EXHIBIT 10.9
INDEMNITY AGREEMENT
THIS INDEMNITY AGREEMENT (THIS "AGREEMENT") IS MADE AS OF JULY 17, 1998
BY AND BETWEEN PREMIER NATIONAL BANCORP, INC., A NEW YORK CORPORATION (THE
"COMPANY"), AND (THE INDEMNITEE").
RECITALS
A. THE INDEMNITEE HAS AGREED TO SERVE AS A DIRECTOR AND/OR OFFICER OF THE
COMPANY AND IN SUCH CAPACITY WILL RENDER VALUABLE SERVICES TO THE
COMPANY.
B. THE COMPANY HAS INVESTIGATED THE SUFFICIENCY OF LIABILITY INSURANCE AND
NEW YORK STATUTORY INDEMNIFICATION PROVISIONS TO PROVIDE ITS DIRECTORS
AND OFFICERS AND ITS SUBSIDIARIES' DIRECTORS AND OFFICERS WITH ADEQUATE
PROTECTION AGAINST VARIOUS LEGAL RISKS AND POTENTIAL LIABILITIES TO
WHICH SUCH INDIVIDUALS ARE SUBJECT DUE TO THEIR POSITION WITH THE
COMPANY OR ITS SUBSIDIARIES AND HAS CONCLUDED THAT SUCH INSURANCE AND
STATUTORY PROVISIONS MAY PROVIDE INADEQUATE AND UNACCEPTABLE
PROTECTION.
C. IN ORDER TO INDUCE AND ENCOURAGE HIGHLY EXPERIENCED AND CAPABLE PERSONS
SUCH AS THE INDEMNITEE TO SERVE AS A DIRECTOR AND/OR OFFICER OF THE
COMPANY, THE BOARD OF DIRECTORS OF THE COMPANY (THE "BOARD") HAS
DETERMINED, AFTER DUE CONSIDERATION AND INVESTIGATION OF THE TERMS AND
PROVISIONS OF THIS AGREEMENT AND THE VARIOUS OTHER OPTIONS AVAILABLE TO
THE COMPANY AND THE INDEMNITEE IN LIEU HEREOF, THAT THIS AGREEMENT IS
NOT ONLY REASONABLE AND PRUDENT BUT NECESSARY TO PROMOTE AND ENSURE THE
BEST INTERESTS OF THE COMPANY, ITS SUBSIDIARIES AND ITS SHAREHOLDERS.
AGREEMENT
NOW, THEREFORE, IN CONSIDERATION OF THE SERVICES OF THE INDEMNITEE AND
IN ORDER TO INDUCE THE INDEMNITEE TO SERVE AS A DIRECTOR AND/OR OFFICER, THE
COMPANY AND THE INDEMNITEE DO HEREBY AGREE AS FOLLOWS:
1. DEFINITIONS
(A) THE TERM "CHANGE IN CONTROL" SHALL BE DEEMED TO HAVE OCCURRED IF
(i) ANY "PERSONS" (AS SUCH TERM IS USED IN SECTIONS 13(d) AND
14(d) OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED (THE
"EXCHANGE ACT"), OTHER THAN A TRUSTEE OR OTHER FIDUCIARY HOLDING
SECURITIES UNDER AN EMPLOYEE BENEFIT PLAN OF THE COMPANY OR A
CORPORATION OWNED DIRECTLY OR INDIRECTLY BY THE SHAREHOLDERS OF
THE COMPANY IN SUBSTANTIALLY THE SAME PROPORTIONS AS THEIR
OWNERSHIP OF STOCK OF THE COMPANY, IS OR BECOMES THE "BENEFICIAL
OWNER" (AS
DEFINED IN RULE 13d-3 OF THE GENERAL RULES AND REGULATIONS UNDER
THE EXCHANGE ACT), DIRECTLY OR INDIRECTLY, OF SECURITIES OF THE
COMPANY REPRESENTING 20% OR MORE OF THE TOTAL VOTING POWER
REPRESENTED BY THE COMPANY'S THEN OUTSTANDING VOTING SECURITIES,
OR (ii) DURING ANY PERIOD OF TWO OR MORE CONSECUTIVE YEARS,
INDIVIDUALS WHO AT THE BEGINNING OF SUCH PERIOD CONSTITUTE THE
BOARD AND ANY NEW DIRECTOR WHOSE ELECTION BY THE BOARD OR
NOMINATION OF ELECTION BY THE COMPANY'S SHAREHOLDERS WAS APPROVED
BY A VOTE OF AT LEAST TWO-THIRDS (2/3) OF THE DIRECTORS THEN STILL
IN OFFICE WHO EITHER WERE DIRECTORS AT THE BEGINNING OF THE PERIOD
OR WHOSE ELECTION OR NOMINATION FOR ELECTION WAS PREVIOUSLY SO
APPROVED, CEASE FOR ANY REASON TO CONSTITUTE A MAJORITY THEREOF,
OR (iii) THE SHAREHOLDERS OF THE COMPANY APPROVE A MERGER OR
CONSOLIDATION OF THE COMPANY WITH ANY OTHER CORPORATION, OTHER
THAN A MERGER OR CONSOLIDATION WHICH WOULD RESULT IN THE VOTING
SECURITIES OF THE COMPANY OUTSTANDING IMMEDIATELY PRIOR THERETO
CONTINUING TO REPRESENT (EITHER BY REMAINING OUTSTANDING OR BY
BEING CONVERTED INTO VOTING SECURITIES OF THE SURVIVING ENTITY) AT
LEAST 80% OF THE TOTAL VOTING POWER REPRESENTED BY THE VOTING
SECURITIES OF THE COMPANY OR SUCH SURVIVING ENTITY OUTSTANDING
IMMEDIATELY AFTER SUCH MERGER OR CONSOLIDATION, OR THE
SHAREHOLDERS OF THE COMPANY APPROVE A PLAN OF COMPLETE LIQUIDATION
OF THE COMPANY OR AN AGREEMENT FOR THE SALE OR DISPOSITION BY THE
COMPANY OF ALL OR SUBSTANTIALLY ALL OF THE COMPANY'S ASSETS.
