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INDEMNIFICATION AGREEMENT
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This INDEMNIFICATION
AGREEMENT (the “Agreement”), dated as of October
14,
2009, is made and entered into by and between San Joaquin
Bancorp, a California corporation (the “Corporation”),
and Mark A. Taylor (“Indemnitee”) with reference to the
following facts:
A. Indemnitee began to serve as of October 4, 2009 (the
“Date of Service”) and is now serving the Company, or a
subsidiary of the Company, as an Agent (as defined herein) thereof
including, more specifically, as an executive officer or director
of the Corporation.
B. The parties hereto acknowledge that Indemnitee’s
service to the Corporation in the capacities indicated above may
expose Indemnitee to claims, lawsuits and risk of liability.
C. The parties further recognize that the compensation or fees
payable to Indemnitee for services to the Corporation may not be
commensurate with the potential risk involved and that the
Corporation may now, or in the future, be unable to provide
adequate insurance at a reasonable cost to cover such risk.
D. Accordingly, as an inducement to Indemnitee to continue to
serve the Corporation in the capacities indicated above, the
Corporation and Indemnitee desire to enter into this Agreement
pursuant to which the Corporation undertakes to indemnify
Indemnitee against such risks incurred as an Agent, to the extent
that it is permitted to do so under the laws of the State of
California and all other applicable laws.
NOW, THEREFORE, in consideration
of the premises and the covenants in this Agreement, and of
Indemnitee serving and continuing to serve the Corporation as an
Agent and intending to be legally bound hereby, effective as of the
Date of Service identified above, the parties hereto agree as
follows:
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1. Services by Indemnitee.
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Indemnitee agrees to serve (a) as a director of the
Corporation so long as Indemnitee is duly appointed or elected
and qualified in accordance with the applicable provisions of the
Articles of Incorporation and bylaws of the Corporation, and until
such time as Indemnitee resigns or fails to stand for election or
is removed from Indemnitee’s position, or (b) otherwise as an
Agent (as hereinafter defined) of the Corporation. Indemnitee may,
in his discretion, from time to time also perform other services at
the request or for the convenience of, or otherwise benefiting the
Corporation. Indemnitee may at any time and for any reason (or for
no reason) resign or be removed as a director (in the manner
provided under California law) or, with respect to other positions
as an Agent, be terminated from such positions (subject to any
other contractual obligation or other restriction imposed in the
Articles of Incorporation or by operation of law).
2. Indemnification.
Subject to the limitations set forth herein and in Section 6
hereof, the Corporation hereby agrees to indemnify Indemnitee as
follows:
The
Corporation shall, with respect to any Proceeding (as hereinafter
defined) associated with Indemnitee’s being an Agent of the
Corporation, indemnify Indemnitee to the fullest extent permitted
by applicable law and the Articles of Incorporation of the
Corporation in effect on the date hereof or as such law or Articles
of Incorporation may from time to time be amended (but, in the case
of any such amendment, only to the extent such amendment permits
the Corporation to provide broader indemnification rights than the
law or Articles of Incorporation permitted the Corporation to
provide before such amendment). The right to indemnification
conferred herein and in the Articles of Incorporation shall be
presumed to have been relied upon by Indemnitee in serving or
continuing to serve the Corporation as an Agent and shall be
enforceable as a contract right. Without in any way diminishing the
scope of the indemnification provided by this Section 2, the
Corporation will indemnify Indemnitee to the full extent permitted
by law if and wherever Indemnitee is or was a party or is
threatened to be made a party to any Proceeding, including any such
Proceeding brought by or in the right of the Corporation, by reason
of the fact that Indemnitee is or was an Agent or by reason of
anything done or not done by Indemnitee in such capacity, against
Expenses (as hereinafter defined) and Liabilities (as hereinafter
defined) actually and reasonably incurred by Indemnitee or on his
behalf in connection with the investigation, defense, settlement or
appeal of such Proceeding. In addition to, and not as a limitation
of, the foregoing, the rights of indemnification of Indemnitee
provided under this Agreement shall include those rights set forth
in Sections 3 and 8 below. Notwithstanding the foregoing, the
Corporation shall be required to indemnify Indemnitee in connection
with a Proceeding commenced by Indemnitee (other than a Proceeding
commenced by Indemnitee to enforce Indemnitee’s rights under
this Agreement) only if the commencement of such Proceeding was
authorized by the Board of Directors.
