INDEMNIFICATION AGREEMENT
Exhibit 10.1
This INDEMNIFICATION AGREEMENT (this “Agreement”) is made as of this day of , 20 , by and
between Farmers National Banc Corp, an Ohio corporation (the “Corporation”), and , a director,
officer, employee, agent, or representative (as hereinafter defined) of the Corporation (the
“Indemnitee”).
WHEREAS, the Corporation and the Indemnitee are each aware of the exposure to litigation
officers, directors, employees, agents, and representatives of the Corporation have as they
exercise their duties to the Corporation,
WHEREAS, the Corporation and the Indemnitee are also aware of conditions in the insurance
industry that have affected and may continue to affect the Corporation’s ability to obtain
appropriate liability insurance on an economically acceptable basis,
WHEREAS, the Corporation desires to continue to benefit from the services of highly qualified,
experienced, and otherwise competent persons such as the Indemnitee, and
WHEREAS, the Indemnitee desires to serve or to continue to serve the Corporation as a
director, officer, employee, or agent or as a director, officer, employee, agent, or trustee of
another corporation, joint venture, trust, or other enterprise in which the Corporation has a
direct or indirect ownership interest, for so long as the Corporation continues to provide, on an
acceptable basis, adequate and reliable indemnification against liabilities and expenses that may
be incurred by the Indemnitee.
NOW, THEREFORE, in consideration of the foregoing premises and the mutual covenants herein
contained, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree
as follows.
1. INDEMNIFICATION. Subject to the exclusions contained in section 9 of this Agreement, the
Corporation shall indemnify the Indemnitee for the Indemnitee’s activities as a director, officer,
employee, or agent of the Corporation or as a person who is serving or has served at the request of
the Corporation (“representative”) as a director, officer, employee, agent, or trustee of another
corporation, joint venture, trust, or other enterprise, domestic or foreign, in which the
Corporation has a direct or indirect ownership interest (an “affiliated entity”) against expenses
(including, without limitation, attorneys’ and experts’ fees, judgments, fines, and amounts paid or
payable in settlement) actually and reasonably incurred (“Expenses”) in any claim against
Indemnitee that is the subject of any threatened, pending, or completed action, suit, or other type
of proceeding, whether civil, criminal, administrative, investigative, or otherwise and whether
formal or informal (a “Proceeding”), to which Indemnitee was, is, or is threatened to be made a
party by reason of facts that include Indemnitee’s being or having been such a director, officer,
employee, agent, or representative, to the extent of the highest and most advantageous to the
Indemnitee, as determined by the Indemnitee, of one or any combination of the following —
| (a) | indemnification provided by the Corporation’s Articles of Incorporation (“Articles”) or Regulations, or the Articles of Incorporation or Bylaws or Regulations of an affiliated entity of which the Indemnitee serves as a representative, in each case as in effect on the date hereof, |
| (b) | indemnification provided by the Corporation’s Articles or Regulations, or the Articles of Incorporation or Bylaws or Regulations of an affiliated entity of which the Indemnitee serves as a representative, in each case as in effect when Expenses are incurred by the Indemnitee, |
| (c) | indemnification allowable under Ohio law in effect at the date hereof or as amended to increase the scope of indemnification, |
| (d) | indemnification allowable under the law of the jurisdiction under which the Corporation exists when Expenses are incurred by the Indemnitee, |
| (e) | indemnification available under any liability insurance obtained by the Corporation in effect when a claim is made against Indemnitee, |
| (f) | indemnification available under any liability insurance obtained by the Corporation in effect when Expenses are incurred by the Indemnitee, and |
| (g) | such other indemnification benefits as are or may be otherwise available to Indemnitee. |
A combination of two or more of the indemnification benefits provided by (a) through (g) shall
be available to the extent that the Applicable Document (as hereafter defined) does not require
that the benefits provided therein be exclusive of other benefits. The document or law providing
for the indemnification benefits listed in items (a) through (g) above is called the “Applicable
Document” in this Agreement. The Corporation hereby undertakes to use its best efforts to assist
Indemnitee in all proper and legal ways to obtain the indemnification benefits selected by
Indemnitee under item (a) through (g) above.