(B) THE TERM "EXPENSES" INCLUDES, WITHOUT LIMITATION, ATTORNEYS' FEES,
DISBURSEMENTS AND RETAINERS, ACCOUNTING AND WITNESS FEES, TRAVEL
AND DEPOSITION COSTS, EXPENSES OF INVESTIGATIONS, JUDICIAL OR
ADMINISTRATIVE PROCEEDINGS OR APPEALS, AMOUNTS PAID IN SETTLEMENT
BY OR ON BEHALF OF THE INDEMNITEE, AND ANY EXPENSES OF
ESTABLISHING A RIGHT TO INDEMNIFICATION PURSUANT TO THIS AGREEMENT
OR OTHERWISE INCLUDING REASONABLE COMPENSATION FOR TIME SPENT BY
THE INDEMNITEE IN CONNECTION WITH THE INVESTIGATION, DEFENSE OR
APPEAL OF A PROCEEDING OR ACTION FOR INDEMNIFICATION FOR WHICH HE
OR SHE IS NOT OTHERWISE COMPENSATED BY THE COMPANY, ANY OF ITS
SUBSIDIARIES OR ANY THIRD PARTY. THE TERM "EXPENSES" DOES NOT
INCLUDE THE AMOUNT OF JUDGMENTS, FINES, PENALTIES ORERISA EXCISE
TAXES ACTUALLY LEVIED AGAINST THE INDEMNITEE.
(C) THE TERM "INDEPENDENT LEGAL COUNSEL" SHALL MEAN LEGAL COUNSEL
RETAINED JOINTLY BY, AND MUTUALLY ACCEPTABLE TO, THE COMPANY AND
THE INDEMNITEE. THE INDEMNITEE AND THE COMPANY EACH MAY SUBMIT NO
MORE THAN THREE (3) CANDIDATES FOR THE POSITION OF INDEPENDENT
LEGAL COUNSEL. ALL CANDIDATES SHALL DISCLOSE TO THE INDEMNITEE AND
THE COMPANY ANY CIRCUMSTANCES LIKELY TO AFFECT HIS OR HER
IMPARTIALITY, INCLUDING, WITHOUT LIMITATION, BIAS, INTEREST IN THE
RESOLUTION OF THE PROCEEDING, AND PAST OR PRESENT RELATIONS WITH
EITHER THE INDEMNITEE, THE EMPLOYER OF THE INDEMNITEE OR THE
COMPANY, OR COUNSEL OF EITHER SUCH PARTY. UNDER NO CIRCUMSTANCES
SHALL THE INDEPENDENT LEGAL
COUNSEL BE (OR HAVE BEEN DURING THE SIX (6) YEAR PERIOD PRIOR TO
THE DATE OF SUCH APPOINTMENT) A RELATIVE, EMPLOYEE, OFFICER,
DIRECTOR OR STOCKHOLDER OF EITHER THE INDEMNITEE, THE EMPLOYER OF
THE INDEMNITEE OR THE COMPANY, OR AN "AFFILIATE" (AS SUCH TERM IS
DEFINED IN RULE 12b-2, AS IN EFFECT ON THE DATE HEREOF, UNDER THE
EXCHANGE ACT) OF THE COMPANY. EACH PARTY MAY REJECT A CANDIDATE
FOR GOOD CAUSE, SUCH AS REASONABLE CONCERN REGARDING THAT
CANDIDATE'S INDEPENDENCE, IMPARTIALITY, ACCESS TO CONFIDENTIAL
INFORMATION OR FAILURE TO MEET AGREED UPON QUALIFICATIONS. ONCE
INDEPENDENT LEGAL COUNSEL HAS BEEN SELECTED AND JOINTLY RETAINED
BY THE PARTIES, THE COMPANY SHALL PAY ALL COSTS AND EXPENSES OF
SUCH COUNSEL. INDEPENDENT LEGAL COUNSEL MAY RETAIN SUCH ADDITIONAL
EXPERTS AS HE OR SHE DETERMINES ARE NECESSARY OR USEFUL FOR THE
RENDERING OF HIS OR HER ADVISE, PROVIDED THAT HE OR SHE IN GOOD
FAITH DETERMINES, AFTER NOTIFYING THE COMPANY AND THE INDEMNITEE
OF THE SELECTION OF SUCH EXPERT AND SOLICITING ANY OBJECTIONS
EITHER PARTY MIGHT HAVE, THAT SUCH EXPERT DOES NOT APPEAR TO HAVE
A CONFLICT OF INTEREST. CIRCUMSTANCES THAT MIGHT CAUSE DOUBT
REGARDING THE EXPERT'S INDEPENDENCE OR IMPARTIALITY INCLUDE BIAS,
INTEREST IN THE RESULT OF ANY PROCEEDING, AND PAST OR PRESENT
RELATIONS WITH THE INDEMNITEE, THE COMPANY (INCLUDING AN AFFILIATE
OF THE COMPANY) OR THEIR RESPECTIVE COUNSELS. UNDER NO
CIRCUMSTANCES SHALL ANY SUCH EXPERT BE (OR HAVE BEEN DURING THE
SIX (6) YEAR PERIOD PRIOR TO THE SELECTION OF THE INDEPENDENT
LEGAL COUNSEL) A RELATIVE, EMPLOYEE, OFFICER, DIRECTOR OR
STOCKHOLDER OF THE INDEMNITEE, THE EMPLOYER OF THE INDEMNITEE, THE
COMPANY OR AN AFFILIATE OF THE COMPANY, OR AN INDIVIDUAL OTHERWISE
PROVIDING MATERIAL SERVICES TO THE INDEMNITEE, THE EMPLOYER OF HE
INDEMNITEE, THE COMPANY OR AN AFFILIATE OF THE COMPANY.
