INDEMNITY AGREEMENT
THIS AGREEMENT is made as of the date of ______________, 19__ by and
between BSM BANCORP, a California corporation (the "Company"), and
__________________ ("Indemnitee"), a director and/or officer of the Company,
with reference to the following facts:
A. The Company and the Indemnitee recognize the importance of
providing the Company's directors and executive officers ("officers") with
advance information and guidance with respect to the legal risks and potential
liabilities to which they may become personally exposed as a result of
performing their duties for the Company;
B. The Company and the Indemnitee are aware of the substantial
growth in the number of lawsuits filed against corporate officers and directors
in connection with their activities in such capacities and by reason of their
status as such;
C. The Company and the Indemnitee recognize that the cost of
defending against such lawsuits, whether or not meritorious, could be beyond the
financial resources of most directors and officers of the Company;
D. The Company and the Indemnitee recognize that the legal risks and
potential liabilities, and the threat thereof, and the resultant substantial
time and expense endured in defending against such lawsuits, bear no reasonable
or logical relationship to the amount of compensation received by the Company's
directors and officers. These factors pose a significant deterrent to, and
induce increased reluctance on the part of, experienced and capable individuals
to serve as directors and officers of the Company;
E. The Company has investigated the availability and deficiency of
liability insurance to provide its directors and officers with adequate
protection against the foregoing legal risks and potential liabilities It has
concluded that such insurance does not provide adequate protection to its
directors and officers, is unreasonably expensive, or both. Thus, it would be
in the best interests of the Company and its shareholders to contract with its
directors and certain officers, including the Indemnitee, to indemnify them to
the fullest extent permitted by law (as in effect on the date hereof, or, to the
extent any amendment may expand such permitted indemnification, as hereinafter
in effect) against personal liability for actions taken in the performance of
their duties to the Company;
F. The Board of Directors of the Company has concluded that it is
not only reasonable and prudent but necessary for the Company to contractually
obligate itself to indemnify in a reasonable and adequate manner its directors
and officers and
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to assume for itself maximum liability for expenses and damages in connection
with claims lodged against such directors and officers for their line of duty
decisions and actions;
G. The General Corporation Law of the State of California (the
"Code") empowers the Company to indemnify certain persons serving as a director,
officer, employee or agent of the Company or a person who serves at the request
of the Company as a director, officers, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise, and further
specifies in Code Section 317(g) that the indemnification provisions set forth
in the Code "shall not be deemed exclusive of any other rights to which those
seeking indemnification may be entitled under any bylaw, agreement, vote of
shareholders or disinterested directors or otherwise, both as to action in an
official capacity and as to action in another capacity while holding such
office, to the extent such additional rights to indemnification are authorized
in the articles of the corporation"; thus, Section 317 does not by itself limit
the extent to which the Company may indemnify persons serving as its officers
and directors;
H. In order to give proper effect to the indemnification provisions
provided under the Code, the Articles of Incorporation which permit the Company
to indemnify its directors and officers to the fullest extent permissible under
the Code, subject to the limitations set forth in Section 204(a)(11) of the
Code;
I. The Board of Directors of the Company has determined, after due
consideration and investigation of this Agreement and various other options
available in lieu hereof, that this Agreement is reasonable, prudent and
necessary to promote and ensure the best interests of the Company and its
shareholders. This Agreement is intended to: (1) induce and encourage highly
experienced and capable persons such as the Indemnitee to serve as officers
and/or directors of the Company; (2) encourage such persons to resist what they
consider unjustifiable suits and claims made against them in connection with the
good faith performance of their duties to the Company, secure in knowledge that
certain expenses, costs and liabilities incurred by them in their defense of
such litigation will be borne by the Company and that they will receive the
maximum protection against such risks and liabilities legally may be made
available to them; and (3) encourage directors to exercise their best business
judgment regarding matters which come before the Board of Directors without
undue concern for the risk that claims may be made against them on account
thereof.