For purposes of this Agreement, references to “other enterprises” shall include employee
benefit plans for employees of the Corporation or of any affiliated entity, without regard to
ownership of such plans; references to “fines” shall include any excise taxes assessed on the
Indemnitee with respect to any employee benefit plan; references to “serving at the request of the
Corporation” shall include any service as a director, officer, employee, or agent of the
Corporation that imposes duties on or involves services by the Indemnitee with respect to an
employee benefit plan, its participants, or beneficiaries; references to the masculine shall
include the feminine; references to the singular shall include the plural and vice versa; and if
the Indemnitee acted in good faith and in a manner the Indemnitee reasonably believed to be in the
best interests of the participants and beneficiaries of an employee benefit plan, the Indemnitee
shall be deemed to have acted in a manner consistent with the standards required for
indemnification by the Corporation under the Applicable Documents.
2. INSURANCE. The Corporation shall maintain liability insurance for so long as Indemnitee’s
services are covered hereunder, provided and to the extent that such insurance is available on a
basis acceptable to the Corporation. However, the Corporation agrees that the provisions hereof
shall remain in effect regardless of whether liability or other insurance
coverage is at any time obtained or retained by the Corporation. But payments made to
Indemnitee under an insurance policy obtained or retained by the Corporation shall reduce the
obligation of the Corporation to make payments hereunder by the amount of the payments made under
any such insurance policy.
3. PAYMENT OF EXPENSES. At Indemnitee’s request, after receipt of written notice under section
5 hereof and an undertaking in the form of Exhibit A attached hereto by or on behalf of Indemnitee
to repay such amounts so paid on Indemnitee’s behalf if it shall ultimately be determined under the
Applicable Document that Indemnitee is not entitled to be indemnified by the Corporation for such
Expenses, the Corporation shall pay the Expenses as and when incurred by Indemnitee. That portion
of Expenses representing attorneys’ fees and other costs incurred in defending any proceeding shall
be paid by the Corporation within 30 days after the Corporation receives the request and reasonable
documentation evidencing the amount and nature of the Expenses, subject to the Corporation also
having received such a notice and undertaking.
4. ADDITIONAL RIGHTS. The indemnification provided in this Agreement shall not be exclusive of
any other indemnification or right to which Indemnitee may be entitled and shall continue after
Indemnitee has ceased to occupy a position as an officer, director, employee, agent, or
representative as described in section 1 above with respect to Proceedings relating to or arising
out of Indemnitee’s acts or omissions during the Indemnitee’s service in such position. The
indemnification benefits provided to Indemnitee under this Agreement for the Indemnitee’s service
as a representative of an affiliated entity shall be payable if and only if and only to the extent
that reimbursement to Indemnitee by the affiliated entity with which Indemnitee has served as a
representative, whether pursuant to agreement, applicable law, articles of incorporation or
association, bylaws or regulations of the entity, or insurance maintained by such affiliated
entity, is insufficient to compensate Indemnitee for Expenses actually incurred and otherwise
payable by the Corporation under this Agreement. Any payments in fact made to or on behalf of the
Indemnitee directly or indirectly by the affiliated entity with which Indemnitee served as a
representative shall reduce the obligation of the Corporation hereunder.
5. NOTICE TO CORPORATION. Indemnitee shall provide to the Corporation prompt written notice of
any Proceeding brought, threatened, asserted, or commenced against Indemnitee for which Indemnitee
may assert a right to indemnification hereunder; provided, however, that failure to provide notice
shall not in any way limit Indemnitee’s rights under this Agreement.