(D) THE TERM "POTENTIAL CHANGE IN CONTROL" SHALL BE DEEMED TO HAVE
OCCURRED IF (i) THE COMPANY ENTERS INTO AN AGREEMENT, THE
CONSUMMATION OF WHICH WOULD RESULT IN THE OCCURRENCE OF A CHANGE
IN CONTROL; (ii) ANY PERSON (INCLUDING THE COMPANY) PUBLICLY
ANNOUNCES AN INTENTION TO TAKE OR TO CONSIDER TAKING ACTIONS
WHICH, IF CONSUMMATED, WOULD CONSTITUTE A CHANGE IN CONTROL; (iii)
ANY PERSON, OTHER THAN A TRUSTEE OR OTHER FIDUCIARY HOLDING
SECURITIES UNDER ANY EMPLOYEE BENEFIT PLAN OF THE COMPANY OR A
CORPORATION OWNED, DIRECTLY OR INDIRECTLY, BY THE SHAREHOLDERS OF
THE COMPANY IN SUBSTANTIALLY THE SAME PROPORTIONS AS THEIR
OWNERSHIP OF STOCK OF THE COMPANY, WHO BECOMES THE BENEFICIAL
OWNER, DIRECTLY OR INDIRECTLY, OF SECURITIES OF THE COMPANY
REPRESENTING 10% OR MORE OF THE COMBINED VOTING POWER OF THE
COMPANY'S THEN-OUTSTANDING VOTING SECURITIES; OR (iv) THE BOARD
ADOPTS A RESOLUTION TO THE EFFECT THAT, FOR THE PURPOSES OF THIS
AGREEMENT, A POTENTIAL CHANGE IN CONTROL HAS OCCURRED.
(E) THE TERM "PROCEEDING" SHALL INCLUDE ANY THREATENED, PENDING OR
COMPLETED ACTION, SUIT OR PROCEEDING, WHETHER BROUGHT IN THE NAME
OF THE COMPANY OR ONE OF ITS SUBSIDIARIES OR OTHERWISE AND WHETHER
OF A CIVIL, CRIMINAL OR ADMINISTRATIVE OR INVESTIGATIVE NATURE, BY
REASON OF OR ARISING OUT OF THE FACT THAT THE INDEMNITEE IS OR WAS
A DIRECTOR OF THE COMPANY, OR IS OR WAS SERVING AT THE REQUEST OF
THE COMPANY AS A DIRECTOR, OFFICER, EMPLOYEE OR AGENT OF
ANOTHER ENTERPRISE, WHETHER OR NOT HE OR SHE IS SERVING IN SUCH
CAPACITY AT THE TIME ANY LIABILITY OR EXPENSES ARE INCURRED FOR
WHICH INDEMNIFICATION OR REIMBURSEMENT IS TO BE PROVIDED UNDER
THIS AGREEMENT.
2. AGREEMENT TO SERVE
THE INDEMNITEE AGREES TO SERVE AS A DIRECTOR AND/OR OFFICER OF THE
COMPANY FOR SO LONG AS HE OR SHE IS DULY ELECTED OR APPOINTED OR UNTIL
SUCH TIME AS HE OR SHE TENDERS HIS OR HER RESIGNATION IN WRITING.
3. INDEMNIFICATION IN THIRD PARTY ACTIONS
THE COMPANY 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 NAME OF THE CMPANY OR
SUCH SUBSIDIARY TO PROCURE A JUDGEMENT IN ITS FAVOR), BY REASON OF THE
FACT THAT THE INDEMNITEE IS OR WAS A DIRECTOR OF THE COMPANY OR A
SUBSIDIARY, OR IS OR WAS SERVING AT THE REQUEST OF THE COMPANY OR A
SUBSIDIARY AS A DIRECTOR, OFFICER, EMPLOYEE OR AGENT OF ANOTHER
ENTERPRISE AGAINST ALL EXPENSES, JUDGEMENTS, FINES, PENALTIES AND ERISA
EXCISE TAX ACTUALLY AND REASONABLY INCURRED BY THE INDEMNITEE IN
CONNECTION WITH THE DEFENSE OR SETTLEMENT OF SUCH PROCEEDING, TO THE
FULLEST EXTENT PERMITTED BY NEW YORK LAW; PROVIDED THAT ANY SETTLEMENT
BE APPROVED IN WRITING BY THE COMPANY.
4. INDEMNIFICATION IN PROCEEDINGS BY OR IN THE NAME OF THE
COMPANY
THE COMPANY 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 NAME OF THE COMPANY OR A SUBSIDIARY TO PROCURE
A JUDGEMENT IN ITS FAVOR BY REASON OF THE FACT THAT THE INDEMNITEE WAS
OR IS A DIRECTOR OF THE COMPANY OR A SUBSIDIARY, OR IS OR WAS SERVING
AT THE REQUEST OF THE COMPANY OR A SUBSIDIARY AS A DIRECTOR, OFFICER,
EMPLOYEE OR AGENT OF ANOTHER ENTERPRISE, AGAINST ALL EXPENSES ACTUALLY
AND REASONABLY INCURRED BY THE INDEMNITEE IN CONNECTION WITH THE
DEFENSE OR SETTLEMENT OF SUCH PROCEEDING, TO THE FULLEST EXTENT
PERMITTED BY NEW YORK LAW.
5. CONCLUSIVE PRESUMPTION REGARDING STANDARD OF CONDUCT
THE INDEMNITEE SHALL BE CONCLUSIVELY PRESUMED TO HAVE MET THE RELEVANT
STANDARDS OF CONDUCT AS DEFINED BY NEW YORK LAW FOR INDEMNIFICATION
PURSUANT TO THIS AGREEMENT, UNLESS A DETERMINATION IS MADE THAT THE
INDEMNITEE HAS NOT MET SUCH STANDARDS BY (i) THE BOARD BY A MAJORITY
VOTE OF A QUORUM THEREOF CONSISTING OF DIRECTORS WHO WERE NOT PARTIES
TO SUCH PROCEEDING (THE "DISINTERESTED DIRECTORS"), (ii) THE
SHAREHOLDERS OF THE COMPANY BY MAJORITY VOTE, OR (iii) IN A WRITTEN
OPINION BY INDEPENDENT LEGAL COUNSEL IN THE CASE OF A CHANGE IN
CONTROL.
