EXHIBIT 10.1
INDEMNIFICATION
AGREEMENT
I NDEMNIFICATION A GREEMENT (“ Agreement ”) made
and entered into as of October 25, 2004, by and between
C OAST
F INANCIAL H OLDINGS , I NC . , a
Florida corporation (the “ Corporation
”), and
(the “ Indemnitee ”).
RECITALS
A. The Indemnitee is either a member
of the board of directors of the Corporation (the “
Board of Directors ”) or an officer of the
Corporation, or both, and in such capacity or capacities, or
otherwise as an Agent (as defined below) of the Corporation, is
performing a valuable service for the Corporation.
B. Highly competent persons are
becoming more reluctant to serve publicly-held corporations as
directors or officers or in other capacities unless they are
provided with adequate protection through insurance or adequate
indemnification against risks of claims and actions against them
arising out of their service to, and activities on behalf of, such
corporations.
C. Although the Board of Directors
has determined that, in order to attract and retain qualified
persons, the Corporation will attempt to maintain on an ongoing
basis, at its sole expense, liability insurance to protect
directors, officers, and certain Agents serving the Corporation and
its subsidiaries from certain liabilities, the Corporation and the
Indemnitee recognize the increasing difficulty in obtaining
liability insurance for directors, officers and agents of a
publicly-traded corporation at a reasonable cost.
D. The Board of Directors has
determined that the difficulty in attracting and retaining such
persons is detrimental to the best interests of the
Corporation’s shareholders and that the Corporation should
act to assure such persons that there will be increased certainty
of such protection in the future.
E. It is reasonable, prudent, and
necessary for the Corporation to obligate itself by contract to
indemnify, and to advance expenses on behalf of, such persons to
the fullest extent permitted by applicable law so that they will
serve or continue to serve the Corporation free from undue concern
that they will not be so protected.
F. The Corporation’s bylaws
(“ Bylaws ”) expressly allow and require
the Corporation to indemnify its directors, officers, and certain
agents to the maximum extent permitted under Florida
law.
G. The Corporation desires the
benefits of having the Indemnitee serve as a member of the Board of
Directors or an officer, or both, or as an Agent, secure in the
knowledge that any expenses, liability and losses incurred by him
or her in his or her good faith service to the Corporation will be
borne by the Corporation or its successors and assigns.
H. The Indemnitee is willing to
serve, continue to serve, or to undertake additional service for or
on behalf of the Corporation, on the condition that he or she be so
indemnified as provided in this Agreement.
I. This Agreement is intended to
supplement and enhance the indemnity provisions under the
Corporation’s Articles of Incorporation (“
Articles of Incorporation ”) and the Bylaws and
any resolutions adopted pursuant thereto, and shall not be deemed a
substitute therefor, nor to diminish or abrogate any rights of
Indemnitee thereunder.
NOW, THEREFORE
, in consideration of the premises
and the covenants contained herein, the Corporation and Indemnitee
do hereby covenant and agree as follows:
1. Services to the
Corporation. The
Indemnitee agrees to serve or continue to serve as a director or
officer of the Corporation or any subsidiary of the Corporation, or
otherwise as an Agent of the Corporation, for so long as Indemnitee
is duly elected or appointed and qualified in accordance with the
applicable provisions of the Articles of Incorporation and Bylaws,
or otherwise employed by the Corporation, and until such time as
Indemnitee tenders his or her resignation in writing, fails to
stand for reelection, is removed as a director and/or officer, or
his or her employment terminates, as the case may be. The
Indemnitee may from time to time also perform other services at the
request of, or for the convenience of, or otherwise benefiting the
Corporation or any Subsidiary or Affiliate. This Agreement shall
not impose any obligation on the Indemnitee or the Corporation to
continue the Indemnitee’s position with the Corporation or
any Subsidiary or Affiliate beyond any period otherwise applicable.
Accordingly, the Indemnitee may resign or be removed from such
position at any time for and for reason (subject to any other
contractual obligation or other obligation imposed by operation of
law), in which event the Corporation or any Subsidiary or Affiliate
shall have no obligation under this Agreement to continue
Indemnitee in any such position.
2. Definitions
. For purposes of this Agreement,
the capitalized terms below shall have the following
meanings;
(a) “ Affiliate
” shall mean any corporation, joint venture, partnership,
limited liability company, trust or other entity which
(a) controls, is controlled by, or is under common control
with, the specified corporation, joint venture, partnership,
limited liability company, trust or other entity or (b) is
controlled by or is under common control with the specified
individual. For purposes of this definition, the terms
“controls”, “controlled by” and
“under common control with” mean the power, directly or
indirectly, to direct or cause the direction of the management or
policies of an entity whether by voting power, contract or
otherwise.