6. COOPERATION IN DEFENSE AND SETTLEMENT. Indemnitee shall not make any admission or effect
any settlement without the Corporation’s written consent unless Indemnitee shall have determined to
undertake the Indemnitee’s own defense in such matter and has waived the benefits of this
Agreement. The Corporation shall not settle any Proceeding to which Indemnitee is a party in a
manner that would impose any Expense on Indemnitee without the Indemnitee’s written consent.
Neither Indemnitee nor the Corporation shall unreasonably withhold consent to the proposed
settlement. Indemnitee and the Corporation shall cooperate to the extent reasonably possible with
each other and with the Corporation’s insurers in attempts to defend or settle such Proceeding.
7. ASSUMPTION OF DEFENSE. Except as otherwise provided below, the Corporation jointly with any
other indemnifying party similarly notified may assume Indemnitee’s defense in any Proceeding, with
counsel mutually satisfactory to Indemnitee and the Corporation. After notice from the Corporation
to Indemnitee of the Corporation’s election to assume such defense, the Corporation shall not be
liable to Indemnitee under this Agreement for Expenses subsequently incurred by Indemnitee in the
defense thereof, other than reasonable costs of investigation or as otherwise provided below.
Indemnitee shall have the right to employ counsel in such Proceeding, but the fees and expenses of
such counsel incurred after notice from the Corporation of its assumption of the defense thereof
shall be at Indemnitee’s expense unless:
| (a) | the employment of counsel by Indemnitee is authorized by the Corporation, |
| (b) | counsel employed by the Corporation initially is unacceptable or later becomes unacceptable to Indemnitee and such unacceptability is reasonable under then existing circumstances, |
| (c) | Indemnitee reasonably concludes that there is a conflict of interest between Indemnitee and the Corporation (or another party being represented jointly with the Corporation) in the conduct of the defense of such Proceeding, or |
| (d) | the Corporation does not employ counsel promptly to assume the defense of the Proceeding, |
in each of which cases the fees and expenses of counsel shall be at the expense of the Corporation
and subject to payment pursuant to this Agreement. The Corporation shall not be entitled to assume
the defense of Indemnitee in any Proceeding brought by or on behalf of the Corporation or as to
which Indemnitee shall have made either of the conclusions provided for in clauses (b) or (c)
above.
8. ENFORCEMENT. If a dispute or controversy arises under this Agreement between Indemnitee and
the Corporation about whether the Indemnitee is entitled to indemnification for any Proceeding or
for Expenses incurred, then for each such dispute or controversy the Indemnitee may seek to enforce
the Agreement through legal action or, at Indemnitee’s sole option and written request, through
arbitration. If the Indemnitee requests arbitration, the dispute or controversy shall be submitted
by the parties to binding arbitration in Mahoning County, Ohio before a single arbitrator agreeable
to both parties; provided, however, that indemnification for any claim, issue, or matter in a
Proceeding brought against Indemnitee by or in the right of the Corporation and as to which
Indemnitee is adjudged liable for negligence or misconduct in the performance of the Indemnitee’s
duty to the Corporation shall be submitted to arbitration only to the extent permitted under the
Applicable Document and applicable law then in effect. If the parties cannot agree on a designated
arbitrator within 15 days after arbitration is requested in writing by the Indemnitee, the
arbitration shall proceed in Mahoning County, Ohio before an arbitrator appointed by the American
Arbitration Association. In either case, the arbitration proceeding shall commence promptly under
the rules then in effect of that Association. And the arbitrator agreed to by the parties or
appointed by that Association shall be an attorney other than an attorney who has been or is
associated with a firm having associated with it an attorney who has been retained by or performed
services for the Corporation or
Indemnitee at any time during the five years preceding commencement of arbitration. The award
shall be rendered in such form that judgment may be entered thereon in any court having
jurisdiction thereof. The prevailing party shall be entitled to prompt reimbursement of any costs
and expenses (including, without limitation, reasonable attorneys’ fees) incurred in connection
with such legal action or arbitration; provided, however, that the Indemnitee shall not be required
to reimburse the Corporation unless the arbitrator or court resolving the dispute determines that
Indemnitee acted in bad faith in bringing the action or arbitration.