J. The Company desires to have the Indemnitee continue to serve as
an officer and/or director of the Company free from concern for unpredictable,
inappropriate or unreasonable legal risk and personal liabilities by reason of
his acting in good faith in the performance of his duty to the Company. The
Indemnitee desires to continue to serve as an officer and/or director of the
Company, provided, and on the express condition, that he is furnished with the
indemnity set forth herein.
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NOW, THEREFORE, in consideration of the mutual covenants and
agreements set forth below and based on the premises set forth above, the
Company and Indemnitee do hereby agree as follows:
1. DEFINITIONS. For the purposes of this Agreement, the following
definitions shall apply:
(a) The term "Proceeding" shall include, for the purposes of this
Agreement, any threatened, pending or completed action, suit or proceeding,
whether brought in the name of the Company or otherwise and whether of a civil,
criminal or 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 Indemnitee may be or may have been
involved as party or otherwise (other than plaintiff against the Company), by
reason of the fact that Indemnitee is or was an Agent of the Company by reason
any action taken by him or of any inaction on his part while acting as such
Agent.
(b) The term "Expenses", includes, without limitation, all direct
and indirect costs of any type or nature whatsoever, including, without
limitation, expenses of investigations, judicial or administrative proceedings
or appeals, court costs, attorneys' fees and disbursements and any expenses of
establishing a right to indemnification under law or Paragraph 8 of this
Agreement, actually and reasonably incurred by the Indemnitee in connection with
the investigation, preparation, defense or appeal of a except that "Expenses"
shall not include the amount of any judgment, fine or penalty actually levied
against Indemnitee or amounts paid in settlement of a Proceeding.
(c) References to "other enterprise" shall include employee
benefit plans; reference to "fines" shall include any excise tax assessed with
respect to any employee benefit plan; references to "serving at the request of
the Company" shall include any service as a director of the Company which
imposes duties on, or involves services by, such director with respect to an
employee benefit plan, its participants, or beneficiaries; and a person who acts
in good faith and in a manner he reasonably believes to be in the interest of
the participants and beneficiaries of an employee benefit plan shall be deemed
to have acted in a manner in the best interests of the Company as referred to in
this Agreement.
(d) For the purposes of this Agreement, Indemnitee shall be
deemed to have been acting as an "Agent" if he was acting in his capacity as an
officer of the Company, director of the Company, member of a committee of the
Board of Directors of this Company, or agent of the Company, or was serving as a
director or officer of another foreign or domestic corporation, partnership,
joint venture, trust or any other
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enterprise at the request of the Company, or was a director and/or officer of
the foreign or domestic corporation which was a predecessor corporation to the
Company or of another enterprise at the request of such predecessor corporation,
whether or not he 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.
(e) The term "Applicable Standard" means that a person acted in
good faith and in a manner such person believed to be in the best interests of
the Company; except that in a criminal proceeding, such person must also have
had no reasonable cause to believe that such person's conduct 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 any
presumption, or establish, that the person did not meet the "Applicable
Standard."
(f) "Independent Legal Counsel" shall include any firm of
attorneys selected by the Board of Directors or by the regular corporate counsel
for the Company from a list of firms which meet minimum size criteria and other
reasonable criteria established by the Board of Directors of the Company, so
long as such firm has not represented the Company, Indemnitee or any entity
controlled by Indemnity within the proceeding 24 calendar months.
2. AGREEMENT TO SERVE. Indemnitee agrees to serve or continue to
serve as a Director and/or officer of the Company to the best of his abilities
at the will of the Company or under separate contract, as the case may be, for
so long as Indemnitee is duly elected or appointed and qualified until such time
as he tenders his resignation in writing. Nothing contained in this Agreement is
intended to create in Indemnitee any right to continued employment.
