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EXHIBIT
10.06
INDEMNIFICATION
AGREEMENT
This
Indemnification Agreement, dated as of August 9, 2007, is made by and among
Bank
of Marin Bancorp, a California corporation, Bank of Marin, a California banking
corporation (Bank of Marin Bancorp and Bank of Marin being collectively referred
to as the "Corporation"),
and a
director [officer] of either Bank of Marin Bancorp or Bank of Marin (the
"Indemnitee").
RECITALS
A. The
Corporation and the Indemnitee recognize that the present state of the law
is
too uncertain to provide the Corporation's officers and directors with adequate
and reliable advance knowledge or guidance with respect to the legal risks
and
potential liabilities to which they may become personally exposed as a result
of
performing their duties for the Corporation;
B. The
Corporation and the Indemnitee are aware of the substantial growth in the number
of lawsuits filed against corporate officers and directors in connection with
their activities in such capacities and by reason of their status as
such;
C. The
Corporation and the Indemnitee recognize that the cost of defending against
such
lawsuits, whether or not meritorious, is typically beyond the financial
resources of most officers and directors of the Corporation;
D. The
Corporation and the Indemnitee recognize that the legal risks and potential
liabilities, and the threat thereof, associated with proceedings filed against
the officers and directors of the Corporation bear no reasonable relationship
to
the amount of compensation received by the Corporation's officers and
directors;
E. The
Corporation has determined that the liability insurance coverage available
to
the Corporation as of the date may not be entirely adequate. The
Corporation believes, therefore, that the interest of the Corporation's
shareholders would be best served by a combination of (i) such insurance as
the
Corporation may obtain pursuant to the Corporation's obligations hereunder
and
(ii) a contract with its officers and directors, including the Indemnitee,
to
indemnify them to the fullest extent permitted by law (as in effect on the
date
hereof, or, to the extent any amendment may expand such permitted
indemnification, as hereafter in effect) against personal liability for actions
taken in the performance of their duties to the Corporation;
F. Section
317 of the California Corporations Code empowers California corporations to
indemnify their officers and directors and further states that the
indemnification provided by Section 317 "shall not be deemed exclusive of any
other rights to which those seeking indemnification may be entitled under any
bylaw, agreement, vote of shareholders or disinterested directors or otherwise,
both as to action in an official capacity and as to action in another capacity
while holding such office, to the extent such additional rights to
indemnification are authorized in the articles of the corporation"; thus,
Section 317 does not by itself limit the extent to which the Corporation may
indemnify persons serving as its officers and directors;
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G. The
Corporation's Articles of Incorporation and Bylaws authorize the indemnification
of the officers and directors of the Corporation in excess of that expressly
permitted by Section 317, subject to the limitations set forth in Section
204(a)(11) of the California Corporations Code;
H. The
Board of Directors of the Corporation has concluded that, to retain and attract
talented and experienced individuals to serve as officers and directors of
the
Corporation and to encourage such individuals to take the business risks
necessary for the success of the Corporation, it is necessary for the
Corporation to contractually indemnify its officers and directors, and to assume
for itself liability for expenses and damages in connection with claims against
such officers and directors in connection with their service to the Corporation,
and has further concluded that the failure to provide such contractual
indemnification could result in great harm to the Corporation and its
shareholders;
I. The
Corporation desires and has requested Indemnitee to serve or continue to serve
as a director [officer] of the Corporation, free from undue concern for the
potential liabilities associated with such services to Corporation;
and
J. The
Indemnitee is willing to serve, or continue to serve, the Corporation, provided,
and on the expressed condition, that he is furnished with the indemnification
provided for herein.
AGREEMENT
NOW,
THEREFORE, the Corporation and Indemnitee agree as follows:
1. Definitions.
(a) "Expenses"
means, for the purposes of this Agreement, 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 the 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.
(b) "Proceeding"
means, for the purposes of this Agreement, 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 Corporation) 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 [officer] of the Corporation,
or is or was a director [officer] of any subsidiary of the Corporation, by
reason of any action taken by him or of any inaction on his part while acting
as
such director [officer] or by reason of the fact that he is or was serving
at
the request of the Corporation 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 Corporation 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.