3. Advancement of
Expenses. All reasonable Expenses incurred by or on behalf of
Indemnitee (including costs of enforcement of this Agreement) shall
be advanced from time to time by the Corporation to Indemnitee
within ten (10) days after the receipt by the Corporation of a
written request for an advance of Expenses, whether prior to or
after final disposition of a Proceeding (except to the extent that
there has been a Final Adverse Determination (as hereinafter
defined) that Indemnitee is not entitled to be indemnified for such
Expenses), including without limitation any Proceeding brought by
or in the right of the Corporation. The written request for an
advancement of any and all expenses under this paragraph shall
contain reasonable detail of the Expenses incurred by Indemnitee.
In the event that such written request shall be accompanied by an
affidavit of counsel to Indemnitee to the effect that such counsel
has reviewed such expenses and that such expenses are reasonable in
such counsel’s view, then such expenses shall be deemed
reasonable in the absence of clear and convincing evidence to the
contrary. By execution of this Agreement, Indemnitee shall be
deemed to have made whatever undertaking may be required by law at
the time of any advancement of Expenses with respect to repayment
to the Corporation of such Expenses. In the event that the
Corporation shall breach its obligation to advance Expenses under
this Section 3, the parties hereto agree that Indemnitee’s
remedies available at law would not be adequate and difficult to
prove and that Indemnitee would be entitled to specific
performance. Accordingly, the Corporation and Indemnitee agree that
Indemnitee shall be entitled to temporary and permanent injunctive
relief to enforce this Agreement without the necessity of proving
actual damages or irreparable harm. The Corporation and Indemnitee
further agree that Indemnitee shall be entitled to such injunctive
relief, including temporary restraining orders, preliminary
injunctions and permanent injunctions, without the necessity of
posting bond or any other similar undertaking in connection
therewith.
4.
Presumptions and Effect of Certain Proceedings. Upon making a
request for indemnification, Indemnitee shall be presumed to be
entitled to indemnification under this Agreement and the
Corporation shall have the burden of proof to overcome that
presumption in reaching any contrary determination. The termination
of any Proceeding by judgment, order, settlement, arbitration award
or conviction, or upon a plea of nolo contendere or its equivalent
shall not affect this presumption or, except as determined by a
judgment or other final adjudication adverse to Indemnitee,
establish a presumption with regard to any factual matter relevant
to determining Indemnitee’s rights to indemnification
hereunder. If the person or persons so empowered to make a
determination pursuant to Section 5 hereof shall have failed to
make the requested determination within ninety (90) days after any
judgment, order, settlement, dismissal, arbitration award,
conviction, acceptance of a plea of nolo contendere or its
equivalent, or other disposition or partial disposition of any
Proceeding or any other event that could enable the Corporation to
determine Indemnitee’s entitlement to indemnification, the
requisite determination that Indemnitee is entitled to
indemnification shall be deemed to have been made.
5. Procedure for
Determination of Entitlement to Indemnification.
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(a)
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Whenever Indemnitee believes that Indemnitee
is entitled to indemnification pursuant to this Agreement,
Indemnitee shall submit a written request for indemnification to
the Corporation. Any request for indemnification shall include
sufficient documentation or information reasonably available to
Indemnitee for the determination of entitlement to indemnification.
In any event, Indemnitee shall submit Indemnitee’s claim for
indemnification within a reasonable time (not to exceed six (6)
months) after any judgment, order, settlement, dismissal,
arbitration award, conviction, acceptance of a plea of nolo
contendere or its equivalent, or final termination or other
disposition or partial disposition of any Proceeding, whichever is
the later date for which Indemnitee requests indemnification. The
President or Secretary or other appropriate officer shall, promptly
upon receipt of Indemnitee’s request for indemnification,
advise the Board of Directors in writing that Indemnitee has made
such request.
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Determination of Indemnitee’s
entitlement to indemnification shall be made not later than ninety
(90) days after the Corporation’s receipt of
Indemnitee’s written request for such indemnification,
provided that any request for indemnification for Liabilities,
other than amounts paid in settlement, shall have been made after a
determination thereof in a Proceeding.
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(b)
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The Corporation shall be entitled to select
the method in which Indemnitee’s entitlement to
indemnification will be determined (to the extent obtainable under
the circumstances); provided, however, that if there is a Change in
Control of the Corporation, Independent Legal Counsel (as
hereinafter defined) or a panel of three arbitrators shall
determine whether Indemnitee is entitled to indemnification.