3. INDEMNIFICATION IN THIRD PARTY PROCEEDINGS. Subject to the
"Limitations on Indemnification" provided in Paragraph 10 herein, or any other
such limitations provided under the Code or any amendment thereto, the Company
shall indemnify Indemnitee if Indemnitee is made a party to or threatened to be
made a party to, or otherwise involved in, any Proceeding (other than a
Proceeding which is an action by or in the right of the Company to procure a
judgment in its favor), by reason of the fact that Indemnitee is or was an Agent
of the Company. This indemnification shall apply, and be limited, to and against
all Expenses, judgments, fines, settlements (if the settlement is approved in
advance by the Company) and other amounts actually and reasonably incurred by
Indemnitee in connection with the defense or settlement of the Proceeding, so
long as it is determined pursuant to Paragraph 8 of this Agreement or by the
court before which such action was brought, that Indemnitee met the Applicable
Standard.
4. INDEMNIFICATION IN PROCEEDINGS BY OR IN THE NAME OF THE COMPANY.
Subject to the "Limitations on Indemnification" provided in Paragraph 10 herein,
or any
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other such limitations provided under the Code or any amendment thereto, the
Company shall indemnify Indemnitee if Indemnitee is made a party to, or
threatened to be made a party to, or otherwise involved in, any Proceeding which
is an action by or in the right of the Company to procure a judgment in its
favor by reason of the fact that Indemnitee is or was an Agent of the Company.
This indemnity shall apply, and be limited, to and against all Expenses actually
and reasonably incurred by Indemnitee in connection with the defense or
settlement of such Proceeding, but only if: (a) Indemnitee met the Applicable
Standard (except that the Indemnitee's belief regarding the best interests of
the Company need not have been reasonable); and (b) the action is not settled or
otherwise disposed of without court approval. No indemnification shall be made
under this Section 4 in respect of any claim, issue or matter as to which
Indemnitee shall have been adjudged to be liable to the Company in the
performance of such person's duty to the Company, 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 indemnification for the Expenses which such
court shall determine.
5. EXPENSE OF SUCCESSFUL INDEMNITEE. Notwithstanding any other
provision of this Agreement, to the extent that Indemnitee has been successful
on the merits in defense of any Proceeding or in defense of any claim, issue or
matter therein, including the dismissal of an action or portion thereof without
prejudice, Indemnitee shall be indemnified against all Expenses actually and
reasonably incurred in connection therewith.
6. SCOPE. Notwithstanding any other provision of this Agreement but
subject to Section 9, the Company shall indemnify the Indemnitee to the fullest
extent permitted by law, notwithstanding that such indemnification is not
specifically authorized by other provisions of this Agreement, the Company's
amended Articles of Incorporation, the Company's Bylaws or by statute.
7. ADVANCEMENT AND REPAYMENT OF EXPENSES. The Expenses incurred by
Indemnitee in defending and investigating any Proceeding shall be advanced by
the Company prior to the final disposition of such Proceeding after receiving
from Indemnitee the copies of invoices presented to Indemnitee for such
Expenses, but only if Indemnitee shall undertake in the form attached as Exhibit
"A" to repay such advances to the extent that it is ultimately determined that
the Indemnitee is not entitled to indemnification. Any advance required
hereunder shall be deemed to have been approved by the Board of Directors of the
Company to the extent this Agreement was so approved. In determining whether or
not to make an advance hereunder, the ability of Indemnitee to repay shall not
be a factor. However, in a proceeding brought by the Company directly, in its
own right (as distinguished from an action brought derivatively or by any
receiver or trustee), the Company shall have discretion whether or not to make
the advances called for hereby if independent legal counsel advises in writing
that the Company has probable cause to believe, and the Company does
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believe, that Indemnitee did not act in good faith with regard to the subject
matter of the Proceeding or a material portion thereof.