6. INDEMNIFICATION OF EXPENSES OF SUCCESSFUL PARTY
NOTWITHSTANDING ANY OTHER PROVISIONS OF THIS AGREEMENT, TO THE EXTENT
THAT THE INDEMNITEE HAS BEEN SUCCESSFUL IN DEFENSE OF ANY PROCEEDING OR
IN DEFENSE OF ANY CLAIM, ISSUE OR MATTER THEREIN, ON THE MERITS OR
OTHERWISE, INCLUDING THE DISMISSAL OF A PROCEEDING WITHOUT PREJUDICE,
THE INDEMNITEE SHALL BE INDEMNIFIED AGAINST ALL EXPENSES INCURRED IN
CONNECTION THEREWITH TO THE FULLEST EXTENT PERMITTED BY NEW YORK LAW.
7. ADVANCES OF EXPENSES
THE EXPENSES INCURRED BY THE INDEMNITEE IN ANY PROCEEDING SHALL BE PAID
PROMPTLY BY THE COMPANY IN ADVANCE OF THE FINAL DISPOSITION OF THE
PROCEEDING AT THE WRITTEN REQUEST OF THE INDEMNITEE TO THE FULLEST
EXTENT PERMITTED BY NEW YORK LAW; PROVIDED THAT AS LONG AS NEW YORK LAW
REQUIRES SUCH AN UNDERTAKING, THE INDEMNITEE SHALL UNDERTAKE IN WRITING
TO REPAY SUCH AMOUNT TO THE EXTENT THAT IT IS ULTIMATELY DETERMINED
THAT THE INDEMNITEE IS NOT ENTITLED TO INDEMNIFICATION.
8. PARTIAL INDEMNIFICATION
IF THE INDEMNITEE IS ENTITLED UNDER ANY PROVISION OF THIS AGREEMENT TO
INDEMNIFICATION BY THE COMPANY OR ONE OF ITS SUBSIDIARIES FOR SOME OR A
PORTION OF THE EXPENSES, JUDGEMENTS, FINES, PENALTIES OR ERISA EXCISE
TAXES ACTUALLY AND REASONABLY INCURRED BY HIM OR HER IN THE
INVESTIGATION, DEFENSE, APPEAL OR SETTLEMENT OF ANY PROCEEDING BUT NOT,
HOWEVER, FOR THE TOTAL AMOUNT THEREOF, THE COMPANY SHALL NEVERTHELESS
INDEMNIFY THE INDEMNITEE FOR THE PORTION OF SUCH EXPENSES, JUDGEMENTS,
FINES, PENALTIES OR ERISA EXCISE TAXES TO WHICH THE INDEMNITEE IS
ENTITLED.
9. INDEMNIFICATION PROCEDURE; DETERMINATION OF RIGHT TO
INDEMNIFICATION
(a) PROMPTLY AFTER RECEIPT BY THE INDEMNITEE OF WRITTEN NOTICE OF THE
COMMENCEMENT OF ANY PROCEEDING, THE INDEMNITEE WILL, IF A CLAIM IN
RESPECT THEREOF IS TO BE MADE AGAINST THE COMPANY UNDER THIS
AGREEMENT, NOTIFY THE COMPANY OF THE COMMENCEMENT THEREOF. THE
OMISSION SO TO NOTIFY THE COMPANY (i) WILL RELIEVE THE COMPANY
FROM ANY LIABILITY WHICH THE COMPANY MAY HAVE TO THE INDEMNITEE
UNDER THIS AGREEMENT ONLY TO THE EXTENT THAT THE COMPANY IS ABLE
TO ESTABLISH THAT ITS ABILITY TO AVOID SUCH LIABILITY WAS
MATERIALLY PREJUDICED BY SUCH OMISSION, AND (ii) WILL NOT RELIEVE
THE COMPANY FROM ANY LIABILITY WHICH IT MAY HAVE TO THE INDEMNITEE
OTHERWISE THAN UNDER THIS AGREEMENT.
(b) IF A CLAIM UNDER THIS AGREEMENT IS NOT PAID BY THE COMPANY WITHIN
THIRTY (30) DAYS OF RECEIPT OF WRITTEN NOTICE, THE RIGHT TO
INDEMNIFICATION AS PROVIDED BY THIS AGREEMENT SHALL BE ENFORCEABLE
BY THE INDEMNITEE IN ANY COURT OF COMPETENT JURISDICTION. THE
BURDEN OF PROVING BY CLEAR AND CONVINCING
EVIDENCE THAT THE RIGHT TO INDEMNIFICATION OR ADVANCEMENT OF
EXPENSES ARE NOT APPROPRIATE SHALL BE ON THE COMPANY. NEITHER THE
FAILURE OF THE DIRECTORS OR SHAREHOLDERS OF THE COMPANY OR
INDEPENDENT LEGAL COUNSEL TO HAVE MADE A DETERMINATION PRIOR TO
THE COMMENCEMENT OF SUCH ACTION THAT THE RIGHT TO INDEMNIFICATION
OR ADVANCEMENT OF EXPENSES ARE PROPER IN THE CIRCUMSTANCES BECAUSE
THE INDEMNITEE HAS MET THE APPLICABLE STANDARD OF CONDUCT, NOR AN
ACTUAL DETERMINATION BY THE DIRECTORS OR SHAREHOLDERS OF THE
COMPANY OR INDEPENDENT LEGAL COUNSEL THAT THE INDEMNITEE HASN'T
MET SUCH APPLICABLE STANDARD OF CONDUCT, SHALL BE A DEFENSE TO THE
ACTION OR CREATE A PRESUMPTION THAT THE INDEMNITEE HAS NOT MET THE
APPLICABLE STANDARD OF CONDUCT.
