Exhibit 10(a)
INDEMNIFICATION AGREEMENT
Preamble
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This
Indemnification Agreement (this "Agreement") is made as of
this 27th day of September 27, 2005, by and
between Sonoma National Bank,
a national banking association (the
"Association"), and Kevin E Carinalli
("Indemnitee").
Recitals
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A. The Association and
Indemnitee recognize the increasing
difficulty in obtaining directors',
officers', and agents' liability
insurance, the significant increases in the
cost of such insurance, and
the general reductions in the coverage of
such insurance.
B. The Association and
Indemnitee further recognize the substantial
increase in corporate litigation in
general, subjecting directors,
officers and agents to expensive litigation
risks at the same time as the
availability and coverage of liability
insurance has been severely limited
and may not be available to the Association
in the future.
C. Indemnitee does not regard
the current protection available as
adequate under the present circumstances,
and Indemnitee and other
directors, officers and agents of the
Association may not be willing to
continue to serve as directors, officers
and agents without additional
protection.
D. The Association desires to
attract and retain the services of
highly qualified individuals, such as
Indemnitee, to serve as directors,
officers and agents of the Association and
to indemnify its directors,
officers and agents so as to provide them
with the maximum protection
permitted by law.
Agreement
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Based upon the
facts and premises contained in the above Recitals
and in consideration of the mutual promises
below, the Association and
Indemnitee hereby agree as follows:
1. Indemnification and Expense
Advancement.
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(a) Action, Etc., Other than by
Right of the Association.
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The Association shall indemnify Indemnitee
if Indemnitee was or is a
party or is threatened to be made a party
to any proceeding (other than
an action by or in the right of the
Association to procure a judgment in
its favor) by reason of the fact that
Indemnitee is or was an Agent of
the Association, against expenses,
judgments, fines, settlements and other
amounts actually and reasonably incurred in
connection with such
proceeding if Indemnitee acted in good
faith and in a manner Indemnitee
reasonably believed to be in the best
interests of the Association and, in
the case of a criminal proceeding, has no
reasonable cause to believe the
conduct of Indemnitee 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 Association or that
Indemnitee had reasonable cause to believe
that Indemnitee's conduct was
unlawful.
(b) Action, Etc., By or in the
Right of the Association.
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The Association shall indemnify Indemnitee
if Indemnitee was or is a
party or is threatened to be made a party
to any threatened, pending or
completed action by or in the right of the
Association to procure a
judgment in its favor by reason of the fact
that Indemnitee is or was an
Agent of the Association, against expenses
actually and reasonably
incurred by Indemnitee in connection with
the defense or settlement of
such action if Indemnitee acted in good
faith, in a manner Indemnitee
believed to be in the best interests of the
Association and its
shareholders; except that no
indemnification shall be made under this
subparagraph (b) for any of the
following:
(i)
In respect of
any claim, issue or matter as to which
Indemnitee shall have been adjudged to be liable to the
Association in the performance of Indemnitee's duty to the
Association and its shareholders, unless and only to the
extent that the court in which such 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 the expenses which such
court shall determine;
(ii)
Of amounts paid
in settling or otherwise disposing of a
pending action without court approval; or
(iii)
Of expenses
incurred in defending a pending action which is
settled or otherwise disposed of without court approval.
(c) Determination of Right of
Indemnification. Any indemnification
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under subparagraphs (a) and (b) shall be
made by the Association only if
authorized in the specific case, upon a
determination that indemnification
of Indemnitee is proper in the
circumstances because Indemnitee has met
the applicable standard of conduct set
forth above in subparagraphs (a)
and (b) by any of the following:
(i)
A majority vote
of a quorum consisting of directors who are
not parties to such proceeding;
(ii)
If such a quorum
of directors is not obtainable, by
independent legal counsel in a written opinion;
(iii)
Approval of the
shareholders by the affirmative vote of a
majority of the shares entitled to vote represented at a
duly held meeting at which a quorum is present or by the
written consent of shareholders as provided in the Bylaws,
with the shares owned by the person to be indemnified not
being entitled to vote thereon; or
(iv)
The court in
which such proceeding is or was pending upon
application made by the Association or its Agent or attorney
or other person rendering services in connection with the
defense, whether or not such application by the Agent,
attorney or other person is opposed by the Association.
(d) Advances of Expenses.
