of Delaware for resolution of any objection
which shall have been made by the Company or the Agent to the other’s selection
of Independent Counsel and/or for the appointment as Independent Counsel of a
person selected by the Court or by such other person as the Court shall
designate, and the person or firm with respect to whom all objections are so
resolved or the person or firm so appointed will act as Independent
Counsel.  In all events, the Company
shall pay all of the reasonable fees and expenses of, and all other fees,
expenses and other amounts paid or payable by, the Independent Counsel in connection
with the Independent Counsel’s determination pursuant to Section 5(b),
including in connection with any challenge thereto or defense thereof, and the
Company shall fully indemnify and hold harmless such counsel against any and
all expenses (including attorney’s fees), claims, liabilities and damages
arising out of or relating to this Agreement or its engagement pursuant hereto.


 


(f)                The Company agrees that if there
is a Change in Control (as defined below) of the Company, then with respect to
all matters thereafter arising concerning the rights of the Agent to indemnity
payments and advances of any Expenses under this Agreement or any other
agreement or Company by-law now or hereafter in effect relating to
Indemnifiable Actions, the Company shall seek legal advice only from
Independent Counsel (as defined below) selected by the Agent and approved by
the Company (which approval shall not be unreasonably withheld).  Such counsel, among other things, shall
render its written opinion to the Company and the Agent as to whether and to
what extent the Agent would be permitted to be indemnified under applicable
law.  In all events, the Company shall
pay all of the reasonable fees and expenses of, and all other fees, expenses
and other amounts paid or payable by, the Independent Counsel referred to in
this Section 5(f) in connection with the foregoing, including in connection
with any challenge to or defense of any action or decision of such Independent
Counsel, and the Company shall fully indemnify and hold harmless such counsel
against any and all expenses (including attorney’s fees), claims, liabilities
and damages arising out of or relating to this Agreement or its engagement
pursuant hereto.


 


“Change in Control” means
the occurrence after the date of this Agreement of any of the following events:


 


(i) any individual,
entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the
Exchange Act) (a “Person”), is or becomes the beneficial owner (within the
meaning of Rule 13d-3 promulgated under the Exchange Act), directly or
indirectly, of 50% or more of the total voting power of the then outstanding
Voting Stock; provided, however, that the following events shall
not constitute or result in a Change in Control: (A) any acquisition of Voting
Stock directly from the Company, (B) any acquisition of Voting Stock by the
Company, (C) any acquisition of Voting Stock by any employee benefit plan (or
related trust, or any trustee or other fiduciary thereof in such capacity)
sponsored or maintained by the Company or any Subsidiary or (D) any acquisition
of Voting Stock by any Person pursuant to a Business Combination that complies
with clauses (A), (B) and (C) of Section (iii) below; or


 


(ii) during any two-year
period, individuals who, as of the beginning of such period, constitute the
Board of Directors (the “Incumbent Directors”) cease for any reason (other than
death or disability) to constitute at least a majority of the Board of
Directors; provided, however, that any individual becoming a
director subsequent to the date hereof whose election, or nomination for
election by the Company’s stockholders, was approved by a vote of at least a
majority of the then Incumbent Directors (either by a specific vote or by
approval of the proxy statement of the Company in which such person is named as
a nominee for director, without objection of the Company, to such nomination)
shall be considered as though such individual were an Incumbent Director, but
excluding for this purpose, any such individual whose initial assumption of
office occurs as a result of an actual or threatened election contest (as
described in Rule 14a-


 


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12(c) of the Exchange Act) with respect to the
election or removal of directors or other actual or threatened solicitation of
proxies or consents by or on behalf of a Person other than the Board of
Directors; or


 


(iii) consummation of a
reorganization, merger or consolidation, or sale or other disposition of all or
substantially all of the assets, of the Company (a “Business Combination”),
unless, in each case, immediately following such Business Combination, (A) all
or substantially all of the individuals and entities who were the beneficial
owners of Voting Stock of the Company immediately prior to such Business
Combination beneficially own, directly or indirectly, more than 50% of the
combined voting power of the then outstanding voting securities entitled to
vote generally in the election of directors of the entity resulting from such
Business Combination (including, without limitation, an entity which as a
result of such transaction owns the Company or all or substantially all of the
Company’s assets either directly or through one or more subsidiaries) in
substantially the same proportions relative to each other as their ownership,
immediately prior to such Business Combination, of the Voting Stock of the
Company, (B) no Person (excluding any entity resulting from such Business
Combination or any employee benefit plan (or related trust, or any trustee or
other fiduciary thereof in such capacity) sponsored or maintained by the
Company, any Subsidiary or such entity resulting from such Business
Combination) beneficially owns, directly or indirectly, voting securities
representing 15% or more of the combined voting power of the then outstanding voting
securities entitled to vote generally in the election of directors of the
entity resulting from such Business Combination 
except to the extent such ownership existed prior to the Business
Combination and (C) at least a majority of the members of the board of
directors of the entity resulting from such Business Combination were Incumbent
Directors at the time of the execution of the initial agreement or of the
action of the Board of Directors providing for such Business Combination; or


 


(iv)  approval by the stockholders of the Company
of a plan of complete liquidation or dissolution of the Company, except
pursuant to a Business Combination that complies with clauses (A), (B) and (C)
of Section (iii) above.