In the event that the Company shall be obligated under this Section 7
to pay the Expenses of any Proceeding against Indemnitee, the Company, if
appropriate, shall be entitled to assume the defense of such Proceeding, with
counsel approved by Indemnitee, which approval shall not be unreasonably
withheld, upon the delivery to Indemnitee of written notice of its election to
do so. After delivery of such notice, approval of such counsel by Indemnitee and
the retention of such counsel by the Company, the Company will not be liable to
Indemnitee under this Agreement for any fees of counsel subsequently incurred by
Indemnitee with respect to the same Proceeding, provided that (i) Indemnitee
shall have the right to employ his counsel in any such Proceeding at
Indemnitee's expense; and (ii) if (A) the employment of counsel by Indemnitee
has been previously authorized by the Company, or (B) Indemnitee shall have
reasonably concluded that there may be a conflict of interest between the
Company and the Indemnitee in the conduct of such defense or (C) the Company
shall not, in fact, have employed counsel to assume the defense of such
Proceeding, then the fees and expenses of Indemnitee's counsel shall be at the
expense of the Company.
8. RIGHT OF INDEMNITEE TO INDEMNIFICATION UPON APPLICATION;
PROCEDURE UPON APPLICATION. Any and/or 7 hereof shall be made no later than 45
days after receipt of a written request of Indemnitee in accordance with
Paragraph 12 hereof. In all other cases, indemnification shall be made by the
Company only if authorized in the specific case, upon a determination that
indemnification of the Agent is proper under the circumstances and the terms of
this Agreement by: (a) a majority vote of a quorum of the Board of Directors (or
a duly constituted committee thereof), consisting of directors who are not
parties to such proceeding; (b) if such a quorum of directors is not obtainable,
by independent legal counsel in a written opinion, (c) approval of the
shareholders (as defined in Section 153 of the California Corporations Code),
with the Indemnitee shares not being entitled to vote thereon; or (d) the court
in which such proceeding is or was pending upon application made by the Company,
the Indemnitee or any person rendering services in connection with Indemnitee's
defense, whether or not the Company opposes such application.
The right to indemnification or advances as provided by this Agreement
shall be enforceable by Indemnitee in any court of competent jurisdiction. The
burden of proving that indemnification or advances are not appropriate shall be
on the Company. Neither the failure of the Company (including its Board of
Directors or independent legal counsel) to have made a determination prior to
the commencement of such action that indemnification or advances are proper in
the circumstances because Indemnitee has met the applicable standard of conduct,
nor an actual determination by the Company (including its Board of Directors or
independent legal counsel) that Indemnitee has not met such applicable standard
of conduct, shall be a
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defense to the action or create a presumption that Indemnitee has not met the
applicable standard of conduct. Indemnitee's Expenses incurred in connection
with successfully establishing his right to indemnification or advances, in
whole or in part, in any such Proceeding shall also be indemnified by the
Company; provided, however, that if Indemnitee is only partially successful,
only an equitably allocated portion of such Expenses shall be indemnified.
If Indemnitee is deceased and is entitled to indemnification under any
provision of this Agreement, the Company shall indemnify Indemnitee's estate and
his or her spouse, heirs, administrators and executors against and shall assume
all of the Expenses, judgments, penalties and fines actually and reasonably
incurred by or for Indemnitee or his estate, in connection with the
investigation, defense, settlement or appeal of any such action, suit or
proceeding; provided, however, that when requested in writing by the spouse of
Indemnitee, and/or the heirs, executors or administrators of Indemnitee's
estate, the Company shall provide appropriate evidence of the Agreement set our
herein to indemnify Agent against and to itself assume such costs, liabilities
and Expenses.
If Indemnitee is entitled under any provision of this Agreement or
indemnification by the Company for some or a portion of the Expenses, judgments,
fines or penalties actually and reasonably incurred by him in the investigation,
defense, appeal or settlement of any Proceeding but not, however, for the total
amount thereof, the Company shall nevertheless indemnify Indemnitee for the
portion (determined on an equitable basis) of such Expenses, judgments, fines or
penalties to which Indemnitee is entitled.
Company's obligations to advance or indemnify hereunder shall be
deemed satisfied to the extent of any payments made by an insurer on behalf of
Company or Indemnitee.
