EXHIBIT 10.44
UNITED PANAM FINANCIAL CORP.
INDEMNIFICATION AGREEMENT
This Indemnification Agreement (the "Agreement"), dated as of
__________, 1997, is made and effective as of the date set forth in Section 15
of the Agreement, by and between United PanAm Financial Corp., a Delaware
corporation and holding company of a federally insured depository institution
(the "Corporation"), and ______________, a director and/or officer of the
Corporation (the "Indemnitee").
RECITALS
A. The Corporation and the Indemnitee recognize that the Federal
Deposit Insurance Corporation has promulgated regulations governing
indemnification agreements between federally insured depository institutions or
affiliated depository institution holding companies and their directors and
officers (the "Regulations") set forth at 12 CFR Part 359, which Regulations
prohibit the making of certain indemnification agreements and the payment of
funds subject to such agreements. The Corporation and the Indemnitee intend
this Agreement to comply with the Regulations [and that this Indemnification
Agreement replace any and all agreements between the Corporation and the
Indemnitee which provide for the payment of any indemnification payments which
were entered into before the promulgation of the Regulations.]
B. The Corporation and the Indemnitee recognize that the present
state of the law relating to director and officer liability is too uncertain to
provide the Corporation's directors and officers with adequate and reliable
advance knowledge or 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 Corporation;
C. The Corporation and the Indemnitee are aware of the substantial
growth in the number of lawsuits filed against corporate directors and officers
in connection with their activities in such capacities and by reason of their
status as such;
D. The Corporation and the Indemnitee recognize that the cost of
defending against such lawsuits, whether or not meritorious, is typically beyond
the financial resources of most directors and officers of the Corporation;
E. The Corporation and the Indemnitee recognize that the legal risks
and potential liabilities, and the threat thereof, associated with proceedings
filed against the directors and officers of the Corporation bear no reasonable
relationship to the amount of compensation received by the Corporation's
directors and officers;
F. The Corporation, after reasonable investigation prior to the date
hereof, has determined that the liability insurance coverage available to the
Corporation as of the date hereof is
1
inadequate, unreasonably expensive or both. The Corporation believes,
therefore, that the interest of the Corporation's stockholders would be best
served by a combination of (i) such insurance as the Corporation may elect to
obtain pursuant to the Corporation's obligations hereunder and (ii) a contract
with its directors and 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 hereafter in
effect) against personal liability for actions taken in the performance of their
duties to the Corporation;
G. Section 145 of the General Corporation Law of the State of
Delaware empowers Delaware corporations to indemnify their directors and
officers and further states that the indemnification and advancement of expenses
provided by Section 145 "shall not be deemed exclusive of any other rights to
which those seeking indemnification or advancement of expenses may be entitled
under any bylaw, agreement, vote of stockholders or disinterested directors or
otherwise, both as to action in his or her official capacity and as to action in
another capacity while holding such office;" thus, Section 145 does not by
itself limit the extent to which the Corporation may indemnify persons serving
as its directors and officers;
[H. The Corporation's Certificate of Incorporation and Bylaws
authorize the indemnification of the directors and officers of the Corporation
in excess of that expressly permitted by Section 145, subject to the limitations
set forth in Section 102(b)(7) of the General Corporation Law of the State of
Delaware;]
I. The Board of Directors of the Corporation has concluded that, to
retain and attract talented and experienced individuals to serve as directors
and officers of the Corporation and to encourage such individuals to take the
business risks necessary for the success of the Corporation, it is necessary for
the Corporation to contractually indemnify its directors and officers, and to
assume for itself liability for expenses and damages in connection with certain
claims against such directors and officers in connection with their service to
the Corporation, and has further concluded that the failure to provide such
contractual indemnification could result in great harm to the Corporation and
its stockholders;
J. The Corporation desires and has requested the Indemnitee to serve
or continue to serve as a [director/officer] of the Corporation, free from undue
concern for the risks and potential liabilities associated with such services to
the Corporation; and
K. The Indemnitee is willing to serve, or continue to serve, the
Corporation, provided, and on the expressed condition, that he is furnished with
the indemnification provided for herein.
