Exhibit 10.13
INDEMNIFICATION
AGREEMENT
This Indemnification Agreement (this
“Agreement”) is made and entered into as of
, 2005, by and between 1 st Pacific Bank of California, a California
state bank (the “Bank”), and
,
[an officer][a director] of the Bank
(“Indemnitee”).
RECITALS
A.
The Bank and Indemnitee are aware of
the substantial growth in the number of lawsuits filed against
corporate directors and officers in connection with their
activities in such capacities and by reason of their status as
such;
B.
The Bank and Indemnitee recognize
that the cost of defending against such lawsuits, whether or not
meritorious, is typically beyond the financial resources of most of
the Bank’s directors and officers;
C.
The Bank and Indemnitee recognize
that the legal risks and potential liabilities associated with
proceedings filed against the Bank’s directors and officers
bear no reasonable relationship to the amount of compensation
received by the Bank’s directors and officers;
D.
The Bank, after reasonable
investigation prior to the date hereof, has determined that the
liability insurance coverage available to the Bank as of the date
hereof is inadequate, unreasonably expensive or both. The
Bank believes, therefore, that the interest of the Bank’s
shareholders would be best served by a combination of (i) such
insurance as the Bank may obtain pursuant to the Bank’s
obligations hereunder and (ii) a contract with its directors
and certain officers, including Indemnitee, to indemnify such
individuals pursuant to Section 317 of the California
Corporations Code (the “Code”) against personal
liability for actions taken in the performance of their duties to
the Bank;
E.
Section 317 of the Code
empowers California corporations to indemnify their directors and
officers;
F.
The Board of Directors of the Bank
(the “Board”) has concluded that, to retain and attract
talented and experienced individuals to serve as the Bank’s
directors and officers and to encourage such individuals to take
the business risks necessary for the success of the Bank, it is
necessary for the Bank to contractually indemnify its directors and
certain officers, and to assume for itself liability for expenses
and damages in connection with claims against such directors and
officers with respect to their service to the Bank, and has further
concluded that the failure to provide such contractual
indemnification could result in great harm to the Bank and its
shareholders;
G.
The Bank desires and has requested
Indemnitee to serve or continue to serve as a director or officer
of the Bank, free from undue concern for the risks and potential
liabilities associated with such services to the Bank;
and
H.
Indemnitee is willing to serve, or
continue to serve, the Bank, provided, and on the expressed
condition, that he is furnished with the indemnification provided
for herein.
AGREEMENT
NOW, THEREFORE, for valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, the Bank and Indemnitee agree as follows:
1.
Definitions
.
(a)
“Expenses” means all
direct and indirect costs of any type or nature whatsoever
(including, without limitation, any fees and disbursements of
Indemnitee’s counsel, accountants and other experts and other
out-of-pocket costs) actually and reasonably incurred by Indemnitee
in connection with the investigation, preparation, defense or
appeal of a Proceeding; provided, however, that Expenses shall not
include judgments, fines, penalties or amounts paid in settlement
of a Proceeding.
1
(b)
“Proceeding” means any
threatened, pending or completed action or proceeding, whether
civil, criminal, administrative or investigative (including an
action brought by or in the right of the Bank) in which Indemnitee
may be or may have been involved as a party or otherwise, by reason
of the fact that Indemnitee is or was a director or officer of the
Bank, by reason of any action taken by Indemnitee or of any
inaction on his part while acting as such director or officer or by
reason of the fact that he is or was serving at the request of the
Bank as a director, officer, employee or agent of another foreign
or domestic corporation, partnership, joint venture, trust or other
enterprise, or was a director and/or officer of the foreign or
domestic corporation which was a predecessor corporation to the
Bank or of another enterprise at the request of such predecessor
corporation, whether or not he 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.
2.
Indemnification
.