9. EXCLUSIONS. Regardless of the scope of indemnification available to Indemnitees from time
to time under any Applicable Document, no indemnification, reimbursement, or payment shall be
required of the Corporation hereunder for —
| (a) | any claim or any part thereof for which Indemnitee is determined by a court of competent jurisdiction, from which no appeal is or can be taken, by clear and convincing evidence, to have acted with deliberate intent to cause injury to the Corporation or with reckless disregard for the best interests of the Corporation, |
| (b) | any claim or any part thereof arising out of acts or omissions for which applicable law prohibits elimination of liability, |
| (c) | any claim or any part thereof arising under section 16(b) of the Securities Exchange Act of 1934 for which Indemnitee is obligated to pay any penalty, fine, settlement, or judgment, |
| (d) | any obligation of Indemnitee based upon or attributable to the Indemnitee gaining in fact any improper personal benefit, gain, profit, or advantage, or |
| (e) | any proceeding initiated by Indemnitee without the consent or authorization of the Corporation’s board of directors, provided that this exclusion shall not apply to any claims brought by Indemnitee (x) to enforce the Indemnitee’s rights under this Agreement or (y) in any Proceeding initiated by another person or entity, regardless of whether the claims were brought by Indemnitee against a person or entity who was otherwise a party to such proceeding. |
Nothing in this section 9 shall eliminate or diminish the Corporation’s obligations to advance
that portion of Indemnitee’s Expenses representing attorneys’ fees and other costs incurred in
defending any proceeding under section 3 of this Agreement.
Furthermore, despite anything to the contrary in this Agreement, nothing in this Agreement
requires indemnification, reimbursement, or payment by the Corporation, and the Indemnitee shall
not be entitled to demand indemnification, reimbursement, or payment under this Agreement, if and
to the extent indemnification, reimbursement, or payment constitutes a “prohibited indemnification
payment” within the meaning of Federal Deposit Insurance Corporation Rule 359.1(l)(1) [12 CFR
359.1(l)(1)].
10. EXTRAORDINARY TRANSACTIONS. The Corporation covenants and agrees that if a merger,
consolidation, or reorganization occurs in which the Corporation is not the surviving entity, if
there is a sale of all or substantially all of the assets of the Corporation, or
if there is a liquidation of the Corporation (each such event being hereinafter referred to as
an “extraordinary transaction”), the Corporation shall —
| (a) | have the obligations of the Corporation under this Agreement expressly assumed by the survivor, purchaser, or successor, as the case may be, in such extraordinary transaction, or |
| (b) | otherwise adequately provide for the satisfaction of the Corporation’s obligations under this Agreement in a manner acceptable to the Indemnitee. |
11. NO PERSONAL LIABILITY. Indemnitee agrees that neither the directors nor any officer,
employee, representative, or agent of the Corporation shall be personally liable for the
satisfaction of the Corporation’s obligations under this Agreement, and Indemnitee shall look
solely to the assets of the Corporation for satisfaction of any claims hereunder.
12. SEVERABILITY. If any provision, phrase, or other portion of this Agreement is determined
by any court of competent jurisdiction to be invalid, illegal, or unenforceable, in whole or in
part, and such determination becomes final, such provision, phrase, or other portion shall be
deemed to be severed or limited, but only to the extent required to render the remaining provisions
and portions of the Agreement enforceable, and the Agreement as thus amended shall be enforced to
give effect to the intention of the parties insofar as that is possible.
13. SUBROGATION. If any payments are made under this Agreement, the Corporation shall be
subrogated to the extent thereof to all rights to indemnification or reimbursement against any
insurer or other entity or person that are vested in the Indemnitee, who shall execute all
instruments and take all other actions as shall be reasonably necessary for the Corporation to
enforce such rights.
14. GOVERNING LAW. The parties hereto agree that this Agreement shall be construed and
enforced in accordance with and governed by the laws of the State of Ohio.