2
AGREEMENT
NOW, THEREFORE, the Corporation and Indemnitee agree as follows:
1. Definitions.
-----------
a. "Expenses" means, for the purposes of this Agreement, all direct
and indirect costs of any type or nature whatsoever (including, without
limitation, any fees and disbursements of Indemnitee's counsel, accountants
and other experts and other out-of-pocket costs) actually and reasonably
incurred by the Indemnitee in connection with the investigation, preparation,
defense or appeal of a Proceeding; provided, however, that Expenses shall not
include judgments, fines, penalties or amounts paid in settlement of a
Proceeding.
b. "Other enterprise" includes, for the purposes of this Agreement,
employee benefit plans; references to "fines" includes any excise taxes assessed
on Indemnitee with respect to an employee benefit plan; and references to
"serving at the request of the Corporation" includes any service as a director,
officer, employee or agent of the Corporation which imposes duties on, or
involves services by, such director, officer, employee or agent with respect to
an employee benefit plan, its participants or its beneficiaries; and if
Indemnitee acted in good faith and in a manner Indemnitee reasonably believed to
be in the interest of the participants and beneficiaries of an employee benefit
plan, Indemnitee shall be deemed to have acted in a manner "not opposed to the
best interests of the Corporation" as referred to in this Agreement.
c. "Proceeding" means, for the purposes of this Agreement, any
threatened, pending, or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative (including an action brought by or in
the right of the Corporation) in which Indemnitee may be or may have been
involved as a party or otherwise, by reason of the fact that Indemnitee is or
was a [director/officer] of the Corporation, by reason of any action taken by
Indemnitee or of any inaction on Indemnitee's part while acting as such
[director/officer] or by reason of the fact that Indemnitee is or was serving at
the request of the Corporation as a director, officer, employee or agent of
another foreign or domestic corporation, partnership, joint venture, trust or
other enterprise, or was a director and/or officer of the foreign or domestic
corporation which was a predecessor corporation to the Corporation or of another
enterprise at the request of such predecessor corporation, whether or not
Indemnitee 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.
2. Agreement to Serve. In consideration of the protection afforded
------------------
by this Agreement, if Indemnitee is a director of the Corporation, Indemnitee
agrees to serve at least for the balance of the current term as a director and
not to resign voluntarily during such period without the written consent of a
majority of the Board of Directors. If Indemnitee is an officer of the
corporation not serving under an employment contract, Indemnitee agrees to serve
in such capacity at least for
3
the balance of the current fiscal year of the Corporation and not to resign
voluntarily during such period without the written consent of a majority of the
Board of Directors. Following the applicable period set forth above, Indemnitee
agrees to serve or continue to serve in such capacity as a director or officer
of the Corporation to the best of his or her abilities at the will of the
Corporation or under separate contract, if such contract exists, for so long as
Indemnitee is duly elected or appointed and qualified or until such time as
Indemnitee tenders his or her resignation in writing. Nothing contained in this
Agreement is intended to create in Indemnitee any right to continued employment.
3. Indemnification.
---------------
a. Third Party Proceedings. The Corporation shall, except to the
-----------------------
extent prohibited by the Regulations, indemnify Indemnitee against Expenses,
judgments, fines, penalties or amounts paid in settlement (if the settlement is
approved in advance by the Corporation) actually and reasonably incurred by
Indemnitee in connection with a Proceeding (other than a Proceeding by or in the
right of the Corporation) if Indemnitee acted in good faith and in a manner
Indemnitee reasonably believed to be in or not opposed to the best interests of
the Corporation, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe Indemnitee'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 a presumption
---------------
that Indemnitee did not act in good faith and in a manner which Indemnitee
reasonably believed to be in or not opposed to the best interests of the
Corporation, and, with respect to any criminal Proceeding, had no reasonable
cause to believe that Indemnitee's conduct was unlawful.
b. Proceedings by or in the Right of the Corporation. To the fullest
-------------------------------------------------
extent permitted by law, the Corporation shall, except to the extent prohibited
by the Regulations, indemnify Indemnitee against Expenses and amounts paid in
settlement, actually and reasonably incurred by Indemnitee in connection with a
Proceeding by or in the right of the Corporation to procure a judgment in its
favor if Indemnitee acted in good faith and in a manner Indemnitee reasonably
believed to be in or not opposed to the best interests of the Corporation.