(a)
Third Party
Proceedings . The
Bank shall indemnify Indemnitee against Expenses, judgments, fines,
penalties or amounts paid in settlement actually and reasonably
incurred by Indemnitee in connection with a Proceeding (other than
a Proceeding by or in the right of the Bank) provided Indemnitee
acted in good faith and in a manner Indemnitee reasonably believed
to be in the best interests of the Bank and its shareholders, and
with respect to any criminal action or proceeding, had no
reasonable cause to believe Indemnitee’s conduct was
unlawful. The termination of any Proceeding by judgment,
order, settlement, 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 and in a manner which
Indemnitee reasonably believed to be in the best interests of the
Bank, or, with respect to any criminal Proceeding, had no
reasonable cause to believe that Indemnitee’s conduct was
unlawful.
(b)
Proceedings by or in the Right of
the Bank . The Bank
shall indemnify Indemnitee against Expenses and amounts paid in
settlement, actually and reasonably incurred by Indemnitee, in
connection with a Proceeding by or in the right of the Bank to
procure a judgment in its favor if Indemnitee acted in good faith
and in a manner Indemnitee reasonably believed to be in the best
interests of the Bank and its shareholders. Notwithstanding
the foregoing, no indemnification shall be made in respect of
(i) any claim, issue or matter as to which Indemnitee shall
have been adjudged liable to the Bank in the performance of
Indemnitee’s duty to the Bank and its shareholders unless the
court in which such action or proceeding is or was pending shall
determine upon application that, in view of all the circumstances
of the case, Indemnitee is fairly and reasonably entitled to
indemnity for Expenses and then only to the extent that such court
shall determine; (ii) any amounts paid by Indemnitee in
settling or otherwise disposing of a pending action without court
approval; and (iii) Expenses incurred in defending a pending
action which is settled or otherwise disposed of without court
approval.
3.
Limitations on
Indemnification .
Notwithstanding any other provision herein to the contrary, the
Bank shall not be obligated pursuant to the terms of this
Agreement:
(a)
Excluded Acts
. To indemnify Indemnitee for
any acts or omissions or transactions from which a director or
officer may not be relieved of liability under Section 204 of
the Code or for expenses, penalties, or other payments incurred in
an administrative proceeding or action instituted by an appropriate
bank regulatory agency which proceeding or action results in a
final order assessing civil money penalties or requiring
affirmative action by an individual or individuals in the form of
payments to the Bank.
(b)
Claims Initiated by
Indemnitee . To
indemnify or advance Expenses to Indemnitee with respect to
Proceedings or claims initiated or brought voluntarily by
Indemnitee and not by way of defense, except with respect to
Proceedings brought to establish or enforce a right to
indemnification under this Agreement or any other statute or law or
otherwise as required under Section 317 of the Code, but such
indemnification or advancement of Expenses may be provided by the
Bank in specific cases if the Board has approved the initiation or
bringing of such Proceeding.
(c)
Lack of Good Faith
. To indemnify Indemnitee for
any Expenses incurred by Indemnitee with respect to any Proceeding
instituted by Indemnitee to enforce or interpret this Agreement, if
a court of competent jurisdiction determines that each of the
material assertions made by Indemnitee in such Proceeding was not
made in good faith or was frivolous.
2
(d)
Insured Claims
. To indemnify Indemnitee for
Expenses or liabilities of any type whatsoever (including, but not
limited to, judgments, fines, ERISA excise taxes or penalties, and
amounts paid in settlement) which have been paid directly to or on
behalf of Indemnitee by an insurance carrier under a policy of
directors’ and officers’ liability insurance
(“D&O Insurance”) maintained by the Bank or any
other policy of insurance maintained by the Bank or
Indemnitee.
(e)
Claims Under
Section 16(b) . To indemnify Indemnitee for Expenses and
the payment of profits arising from the purchase and sale by
Indemnitee of securities in violation of Section 16(b) of
the Securities Exchange Act of 1934, as amended, or any similar
successor statute.
(f)
Regulatory Limitations
. Notwithstanding any other
provisions contained herein, this Agre