(C) THE INDEMNITEE'S EXPENSES INCURRED IN CONNECTION WITH ANY
PROCEEDING CONCERNING HIS OR HER RIGHT TO INDEMNIFICATION OR
ADVANCEMENT OF EXPENSES IN WHOLE OR IN PART PURSUANT TO THIS
AGREEMENT SHALL ALSO BE INDEMNIFIED BY THE COMPANY REGARDLESS OF
THE OUTCOME OF SUCH PROCEEDING, UNLESS A COURT OF COMPETENT
JURISDICTION DETERMINES THAT THE MATERIAL ASSERTIONS MADE BY THE
INDEMNITEE IN SUCH PROCEEDING WERE NOT MADE IN GOOD FAITH OR WERE
FRIVOLOUS.
(D) WITH RESPECT TO ANY PROCEEDING FOR WHICH INDEMNIFICATION IS
REQUESTED, THE COMPANY WILL BE ENTITLED TO PARTICIPATE THEREIN AT
ITS OWN EXPENSE AND, EXCEPT AS OTHERWISE PROVIDED BELOW, TO THE
EXTENT THAT IT MAY WISH, THE COMPANY MAY ASSUME THE DEFENSE
THEREOF, WITH COUNSEL REASONABLY SATISFACTORY TO THE INDEMNITEE.
AFTER NOTICE FROM THE COMPANY TO THE INDEMNITEE OF ITS ELECTION TO
ASSUME THE DEFENSE OF A PROCEEDING, THE COMPANY WILL NOT BE LIABLE
TO THE INDEMNITEE UNDER THIS AGREEMENT FOR ANY LEGAL OR OTHER
EXPENSES SUBSEQUENTLY INCURRED BATHE INDEMNITEE IN CONNECTION WITH
DEFENSE THEREOF, OTHER THAN REASONABLE COSTS OF INVESTIGATION OR
AS OTHERWISE PROVIDED BELOW. THE COMPANY SHALL NOT SETTLE ANY
PROCEEDING IN ANY MANNER WHICH WOULD IMPOSE ANY PENALTY OR
LIMITATION ON THE INDEMNITEE WITHOUT THE INDEMNITEE'S WRITTEN
CONSENT. THE INDEMNITEE SHALL HAVE THE RIGHT TO EMPLOY HIS OR HER
COUNSEL IN ANY PROCEEDING BUT THE FEES AND EXPENSES OF SUCH
COUNSEL INCURRED AFTER WRITTEN NOTICE FROM THE COMPANY OF ITS
ASSUMPTION OF THE DEFENSE THEREOF SHALL BE AT THE EXPENSE OF THE
INDEMNITEE, UNLESS (i) THE EMPLOYMENT OF COUNSEL BY THE INDEMNITEE
HAS BEEN AUTHORIZED BY THE COMPANY, (ii) THE INDEMNITEE SHALL HAVE
REASONABLY CONCLUDED THAT THERE MAY BE A CONFLICT OF INTEREST
BETWEEN THE COMPANY AND THE INDEMNITEE IN THE CONDUCT OF A
PROCEEDING, OR (iii) THE COMPANY SHALL NOT IN FACT HAVE EMPLOYED
COUNSEL TO ASSUME THE DEFENSE OF A PROCEEDING, IN EACH OF WHICH
CASES THE FEES AND EXPENSES OF THE INDEMNITEE'S COUNSEL SHALL BE
AT THE EXPENSE OF THE COMPANY. THE COMPANY SHALL NOT BE ENTITLED
TO ASSUME THE DEFENSE OF ANY PROCEEDING BROUGHT BY OR ON BEHALF OF
THE COMPANY OR AS TO WHICH THE INDEMNITEE HAS MADE THE CONCLUSION,
WITH THE CONCURRENCE OF INDEPENDENT LEGAL COUNSEL, THAT THERE MAY
BE A CONFLICT OF INTEREST BETWEEN THE COMPANY AND THE INDEMNITEE.
10. LIMITATIONS ON INDEMNIFICATION
NO PAYMENTS PURSUANT TO THIS AGREEMENT SHALL BE MDE BY THE COMPANY:
(a) TO INDEMNIFY OR ADVANCE EXPENSES TO THE INDEMNITEE WITH RESPECT TO
PROCEEDINGS INITIATED, BROUGHT OR JOINED IN VOLUNTARILY BY THE
INDEMNITEE, EXCEPT WITH RESPECT TO PROCEEDINGS BROUGHT TO ESTABISH
OR ENFORCE A RIGHT TO INDEMNIFICATION OR ADVANCEMENT OF EXPENSES
UNDER THIS AGREEMENT OR ANY OTHER STATUTE OR LAW OR OTHERWISE AS
REQUIRED UNDER NEW YORK LAW, BUT SUCH INDEMNIFICATION OR
ADVANCEMENT OF EXPENSES MAY BE PROVIDED BY THE COMPANY IN SPECIFIC
CASES IF THE BOARD FINDS IT TO BE APPROPRIATE;
(b) TO INDEMNIFY THE INDEMNITEE FOR ANY EXPENSES, JUDGEMENTS, FINES,
PENALTIES OR ERISA EXCISE TAXES 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;
(c) TO INDEMNIFY THE INDEMNITEE FOR ANY EXPENSES, JUDGEMENTS, FINES OR
PENALTIES SUSTAINED IN ANY PROCEEDING FOR AN ACCOUNTING OF PROFITS
MADE FROM THE PURCHASE OR SALE BY THE INDEMNITEE OF SECURITIES OF
THE COMPANY PURSUANT TO THE PROVISIONS OF SECTION 16(b) OF THE
EXCHANGE ACT, THE RULES AND REGULATIONS PROMULGATED THEREUNDER AND
AMENDMENTS THERETO OR SIMILAR PROVISIONS OF ANY FEDERAL, STATE OR
LOCAL STATUTORY LAW;
(d) TO INDEMNIFY THE INDEMNITEE FOR ANY EXPENSES, JUDGEMENTS, FINES,
PENALTIES OR ERISA EXCISE TAXES RESULTING FROM THE INDEMNITEE'S
CONDUCT WHICH IS FINALLY ADJUDGED TO HAVE BEEN WILLFUL MISCONDUCT,
KNOWINGLY FRAUDULENT OR DELIBERATELY DISHONEST; OR
(e) IF A COURT OF COMPETENT JURISDICTION SHALL FINALLY DETERMINE THAT
ANY INDEMNIFICATION HEREUNDER IS UNLAWFUL.