15. NOTICES. All notices, requests, demands and other communications hereunder shall be in
writing and shall be considered to have been duly given if delivered by hand or mailed, certified
or registered mail, return receipt requested, with postage prepaid, to the following addresses or
to such other address as either party may designate by like notice. If to the Corporation, notice
shall be given to the board of directors, Farmers National Banc Corp, 00 Xxxxx Xxxxx Xxxxxx,
Xxxxxxxx, Xxxx 00000, or to such other or additional person or persons as the Corporation shall
have designated to the Indemnitee in writing. If to the Indemnitee, notice shall be given to the
Indemnitee at the address of the Indemnitee appearing on the Corporation’s records, or to such
other or additional person or persons as the Indemnitee shall have designated to the Corporation in
writing.
16. TERMINATION. This Agreement may be terminated by either party upon not less than 60 days’
prior written notice delivered to the other party, but such termination shall not diminish the
obligations of the Corporation hereunder for the Indemnitee’s activities before the effective date
of termination.
17. AMENDMENTS AND BINDING EFFECT. This Agreement and the rights and duties of Indemnitee and
the Corporation hereunder may not be amended, modified, or terminated except by written instrument
signed and delivered by the parties hereto. This Agreement is binding upon and shall inure to the
benefit of the parties hereto and their respective heirs, executors, administrators, successors,
and assigns.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the date first above
written.
| FARMERS NATIONAL BANC CORP |
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| By: | |||||
| Its: | |||||
| INDEMNITEE |
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Exhibit 1
FORM OF UNDERTAKING
This UNDERTAKING is entered into by (“Indemnitee”) in accordance with an Indemnification
Agreement dated as of , 20 (the “Indemnification Agreement”), by and between Farmers
National Banc Corp, an Ohio corporation (the “Corporation”), and Indemnitee.
RECITALS:
A. Under the Indemnification Agreement, the Corporation has agreed to pay Expenses (within the
meaning of the Indemnification Agreement) as and when incurred by Indemnitee for any claim against
Indemnitee that is the subject of any threatened, pending, or completed action, suit, or
proceeding, whether civil, criminal, or investigative, to which Indemnitee was, is, or is
threatened to be made a party by reason of facts that include Indemnitee’s being or having been a
director, officer, or representative (within the meaning of the Indemnification Agreement) of the
Corporation,
B. Such a claim has arisen against Indemnitee and Indemnitee has notified the Corporation
thereof in accordance with the terms of section 5 of the Indemnification Agreement (hereinafter the
“Proceeding”), and
C. Indemnitee believes that Indemnitee should prevail in the Proceeding, and it is in the
interest of both Indemnitee and the Corporation to defend against the claims against Indemnitee
thereunder.
NOW, THEREFORE, Indemnitee hereby agrees that in consideration of the Corporation’s advance
payment of Indemnitee’s Expenses incurred before final disposition of the Proceeding, Indemnitee
hereby undertakes to reimburse the Corporation for any and all expenses paid by the Corporation on
behalf of Indemnitee before final disposition of the Proceeding if the Indemnitee is determined
under the Applicable Document (within the meaning of the Indemnification Agreement) to be required
to repay such amounts to the Corporation under the Indemnification Agreement and applicable law,
provided that if Indemnitee is entitled under the Applicable Document to indemnification for some
or a portion of such Expenses, Indemnitee’s obligation to reimburse the Corporation shall only be
for those Expenses for which Indemnitee is determined to be required to repay such amounts to the
Corporation. Such reimbursement or arrangements for reimbursement by Indemnitee shall be
consummated within 90 days after a determination that Indemnitee is required to repay such amounts
to the Corporation under the Indemnification Agreement and applicable law.
Further, the Indemnitee agrees to reasonably cooperate with the Corporation concerning such
proceeding.
IN WITNESS WHEREOF, the undersigned has executed this undertaking this day of , 20 .
| Indemnitee | ||||
