Plumas Bancorp Indemnification Agreement
Exhibit 10.41
This
Indemnification Agreement (“Agreement”) is made and entered into as of the day of
, 2002, by and between Plumas Bancorp, a California corporation (“Bancorp”), and
, (the “Indemnitee”), a director (and/or officer) of Bancorp.
RECITALS
A. Bancorp and the Indemnitee recognize that statutes, regulations, court opinions and
Bancorp’s Articles of Incorporation and Bylaws are indefinite in providing Bancorp’s directors and
officers with adequate protection from liabilities to which they may become personally exposed as a
result of performing their duties in good faith for Bancorp;
B. Bancorp and the Indemnitee are aware of the large number of lawsuits filed against
corporate directors and officers;
C. Bancorp and the Indemnitee recognize that the cost of defending against such lawsuits may
be beyond the financial resources of most directors and officers of Bancorp;
D. Bancorp and the Indemnitee recognize that the potential risks and liabilities of being a
director and/or officer pose a significant deterrent and increased reluctance on the part of
experienced and capable individuals to serve as a director and/or officer of Bancorp;
E. Bancorp has investigated the availability and sufficiency of liability insurance for its
directors and officers with adequate protection against potential liabilities and has determined
that such insurance provides inadequate protection to its directors and officers, and, thus, it
would be in the best interests of Bancorp and its shareholders to contract with the Indemnitee, to
indemnify him/her to the fullest extent permitted by law against personal liability for
actions taken in the good faith performance of his/her duties to Bancorp;
F. Section 317 of the California Corporations Code (“Section 317”) sets forth certain
provisions relating to the mandatory and permissive indemnification of directors and officers
(among others) of a California corporation by such corporation;
G. As inducement and encouragement for experienced and capable persons such as the Indemnitee
to continue to serve as a director and/or officer of Bancorp, the Board of Directors of
Bancorp has determined, after due consideration and investigation, that this Agreement is a
reasonable and prudent means to promote and ensure the best interests of Bancorp and its
shareholders; and
H. Bancorp desires to have the Indemnitee continue to serve as a director or
officer of Bancorp free from undue concern for unpredictable, inappropriate or unreasonable
legal risks and personal liabilities by reason of his/her acting in good faith in the
performance of his/her duty to Bancorp; and the Indemnitee desires to continue to serve as
a director or officer of Bancorp; provided, and on the express condition, that the
Indemnitee is furnished with the indemnity set forth hereinafter.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth below and
based on the premises set forth above, Bancorp and the Indemnitee do hereby agree as follows:
1. Agreement to Serve. The Indemnitee will serve or continue to serve as a
director or officer of Bancorp to the best of his/her abilities at the will of
Bancorp for so long as the Indemnitee is duly elected or appointed or until such time as the
Indemnitee tenders his/her resignation in writing.
2. Definitions. As used in this Agreement:
(a) The term “Proceeding” shall include any threatened, pending or completed action, suit or
proceeding, whether brought in the right of Bancorp or otherwise and whether of a civil, criminal,
administrative or investigative nature, including, but not limited to, actions, suits or
proceedings brought under and/or predicated upon the Securities Act of 1933, as amended, and/or the
Securities Exchange Act of 1934, as amended, and/or their respective state counterparts, and/or any
rule or regulation promulgated thereunder, in which the Indemnitee may be or may have been involved
as a party or otherwise, by reason of the fact that the Indemnitee is or was a director or
officer of Bancorp, by reason of any action taken by him/her or of any inaction on
his/her part while acting as such director or officer or by reason of the fact that
he/she is or was serving at the request of Bancorp as a director, officer, employee or
agent of another corporation, partnership, joint venture, trust or other enterprise, whether or not
he/she is serving in such capacity at the time any liability or expense is incurred for
which indemnification or reimbursement can be provided under this Agreement.
(b) The term “Expenses” includes, without limitation thereto, expenses of investigations, of
judicial or administrative proceedings or appeals, attorneys’ fees and disbursements and any
expenses of establishing a right to indemnification under Paragraph 7 of this Agreement, but shall
not include the amount of judgments, settlements, fines or penalties actually levied against the
Indemnitee.
3. Indemnity in Third Party Proceedings. Bancorp shall indemnify the
Indemnitee in accordance with the provisions of this section if the Indemnitee is a party to or
threatened to be made a party to or otherwise involved in any Proceeding (other than a Proceeding
by or in the right of Bancorp to procure a judgment in its favor), by reason of the fact that the
Indemnitee is or was a director, officer, employee or agent of Bancorp or is or was serving at the
request of Bancorp as a director, officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise, against all Expenses, judgments, fines, settlements and
other amounts actually and reasonably incurred by the Indemnitee in connection with such
Proceeding, provided it is determined pursuant to Paragraph 7 of this Agreement or by the court
before which such action was brought or by the shareholders of Bancorp in the manner prescribed by
Section 317, that the Indemnitee acted in good faith and in a manner which he/she
reasonably believed to be in the best interests of Bancorp and, in the case of a criminal
proceeding, in addition, had no reasonable cause to believe that his/her conduct was
unlawful. The termination of any such Proceeding by judgment, order of court, settlement,
conviction, or upon a plea of nolo contendere, or its equivalent, shall not, of itself, create a
presumption that the Indemnitee did not act in good faith and in a manner which he/she
reasonably believed to be in the best interests of Bancorp, and with respect to any criminal
proceeding, that such person had reasonable cause to believe that his/her conduct was
unlawful.