 


(v) For purposes of this
Section, the following terms shall have the following meanings:


 


(A)          “Exchange Act” shall mean the
Securities Exchange Act of 1934, as amended, and the rules and regulations
promulgated thereunder.


 


(B)           “Subsidiary” means an entity in which
the Company directly or indirectly beneficially owns 50% or more of the
outstanding Voting Stock.


 


(C)           “Voting Stock” means securities
entitled to vote generally in the election of directors.


 


“Independent Counsel”
means a law firm, or a member of a law firm, that is experienced in matters of
corporation law and neither presently is, nor in the past five years has been,
retained to represent:  (i) the Company
or the Agent in any matter material to either such party (other than with
respect to matters concerning the Agent under this Agreement, or of other
indemnitees under similar indemnification agreements), or (ii) any other party
to the Indemnifiable Action giving rise to indemnification hereunder.  Notwithstanding the foregoing, the term
“Independent Counsel” shall not include any person who, under the applicable
standards of professional conduct then prevailing, would have a conflict of
interest in representing either the Company or the Agent in an action to
determine the Agent’s rights under this Agreement.


 


(g)               In the event of a Potential Change
in Control (as defined below), the Company shall, upon written request by the
Agent, create a trust for the benefit of the Agent and from time to time upon
written request of the Agent shall fund such trust in an amount sufficient to
satisfy any and all Expenses relating to an Indemnifiable Action reasonably
anticipated at the time of each such request to be incurred in connection with
investigating, preparing for and defending any Indemnifiable Action any and all
judgments, fines, penalties and settlement amounts of any and all Expenses 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 Independent Counsel referred to in Section 5(f) but in no
event shall exceed an amount equal to the policy limits of any D&O
Insurance (as hereafter defined) then in effect or $50,000,000, whichever is
greater.  The terms of the 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 Agent, (ii) the
trustee shall advance, within two business days of a request by the Agent, any
and 


 


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all Expenses to the Agent
(and the Agent hereby agrees to reimburse the trust under the circumstances
under which the Agent would be required to reimburse the Company under Section
1 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 Agent all amounts for which the Agent 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 any forum listed in Section 5(b) or a court of competent
jurisdiction, as the case may be, that the Agent has been fully indemnified
under the terms of this Agreement.  The
trustee shall be chosen by the Agent. 
Nothing in this Section 5(g) shall relieve the Company of any of its
obligations under this Agreement.


 


“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; (iii) any person, other than a trustee or other
fiduciary holding securities under an employee benefit plan of the Company or 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, who is or becomes the beneficial owner, directly or indirectly, of
securities of the Company representing 9.5% or more of the combined voting
power of the Company’s then outstanding Voting Stock, increases his beneficial
ownership of such securities by five percentage points (5%) or more over the
percentage so owned by such person; or (iv) the Board of Directors adopts a
resolution to the effect that, for purposes of this Agreement, a Potential
Change in Control has occurred.


 


6.   Presumption of Entitlement. 
In making any Standard of Conduct Determination or other determination
relating to this Agreement, the person or persons making such determination
shall presume that the Agent has satisfied the applicable standard of conduct
or otherwise is entitled to the treatment hereunder requested by the Agent, and
the Company shall have the burden of proof to overcome such presumption and
shall satisfy such burden of proof (and the person or persons making such
determination shall be entitled to reach a conclusion contrary to such
presumption) only if the Company adduces clear and convincing evidence to the
contrary.  Any Standard of Conduct
Determination that is adverse to the Agent may be challenged by the Agent in
the Court of Chancery of the State of Delaware. 
No determination by the Company (including by its directors or any
Independent Counsel or any arbitration panel) that the Agent has not satisfied
any applicable standard of conduct shall be a defense to any Claim by the Agent
for indemnification or reimbursement or advance payment of Expenses by the
Company hereunder or create a presumption that the Agent has not met any
applicable standard of conduct.


 


7.   No Other Presumption. 
For purposes of this Agreement, the termination of any Claim or
Proceeding by judgment, order, settlement (whether with or without court
approval) or conviction, or upon a plea of nolo
contendere or its equivalent, will not create a presumption that the
Agent did not meet any applicable standard of conduct or that indemnification
hereunder is otherwise not permitted.