9. INDEMNIFICATION HEREUNDER NOT EXCLUSIVE. (a) The indemnification
provided by this Agreement shall not be deemed exclusive of any other rights to
which Indemnitee may be entitled under the Articles of Incorporation, the
Bylaws, any agreement, any vote of shareholders or disinterested directors, the
General Corporation Law of the State of California, or otherwise, both as to
action in his official capacity and as to action in another capacity while
holding such office. The indemnification under this Agreement shall continue as
to Indemnitee even though he may have ceased to be a director or officer and
shall inure to the benefit of the heirs and personal representatives of
Indemnitee.
(b) In the event of any changes, after the date of this
Agreement, in any applicable law, statute, or rule which expand the right of a
California corporation to indemnify its officers and directors, the Indemnitee's
rights and the Company's obligations under this Agreement shall be expanded to
the full extent permitted by
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such changes. In the event of any changes in any applicable law, statute or
rule, which narrow the right of a California corporation to indemnify a director
or officer, such changes, to the extent not otherwise required by such law,
statute or rule to be applied to this Agreement, shall have no effect on this
Agreement or the parties' rights and obligations hereunder.
10. LIMITATIONS ON INDEMNIFICATION. The Company shall not be liable
under this Agreement to make any payment in connection with any claim made
against the Indemnitee:
(a) for which payment is actually made to the Indemnitee under a
valid and collectible insurance policy, except in respect of any excess beyond
the amount of payment under such insurance;
(b) for which the Indemnitee is indemnified by the Company
otherwise than pursuant to this Agreement;
(c) for an accounting of profits made from the purchase or sale
by the Agent of securities for the Company within the meaning of Section 16(b)
of the Securities Exchange Act of 1934 and amendments thereto or similar
provisions of any state statutory law or common law;
(d) brought about or contributed to by the active and deliberate
dishonesty of the Indemnitee; however, notwithstanding the proceeding clause,
the Indemnitee shall be protected to the extent otherwise provided under this
Agreement as to any claims upon which suit may be brought against him by reason
of any alleged dishonesty on his part, unless a judgment or other final
adjudication thereof adverse to the Indemnitee shall establish that he committed
(i) acts of active and deliberate dishonesty (ii) with actual dishonest purpose
and intent, which acts were material to the cause of action so adjudicated;
(e) for acts or omissions that involve intentional misconduct or
a knowing and culpable violation of law;
(f) for acts or omissions that the Indemnitee believes to be
contrary to the best interests of the Company or its shareholders that involve
the absence of good faith on the part of the Indemnitee;
(g) for any transaction from which the Indemnitee derived an
improper personal benefit;
(h) for acts or omissions that show a reckless disregard for the
Indemnitee's duty to the Company or its shareholders in circumstances in which
the Indemnitee was aware, or should have been aware, in the ordinary course of
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performing Indemnitee's duties, of a risk of serious injury to the Company or
its shareholders;
(i) for acts or omissions that constitute unexcused matter of
inattention that amounts to abdication of the Indemnitee's duty to the Company
or shareholders;
(j) under Section 310 of the Code [i.e., for any transaction
between the Company and (a) a director, or (b) a corporation, firm, or
association in which the director has a material financial interest];
(k) under Section 316 of the Code [i.e., for any distribution to
shareholders, and for any loan or guaranty to officers or directors, that
violate specified provisions of the Code]; or
(l) for any such further acts or omissions delineated under Code
Section 204(a)(10) or any successor statute thereto.
11. SAVINGS CLAUSE. If this Agreement or any portion hereof is
invalidated on any ground by any court of competent jurisdiction, then the
Company shall nevertheless indemnify Indemnitee as to Expenses, judgments, fines
and penalties with respect to any Proceeding to the full extent permitted by any
applicable portion of this Agreement by any other applicable law.
12. NOTICES. Indemnitee shall, as a condition precedent to his right
to be indemnified under this Agreement, give to the Company notice in writing
within 30 days after he becomes aware of any claim made against him for which he
believes, or should reasonably believe, indemnification will or could be sought
under this Agreement. Notice to the Company shall be directed to the Company's
main office, Attention: President (or such other address the Company shall
designate in writing to Indemnitee). Failure to 80 notify Company shall not
relieve Company of any liability which it may have to Indemnitee otherwise than
under this Agreement.
