Boise Inc.

Boise Inc.

Boise Inc. Securities Settlement

The lawsuit was settled for additional disclosures in the proxy statement mailed to shareholders. the following is a summary of the proceedings in this lawsuit: ‘On September 16, 2013, Boise and Packaging Corporation of America (PCA) announced that they had entered into an Agreement and Plan of Merger, dated as of September 16, 2013 (the Merger Agreement), by and among PCA, Bee Acquisition Corporation (Merger Sub) and Boise (the Proposed Transaction). Pursuant to the Merger Agreement, Merger Sub commenced a cash tender offer on September 26, 2013 to acquire all shares of Boise’s common stock for $12.55 per share (the Offer). The Merger Agreement provided that, following the consummation of the Offer, subject to its conditions, Merger Sub would be merged with and into Boise, with Boise becoming a wholly owned subsidiary of PCA (the Merger). On September 20, 2013, Jean Ratley, a purported stockholder of Boise, filed his Verified Class Action Complaint (the Ratley Action), titled Ratley v. Boise, Inc., et al., C.A. No. 8933-VCG, on behalf of the public stockholders of Boise, challenging the Proposed Transaction and asserting claims against Carl A. Albert, Alexander Toeldte, Jonathan W. Berger, Jack Goldman, Heinrich R. Lenz, and Jason G. Weiss (collectively, the Individual Defendants), and Boise (collectively with the Individual Defendants, the Boise Defendants), PCA and Merger Sub (with the Boise Defendants, the Defendants). On September 25, 2013, DCM Multi-Manager Fund, LLC, another purported stockholder of Boise, filed its Verified Class Action Complaint (the DCM Action), titled DCM Multi-Manager Fund, LLC v. Boise Inc., et al., C.A. 8944-VCG, on behalf of the public stockholders of Boise, challenging the Proposed Transaction and asserting claims against Defendants. On September 27, 2013, Louisiana Municipal Police Employees Retirement System, another purported stockholder of Boise, filed its Verified Shareholder Class Action Complaint (the Louisiana Action), titled Louisiana Municipal Police Employees Retirement System v. Boise Inc. et al., C.A. 8952-VCG, on behalf of the public stockholders of Boise, challenging the Proposed Transaction and asserting claims against Defendants. On September 26, 2013, Merger Sub filed with the United States Securities and Exchange Commission (the SEC) a Schedule TO, to commence the Offer. On September 26, 2013, Boise filed with the SEC a Solicitation/Recommendation Statement on Schedule 14D-9 (the 14D-9), which, among other things, summarizes the Merger Agreement, provides an account of the events leading up to the execution of the Merger Agreement and a summary of the valuation analyses conducted by Boise board of directors financial advisor, J.P. Morgan Securities LLC (J.P. Morgan), and includes the Individual Defendants recommendation that Boise stockholders accept the Offer and tender their shares in the Offer. The Boise Defendants filed an answer to the complaint in the Ratley Action on September 26, 2013. The Boise Defendants filed an answer to the complaint in the DCM Action on September 27, 2013. On September 27, 2013, the plaintiff in the DCM Action served a First Request for Production of Documents to All Defendants, and served a subpoena on J.P. Morgan. On October 2, 2013, the Court granted the Order of Consolidation and Appointment of Leadership Structure for Plaintiffs, which consolidated the Ratley Action, the DCM Action and the Louisiana Action into the single, above-captioned action (the Action), and appointed lead and liaison counsel for plaintiffs (Plaintiffs Counsel), among other things. On October 3, 2013, the plaintiffs in the Action filed a Verified Consolidated Class Action Complaint (the Consolidated Complaint) alleging, among other things, that the Individual Defendants, aided and abetted by PCA and Merger Sub, breached their fiduciary duties in connection with the Proposed Transaction because (a) they failed to secure the best available value for Boise stockholders, and engaged in an inadequate sales process that included a failure to adequately explore strategic alternatives involving a potential sale or spin-off of the Company paper division and/or packaging division, and (b) the disclosures in the 14D-9 concerning the Proposed Transaction were materially misleading and incomplete because the 14D-9 failed to detail the separation and tax costs cited by the Individual Defendants in favoring the Proposed Transaction over a potential sale or spin-off of the Company paper division and/or packaging division, and failed to detail the full set of multi-year financial projections utilized in certain valuations analyses conducted by J.P. Morgan in connection with J.P. Morgan fairness opinion. On October 3, 2013, the plaintiffs in the Action also filed a motion for expedited discovery and other proceedings (the Expedition Motion), and a motion for a preliminary injunction seeking to enjoin the Proposed Transaction based on the failure of the 14D-9 to provide certain material information to Boise stockholders, as alleged in the Consolidated Complaint. On October 4, 2013, the Boise Defendants filed an answer to the Consolidated Complaint, and also filed a motion for judgment on the pleadings pursuant to Chancery Court Rule 12(c). On October 4, 2013, Jamie Suprina, another purported stockholder of Boise, filed her Verified Class Action Complaint (the Suprina Action), titled Suprina v. Boise Inc. et al., C.A. 8978-VCG, on behalf of the public stockholders of Boise challenging the Proposed Transaction and asserting claims against Defendants. On October 7, 2013, Defendants filed an opposition to the Expedition Motion, and the Court scheduled an October 9, 2013 hearing on the Expedition Motion. On October 8, 2013, PCA and Merger Sub filed a motion to dismiss the claims asserted against them in the Consolidated Complaint pursuant to Chancery Court Rule 12(b)(6). The parties reached agreement as to the scope of discovery to be provided, such that the Court cancelled the October 9, 2013 hearing on the Expedition Motion. On October 14, 2013, the Court granted the Amended Order of Consolidation and Appointment of Leadership Structure for Plaintiffs, thereby consolidating the Suprina Action into the Action. Plaintiffs Counsel proceeded to conduct discovery including a review and analysis of internal, non-public documents of Boise and J.P. Morgan, as well as the deposition of Samuel K. Cotterell, Chief Financial Officer of Boise, on October 13, 2013. On October 15, 2013, the plaintiff in the DCM Action withdrew as a plaintiff from the Action.1 Counsel for the parties to the Action engaged in discussions regarding Plaintiffs demands for further disclosure to Boise stockholders through an amendment to the 14D-9 (the Supplemental Disclosures), and held arm-length discussions concerning a possible settlement of the Action based on Plaintiffs demands. After arm-length negotiations, counsel to the parties in the Action reached an agreement-in-principle concerning the proposed settlement of the Action. Those negotiations and discussions led to the execution of a memorandum of understanding (the MOU) on October 15, 2013. The MOU provided for an agreement in principle to settle the Action (the Settlement), subject to additional confirmatory discovery and approval of the Court, on the basis of the Supplemental Disclosures to Boise stockholders in an amendment to the 14D-9 in the form attached hereto as Exhibit A, that was filed with the SEC on October 15, 2013, concerning subject areas raised by Plaintiffs Counsel. On October 16, 2013, the parties notified the Court regarding the MOU and of Plaintiffs intention to conduct confirmatory discovery relating to the proposed Settlement. Following the execution of the MOU, and as contemplated therein, Plaintiffs Counsel conducted a further investigation of the facts and circumstances underlying the claims asserted in the Action, which included, among other things, reviewing and analyzing over 15,000 pages of documents produced by Defendants and conducting the deposition of Michael Macakanja, an Executive Director of J.P. Morgan, on April 30, 2014. On October 25, 2013, Merger Sub completed the Offer and Merger Sub was merged with and into Boise in accordance with Section 251(h) of the Delaware General Corporation Law.’

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