Notwithstanding the foregoing, no indemnification shall be made in respect of
any claim, issue or matter as to which Indemnitee shall have been adjudged
liable to the Corporation unless and only to the extent that the Court of
Chancery or the court in which such action or suit was brought shall determine
upon application that, despite the adjudication of liability but in view of all
the circumstances of the case, Indemnitee is fairly and reasonably entitled to
indemnity for such expenses which the Court of Chancery or such other court
deems proper.
c. Scope. Notwithstanding any other provision of this Agreement but
-----
subject to Section 14(b), the Corporation shall, except to the extent prohibited
by the Regulations, 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 Corporation's Certificate of
Incorporation, the Corporation's Bylaws or by statute.
4
4. Limitations on Indemnification. Any other provision herein to the
------------------------------
contrary notwithstanding, the Corporation shall not be obligated pursuant to the
terms of this Agreement:
a. Excluded Acts. To indemnify Indemnitee for any acts or omissions
-------------
or transactions from which a director may not be relieved of liability under
Section 102(b)(7)of the General Corporation Law of the State of Delaware; or
b. Claims Initiated by Indemnitee. To indemnify or advance Expenses
------------------------------
to Indemnitee with respect to Proceedings or claims initiated or brought
voluntarily by Indemnitee and not by way of defense, except with respect to
proceedings brought to establish or enforce a right to indemnification under
this Agreement or any other statute or law or otherwise as required under
Section 145 of the General Corporation Law of the State of Delaware, but such
indemnification or advancement of Expenses may be provided by the Corporation in
specific cases if the Board of Directors has approved the initiation or bringing
of such suit; or
c. Lack of Good Faith. To indemnify Indemnitee for any Expenses
------------------
incurred by the Indemnitee with respect to any proceeding instituted by
Indemnitee to enforce or interpret this Agreement, if a court of competent
jurisdiction determines that each of the material assertions made by the
Indemnitee in such proceeding was not made in good faith or was frivolous; or
d. Insured Claims. To indemnify Indemnitee for Expenses or
--------------
liabilities of any type whatsoever (including, but not limited to, judgments,
fines, ERISA excise taxes or penalties, and amounts paid in settlement) which
have been paid directly to or on behalf of Indemnitee by an insurance carrier
under a policy of directors' and officers' liability insurance maintained by the
Corporation or any other policy of insurance maintained by the Corporation, or a
subsidiary of the Corporation, or Indemnitee; or
e. Claims Under Section 16(b). To indemnify Indemnitee for Expenses
--------------------------
and the payment of profits arising from the purchase and sale by Indemnitee of
securities in violation of Section 16(b) of the Securities Exchange Act of 1934,
as amended, or any similar successor statute; or
f. Claims Affected by the Regulations. To indemnify Indemnitee for
----------------------------------
any Expenses, fines, monetary penalties or amounts paid in settlement prohibited
by the Regulations.
