Exhibit 10.1
DIRECTOR INDEMNIFICATION
AGREEMENT
This DIRECTOR INDEMNIFICATION
AGREEMENT (this “Agreement”) is made this
day of
, by and between UNITED SECURITY BANCSHARES, INC. , a
Delaware corporation (the “Company”), and
, a member of the Company’s Board of Directors
(“Indemnitee”).
RECITALS
WHEREAS , it is essential to the Company to retain and
attract the most competent and experienced persons available to
serve as members of the Company’s Board of Directors;
and
WHEREAS , there is a general awareness that competent
and experienced persons are becoming more reluctant to serve as
directors of a corporation unless they are protected by
comprehensive insurance or indemnification, especially since
shareholder and derivative lawsuits against publicly-held
corporations, including their directors and officers, for
line-of-duty decisions and actions have increased in number in
recent years for damages in amounts that have no reasonable or
logical relationship to the amount of compensation received by the
directors and officers from the corporation; and
WHEREAS , plaintiffs often seek damages in such large
amounts and the costs of litigation may be so substantial (whether
or not the case is meritorious) that the defense and/or settlement
of such litigation is often beyond the personal resources of
directors and officers; and
WHEREAS , it is now and has always been the express
policy of the Company, as set forth in the Company’s
Certificate of Incorporation, to indemnify and hold harmless its
directors and officers so as to provide them with the maximum
possible protection authorized by the Delaware General Corporation
Law, as the same exists or may hereafter be amended (the
“DGCL”), as specifically provided in Section 145
of the DGCL; and
WHEREAS , in connection with its commitment to indemnify
and hold harmless its directors and officers, the Company has
purchased and presently maintains a policy or policies of Directors
and Officers Liability Insurance (“D&O Insurance”)
covering certain liabilities that may be incurred by the directors
and officers of the Company in the performance of their services
for the Company; and
WHEREAS , recent developments with respect to the terms
and ongoing availability of D&O Insurance and uncertainty with
respect to the application, amendment and enforcement of statutory
indemnification provisions, as well as those found in the
Company’s Certificate of Incorporation, generally have caused
concern of the Company regarding the adequacy and reliability of
the protection afforded to the Company’s directors and
officers thereby; and
WHEREAS , the Company has concluded that, to retain and
attract the most competent and experienced persons available to
serve as members of the Company’s Board of Directors and to
encourage such individuals to take the business risks necessary for
the success of the Company, it is necessary for the Company to
contractually indemnify its directors and to assume for itself the
maximum liability for expenses and damages incurred in connection
with claims against such directors in connection with their service
to the Company and has further concluded that the failure to
provide such contractual indemnification could result in great harm
to the Company and its shareholders; and
WHEREAS , Section 145 of the DGCL and the
Company’s Certificate of Incorporation each contemplate that
agreements may be entered into between the Company and its
directors with respect to indemnification; and
WHEREAS , the Company desires and has requested
Indemnitee to serve or continue to serve as a director of the
Company free from undue concern for claims for damages arising out
of or related to service to the Company as a member of the Board of
Directors; and A
WHEREAS , Indemnitee is willing to serve, or to continue
to serve, the Company, provided that he is furnished the
indemnification provided for herein.
AGREEMENT
NOW, THEREFORE
, in consideration of
Indemnitee’s service as a director as of and after the date
hereof, the parties hereto agree as follows:
1. Agreement to
Serve . Indemnitee
agrees to serve as a director of the Company for so long as he is
duly elected or appointed in accordance with the applicable
provisions of the Company’s current Certificate of
Incorporation and Bylaws or until the resignation, removal,
permanent disability or death of Indemnitee.
2. Definitions
. As used in this
Agreement:
(a) The term
“Proceeding” shall include any threatened, pending or
completed action, suit or proceeding, whether brought by or in the
right of the Company or otherwise, and whether of a civil,
criminal, administrative or investigative nature, in which
Indemnitee is or was a party, is threatened to be made a party or
is or was a witness by reason of the fact that Indemnitee is or was
a director of the Company (or any subsidiary of the Company) or is
or was serving at the request of the Company as a director,
officer, employee, agent or fiduciary of another Company,
partnership, joint venture, trust or other enterprise.
