Indemnification
Agreement
This Indemnification Agreement
(“Agreement”) is made and entered into as of the
day of
, 200_, by and between Plumas Bank, a California corporation (the
“Bank”), and
, (the “Indemnitee”), a director (and/or
officer) of the Bank.
A. The Bank and the Indemnitee recognize
that statutes, regulations, court opinions and the Bank’s
Articles of Incorporation and Bylaws are indefinite in providing
‘s directors and officers with adequate protection from
liabilities to which they may become personally exposed as a result
of performing their duties in good faith for the Bank;
B. The Bank and the Indemnitee are aware of
the large number of lawsuits filed against corporate directors and
officers;
C. The Bank and the Indemnitee recognize
that the cost of defending against such lawsuits may be beyond the
financial resources of most directors and officers of the
Bank;
D. The Bank and the Indemnitee recognize
that the potential risks and liabilities of being a director and/or
officer pose a significant deterrent and increased reluctance on
the part of experienced and capable individuals to serve as a
director and/or officer of the Bank;
E. The Bank has investigated the
availability and sufficiency of liability insurance for its
directors and officers with adequate protection against potential
liabilities and has determined that such insurance provides
inadequate protection to its directors and officers, and, thus, it
would be in the best interests of the Bank and its shareholders to
contract with the Indemnitee, to indemnify him/her to the
fullest extent permitted by law against personal liability for
actions taken in the good faith performance of his/her
duties to the Bank;
F. Section 317 of the California
Corporations Code (“Section 317”) sets forth
certain provisions relating to the mandatory and permissive
indemnification of directors and officers (among others) of a
California corporation by such corporation;
G. Section 359.3 of Title 12 of the
Federal Code of Regulations limits certain indemnification payments
to a director, officer or institution affiliated party of a insured
depository institution;
H. As inducement and encouragement for
experienced and capable persons such as the Indemnitee to continue
to serve as a director and/or officer of the Bank, the Board
of Directors of the Bank has determined, after due consideration
and investigation, that this Agreement is a reasonable and prudent
means to promote and ensure the best interests of the Bank and its
shareholders; and
I. The Bank desires to have the Indemnitee
continue to serve as a director or officer of the Bank free
from undue concern for unpredictable, inappropriate or unreasonable
legal risks and personal liabilities by reason of his/her
acting in good faith in the performance of his/her duty to
the Bank; and the Indemnitee desires to continue to serve as a
director or officer of the Bank; provided, and on the
express condition, that the Indemnitee is furnished with the
indemnity set forth hereinafter.
NOW, THEREFORE, in consideration of the mutual
covenants and agreements set forth below and based on the premises
set forth above, the Bank and the Indemnitee do hereby agree as
follows:
1. Agreement to Serve .
The Indemnitee will serve or
continue to serve as a director or officer of the Bank to
the best of his/her abilities at the will of the Bank for so
long as the Indemnitee is duly elected or appointed or until such
time as the Indemnitee tenders his/her resignation in
writing.
2.
Definitions . As
used in this Agreement:
(a) The term “Proceeding” shall
include any threatened, pending or completed action, suit or
proceeding, whether brought in the right of the Bank or otherwise
and whether of a civil, criminal, administrative or investigative
nature, including, but not limited to, actions, suits or
proceedings brought under and/or predicated upon the Securities Act
of 1933, as amended, and/or the Securities Exchange Act of 1934, as
amended, and/or their respective state counterparts, and/or any
rule or regulation promulgated thereunder, in which the Indemnitee
may be or may have been involved as a party or otherwise, by reason
of the fact that the Indemnitee is or was a director or
officer of the Bank, by reason of any action taken by
him/her or of any inaction on his/her part while
acting as such director or officer or by reason of the fact
that he/she is or was serving at the request of the Bank as
a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, whether or
not he/she 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.
(b) The term “Expenses”
includes, without limitation thereto, expenses of investigations,
of judicial or administrative proceedings or appeals,
attorneys’ fees and disbursements and any expenses of
establishing a right to indemnification under Paragraph 7 of
this Agreement, but shall not include the amount of judgments,
settlements, fines or penalties actually levied against the
Indemnitee.
3. Indemnity in Third Party Proceedings
. Subject to
Section 359.1 of Title 12 of the Federal Code of Regulations,
the Bank shall indemnify the Indemnitee in accordance with the
provisions of this section if the Indemnitee is a party to or
threatened to be made a party to or otherwise involved in any
Proceeding (other than a Proceeding by or in the right of the Bank
to procure a judgment in its favor), by reason of the fact that the
Indemnitee is or was a director, officer, employee or agent of the
Bank or is or was serving at the request of the Bank as a director,
officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise, against all Expenses,
judgments, fines, settlements and other amounts actually and
reasonably incurred by the Indemnitee in connection with such
Proceeding, provided it is determined pursuant to Paragraph 7
of this Agreement or by the court before which such action was
brought or by the shareholders of the Bank in the manner prescribed
by Section 317, that the Indemnitee acted in good faith and in
a manner which he/she reasonably believed to be in the best
interests of the Bank and, in the case of a criminal proceeding, in
addition, had no reasonable cause to believe that his/her
conduct was unlawful. The termination of any such Proceeding by
judgment, order of court, settlement, conviction, or upon a plea of
nolo contendere, or its equivalent, shall not, of itself, create a
presumption that the Indemnitee did not act in good faith and in a
manner which he/she reasonably believed to be in the best
interests of the Bank, and with respect to any criminal proceeding,
that such person had reasonable cause to believe that
his/her conduct was unlawful.
2
With respect to any Proceeding involving
Indemnitee as to which Section 359.1 of Title 12 of the
Federal Code of Regulations is applicable, the Bank agrees to use
its best efforts to actively and fully comply with the requirements
of Section 359.3 of Title 12 of the Federal Code of
Regulations to provide the Indemnitee with indemnification to the
maximum permitted under such section.
4. Indemnity in Proceedings by or in
the Right of the Bank . Subject to Section 359.1 of Title 12 of the
Federal Code of Regulations, the Bank shall indemnify the
Indemnitee in accordance with the provisions of this section if the
Indemnitee is a party to or threatened to be made a party to or
otherwise involved in any Proceeding by or in the right of the Bank
to procure a judgment in its favor by reason of the fact that the
Indemnitee is or was a director, officer, employee or agent of the
Bank or is or was serving at the request of the Bank as a director,
officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise against all Expenses
actually and reasonably incurred by the Indemnitee in connection
with the defense or settlement of such Proceeding, provided it is
determined pursuant to Paragraph 7 of this Agreement or by the
court before which such action was brought or by the shareholders
of the Bank in the manner prescribed by Section 317, that the
Indemnitee acted in good faith and in a manner which he/she
believed to be in the best interests of the Bank and its
shareholders. Notwithstanding the foregoing, no indemnification
shall be made under this Paragraph 4:
(a) in respect of any claim, issue or
matter as to which the Indemnitee shall have been adjudged to be
liable to the Bank, 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, the
Indemnitee is fairly and reasonably entitled to indemnity for such
Expenses as such court shall determine;
(b) of amounts paid in settling or
otherwise disposing of a pending action without court
approval;
(c) of Expenses incurred in defending a
pending action which is settled or otherwise disposed of without
court
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