5. Determination of Right to Indemnification. Upon receipt of a
-----------------------------------------
written claim addressed to the Board of Directors for indemnification pursuant
to Section 3, the Corporation shall determine by any of the methods set forth in
Section 145(d) of the General Corporation Law of the State of Delaware and the
Regulations whether Indemnitee has met the applicable standards of conduct which
make it permissible under applicable law to indemnify Indemnitee. If a claim
under Section 3 is not paid in full by the Corporation within thirty (30) days
after such written claim has been received by the Corporation or if applicable,
whatever time is reasonably necessary for the
5
Corporation to complete the investigation contemplated in Section 3 of this
Agreement, the Indemnitee may at any time thereafter bring suit against the
Corporation to recover the unpaid amount of the claim. The Indemnitee's
Expenses incurred in connection with successfully establishing his or her right
to indemnification or advances, in whole or in part, in any such Proceeding
shall also be indemnified by the Corporation. Neither the failure of the
Corporation (including its Board of Directors, independent legal counsel, or its
stockholders) to make a determination prior to the commencement of such action
that indemnification of the Indemnitee is proper in the circumstances because
Indemnitee has met the applicable standard of conduct under applicable law, nor
an actual determination by the Corporation (including its Board of Directors,
independent legal counsel or its stockholders) that the Indemnitee has not met
such applicable standard of conduct, shall create a presumption that Indemnitee
has not met the applicable standard of conduct. The Corporation shall have the
burden of proof concerning whether the Indemnitee has or has not met the
applicable standard of conduct.
6. Advancement and Repayment of Expense.
-------------------------------------
a. Proceedings. The Expenses incurred by Indemnitee in defending and
-----------
investigating any Proceeding shall, except to the extent prohibited by the
Regulations, be paid by the Corporation in advance of the final disposition of
such Proceeding within thirty (30) days after receiving from Indemnitee the
copies of invoices presented to Indemnitee for such Expenses, if Indemnitee
shall provide an undertaking to the Corporation to repay such amount to the
extent it is ultimately determined that Indemnitee is not entitled to
indemnification. In determining whether or not to make an advance hereunder,
the ability of Indemnitee to repay shall not be a factor. Notwithstanding the
foregoing, in a proceeding brought by the Corporation directly, in its own right
(as distinguished from an action bought derivatively or by Any receiver or
trustee), the Corporation shall not be required to make the advances called for
hereby if the Board of Directors determines, in its sole discretion, that it
does not appear that Indemnitee has met the standards of conduct which make it
permissible under applicable law to indemnify Indemnitee and the advancement of
Expenses would not be in the best interests of the Corporation and its
stockholders.
b. Mandatory Payment of Expenses. To the extent that Indemnitee has
-----------------------------
been successful on the merits, in defense of any action, suit, or proceeding
referred to in Section (3) hereof or in defense of any claim, issue or matter
therein, Indemnitee shall, except to the extent prohibited by the Regulations,
be indemnified against all Expenses incurred by Indemnitee in connection
therewith.
7. Partial Indemnification. If the Indemnitee is entitled under the
-----------------------
Regulations and any provision of this Agreement to indemnification or
advancement by the Corporation of some or a portion of any Expenses or
liabilities of any type whatsoever (including, but not limited to, judgments,
fines, penalties, and amounts paid in settlement) incurred by Indemnitee in the
investigation, defense, settlement or appeal of a Proceeding, but is not
entitled to indemnification or advancement of the total amount thereof, the
Corporation shall, except to the extent prohibited by
6
the Regulations, nevertheless indemnify or pay advancements to the Indemnitee
for the portion of such Expenses or liabilities to which the Indemnitee is
entitled.
8. Notice to Corporation by Indemnitee. Indemnitee shall notify the
-----------------------------------
Corporation in writing of any matter with respect to which Indemnitee intends to
seek indemnification hereunder as soon as reasonably practicable following the
receipt by Indemnitee of written notice thereof; provided that any delay in so
notifying Corporation shall not constitute a waiver by Indemnitee of his or her
rights hereunder. The written notification to the Corporation shall be
addressed to the Board of Directors and shall include a description of the
nature of the Proceeding and the facts underlying the Proceeding and be
accompanied by copies of any documents filed by any state or federal regulatory
agency or with the court in which the Proceeding is pending. In addition,
Indemnitee shall give the Corporation such information and cooperation as it may
reasonably require and as shall be within Indemnitee's power.