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4. Indemnity in Proceedings by or in the Right of Bancorp. Bancorp shall indemnify the
Indemnitee in accordance with the provisions of this section if the Indemnitee is a party to or
threatened to be made a party to or otherwise involved in any Proceeding by or in the right of
Bancorp to procure a judgment in its favor by reason of the fact that the Indemnitee is or was a
director, officer, employee or agent of Bancorp or is or was serving at the request of Bancorp as a
director, officer, employee or agent of another corporation, partnership, joint venture, trust or
other enterprise against all Expenses actually and reasonably incurred by the Indemnitee in
connection with the defense or settlement of such Proceeding, provided it is determined pursuant to
Paragraph 7 of this Agreement or by the court before which such action was brought or by the
shareholders of Bancorp in the manner prescribed by Section 317, that the Indemnitee acted in good
faith and in a manner which he/she believed to be in the best interests of Bancorp and its
shareholders. Notwithstanding the foregoing, no indemnification shall be made under this Paragraph
4:
(a) in respect of any claim, issue or matter as to which the Indemnitee shall have been
adjudged to be liable to Bancorp, unless and only to the extent that the court in which such
Proceeding is or was pending shall determine upon application that, in view of all the
circumstances of the case, the Indemnitee is fairly and reasonably entitled to indemnity for such
Expenses as such court shall determine;
(b) of amounts paid in settling or otherwise disposing of a pending action without court
approval;
(c) of Expenses incurred in defending a pending action which is settled or otherwise disposed
of without court approval; or
(d) in respect of any act, omission or transaction set forth in Section 204(a)(10)(A)(i)-(vii)
of the California Corporations Code.
5. Indemnification of Expenses of Successful Party. Notwithstanding any other
provision of this Agreement, to the extent that the Indemnitee has been successful on the merits in
defense of any Proceeding or in defense of any claim, issue or matter therein, the Indemnitee shall
be indemnified against all Expenses actually and reasonably incurred in connection therewith.
6. Advances of Expenses. The Expenses incurred by the Indemnitee pursuant to
Paragraphs 3 and 4 in defending any Proceeding shall be paid by Bancorp in advance of the final
disposition of such Proceeding at the written request of the Indemnitee, if the Indemnitee shall
provide an undertaking in the form attached hereto as Exhibit “A” to Bancorp to repay such amount
unless it is ultimately determined that the Indemnitee is entitled to the payment of Expenses. The
written request to Bancorp shall include a description of the nature of the Proceeding and be
accompanied by copies of any documents filed with a court relating to the Proceeding.
Notwithstanding the foregoing or any other provision of this Agreement, no advance shall be
made by Bancorp if a determination is reasonably and promptly made by the Board of Directors by a
majority vote of a quorum of disinterested directors, or (if such a quorum is not obtainable or,
even if obtainable, a quorum of disinterested directors so directs) by independent legal counsel,
that, based upon the facts known to the Board of Directors or counsel at the time such
determination is made, (a) the Indemnitee acted in bad faith or deliberately breached
his/her duty to Bancorp or its shareholders, and (b) as a result of such actions by the
Indemnitee, it is more likely than not that it will ultimately be determined that the Indemnitee is
not entitled to indemnification under the terms of this Agreement.
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7. Rights of the Indemnitee to Indemnification Upon Application; Procedure Upon
Application. To the extent a quorum of the Board of Directors of Bancorp consisting of
directors who were or are not parties to a Proceeding is obtainable, the Board of Directors shall
determine within 45 days after receipt of the written request of the Indemnitee for indemnification
whether the Indemnitee has met the relevant standards for indemnification set forth in Paragraphs 3
and 4 and, if it determines that such standards have been met, it shall provide indemnification to
the Indemnitee.
Notwithstanding the foregoing, the Indemnitee may request independent counsel or may bring
suit in the court in which such Proceeding is or was pending to determine whether the Indemnitee is
entitled to indemnification as provided by this Agreement. The Indemnitee’s expenses incurred in
connection with successfully establishing his/her right to indemnification, in whole or in
part, shall also be indemnified by Bancorp.
8. Partial Indemnification. If the Indemnitee is entitled under any provision of this
Agreement to indemnification by Bancorp for some or a portion of the Expenses, judgments, fines,
settlements or other amounts actually and reasonably incurred by him/her in the
investigation, defense, appeal or settlement of any Proceeding but not, however, for the total
amount thereof, Bancorp shall nevertheless indemnify the Indemnitee for the portion of such
Expenses, judgments, fines, settlements or other amounts to which the Indemnitee is entitled.