Expenses (including attorneys' fees)
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costs, and charges incurred in defending
any proceeding shall be advanced
by the Association prior to the final
disposition of such proceeding upon
receipt of an undertaking by or on behalf
of Indemnitee to repay such
amount unless it shall be determined
ultimately that Indemnitee is
entitled to be indemnified as authorized in
this Paragraph 1.
(e) Indemnification Against
Expenses of successful Party.
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Notwithstanding the other provisions of
this paragraph 1, to the extent
that Indemnitee has been successful on the
merits in a defense of any
proceeding, claim, issue or matter referred
to in subparagraphs (a) and
(b), Indemnitee shall be indemnified
against all expenses actually and
reasonably incurred by Indemnitee in
connection therewith.
(f) Right of Indemnitee to
Indemnification Upon Application;
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Procedure Upon Application. Any
indemnification provided for in
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subparagraphs (a), (b) or (e) shall be made
no later than ninety (90)
days after the Association is given notice
of request by Indemnitee,
provided that such request is made after
final adjudication, dismissal,
or settlement unless an appeal is filed, in
which case the request is
made after the appeal is resolved
(hereafter referred to as "Final
Disposition"). Upon such notice, if a
quorum of directors who were not
parties to the action, suit, or proceeding
giving rise to indemnification
is obtainable, the Association shall within
two (2) weeks call a Board of
Directors meeting to be held within four
(4) weeks of such notice, to make
a determination as to whether Indemnitee
has met the applicable standard
of conduct. Otherwise, if a quorum
consisting of directors who were not
parties in the relevant action, suit, or
proceeding is not obtainable, the
Association shall retain (at the
Association's expense) independent legal
counsel chosen either jointly by the
Association and Indemnitee or else by
Association counsel within two (2) weeks to
make such determination. If
(1) at such directors meeting such a quorum
is not obtained or, if
obtained, refuses to make such
determination or (2) if such legal counsel
is not so retained or, if retained, does
not make such determination
within four (4) weeks, then the Board of
Directors shall cause a
shareholders meeting to be held within four
(4) weeks to make such a
determination.
If notice of a
request for payment of a claim under any statute,
under this Agreement, or under the
Association's Articles of Association
or Bylaws providing for indemnification or
advance of expenses has been
given to the Association by Indemnitee, and
such claim is not paid in
full by the Association within ninety (90)
days of the later occurring
of the giving of such notice and Final
Disposition in case of
indemnification and twenty (20) days of the
giving of such notice in case
of advance of expenses, Indemnitee may, but
need not, at any time
thereafter bring an action against the
Association to receive the unpaid
amount of the claim or the expense advance
and, if successful, Indemnitee
shall also be paid for the expenses
(including attorneys' fees) of
bringing such action. It shall be a defense
to any such action (other than
an action brought to enforce a claim for
expenses incurred in connection
with any action, suit, or proceeding in
advance of its Final Disposition)
that Indemnitee has not met the standards
of conduct which make it
permissible under applicable law for the
Association to indemnify
Indemnitee for the amount claimed, and
Indemnitee shall be entitled to
receive interim payment of expenses
pursuant to Subparagraph (d) unless
and until such defense may be finally
adjudicated by court order or
judgment from which no further right of
appeal exists. Neither the failure
of the Association (including its Board of
Directors, independent legal
counsel, or its shareholders) to have made
a determination that
indemnification of Indemnitee is proper in
the circumstances because
Indemnitee has met the applicable standard
of conduct required by
applicable law, nor an actual determination
by the Association (including
its Board of Directors, independent legal
counsel, or its shareholders)
that Indemnitee has not met such applicable
standard of conduct, shall
create a presumption that Indemnitee has or
has not met the applicable
standard of conduct.
(g) Other Rights and Remedies.
The indemnification provided by
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this Paragraph 1 shall not be deemed
exclusive of, and shall not affect,
any other rights to which an Indemnitee may
be entitled under any law,
the Association's Articles of Association,
Bylaws, agreement, vote of
shareholders or disinterested directors or
otherwise, both as to action
in his or her official capacity and as to
action in another capacity while
holding such office, and shall continue
after Indemnitee has ceased
holding such office or acting in such
official capacity and shall inure to
the benefit of the heirs, executors, and
administrators of Indemnitee.
(h) Insurance. The Association
may purchase and maintain insurance
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on behalf of any person who is or was an
Agent against any liability
asserted against such person and incurred
by him or her in any such
capacity, or arising out of his or her
status as such, whether or not
the Association would have the power to
indemnify such person against
such liability u