11. MAINENANCE OF LIABILITY INSURANCE
(a) THE COMPANY CURRENTLY MAINTAINS IN FULL FORCE AND EFFECT
DIRECTORS' AND OFFICERS' LIABILITY INSURANCE ("D&O INSURANCE").
(b) UPON EXECUTION OF THIS AGREEMENT, THE INDEMNITEE SHALL BE NAMED AS
AN INSURED IN SUCH A MANNER AS TO PROVIDE THE INDEMNITEE THE SAME
RIGHTS AND BENEFITS AS ARE ACCORDED TO THE MOST FAVORABLY INSURED
OF THE COMPANY'S DIRECTORS AND/OR OFFICERS, AS APPROPRIATE.
(c) 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 SO LIMITED BY EXCLUSIONS THAT IT
PROVIDES AN INSUFFICIENT BENEFIT, OR THE INDEMNITEE IS COVERED BY
SIMILAR INSURANCE MAINTAINED BY A SUBSIDIARY OF THE COMPANY.
12. LIMITATION OF ACTIONS AND RELEASE OF CLAIMS
NO PROCEEDING SHALL BE BROUGHT AND NO CAUSE OF ACTION SHALL BE ASSERTED
BY OR ON BEHALF OF THE COMPANY OR ANY SUBSIDIARY AGAINST THE
INDEMNITEE, HIS OR HER SPOUSE, HEIRS, ESTATE, EXECUTORS OR
ADMINISTRATORS AFTER THE EXPIRATION OF TWO YEARS FROM THE ACT OR
OMISSION OF THE INDEMNITEE UPON WHICH SUCH PROCEEDING IS BASED;
HOWEVER, IN A CASE WHERE THE INDEMNITEE FRAUDULENTLY CONCEALS THE FACTS
UNDERLYING SUCH CAUSE OF ACTION, NO PROCEEDING SHALL BE BROUGHT AND NO
CAUSE OF ACTION SHALL BE ASSERTED AFTER THE EXPIRATION OF TWO YEARS
FROM THE EARLIER OF (i) THE DATE THE COMPANY OR ANY SUBSIDIARY OF THE
COMPANY DISCOVERS SUCH FACTS, OR (ii) THE DATE THE COMPANY OR ANY
SUBSIDIARY OF THE COMPANY COULD HAVE DISCOVERED SUCH FACTS BY THE
EXERCISE OF REASONABLE DILIGENCE. ANY CLAIM OR CAUSE OF ACTION OF THE
COMPANY OR ANY SUBSIDIARY OF THE COMPANY, INCLUDING CLAIMS PREDICATED
UPON THE NEGLIGENT ACT OR OMISSION OF THE INDEMNITEE, SHALL BE
EXTINGUISHED AND DEEMED RELEASED UNLESS ASSERTED BY FILING OF A LEGAL
ACTION WITHIN SUCH PERIOD. THIS SECTION SHALL NOT APPLY TO ANY CAUSE OF
ACTION WHICH HAS ACCRUED ON THE DATE HEREOF AND OF WHICH THE INDEMNITEE
IS AWARE ON THE DATE HEREOF, BUT AS TO WHICH THE COMPANY HAS NO ACTUAL
KNOWLEDGE APART FROM THE INDEMNITEE'S KNOWLEDGE.
13. CHANGE IN CONTROL
THE COMPANY AGREES THAT IF THERE IS A CHANGE IN CONTROL OF THE COMPANY
(OTHER THAN A CHANGE IN CONTROL WHICH HAS BEEN APPROVED BY A MAJORITY
OF THE BOARD WHO WERE DIRECTORS IMMEDIATELY PRIOR TO SUCH CHANGE IN
CONTROL) THEN WITH RESPECT TO ALL MATTERS THEREAFTER ARISING CONCERNING
THE RIGHTS OF THE INDEMNITEE TO INDEMNITY PAYMENTS OR ADVANCEMENT OF
EXPENSES UNDER THIS AGREEMENT, ANY OTHER AGREEMENT OR THE COMPANY'S
CERTIFICATE OF INCORPORATION OR BYLAWS NOW OR HEREAFTER IN EFFECT
RELATING TO CLAIMS FOR INDEMNITY PAYMENTS OR THE ADVANCEMENT OF
EXPENSES, THE COMPANY SHALL SEEK LEGAL ADVISE ONLY FROM AN INDEPENDENT
LEGAL COUNSEL. THE INDEPENDENT LEGAL COUNSEL SHALL, AMONG OTHER THINGS,
RENDER ITS WRITTEN OPINION TO THE COMPANY AND THE INDEMNITEE AS TO
WHETHER AND TO WHAT EXTENT THE INDEMNITEE WOULD BE PERMITTED TO BE
INDEMNIFIED UNDER APPLICABLE LAW. THE COMPANY AGREES TO INDEMNIFY THE
INDEPENDENT LEGAL COUNSEL AGAINST ANY AND ALL EXPENSES (INCLUDING
ATTORNEYS' FEES), CLAIMS, LIABILITIES, AND DAMAGES ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR ITS ENGAGEMENT PURSUANT HERETO.