 


8.  Reliance as
Safe Harbor; Actions of Others.


 


(a)  For purposes of any Standard of Conduct
Determination, the Agent shall be deemed to have met the requisite standard of
conduct if the Agent’s action is based on the records or books of account of
the Company, including financial statements, or on information supplied to the
Agent by the officers of the Company in the course of their duties, or on the
advice of legal counsel for the Company or on information or records given or
reports made to the Company by an independent certified public accountant or by
an appraiser or other expert selected with reasonable care by the Company.  The provisions of this Section 8 shall not be
deemed to be exclusive or to limit in any way the other circumstances in which
the Agent may be deemed to have met the applicable standard of conduct set
forth in this Agreement.


 


(b)  The knowledge and/or actions, or failure to
act, of any director, officer, agent or employee of the Company shall not be
imputed to the Agent for purposes of determining the right to indemnification
under this Agreement.


 


9.   D&O Liability Insurance.


 


(a) Subject only to the
provisions of Section 9(b) hereof, so long as the Agent shall continue to serve
as an officer or director of the Company (or shall continue at the request of
the Company to serve as a director, officer, partner, employee, fiduciary or
agent of another business trust, company, partnership, joint venture or other
enterprise or an employee benefit plan), and thereafter so long as the Agent
shall be subject to any possible claim or threatened, 


 


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pending or completed
action, suit or proceeding, whether civil, criminal, administrative or
investigative, by reason of the fact that the Agent was a director and/or
officer of the Company or served in any of said other capacities, the Company
shall purchase and maintain in effect, including through the obtaining or
exercise of appropriate “tail” coverage, one or more valid, binding and
enforceable insurance policies issued by a reputable insurer or insurers
protecting the Company directors and the Company officers (subject to customary
limitations and exceptions) against losses, costs and expenses arising out of
any such claim, action, suit or proceeding (“D&O Insurance’“), which
D&O Insurance shall provide coverage in all respects at least comparable to
that presently provided, and shall cause the Agent to be covered by such policy
or policies.


 


The Company shall not be
required to maintain in effect the policy or policies of D&O Insurance
contemplated by the first paragraph of this Section 9(a) at any time at which
(i) said insurance is not generally available, or (ii) in the reasonable
business judgment of the persons then constituting the Board of Directors,
either (I) the premium cost for such insurance is substantially
disproportionate to the amount of coverage afforded, or (II) the coverage
provided by such insurance is so limited and/or subject to such exclusions that
there is insufficient benefit to the Company and the other insureds from such
insurance; provided, however, that to the extent that the Company
maintains any D&O Insurance, the Agent 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 or Company officer under such
policy or policies, and, further, that in the event the Company does not
purchase and maintain in effect the policy or policies of D&O Insurance
contemplated by this Section 9(a), the Company shall indemnify, and advance
expenses to, the Agent to the full extent of the coverage that would otherwise
have been provided for the benefit of the Agent pursuant to such D&O
Insurance.


 


(b) The Company’s
obligation under this Section 9 shall terminate as of the sixth anniversary of
the date on which Agent ceases to render any service or to act in any capacity
specified in Section 1 hereof.


 


 


10.  Indemnity
Limitation. The Company shall not be liable under this Agreement to
make any payment (i) with respect to any Expenses to the extent that the Agent
has already been unconditionally reimbursed from other sources or (ii) for an
accounting of profits made from the purchase or sale by the Agent of securities
of the Company within the meaning of Section 16(b) of the Securities Exchange
Act of 1934, as amended, or similar provisions of any state statutory law or
common law.


 


11.  Subrogation.
In the event of any payment by the Company under this Agreement, the
Company shall be subrogated to the extent of such payment to all of the rights
of recovery of the Agent, who shall (upon reasonable written request by the
Company and at the Company’s sole expense) execute all documents, and take all
reasonable actions as are necessary to enable the Company to enforce such
rights.


 


12.  Notice by
Agent. Agent agrees promptly to notify the Company in writing upon
being served with any summons, citation, subpoena, complaint, indictment,
information or other document relating to any Proceeding or matter which may be
subject to indemnification or advancement of expenses covered hereunder; but no
delay in complying with the foregoing obligation shall in any way limit or
affect Agent’s rights or the Company’s obligations under this Agreement.