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2. Agreement
to Serve. In consideration of the protection afforded by this
Agreement, if Indemnitee is a director of the Corporation, he agrees to continue
to serve in such capacity until his resignation or the expiration of his
term. If Indemnitee is an officer of the corporation not serving
under an employment contract, he agrees to continue to serve in such capacity
until his resignation or until at least for the balance of the current fiscal
year of the Corporation. Nothing contained in this Agreement is intended to
create in Indemnitee any right to continued employment.
3. Indemnification.
(a) Third
Party Proceedings. The Corporation shall indemnify Indemnitee
against Expenses, judgments, fines, penalties or amounts paid in settlement
(if
the settlement is approved in advance by the Corporation, which approval shall
not be unreasonably withheld) actually and reasonably incurred by Indemnitee
in
connection with a Proceeding (other than a Proceeding by or in the right of
the
Corporation) if Indemnitee acted in good faith and in a manner Indemnitee
reasonably believed to be in the best interests of the Corporation, 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 Corporation, 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 Corporation. To the fullest extent
permitted by law, the Corporation 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 Corporation 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 Corporation
and its shareholders.
(c) Scope. Notwithstanding
any other provision of this Agreement but subject to Section 14(b), the
Corporation shall indemnify the Indemnitee to the fullest extent permitted
by
law, notwithstanding that such indemnification is not specifically authorized
by
other provisions of this Agreement, the Corporation's Articles of Incorporation,
the Corporation's Bylaws or by statute.
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4. Limitations
on Indemnification. Any other provision herein to the contrary
notwithstanding, the Corporation 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 the California General Corporation Law or for expenses, penalties, or
other payments prohibited by Part 359 of the FDIC’s Rules and Regulations,
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 Corporation or its
subsidiary;
(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 California General Corporation Law, but such indemnification
or advancement of Expenses may be provided by the Corporation in specific cases
if the Board of Directors has approved the initiation or bringing of such suit;
or
(c) Lack
of Good Faith. To indemnify Indemnitee for any Expenses incurred
by the 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 the Indemnitee in such
proceeding was not made in good faith or was frivolous; or
(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 maintained by the Corporation
or
any other policy of insurance maintained by the Corporation or Indemnitee;
or
(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.
5. Determination
of Right to Indemnification.
Upon
receipt of a written claim
addressed to the Board of Directors for indemnification pursuant to Section
3,
the Corporation shall determine by any of the methods set forth in Section
317(e) of the California Corporations Code whether Indemnitee has met the
applicable standard of conduct which makes it permissible under applicable
law
to indemnify Indemnitee. If a claim under Section 3 is not paid in
full by the Corporation within ninety (90) days after such written claim has
been received by the Corporation, the Indemnitee may at any time thereafter
bring suit against the Corporation to recover the unpaid amount of the claim
and, unless such action is dismissed by the court as frivolous or brought in
bad
faith, the Indemnitee shall be entitled to be paid also the expense of
prosecuting such claim. It shall be a defense to any such action,
other than an action brought to enforce a claim for Expenses incurred in
defending any Proceeding (other than a Proceeding brought by the Corporation
directly in its own right as distinguished from an action brought derivatively
or by any receiver or trustee) in advance of its final disposition where the
required undertaking, if any, has been tendered to the Corporation that the
Indemnitee has not met the standards of conduct which make it permissible under
applicable law to indemnify the Indemnitee for the amount claimed, but the
burden of proving such defense, by clear and convincing evidence, shall be
on
the Corporation. Neither the failure of the Corporation (including
its Board of Directors, independent legal counsel, or its shareholders) to
make
a determination prior to the commencement of such action that indemnification
of
the Indemnitee is proper in the circumstances because Indemnitee has met the
applicable standard of conduct under applicable law, nor an actual determination
by the Corporation (including its Board of Directors, independent legal counsel
or its shareholders) that the Indemnitee has not met such applicable standard
of
conduct, shall be a defense to the action or create a presumption that
Indemnitee has not met the applicable standard of conduct.