14. ESTABLISHMENT OF A TRUST IN THE EVENT OF A POTENTIAL CHANGE
IN CONTROL
IN THE EVENT OF A POTENTIAL CHANGE IN CONTROL, THE COMPANY SHALL, UPON
THE WRITTEN REQUEST BY THE INDEMNITEE AND UPON APPROVAL BY A MAJORITY
OF DISINTERESTED DIRECTORS, CREATE A TRUST FOR HE BENEFIT OF THE
INDEMNITEE, AND THE COMPANY SHALL, FROM TIME TO TIME UPON WRITTEN
REQUEST OF THE INDEMNITEE AND UPON APPROVAL BY A MAJORITY OF
DISINTERESTED DIRECTORS OR THE INDEPENDENT LEGAL COUNSEL IN THE EVENT
OF
A CHANGE IN CONTROL, FUND SUCH TRUST IN AN AMOUNT SUFFICIENT TO SATISFY
ANY AND ALL EXPENSES REASONABLY ANTICIPATED AT THE TIME OF EACH SUCH
REQUEST TO BE INCURRED IN CONNECTION WITH INVESTIGATING, PREPARING FOR,
AND DEFENDING ANY PROCEEDING, ANY AND ALL JUDGMENTS, FINES, PENALTIES
AND SETTLEMENT AMOUNTS IN CONNECTION WITH ANY AND ALL PROCEEDINGS FROM
TIME TO TIME ACTUALLY PAID OR CLAIMED, REASONABLY ANTICIPATED OR
PROPOSED TO BE PAID, AND THE FEES AND EXPENSES OF THE TRUSTEE. THE
AMOUNT OR AMOUNTS TO BE DEPOSITED IN THE TRUST PURSUANT TO THE
FOREGOING FUNDING OBLIGATION SHALL BE DETERMINED BY THE BOARD, OR THE
INDEPENDENT LEGAL COUNSEL IN THE EVENT OF A CHANGE IN CONTROL. THE
TERMS OF THE TTRUST SHALL PROVIDE THAT, UPON A CHANGE IN CONTROL, (i)
THE TRUST SHALL NOT BE REVOKED OR THE PRINCIPAL THEREOF INVADED,
WITHOUT THE WRITTEN CONSENT OF THE INDEMNITEE, (ii) THE TRUSTEE SHALL
ADVANCE, WITHIN FIVE (5) DAYS OF A REQUEST BY THE INDEMNITEE, ANY AND
ALL EXPENSES TO THE INDEMNITEE (AND THE INDEMNITEE HEREBY AGREES TO
REIMBURSE THE TRUST UNDER THE CIRCUMSTANCES UNDER WHICH THE INDEMNITEE
WOULD BE REQUIRED TO REIMBURSE THE COMPANY UNDER SECTION 7 OF THIS
AGREEMENT), (iii) THE TRUST SHALL CONTINUE TO BE FUNDED BY THE COMPANY
IN ACCORDANCE WITH THE FUNDING OBLIGATIONS SET FORTH ABOVE, (iv) THE
TRUSTEE SHALL PROMPTLY PAY TO THE INDEMNITEE ALL AMOUNTS FOR WHICH THE
INDEMNITEE SHALL BE ENTITLED TO INDEMNIFICATION PURSUANT TO THIS
AGREEMENT OR OTHERWISE, AND (v) ALL UNEXPECTED FUNDS IN SUCH TRUST
SHALL REVERT TO THE COMPANY UPON A FINAL DETERMINATION BY THE BOARD,
THE INDEPENDENT LEGAL COUNSEL, OR A COURT OF COMPETENT JURISDICTION, AS
THE CASE MAY BE, THAT THE INDEMNITEE HAS BEEN FULLY INDEMNIFIED UNDER
THE TERMS OF THIS AGREEMENT. THE TRUSTEE SHALL BE CHOSEN BY THE
INDEMNITEE AND APPROVED OF BY A MAJORITY OF DISINTERESTED DIRECTORS.
NOTHING IN THIS SECTION 14 SHALL RELIEVE THE COMPANY OF ANY OF ITS
OBLIGATIONS UNDER THIS AGREEMENT.
15. INDEMNIFICATION HEREUNDER NOT EXCLUSIVE
THE INDEMNIFICATION PROVIDED BY THIS AGREEMENT SHALL NOT BE DEEMED
EXCLUSIVE OF ANY OTHER RIGHTS TO WHICH THE INDEMNITEE MAY BE ENTITLED
UNDER THE COMPANY'S OR ANY SUBSIDIARY'S CHARTER OR BYLAWS, OR ANY VOTE
OF SHAREHOLDERS OR DISINTERESTED DIRECTORS OR NEW YORK LAW, BOTH AS TO
ACTION IN HIS OR HER OFFICIAL CAPACITY AND AS TO ACTION IN ANOTHER
CAPACITY ON BEHALF OF THE COMPANY OR ANY SUBSIDIARY WHILE HOLDING SUCH
OFFICE.
16. SUCCESSORS AND ASSIGNS
THIS AGREEMENT SHALL BE BINDING UPON, AND SHALL INURE TO THE BENEFIT OF
THE INDEMNITEE AND HIS OR HER HEIRS, PERSONAL REPRESENTATIVES AND
ASSIGNS, AND THE COMPANY AND ITS SUCCESSORS AND ASSIGNS.
17. SEPARABILITY
EACH PROVISION OF THIS AGREEMENT IS A SEPARATE AND DISTINCT AGREEMENT
AND INDEPENDENT OF THE OTHERS, SO THAT IF ANY PROVISION HEREOF SHALL BE
HELD TO BE INVALID OR UNENFORCEABLE FOR ANY REASON, SUCH INVALIDITY OR
UNENFORCEABILITY SHALL NOT AFFECT THE VALIDITY OR ENFORCEABILITY OF THE
OTHER PROVISIONS HEREOF. TO THE EXTENT REQUIRED,
ANY PROVISION OF THIS AGREEMENT MAY BE MODIFIED BY A COURT OF COMPETENT
JURISDICTION TO PRESERVE ITS VALIDITY AND TO PROVIDE THE INDEMNITEE
WITH THE BROADEST POSSIBLE INDEMNIFICATION PERMITTED UNDER NEW YORK
LAW.
18. SAVINGS CLAUSE
IF THIS AGREEMENT OR ANY PORTION THEREOF BE INVALIDATED ON ANY GROUND
BY ANY COURT OF COMPETENT JURISDICTION, THEN THE COMPANY SHALL
NEVERTHELESS INDEMNIFY INDEMNITEE AS TO EXPENSES, JUDGEMENTS, FINES,
PENALTIES OR ERISA EXCISE TAXES WITH RESPECT TO ANY PROCEEDING TO THE
FULL EXTENT PERMITTED BY ANY APPLICABLE PORTION OF THIS AGREEMENT THAT
SHALL NOT HAVE BEEN INVALIDATED OR BY ANY OTHER APPLICABLE NEW YORK
LAW.