(b) “ Agent
” shall mean any person who is or was, or who has consented
to serve as, a director, officer, employee or agent of the
Corporation or a subsidiary of the Corporation whether serving in
such capacity or as a director, officer, employee, agent,
fiduciary, joint venturer, partner, member, manager, or other
official of another corporation, partnership, limited liability
company, joint venture, trust, or other enterprise (including,
without limitation, an employee benefit plan) either at the request
of, for the convenience of, or otherwise to benefit the Corporation
or a subsidiary of the Corporation.
(c) “ Change of
Control ” shall mean the occurrence of any of the
following after the date of this Agreement: (i) any
“person” (as such term is used in Sections 13(d) and
14(d) of the Exchange Act) is or becomes the “beneficial
owner” (as defined in Rule 13d-3 under the Exchange Act),
directly or indirectly, of securities of the Corporation
representing 30% or more of the combined voting power of the
Corporation’s then outstanding voting securities, or
(ii) during any period of two (2) consecutive years,
individuals who at the beginning of such period constituted the
Board of Directors and any new director whose election or
nomination for election by the
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Corporation’s shareholders was approved by
a vote of at least two-thirds of the directors then still in office
who either were directors at the beginning of such period or whose
election or nomination for election was previously so approved,
cease for any reason to constitute at least a majority of the Board
of Directors, (iii) any “person” is or becomes the
“beneficial owner” (as those terms are defined in Rule
13d-3 under the Exchange Act), directly or indirectly, of Voting
Securities of the Corporation representing at least 50% of the
total voting power represented by the then-outstanding Voting
Securities, (iv) the shareholders of the Corporation approve a
merger or consolidation with any other corporation or entity, other
than a merger or consolidation that would result in the Voting
Securities of the Corporation outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or by
converted into Voting Securities of the surviving entity) at least
80% of the total voting power represented by the Voting Securities
of the Corporation or such surviving entity outstanding immediately
after such merger or consolidation, or (v) the shareholders of
the Corporation approve a plan of complete liquidation of the
Corporation or an agreement for the sale or disposition of all or
substantially all of the assets of the Corporation.
(d) “ Disinterested
Director ” shall mean a director of the Corporation
who is not and was not a party to the Proceeding in respect of
which indemnification is being sought by Indemnitee.
(e) “ Exchange
Act ” shall mean the Securities and Exchange Act of
1934, as amended.
(f) “ Expenses
” shall be broadly construed and shall include, without
limitation, (i) all direct and indirect costs actually and
reasonably incurred, paid, or accrued, (ii) all
attorneys’ fees, retainers, court costs, transcripts, fees of
experts, witness fees, travel expenses, food and lodging expenses
while traveling, duplicating costs, printing and binding costs,
telephone charges, postage, delivery service, freight, or other
transportation fees and expenses, and (iii) all other
disbursements or out of pocket expenses of the type customarily
incurred in connection with prosecuting, defending, preparing to
prosecute or defend, or investigating a Proceeding; in each case
incurred in connection with either the investigation of, the
defense of, being a witness in, participating in, preparing to
prosecute or defend, settling, or appealing a Proceeding, or
establishing or enforcing a right of indemnification under this
Agreement, applicable law or otherwise. Notwithstanding any of the
foregoing, the term “Expense” shall not include any
Liabilities.
(g) “ Independent Legal
Counsel ” shall mean a law firm, or a member of a law
firm, selected by the Corporation and approved by Indemnitee (which
approval shall not be unreasonably withheld), that is experienced
in matters of corporation law and neither at the time of
designation is, nor in the five years immediately preceding such
designation was, retained to represent: (i) the Corporation or
any of its subsidiaries or affiliates, or the Indemnitee or any of
its affiliates or any corporation of which the Indemnitee was or is
a director, officer, employee or agent, or any subsidiary or
affiliate of such a corporation, in any matter material to either
such party, or (ii) any other party to the Proceeding giving
rise to a claim for indemnification hereunder. Notwithstanding the
foregoing, the term “Independent Legal Counsel” shall
not include any person who, under the applicable standards of
professional conduct then prevailing, would have a conflict of
interest in representing either the Corporation or Indemnitee in an
action to determine Indemnitee’s right to indemnification
under this Agreement arising on or after the date of this
Agreement, regardless of when the Indemnitee’s act or failure
to act occurred.
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(h) “
Liabilities ” shall mean liabilities of any
type whatsoever, including, but not limited to, judgments
(including punitive and exemplary damages), fines, ERISA or other
excise taxes and penalties, and amounts paid in settlement
(including all interest, assessments, or other charges paid or
payable in connection with or in respect of any of the
foregoing).