 


13.  Notice.
For all purposes of this Agreement, all communications, including without
limitation notices, consents, requests or approvals, required or permitted to
be given hereunder shall be in writing and shall be deemed to have been duly
given when hand delivered or dispatched by electronic facsimile transmission
(with receipt thereof orally confirmed), or five business days after having
been mailed by United States registered or certified mail, return receipt
requested, postage prepaid or one business day after having been sent for next
day delivery by a nationally recognized overnight courier service, addressed to
the Company at 999 Third Avenue, Suite 4300, Seattle, Washington 98104
Attn:Corporate Secretary and to the Agent at the addresses shown on the
signature page hereto, or to such other address as any party may have furnished
to the other in writing and in accordance herewith, except that notices of
changes of address will be effective only upon receipt.


 


14.  Rights Not Exclusive.
Nothing herein shall be deemed to diminish or otherwise restrict any rights to
indemnification or to advancement of costs and expenses that the Agent may have
outside this Agreement, including without limitation rights under any provision
of the Certificate of Incorporation or By-laws of the Company, under laws of
the jurisdiction under which the Company was organized at the time that the
claim against the Agent arose, or under 


 


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any other agreement to
which the Agent is a party (collectively, “Other Indemnity Provisions”). The
Company will not adopt any amendment to the Certificate of Incorporation or
By-laws of the Company the effect of which would be to deny, diminish or
encumber the Agent’s right to indemnification under this Agreement or any Other
Indemnity Provision.


 


15.  Successors.
The Company shall require any successor (whether direct or indirect, by
purchase, merger, consolidation, reorganization or otherwise) to all or
substantially all of the business or assets of the Company, by agreement in
form and substance satisfactory to the Agent and his or her counsel, expressly
to assume and agree to perform this Agreement in the same manner and to the
same extent the Company would be required to perform if no such succession had
taken place.  This Agreement shall be
binding upon and inure to the benefit of the Company and any successor to the
Company, including without limitation any person acquiring directly or
indirectly all or substantially all of the business or assets of the Company
whether by purchase, merger, consolidation, reorganization or otherwise (and
such successor will thereafter be deemed the “Company” for purposes of this
Agreement), but shall not otherwise be assignable or delegatable by the
Company.


 


16.  Severability.
Should any section, clause or provision of this Agreement be held to be
invalid, illegal, or unenforceable, in whole or in part, the remaining
provisions of this Agreement shall remain fully enforceable and binding upon
the parties.


 


17.  Modification
and Waiver. This Agreement supersedes in its entirety any existing
or prior agreement between the Company and Agent pertaining to the subject
matter of indemnification and insurance thereof.  No supplement, modification or amendment of
this Agreement shall be binding unless executed in writing by both of the
parties hereto or their respective successors or legal representatives. No
waiver by either party of any breach by the other party of any condition or
provision contained in this Agreement to be performed by such other party shall
be deemed a waiver of similar or dissimilar condition or provision at the same
or at any prior or subsequent time. Any waiver must be in writing and signed by
the waiving party or such party’s successor or legal representative.


 


18.  Headings.  The headings of the sections of this
Agreement are for convenience only and shall not be deemed to control or affect
the meaning or construction of any provision of this Agreement.


 


19.  Counterparts.
This Agreement may be executed in one or more counterparts each of which shall
be an original, but all of which, when taken together, shall constitute one and
the same agreement.


 


20.  Duration.
This Agreement shall continue until and terminate upon the later of (a) 10
years after Agent has ceased to occupy any position or have any relationship
with the Company or (b) the final determination of all pending or threatened
actions, suits, proceedings or investigations with respect to the Agent. This
Agreement shall he binding upon the Company and its successors and assigns and
shall inure to the benefit of the Agent and his spouse, assigns, heirs,
devisees, executors, administrators or personal or legal representatives.


 


21.  Applicable
Law. This Agreement shall be governed by and construed and enforced
in accordance with the law of the State of Delaware without reference to
principles of conflict of laws. The Company and the Agent each hereby
irrevocably consent to the jurisdiction of the Chancery Court of the State of
Delaware for all purposes in connection with any action or proceeding which
arises out of or relates to this Agreement and agree that any action instituted
under this Agreement shall be brought only in the Chancery Court of the State
of Delaware.


 


22.  Certain
Interpretive Matters.  No
provision of this Agreement shall be interpreted in favor of, or against,
either of the parties hereto by reason of the extent to which any such party or
its counsel participated in the drafting thereof or by reason of the extent to
which any such provision is inconsistent with any prior draft hereof or
thereof.


 


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IN WITNESS WHEREOF, the
undersigned have executed this Agreement as of the date first above written.


 


	
   

  	
  PLUM CREEK TIMBER COMPANY, INC.

  
	
   

  	
  a Delaware corporation

  
	
   

  	
   

  	
   

  
	
   

  	
  By: 

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
  Title: 

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  [Agent]

  	
   

  
	
   

  	
  [Address]

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  [Agent]

  	
   

  
						



 


 


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