19. INTERPRETATION; GOVERNING LAW
THIS AGREEMENT SHALL BE CONSTRUED AS A WHOLE AND IN ACCORDANCE WITH ITS
FAIR MEANING. HEADINGS ARE FOR CONVENIENCE ONLY AND SHALL NOT BE USED
IN CONSTRUING MEANING. THIS AGREEMENT SHALL BE GOVERNED AND INTERPRETED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO
PRINCIPLES OF CONFLICTS OF LAWS THEREOF.
20. AMENDMENTS
NO AMENDMENT, WAIVER, MODIFICATION, TERMINATION OR CANCELLATION OF THIS
AGREEMENT SHALL BE EFFECTIVE UNLESS IN WRITING SIGNED BY THE PARTY
AGAINST WHOM ENFORCEMENT IS SOUGHT. THE INDEMNIFICATION RIGHTS AFFORDED
TO THE INDEMNITEE HEREBY ARE CONTRACT RIGHTS AND MAY NOT BE DIMINISHED,
ELIMINATED OR OTHERWISE AFFECTED BY AMENDMENTS TO THE COMPANY'S OR ANY
SUBSIDIARY'S CHARTER OR BYLAWS OR BY AMENDMENTS TO ANY AGREEMENTS,
INCLUDING D&O INSURANCE POLICIES.
21. COUNTERPARTS
THIS AGREEMENT MAY BE EXECUTED IN ONE OR MORE COUNTERPARTS, ALL OF
WHICH SHALL BE CONSIDERED ONE AND THE SAME AGREEMENT AND SHALL BECOME
EFFECTIVE WHEN ONE OR MORE COUNTERPARTS HAVE BEEN SIGNED BY EACH PARTY
AND DELIVERED TO THE OTHER.
22. NOTICES
ALL NOTICES, DEMANDS, REQUESTS, OR OTHER COMMUNICATIONS WHICH MAY BE OR
ARE REQUIRED TO BE GIVEN, SERVED OR SENT BY EITHER PARTY TO THE OTHER
PARTY PURSUANT TO THIS AGREEMENT, SHALL BE IN WRITING AND SHALL BE HAND
DELIVERED, SENT BY EXPRESS MAIL OR OTHER OVERNIGHT DELIVERY SERVICE OR
MAILED BY REGISTERED OR CERTIFIED MAIL, RETURN RECEIPT REQUESTED,
POSTAGE PREPAID, OR TRANSMITTED BY TELEGRAM, TELEX OR TELECOPY,
ADDRESSED AS FOLLOWS:
IF TO THE COMPANY:
PREMIER NATIONAL BANCORP, INC.
XXXXX 00
XXXXXXXXXXXXX, XXX XXXX 00000
ATTN: PRESIDENT
IF TO THE INDEMNITEE:
EACH PARTY MAY DESIGNATE BY NOTICE IN WRITING A NEW ADDRESS (OR
SUBSTITUTE OR ADDITIONAL PERSONS) TO WHICH ANY NOTICE, DEMAND, REQUEST
OR COMMUNICATION MAY THEREAFTER BE SO GIVEN, SERVED OR SENT. EACH
NOTICE, DEMAND, REQUEST, OR COMMUNICATION WHICH SHALL BE MAILED, SENT,
DELIVERED, TELEFAXED OR TELEXED IN THE MANNER DESCRIBED ABOVE, OR WHICH
SHALL BEDELIVERED TO A TELEGRAPH COMPANY, SHALL BE DEEMED SUFFICIENTLY
GIVEN, SERVED, SENT TO BE DELIVERED OR RECEIVED FOR ALL PURPOSES AT
SUCH TIME AS IT IS DELIVERED TO THE ADDRESSEE (WITH THE RETURN RECEIPT,
THE DELIVERY RECEIPT OR, WITH RESPECT TO ATELEX OR TELEFAX, THE ANSWER
BACK BEING DEEMED CONCLUSIVE EVIDENCE OF SUCH DELIVERY) OR AT SUCH TIME
AS DELIVERY IS REFUSED BY THEADDRESSEE UPON PRESENTATION.
23. TERMINATION OF PRIOR INDEMNIFICATION AGREEMENT
THIS AGREEMENT SUPERCEDES AND REPLACES ANY PRIOR AGREEMENTS BETWEEN THE
COMPANY OR ANY OF ITS PREDECESSORS AND THE INDEMNITEE RELATING TO
INDEMNIFICATION OF THE INDEMNITEE BY THE COMPANY OR SUCH PREDECESSOR,
INCLUDING WITHOUT LIMITATION THE INDEMNIFICATION AGREEMENT EFFECTIVE
JULY 17, 1998 BETWEEN PROGRESSIVE BANK, INC. AND THE INDEMNITEE, AND
UPON THE EXECUTION AND DELIVERY OF THIS AGREEMENT BY THE PARTIES HERETO
ALL SUCH AGREEMENTS SHALL TERMINATE AND BE OF NO FURHER FORCE OR
EFFECT. NOTHING CONTAINED IN THISSECTION 23 SHALL BE CONSTRUED TO LIMIT
IN ANY WAY THE PROVISIONS OF SECTION 15 HEREOF.
24. SUBROGATION
IN THE EVENT OF PAYMENT UNDER THIS AGREEMENT, THECOMPANY SHALL BE
SUBROGATED TO THE EXTENT OF SUCH PAYMENT TO ALL OF THE RIGHTS OF
RECOVERY OF INDEMNITEE, WHO SHALL EXECUTE ALL PAPERS REQUIRED AND SHALL
DO EVERYTHING HAT MAY BE NECESSARY TO ENABLE THECOMPANY EFFECTIVELY TO
BRING SUIT TO ENFORCE SUCH RIGHTS.
IN WITNESS WHEREOF, THE PARTIES HERETO HAVE ENERED INTO THIS AGREEMENT
AS OF THE DATE FIRST WRITTEN ABOVE.
INDEMNITEE
-----------------------------------
PREMIER NATIONAL BANCORP, INC.
BY:
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NAME:
TITLE:
