This
Indemnity Agreement, dated as of
,
is made by and between HANMI
FINANCIAL CORPORATION, a Delaware corporation (the “
Company ”), and
, a director, officer or key employee of the Company or one of the
Company’s subsidiaries or other service provider who
satisfies the definition of Indemnifiable Person set forth below
(the “ Indemnitee ”).
A. The
Company is aware that competent and experienced persons are
increasingly reluctant to serve as representatives of corporations
unless they are protected by comprehensive liability insurance
and/or indemnification, due to increased exposure to litigation
costs and risks resulting from their service to such corporations,
and due to the fact that the exposure frequently bears no
reasonable relationship to the compensation of such
representatives;
B. Plaintiffs
often seek damages in such large amounts and the costs of
litigation may be so substantial (whether or not the case is
meritorious), that the defense and/or settlement of such litigation
are often beyond the personal resources of
representatives;
C. The
Company believes that it is unfair for its representatives and the
representatives of its Subsidiaries or Affiliates (as defined
below) to assume the risk of large judgments and Expenses and Other
Liabilities (as defined below) that may be incurred in cases in
which the representative received no personal profit and in cases
where the representative was not culpable;
D. The
Company recognizes that the issues in controversy in litigation
against a representative of a corporation such as the Company or a
Subsidiary or Affiliate of the Company are often related to the
knowledge, motives and intent of such representatives, that he or
she is usually the only witness with knowledge of the essential
facts and exculpating circumstances regarding such matters and that
the long period of time which usually elapses before the trial or
other disposition of such litigation often extends beyond the time
that the representative can reasonably recall such matters; and may
extend beyond the normal time for retirement for such
representative with the result that the representative, or in the
event of his or her death, his or her spouse, heirs, executors or
administrators may be faced with limited ability and undue hardship
in maintaining an adequate defense, which may discourage such a
representative from serving in that position;
E. Based
upon their experience as business managers, the members of the
Board of Directors of the Company (the “ Board
”) have concluded that, to retain and attract talented and
experienced individuals to serve as representatives of the Company
and its Subsidiaries and Affiliates and to encourage such
individuals to take the business risks necessary for the success of
the Company and its Subsidiaries and Affiliates, it is necessary
for the Company to contractually indemnify certain of its
representatives and the representatives of its Subsidiaries and
Affiliates, and to assume for itself maximum liability for Expenses
and Other Liabilities in connection with claims against such
representatives in
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connection with
their service to the Company and its Subsidiaries and Affiliates,
and have further concluded that the failure to provide such
contractual indemnification could result in great harm to the
Company and its Subsidiaries and Affiliates and the Company’s
stockholders;
F. Section 145
of the Delaware General Corporation Law, under which the Company is
organized (“ Section 145 ”), empowers the
Company to indemnify by agreement its officers, directors,
employees and agents, and persons who serve, at the request of the
Company, as directors, officers, employees or agents of other
corporations, partnerships, joint ventures, trusts or other
enterprises, and expressly provides that the indemnification
provided by Section 145 is not exclusive;
G. The
Company has determined that the liability insurance coverage
available to the Company and its Subsidiaries and Affiliates for
their representatives as of the date hereof is inadequate and/or
unreasonably expensive. The Company believes, therefore, that the
interests of the Company’s stockholders would best be served
by the indemnification by the Company of selected representatives
of the Company and its Subsidiaries and Affiliates;
H. The
Company desires and has requested the Indemnitee to serve or
continue to serve as a representative of the Company and/or the
Subsidiaries or Affiliates of the Company free from undue concern
about inappropriate claims for damages arising out of or related to
such services to the Company and/or the Subsidiaries or Affiliates
of the Company;
I. The
Bylaws of the Company require the Company to indemnify those
representatives of the Company who are officers or directors of the
Company and permit the Company to indemnify other representatives
of the Company and its Subsidiaries and Affiliates in accordance
with governing law and the Indemnitee has been serving and
continues to serve as a representative of the Company and/or its
Subsidiaries and/or Affiliates in part in reliance on such
Bylaws;
J. The
Indemnitee is willing to serve, or to continue to serve, the
Company and/or the Subsidiaries and Affiliates of the Company,
provided that Indemnitee is furnished the indemnity provided for
herein; and
K. In
recognition of Indemnitee’s need for substantial protection
against personal liability in order to support and encourage
Indemnitee’s continued service to the Company and/or its
Subsidiaries and Affiliates in an effective manner, the difficulty
in obtaining satisfactory director and officer liability insurance
coverage, and Indemnitee’s reliance on the Company’s
Bylaws and applicable law, and in part to provide Indemnitee with
specific contractual assurance that the protection promised or
permitted by such Bylaws will be available to Indemnitee
(regardless of, among other things, any amendment to or revocation
of such Bylaws or any change in the composition of the Board or
acquisition transaction relating to the Company), the Company
wishes to provide in this Agreement for the indemnification of and
the advancement of Expenses to Indemnitee to the fullest extent
(whether partial or complete) permitted by law and as set forth in
this Agreement, and, to the
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extent
insurance is maintained, for the continued coverage of Indemnitee
under the directors’ and officers’ liability insurance
policies of the Company and its Subsidiaries and
Affiliates.
NOW,
THEREFORE, the parties hereto, intending to be legally bound,
hereby agree as follows:
(a)
Affiliate . For purposes of this Agreement,
“Affiliate” of the Company means any corporation,
partnership, joint venture, trust or other enterprise in respect of
which the Indemnitee is or was or will be serving as a director,
officer, advisory director, trustee, manager, member, partner,
employee, agent, attorney, consultant, member of the entity’s
governing body (whether constituted as a board of directors, board
of managers, general partner or otherwise), fiduciary, or in any
other similar capacity at the direct or indirect request of the
Company, and including, but not limited to, any employee benefit
plan of the Company or a Subsidiary or Affiliate of the
Company.
(b)
Expenses . For purposes of this Agreement,
“Expenses” means all direct and indirect costs of any
type or nature whatsoever (including, without limitation, all
attorneys’ fees and related disbursements, and other
out-of-pocket costs, including, without limitation, experts’
fees, court costs, retainers, transcript fees, duplicating,
printing and binding costs, as well as telecommunications, postage
and courier charges) paid or incurred by the Indemnitee in
connection with the inquiry, investigation, defense or appeal of a
Proceeding (as defined below), establishing, defending or enforcing
a right to indemnification under this Agreement, Section 145
or otherwise or being a witness in or participating in (including
on appeal) any Proceeding, or preparing for the inquiry, defense or
appeal of a Proceeding or for being a witness in or participating
in (including on appeal) any Proceeding; provided, however, that
Expenses shall not include any judgments, fines, ERISA (or other
employee benefit plan related) excise taxes or penalties or amounts
paid in settlement of a Proceeding.
(c)
Indemnifiable Event . For purposes of this Agreement,
“Indemnifiable Event” means any event or occurrence
related to
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Indemnitee’s service for the Company or
its Subsidiaries and/or Affiliates as an Indemnifiable Person (as
defined below), or by reason of anything done or not done, or any
act or omission, by Indemnitee in any such capacity.
(d)
Indemnifiable Person . For the purposes of this Agreement,
“Indemnifiable Person” means any person who is or was a
director, officer, employee, attorney, advisory director, trustee,
manager, member, partner, consultant, member of an entity’s
governing body (whether constituted as a board of directors, board
of managers, general partner or otherwise) or other agent or
fiduciary of the Company or a Subsidiary or Affiliate of the
Company; or is or was serving at the request of the Company, or for
the convenience of, or to represent the interest of the Company or
a Subsidiary or Affiliate of the Company as a director, officer,
employee, attorney, advisory director, trustee, manager, member,
partner, consultant, member of an entity’s governing body
(whether constituted as a board of directors, board of managers,
general partner or otherwise) or other agent or fiduciary of
another foreign or domestic corporation, partnership, limited
liability company, joint venture, trust, employee benefit plan or
other enterprise or entity; or was a director, officer, employee,
attorney, advisory director, trustee, manager, member, partner,
consultant, member of an entity’s governing body (whether
constituted as a board of directors, board of managers, general
partner or otherwise) or other agent or fiduciary of a foreign or
domestic corporation or other enterprise which was a predecessor of
the Company or a Subsidiary of the Company, or was a director,
officer, employee, attorney, advisory director, trustee, manager,
member, partner, consultant, member of an entity’s governing
body (whether constituted as a board of directors, board of
managers, general partner or otherwise) or other agent or fiduciary
of another corporation, partnership, limited liability company,
joint venture, trust, employee benefit plan or other enterprise or
entity at the request of, for the convenience of, or to represent
the interests of such predecessor.
(e)
Other Liabilities . For purposes of this Agreement,
“Other Liabilities” means any and all liabilities of
any type whatsoever (including, but not limited to, judgments,
fines, ERISA (or other benefit plan related) excise taxes or
penalties, and amounts paid in settlement and all interest, taxes,
assessments and other charges paid or payable in
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connection with
or in respect of any Expenses or any such judgments, fines, ERISA
(or other benefit plan related) excise taxes or penalties, or
amounts paid in settlement).
(f)
Proceeding . For the purposes of this Agreement,
“Proceeding” means any threatened, pending, or
completed action, suit or other proceeding, whether civil, criminal
or administrative and including any appeal thereof, or any inquiry
or investigation, whether instituted by the Company or any
governmental agency or any other party, that Indemnitee in good
faith believes might lead to the institution of any such action,
suit or other proceeding, whether civil, criminal, administrative,
investigative or any other type whatsoever, including any
arbitration or other alternative dispute resolution
mechanism.
(g)
Subsidiary . For purposes of this Agreement,
“Subsidiary” means any corporation controlled directly
by the Company, or indirectly by the Company through one or more
intermediaries.
2.
Agreement to Serve . The Indemnitee agrees to serve and/or
continue to serve the Company as an Indemnifiable Person in the
capacity or capacities in which Indemnitee currently serves the
Company as an Indemnifiable Person, and any additional capacity in
which Indemnitee may agree to serve, until such time as
Indemnitee’s service in a particular capacity shall end
according to the terms of an agreement, the Company’s
Certificate of Incorporation or Bylaws, governing law, or
otherwise. Nothing contained in this Agreement is intended to
create any right to continued employment or other form of service
for the Company or a Subsidiary or Affiliate of the Company by
Indemnitee.
3.
Mandatory Indemnification . In the event Indemnitee was, is
or becomes a party to or witness or other participant in, or is
threatened to be made a party to or witness or other participant
in, a Proceeding by reason of (or arising in part out of) an
Indemnifiable Event, the Company shall hold harmless and indemnify
the Indemnitee to the fullest extent not prohibited by the
provisions of the Company’s Bylaws and the Delaware General
Corporation Law (“GCL”), as the same may be amended
from time to time (but only to the extent that such amendment
permits the Company to provide broader indemnification rights than
the Bylaws or the GCL permitted prior to the adoption of such
amendment). In
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addition to and
not in limitation of the indemnification otherwise provided for
herein, and subject only to the exclusions set forth in
Section 10 below, the Company hereby further agrees to hold
harmless and indemnify Indemnitee as follows:
(a)
Third Party Actions . If the Indemnitee is a person who 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 Company, which
actions are addressed in Section 3(b) below) by reason of the fact
that he or she is or was serving the Company or a Subsidiary or
Affiliate of the Company as an Indemnifiable Person, or by reason
of anything done or not done by Indemnitee in any such capacity as
an Indemnifiable Person, or by reason of an Indemnifiable Event,
against any and all Expenses and Other Liabilities incurred by
Indemnitee in connection with (including in preparation for) the
inquiry, investigation, defense, settlement or appeal of such
Proceeding if Indemnitee acted in good faith and in a manner he or
she reasonably believed to be in or not opposed to the best
interests of the Company, and, with respect to any criminal action
or Proceeding, had no reasonable cause to believe his or her
conduct was unlawful; and
(b)
Derivative Actions . If the Indemnitee is a person who was
or is a party or is threatened to be made a party to any Proceeding
by or in the right of the Company to procure a judgment in its
favor by reason of the fact that he or she is or was serving the
Company or a Subsidiary or Affiliate of the Company as an
Indemnifiable Person, or by reason of anything done or not done by
Indemnitee in any such capacity as an Indemnifiable Person, or by
reason of an Indemnifiable Event, against any and all Expenses and
Other Liabilities incurred by Indemnitee in connection with the
inquiry, investigation, defense, settlement, or appeal of such
Proceeding if Indemnitee acted in good faith and in a manner he or
she reasonably believed to be in or not opposed to the best
interests of the Company; except that no indemnification under this
subsection shall be made in respect of any claim, issue or matter
as to which such person shall have been finally adjudged to be
liable to the Company, unless and only to the extent that the Court
of Chancery of the State of Delaware (“Court of
Chancery”) or the court in which such Proceeding was brought
shall determine upon application that, despite the adjudication of
liability but in view of all the circumstances of the case, such
person is fairly and reasonably entitled to indemnity for
such
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amounts which
the Court of Chancery or such other court shall deem
proper.