(i) “ Potential Change
of Control ” shall mean the occurrence of any of the
following: (i) the Corporation enters into an agreement or
arrangement, the consummation of which would result in the
occurrence of a Change in Control; (ii) any
“person” (as that term is used in Sections 13(d) and
14(d) of the Exchange Act), including, without limitation, the
Corporation, publicly announces an intention to take or to consider
taking actions that, if consummated, would constitute a Change in
Control; (iii) any “person” (as that term is used
in Sections 13(d) and 14(d) of the Exchange Act), who is or becomes
the “beneficial owner” (as defined in Rule 13d-3 under
the Exchange Act), directly or indirectly, of securities of the
Corporation representing 30% or more of the combined voting power
of the Corporation’s then outstanding Voting Securities; or
(iv) the Board of the Corporation adopts a resolution to the
effect that, for purposes of this Agreement, ultimately result in a
Change of Control or any of the events described in
Section 2(h)(i), (ii), or (iii) hereof.
(j) “ Proceeding
” shall mean any pending, threatened, or completed action,
claim, hearing, suit, arbitration, alternative dispute resolution
mechanism, inquiry, investigation, or any other proceeding
(including any appeals from any of the foregoing), whether civil,
criminal, administrative, legislative, or investigative in nature,
whether formal or informal, including, without limitation, any such
Proceeding brought by or in the right of the Corporation or
otherwise.
(k) “ Subsidiary
” shall mean any corporation, joint venture, partnership,
limited liability company, trust or other entity which is
controlled by the Corporation. For purposes of this definition, the
term “controlled by” means the power, directly or
indirectly, to direct or cause the direction of the management or
policies of the applicable entity whether by voting power, contract
or otherwise.
(l) “ Voting
Securities ” shall mean any securities of the
Corporation that are entitled generally to vote in the election of
directors.
3. Basic Indemnification
Agreement. Subject to the
limitations set forth herein and in Section 9
hereof:
(a) The Corporation shall indemnify
the Indemnitee to the fullest extent authorized or permitted under
the Florida Business Corporation Act (“ FBCA
”) and the provisions of the Articles of Incorporation and
Bylaws in effect on the date hereof or as FBCA, the Articles of
Incorporation, or Bylaws may be amended from time to time (but, in
the case of any such amendment, only to the extent that such
amendment permits the Corporation to provide broader
indemnification rights than were permitted prior to such
amendment). The right to indemnification conferred in the Articles
of Incorporation and Bylaws shall be presumed to have been relied
upon by Indemnitee in serving or continuing to serve the
Corporation or any Subsidiary or Affiliate as a director, officer,
or other Agent and shall be enforceable as a contract right. The
Corporation shall not adopt any amendments to its Articles of
Incorporation or Bylaws, or permit any Subsidiary or Affiliate to
adopt any amendments to its organic documents, the effect of which
would be to deny, diminish, or encumber Indemnitee’s rights
to indemnity pursuant to the Articles of Incorporation, Bylaws, or
the FBCA, or any other applicable law, as applied to any act or
failure to act occurring in whole or in part prior to the date upon
which such amendment was approved by the Board of
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Directors or the Corporation’s
shareholders, as the case may be (“ Effective
Date ”). In the event that the Corporation shall
adopt any amendment to its Articles or Incorporation or Bylaws, or
any Subsidiary or Affiliate shall adopt any amendment to its
organic documents, the effect of which is to deny, diminish, or
encumber Indemnitee’s right to indemnity pursuant to the
Articles of Incorporation, Bylaws, or such organic documents, as
the case may be, or under the FBCA, or any other such law, such
amendment shall apply only to acts of failures to act occurring
entirely after the Effective Date thereof. The Corporation shall
give notice of any such amendment to the Indemnitee.
(b) Without in anyway diminishing
the scope of the indemnification provided by this Section 3,
and in addition to any other rights of indemnification which the
Indemnitee may have under the Articles of Incorporation, Bylaws,
organic documents of any Subsidiary or Affiliate, or other contract
right, the Corporation agrees to indemnify and hold the Indemnitee
harmless (whenever the Indemnitee is or was a witness or a party,
or is threatened to be made a witness or a party, to any
Proceeding, including without limitation any Proceeding brought by
or in the right of the Corporation or any Subsidiary or Affiliate,
by reason of the fact that the Indemnitee is or was a director,
officer or other Agent of the Corporation or any Subsidiary or
Affiliate, or by reason of anything done or not done, or alleged to
have been done or not done, by the Indemnitee in such capacity)
against all Expenses and Liabilities actually and reasonably
incurred by the Indemnitee or on his or her behalf in connection
with the investigation, defense, testimony in, settlement, or
appeal of such Proceeding. The parties hereto intend that this
Agreement shall provide for indemnification in excess of that
expressly permitted by statute in the absence of an
agreement.