(b) The term “Expenses”
shall include, without limitation, expenses of investigation
(including fees of expert witnesses, professional advisers and
private investigators), judicial or administrative proceedings or
appeals, amounts paid in settlement by or on behalf of Indemnitee,
attorneys’ fees and disbursements and any expenses of
establishing a right to indemnification under this Agreement, but
shall not include amounts of judgments, fines or penalties against
Indemnitee.
(c) References to “other
enterprises” shall include employee benefit plans; references
to “fines” shall include any excise taxes assessed on
Indemnitee with respect to any employee benefit plan; references to
“serving at the request of the Company” shall include
any service as a director, officer, employee or agent of the
Company that imposes duties on, or involves services by, such
director, officer, employee, agent or fiduciary with respect to an
employee benefit plan, its participants or beneficiaries; and a
person who acted in good faith and in a manner he reasonably
believed to be in the interest of the participants and
beneficiaries of an employee benefit plan shall be deemed to have
acted in a manner “not opposed to the best interest of the
Company” as referred to in this Agreement.
3. Indemnification in
Third-Party Proceedings . The Company shall indemnify Indemnitee, in
accordance with the provisions of this section, against all
Expenses, judgments, fines and penalties actually and reasonably
incurred by Indemnitee in connection with the defense or settlement
of any Proceeding (other than a Proceeding by or in the right of
the Company to procure a judgment in its favor), but only if
Indemnitee acted in good faith and in a manner that he reasonably
believed to be in or not opposed to the best interests of the
Company, and, in the case of a criminal proceeding, had no
reasonable cause to believe that his conduct was unlawful. The
termination of any such Proceeding by
2
adverse judgment, order, settlement or
conviction, or upon a plea of nolo contendere or its equivalent,
shall not, of itself, create a presumption that Indemnitee did not
act in good faith in a manner that he reasonably believed to be in
or not opposed to the best interests of the Company, and, with
respect to any criminal proceeding, that Indemnitee had reasonable
cause to believe that his conduct was unlawful.
4. Indemnification in
Proceedings By or In the Right of the Company
. The Company shall indemnify
Indemnitee, in accordance with the provisions of this section,
against all Expenses actually and reasonably incurred by Indemnitee
in connection with the defense or settlement of any Proceeding by
or in the right of the Company to procure a judgment in its favor,
but only if Indemnitee acted in good faith and in a manner that he
reasonably believed to be in or not opposed to the best interests
of the Company, except that no indemnification for Expenses shall
be made under this section in respect of any claim, issue or matter
as to which Indemnitee shall have been adjudged to be liable to the
Company for negligence or misconduct in the performance of his duty
to the Company, unless and only to the extent that the court in
which such Proceeding 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 indemnification for such Expenses that such court shall
deem proper.
5. Indemnification of Expenses
of Successful Party .
Notwithstanding any other provision of this Agreement, to the
extent that Indemnitee has been successful on the merits or
otherwise in defense of any Proceeding, or in defense of any claim,
issue or matter therein, Indemnitee shall be indemnified against
all Expenses actually and reasonably incurred by Indemnitee in
connection therewith.
6. Advances of
Expenses . Except as
otherwise provided by this Agreement, at the written request of
Indemnitee, the Expenses incurred by Indemnitee in any Proceeding
shall be paid by the Company in advance of the final,
non-appealable conclusion and disposition of such Proceeding,
provided that Indemnitee shall undertake in writing to repay such
amount to the extent that it is ultimately determined that
Indemnitee is not entitled to indemnification. If the Company makes
an advance of Expenses pursuant to this section, the Company shall
be subrogated to every right of recovery that Indemnitee may have
against any insurance carrier from whom the Company has purchased
insurance for such purpose. Advances shall be made without regard
to Indemnitee’s ability to repay the Expenses and without
regard to Indemnitee’s ultimate entitlement to
indemnification under the provisions of this Agreement.
Indemnitee’s obligation to reimburse the Company for Expenses
shall be unsecured, and no interest shall be charged
thereon.
7. Right of Indemnitee to
Indemnification Upon Application; Procedure Upon
Application .
(a) Any indemnification or advance
under this Agreement shall be paid by the Co