(c)
Determination of “Good Faith” . For purposes of
any determination of “good faith” hereunder, Indemnitee
shall be deemed to have acted in good faith if in taking such
action Indemnitee relied on the records or books of account of the
Company or a Subsidiary or Affiliate of the Company, including
financial statements, or on information, opinions, reports or
statements provided to Indemnitee by the officers or other
employees of the Company or a Subsidiary or Affiliate of the
Company in the course of their duties, or on the advice of legal
counsel for the Company or a Subsidiary or Affiliate of the
Company, or on information or records given or reports made to the
Company or a Subsidiary or Affiliate of the Company by an
independent certified public accountant or by an appraiser or other
expert selected by the Company or a Subsidiary or Affiliate of the
Company, or by any other person (including legal counsel,
accountants and financial advisors) as to matters Indemnitee
reasonably believes are within such other person’s
professional or expert competence and who has been selected with
reasonable care by or on behalf of the Company. In connection with
any determination as to whether Indemnitee is entitled to be
indemnified hereunder, the Reviewing Party (as defined below) or
court shall presume that the Indemnitee has satisfied the
applicable standard of conduct and is entitled to indemnification,
and the burden of proof shall be on the Company to establish, by
clear and convincing evidence, that Indemnitee is not so entitled.
The provisions of this Section 3(c) shall not be deemed to be
exclusive or to limit in any way the other circumstances in which
the Indemnitee may be deemed to have met the applicable standard of
conduct set forth in this Agreement. In addition, the knowledge
and/or actions, or failures to act, of any other person serving the
Company or a Subsidiary or Affiliate of the Company as an
Indemnifiable Person shall not be imputed to Indemnitee for
purposes of determining the right to indemnification
hereunder.
4.
Partial Indemnification . If the Indemnitee is entitled
under any provision of this Agreement to indemnification by the
Company for some or a portion of any Expenses or Other Liabilities
incurred by Indemnitee (a) in connection with (including in
preparation for) the inquiry, investigation, defense, settlement or
appeal of a Proceeding, (b)
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as or in
preparation to be a witness or participant in a Proceeding, or
(c) otherwise, but not entitled, however, to indemnification
for the total amount of such Expenses or Other Liabilities, the
Company shall nevertheless indemnify the Indemnitee for such total
amount except as to the portion thereof to which the Indemnitee is
not entitled as determined pursuant to the standard set forth in
Section 3 above. For avoidance of doubt, if Indemnitee is not
wholly successful in such Proceeding but is successful, on the
merits or otherwise, as to one or more but less than all claims,
issues or matters in such Proceeding, the Company shall indemnify
Indemnitee in connection with each successfully resolved claim,
issue or matter. Indemnitee’s satisfaction of the applicable
standard of conduct described in Section 3 above with respect
to a particular claim, issue or matter shall be considered a
successful resolution as to such claim, issue or matter.
Furthermore, for purposes of this Agreement and without limitation,
the termination of any claim, issue or matter by dismissal with or
without prejudice shall be deemed to be a successful resolution as
to such claim, issue or matter. In any review or Proceeding to
determine the extent of indemnification, the Company shall bear the
burden to establish, by clear and convincing evidence, the lack of
a successful resolution of a particular claim, issue or matter and
which amounts sought in indemnity are allocable to claims, issues
or matters which were not successfully resolved.
5.
Liability Insurance . So long as Indemnitee shall continue
to serve the Company or a Subsidiary or Affiliate of the Company as
an Indemnifiable Person and thereafter so long as Indemnitee shall
be subject to any possible claim or threatened, pending or
completed Proceeding as a result of an Indemnifiable Event, the
Company shall use its commercially reasonable efforts to maintain
in full force and effect for the benefit of Indemnitee as an
insured (i) liability insurance issued by one or more
reputable insurers and having the policy amount and deductible
deemed appropriate by the Board and providing i
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