(c) In addition to, and not as a
limitation of, the indemnification provided by this Section 3,
the rights of indemnification of the Indemnity provided under this
Agreement shall include those rights set forth in Sections 4, 5,
and 7 of this Agreement. Notwithstanding the provisions of this
Section 3, the Corporation shall not be required to indemnify
the Indemnitee in connection with a Proceeding commenced by the
Indemnitee (other than a Proceeding commenced by the Indemnity to
enforce the Indemnitee’s rights under this Agreement) unless
the commencement of such Proceeding was authorized by the Board of
Directors.
(d) The Corporation’s
obligations to make payments under this Agreement are not subject
to diminution by set-off, counterclaim, abatement, or otherwise.
However, the Indemnitee will not be released from any liability or
obligations owed to the Corporation, whether under this Agreement
or otherwise.
4. Payment of
Expenses.
(a) Full
Indemnification . Notwithstanding any other provision in
this Agreement, to the extent that the Indemnitee has been
successful on the merits or otherwise in defense of any Proceeding,
the Indemnitee shall be indemnified against all Expenses actually
and reasonably incurred by the Indemnitee in connection therewith.
For purposes of this Section 4 and without limitation, the
termination of any claim, issue, or matter in any such Proceeding
by dismissal, settlement, or withdrawal, with or without prejudice,
shall be deemed to be a successful resolution as to such claim,
issue, or matter.
(b) Partial
Indemnification . Notwithstanding any other provision in
this Agreement, if the Indemnitee is not wholly successful in any
Proceeding but is successful on the merits or otherwise in defense
of such Proceeding as to one or more, but less than all, of the
claims, issues, or matters in such Proceedings, the Corporation
shall indemnify the Indemnitee against all Expenses actually and
reasonably incurred by the Indemnitee in connection with each
successfully resolved claim, issue, or matter.
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(c) Advance of Expenses
.
(i) All Expenses incurred by or on
behalf of Indemnitee shall be advanced by the Corporation to
Indemnitee (“ Expense Advance ”) within
20 days after the receipt by the Corporation of a written request
for such advance which may be made from time to time, whether prior
to or after final disposition of a Proceeding (unless there has
been a final determination by a court of competent jurisdiction or
decision of an arbitrator that Indemnitee is not entitled to be
indemnified for such Expenses). Any Expense Advance requested
hereby shall be made without regard to Indemnitee’s ability
to repay the amount of the Expense Advance and without regard to
the Indemnitee’s ultimate entitlement to indemnification
under this Agreement. Indemnitee’s entitlement to Expense
Advances shall include those Expenses incurred in connection with
any Proceeding by Indemnitee seeking a determination, an
adjudication or an award in arbitration pursuant to this Agreement.
Each written request shall reasonably evidence the Expenses
incurred by Indemnitee in connection therewith. The Indemnitee
hereby promises to repay to the Corporation the amounts advanced if
it shall ultimately be determined that the Indemnitee is not
entitled to be indemnified pursuant to the terms of this
Agreement.
(ii) If the Indemnitee has commenced
legal proceedings in a court of competent jurisdiction to secure a
determination that the Indemnitee is entitled to be indemnified
under this Agreement, as provided in Section 7, any
determination made under Section 5 hereof that the Indemnitee
is not entitled to be indemnified under this Agreement shall not be
binding and Indemnitee shall not be required to reimburse the
Corporation for any Expense Advances until a final judicial
determination (as to which all rights of appeal therefrom have been
exhausted or have lapsed) is made that Indemnitee is not permitted
to be indemnified under this Agreement. Indemnitee’s
obligation to reimburse the Corporation for any Expense Advance
shall be unsecured and no interest shall be charged
thereon.
5. Procedure for Determination of
Entitlement to Indemnification.
(a) Whenever the Indemnitee believes
that the Indemnity is entitled to indemnification under this
Agreement, the Indemnitee shall submit a written request to the
Corporation for indemnification to the attention of the corporate
secretary. The request for indemnification shall include
documentation or information which is necessary for the
determination of entitlement to indemnification and which is
reasonably available to Indemnitee. In any event, the Indemnitee
shall submit Indemnitee’s claim for indemnification within a
reasonable time, not to exceed one (1) year after any
judgment, order, settlement, dismissal, arbitration award,
conviction, acceptance of a plea of nolo contendere or its
equivalent, or final termination, whichever is the later date for
which Indemnitee requests indemnification. The secretary of the
C