All notices, requests, demands and other communications (collectively
"notices") provided for under this Agreement shall be in writing (including
communications by telephone, telex or telecommunication facilities providing
facsimile transmission) and mailed (postage prepaid and return receipt
requested), telegraphed, telexed, transmitted or personally served to each party
at the address set forth at the end of this Agreement or at such other address
as any party affected may designate in a written notice to the other parties in
compliance with this section. All such notices shall be effective when received;
provided, however, receipt shall be deemed to be effective within three (3)
business days of any properly addressed notice having been deposited in the
mail, within twenty-four (24) hours from the time electronic
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transmission was made, or upon actual receipt of electronic delivery, whichever
occurs first.
No costs, charges or expenses for which indemnity shall be sought
hereunder shall be incurred without the Company's consent, which consent shall
not be unreasonably withheld.
13. MAINTENANCE OF LIABILITY INSURANCE.
(a) The Company hereby agrees that so long as Indemnitee shall
continue to serve as a director and/or officer of the Company and thereafter so
long as Indemnitee shall be subject to any possible Proceeding, the Company,
subject to Section 13(b), shall use its best efforts to obtain and maintain in
full force and effect directors' and officers' liability insurance ("D&O
Insurance") which provides Indemnitee the same rights and benefits as are
accorded to the most favorably insured of the Company's directors, if Indemnitee
is a director; or of the Company's officers, if Indemnitee is not a director of
the Company but is an officer.
(b) Notwithstanding the foregoing, the Company shall have no
obligation to obtain or maintain D&O Insurance if the Company determines in good
faith that such insurance is not reasonably available, the premium costs for
such insurance are disproportionate to the amount of coverage provided, the
coverage provided by such insurance is limited by exclusions 80 as to provide an
insufficient benefit or the Indemnitee is covered by similar insurance
maintained by a subsidiary or parent of the Company.
(c) If, at the time of the receipt of a notice of a claim
pursuant to Section 12 hereof, the Company has D&O Insurance in effect, the
Company shall give prompt notice of the commencement of such Proceeding to the
insurers in accordance with the procedures set forth in the respective policies.
The Company shall thereafter take all necessary or desirable action to cause
such insurers to pay, on behalf of the Indemnitee, all amounts payable as a
result of such Proceeding in accordance with the terms of such policies.
14. CHOICE OF LAW. This Agreement should be interpreted and enforced
in accordance with the laws of the State of California, including applicable
statutes of limitation and other procedural statutes.
15. AMENDMENTS. Provisions of this Agreement may be waived, altered,
amended or repealed in whole or in part only by the written consent of all
parties.
16. PARTIES IN INTEREST. Nothing in this Agreement, whether express
or implied, is intended to confer any right or remedies under or by reason of
this Agreement to any persons other than the parties to it and their respective
successors
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and assigns (including an estate of Indemnitee), nor is anything in this
Agreement intended to relieve or discharge the obligation or liability of any
third persons to any party hereto. Furthermore, no provision of this Agreement
shall give any third persons any right of subrogation or action against any
party hereto.
17. SEVERABILITY. Nothing in this Agreement is intended to require
or shall be construed as requiring the Company to do or fail to do any act in
violation of applicable law. The Company's inability, pursuant to court order,
to perform its obligations under this Agreement shall not constitute a breach of
this Agreement. If any portion of this Agreement shall be deemed by a court of
competent jurisdiction to be unenforceable, the remaining portions shall be
valid and enforceable only if, after excluding the portion deemed to be
unenforceable, the remaining terms shall provide for the consummation of the
transaction contemplated herein in substantially the same manner as originally
set forth at the date this Agreement was executed.
18. SUCCESSOR AND ASSIGNS. All terms and conditions of this
Agreement shall be binding upon and shall inure to the benefit of the parties
and their respective transferees, successors and assigns; provided, however,
that this Agreement and all rights, privileges, duties and obligations of the
parties, may not be assigned or delegated by any party without the prior written
consent of the other parties.