9. Directors’ and Officers’ Liability Insurance. The obtaining of directors’ and
officers’ liability insurance (“D&O Coverage”) at the expense of and by Bancorp shall in no way
limit or diminish the obligation of Bancorp to indemnify the Indemnitee as provided in this
Agreement; provided, however, that any amounts actually recovered by the Indemnitee from the
insurer providing D&O Coverage shall be applied in reduction of amounts otherwise owing by Bancorp
by reason of its indemnification under this Agreement and if Bancorp pays any amounts to the
Indemnitee pursuant to this Agreement, Bancorp shall be subrogated to the Indemnitee’s rights and
claims against the insurer providing D&O Coverage and the Indemnitee shall execute such documents
as Bancorp shall deem necessary to reflect such subrogation.
10. Settlement of Claims.
(a) If Bancorp has not obtained D&O Coverage, the Indemnitee shall not settle any Proceeding
for which he/she intends to seek indemnification hereunder without first attempting to
obtain the approval of Bancorp. If the Indemnitee seeks such approval and such approval is not
granted by Bancorp, the Indemnitee shall be free to settle the Proceeding and pursue any procedures
to establish his/her right to indemnification as provided under this Agreement. If the
Indemnitee seeks such approval and such approval is not granted by Bancorp, but Bancorp agrees to
indemnify the Indemnitee, subject to Paragraph 4 herein, against any Expenses, judgments, fines,
settlements or other amounts actually and reasonably incurred by the Indemnitee in connection with
such Proceeding, the Indemnitee shall not settle such Proceeding. If, however, under such
circumstances the Indemnitee does settle such Proceeding, the Indemnitee shall forfeit
his/her rights to indemnification under this Agreement.
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(b) If Bancorp has obtained D&O Coverage, the Indemnitee shall not settle any Proceeding for
which he/she intends to seek indemnification without first attempting to obtain any
approval required with respect to such settlement by the insurance carrier of any applicable D&O
Coverage. If the Indemnitee seeks such approval and such approval is not granted by the insurance
carrier of any applicable D&O Coverage, the Indemnitee shall not settle such Proceeding without
then attempting to obtain the approval of Bancorp. In the event the Indemnitee seeks such approval
from Bancorp, Bancorp and the Indemnitee shall have the same rights and obligations as set forth in
Paragraph 10(a). If the Indemnitee seeks such approval from Bancorp and such approval is granted,
Bancorp shall be subrogated to the Indemnitee’s rights and claims against the insurance carrier of
any applicable D&O Coverage and the Indemnitee shall execute such documents as Bancorp shall deem
necessary to effect such subrogation.
11. Mutual Acknowledgment. Both Bancorp and the Indemnitee acknowledge that in
certain instances, Federal law or applicable public policy may prohibit Bancorp from indemnifying
the Indemnitee under this Agreement or otherwise.
12. Successors and Assigns. This Agreement shall be binding upon Bancorp and its
successors and assigns and shall inure to the benefit of the Indemnitee and the Indemnitee’s
spouse, heirs, executors and administrators.
13. Savings Clause. If this Agreement or any portion thereof be invalidated on any
ground by any court of competent jurisdiction, then Bancorp shall nevertheless indemnify the
Indemnitee as to Expenses, judgments, fines, settlements or other amounts with respect to any
Proceeding to the fullest extent permitted by any applicable portion of this Agreement that shall
not have been invalidated or by any other applicable law.
14. Governing Law. This Agreement shall be governed by and construed in accordance
with the laws of the State of California.
15. Notices. The Indemnitee shall, as a condition precedent to his/her
right to be indemnified under this Agreement, give to Bancorp notice in writing as soon as
practicable of any claim made against him/her for which indemnification will or could be
sought under this Agreement. Notice to Bancorp shall be directed to Plumas Bancorp, ▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: President (or such other address as Bancorp shall
designate in writing to the Indemnitee).
16. Modification and Amendment. No amendment, modification, termination or
cancellation of this Agreement, except as permitted pursuant to Section 11 above, shall be effected
unless in writing signed by both parties hereto.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date and year set forth
above.
| Indemnitee | Plumas Bancorp | |||||||||
By:
|
By: | |||||||||
| Its: | ||||||||||
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EXHIBIT A
Undertaking
TO:
|
, President | |
| Plumas Bancorp | ||
| ▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇ | ||
| ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ |
I, , a director or officer of Plumas Bancorp, a California corporation,
pursuant to Section 317(f) of the California Corporations Code and the terms of my Indemnification
Agreement with Plumas Bancorp agree to repay Plumas Bancorp for all Expenses advanced on my behalf
in defense of any Proceeding or in defense of any claim, issue or matter therein, prior to the
disposition of such Proceeding, unless it shall be ultimately determined that I am entitled to
indemnification under Section 317 of the California Corporations Code or Plumas Bancorp’s Articles
of Incorporation, Bylaws or my Indemnification Agreement.
Dated:
Indemnitee
By
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