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The forum shall be any one of the following
three methods (if such method is obtainable under the
circumstances): (i) a majority vote of a quorum of the Board of
Directors consisting entirely of Disinterested Directors (as
hereinafter defined), if such a quorum is obtainable; (ii)
Independent Legal Counsel, whose determination shall be made in a
written opinion. Independent Legal Counsel
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shall be selected based on the guidelines set
forth in section 16(f) herein; provided, however that if, within 20
days after submission by Indemnitee of a written request for
indemnification pursuant to Section 5 hereof, unless the
Corporation has advised the Indemnitee in writing prior to that
date that a determination of the Indemnitee’s rights
hereunder will be made on the basis contemplated under this
Agreement pursuant to either of Sections 5(b)(i) (if this is an
available method) or 5(b)(iii) herein, an Independent Legal Counsel
shall not have been selected and agreed upon by the parties, either
the Corporation or Indemnitee may petition any court of competent
jurisdiction in the State of California for resolution of any
objection that shall have been made by the Corporation or
Indemnitee to the other’s selection of Independent Legal
Counsel and/or for the appointment as Independent Legal Counsel of
a person selected by the court or by such other person as the court
shall designate, and the person with respect to whom all objections
are so resolved or the person so appointed shall act as Independent
Legal Counsel under section 5(b)(ii) hereof.; or (iii) a panel of
three arbitrators, one selected by the Corporation, another by
Indemnitee and the third by the first two arbitrators; or if for
any reason three arbitrators are not selected within thirty (30)
days after the appointment of the first arbitrator, then selection
of additional arbitrators shall be made by the American Arbitration
Association. If any arbitrator resigns or is unable to serve in
such capacity for any reason, the American Arbitration Association
shall select such arbitrator’s replacement. The arbitration
shall be conducted pursuant to the commercial arbitration rules of
the American Arbitration Association now in effect.
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(c)
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In making a determination with respect to
entitlement to indemnification hereunder, the person or persons or
entity making such determination shall presume that Indemnitee is
entitled to indemnification under this Agreement.
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Anyone seeking to overcome this presumption
shall have the burden of proof to overcome that presumption.
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(d)
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Indemnitee shall cooperate with the person,
persons or entity making such determination with respect to
Indemnitee’s entitlement to indemnification, including
providing to such person, persons or entity upon reasonable advance
request any documentation or information that is not privileged or
otherwise protected from disclosure and that is reasonably
available to Indemnitee and reasonably necessary to such
determination. Indemnitee and any Independent Legal Counsel, member
of the Board of Directors or arbitrator shall act reasonably and in
good faith in making a determination under the Agreement of
Indemnitee’s entitlement to indemnification. Any costs or
expenses (including attorneys’ fees and disbursements)
incurred by Indemnitee in so cooperating with the person, persons
or entity making such determination shall be borne by the
Corporation (irrespective of the determination as to
Indemnitee’s entitlement to indemnification).
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6. Specific Limitations on Indemnification.
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Notwithstanding anything in this
Agreement to the contrary, the Corporation shall not be obligated
under this Agreement to make any payment to Indemnitee with respect
to any Proceeding:
(i) To the extent that payment is actually made to Indemnitee
under any insurance policy, or is made to Indemnitee by the
Corporation or an affiliate otherwise than pursuant to this
Agreement. Notwithstanding the availability of such insurance,
Indemnitee also may claim indemnification from the Corporation
pursuant to this Agreement by assigning to the Corporation any
claims under such insurance to the extent Indemnitee is paid by the
Corporation;
(ii) To the extent of any state or federal income taxes in
connection with Proceedings related to compensation (including
deferred compensation) that Indemnitee actually received;
(iii) For Liabilities in connection with Proceedings settled
without the Corporation’s written consent, which consent,
however, shall not be unreasonably withheld;
(iv) For an accounting of profits made from the purchase or sale
by Indemnitee of securities of the Corporation within the meaning
of section 16(b) of the Securities Exchange Act of 1934, as amended
(the “Exchange Act”), or similar provisions of any
state statutory or common law;
(v) To the extent it would be otherwise prohibited by law, if so
established by a court having jurisdiction in the matter in a
judgment or other final adjudication (and, in this respect, both
the Corporation and Indemnitee have been advised that the
Securities and Exchange Commission believes that indemnification
for liabilities arising under the federal securities laws is
against public policy and is, therefore, unenf