19. COUNTERPARTS. This Agreement may be executed simultaneously in
one or more counterparts, each of which shall be deemed an original, but all of
which together shall be deemed an original, but all of which together shall
constitute one and the same instrument.
20. ENTIRE AGREEMENT. Except as provided in Section 9 hereof, this
Agreement represents and contains the entire agreement and understanding between
and among the parties, and all previous statements or understandings, whether
express or implied, oral or written, relating to the subject matter hereof are
fully and completely extinguished and superseded by this Agreement. This
Agreement shall not be altered or varied except by a writing duly signed by all
of the parties.
21. MUTUAL ACKNOWLEDGMENT. Both the Company and Indemnitee
acknowledge that in certain instances, federal law or applicable public policy
may prohibit the Company from indemnifying its directors and officers under this
Agreement or otherwise. Indemnitee understands and acknowledges that the Company
has undertaken or may be required in the future to undertake with the Securities
and Exchange Commission to submit the question of indemnification to a court in
certain circumstances for a determination of the Company's right under public
policy to indemnify Indemnitee.
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IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the date first above written.
BSM BANCORP
By:
-------------------------------
X.X. Xxxxx
Chairman of the Board
By:
-------------------------------
Xxxxxxx X. Xxxxxxxx
Secretary
"Company"
-----------------------------------
Address:
--------------------------
--------------------------
"Indemnitee"
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EXHIBIT A
UNDERTAKING
THIS UNDERTAKING is made as of the date of _____________, 19__ by
___________________ ("Indemnitee") with reference to the following facts:
A. Indemnitee and BSM Bancorp (the "Company") have executed an
Indemnity Agreement dated _____________, 19__ permitting Indemnitee
indemnification of all direct and indirect costs of Proceedings (as defined in
the Indemnity Agreement) by reason of the fact that Indemnitee is an Agent (as
defined in the Indemnity Agreement) of the Company and has met the Applicable
Standard (as defined in the Indemnity Agreement).
B. Paragraph 7 of the Indemnity Agreement allows for the Company to
advance Expenses incurred by the Indemnitee in defending and investigating any
Proceeding prior to the final disposition of such Proceeding after receiving
from Indemnitee copies of invoices presented to Indemnitee for such Expenses,
but only if Indemnitee shall undertake to repay such advances to the extent that
it is ultimately determined that the Indemnitee is not entitled to
indemnification, as well as other requirements contained in the Indemnity
Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and
agreements set forth below and based on the premises set forth above, the
Indemnitee does hereby undertake to the Company as follows:
1. The Expenses incurred by Indemnitee in defending and investigating
any Proceeding shall be advanced by the Company prior to the final disposition
of such Proceeding after receiving from Indemnitee copies of invoices presented
to Indemnitee for such Expenses.
2. Indemnitee hereby undertakes to repay such advances to the extent
that it is ultimately determined that the Indemnitee is not entitled to
indemnification,
3. Any advance required hereunder shall be deemed to have been
approved by the Board of Directors of the Company to the extent the Indemnity
Agreement was approved.
4. In determining whether or not to make an advance hereunder, the
ability of Indemnitee to repay shall not be a factor.
5. In a proceeding brought by the Company directly, in its own right
(as distinguished from an action brought derivatively or by any receiver or
trustee), the
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Company shall have discretion whether or not to make the advances called for in
the Indemnification Agreement if independent legal counsel advises in writing
that the Company has probable cause to believe, and the Company does believe,
that Indemnitee did not act in good faith with regard to the subject matter of
the Proceeding or a material portion thereof.
6. The remainder of the terms and conditions of the Indemnity
Agreement and Paragraph 7 regarding assumption of the defense by the Company
shall also remain applicable.
IN WITNESS WHEREOF, the undersigned has executed this Undertaking as
of the date first above written.
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Address:
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"Indemnitee"
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