9. Maintenance of Liability Insurance.
----------------------------------
a. The Corporation hereby agrees that so long as Indemnitee shall
continue to serve as a [director/officer] of the Corporation and thereafter so
long as Indemnitee shall be subject to any possible Proceeding, the Corporation,
subject to Section 9(b), it shall use its best efforts to obtain and maintain in
full force and effect directors' and officers' liability insurance ("D&O
Insurance") which complies with the Regulations and which provides Indemnitee
the same rights and benefits as are accorded to the most favorably insured of
the Corporation's directors, if Indemnitee is a director; or of the
Corporation's officers, if Indemnitee is not a director of the Corporation but
is an officer.
b. Notwithstanding the foregoing, the Corporation shall have no
obligation to obtain or maintain D&O Insurance if the Corporation 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 so as to provide an
insufficient benefit, or the Indemnitee is covered by similar insurance
maintained by a subsidiary or parent of the Corporation.
c. Notice to Insurers. If, at the time of the receipt of a notice of
------------------
a claim pursuant to Section 8 hereof, the Corporation has D&O Insurance in
effect, the Corporation shall give prompt notice of the commencement of such
claim to the insurers in accordance with the procedures set forth in the
respective policies. The Corporation 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.
10. Defense of Claim. In the event that the Corporation shall be
----------------
obligated under Section 6 hereof to pay any Expenses of any Proceeding against
Indemnitee, the Corporation, 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
7
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
Corporation, the Corporation 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 or her 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 Corporation, or (B) Indemnitee shall have
reasonably concluded that there may be a conflict of interest between the
Corporation and the Indemnitee in the conduct of such defense or (C) the
Corporation 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 Corporation.
11. Attorneys' Fees. In the event that Indemnitee or the Corporation
---------------
institutes an action to enforce or interpret any terms of this Agreement, the
Corporation shall reimburse Indemnitee for all of the Indemnitee's reasonable
fees and expenses in bringing and pursuing such action or defense, unless as
part of such action or defense, a court of competent jurisdiction determines
that the material assertions made by Indemnitee as a basis for such action or
defense were not made in good faith or were frivolous.
12. Continuation of Obligations. All agreements and obligations of
---------------------------
the Corporation contained herein shall continue during the period the Indemnitee
is a [director/officer] of the Corporation, or is or was serving at the request
of the Corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise, and shall
continue thereafter so long as the Indemnitee shall be subject to any possible
proceeding by reason of the fact that Indemnitee served in any capacity referred
to herein.
13. Successors and Assigns. This Agreement establishes contract
----------------------
rights that shall be binding upon, and shall inure to the benefit of, the
successors, assigns, heirs and legal representatives of the parties hereto.
14. Non-exclusivity.
---------------
a. The provisions for indemnification and advancement of expenses set
forth in this Agreement shall not be deemed to be exclusive of any other rights
that the Indemnitee may have under any provision of law, the Corporation's
Certificate of Incorporation or Bylaws, the vote of the Corporation's
stockholders or disinterested directors, other agreements or otherwise, both as
to action in his or her official capacity and action in another capacity while
occupying his or her position as a [director/officer] of the Corporation. The
indemnification provided under this Agreement shall continue as to Indemnitee
for any action taken or not taken while serving in an indemnified capacity even
though Indemnitee may have ceased to serve in such capacity.
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 Delaware
corporation or a depository institution holding company to indemnify its
officers and directors, the Indemnitee's rights and the
8
Corporation's obligations under this Agreement shall be expanded to the full
extent permitted by such changes. In the event of any changes in any applicable
law, statute or rule, which narrow the right of a Delaware corporation or a
depository institution holding company 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.
15. Effectiveness of Agreement. [To the extent that the
--------------------------
indemnification permitted under the terms of certain provisions of this
Agreement exceeds the scope of the indemnification provided for in the General
Corporation Law of the State of Delaware, such provisions shall not be effective
unless and until the Corporation's Certificate of Incorporation authorize such
additional rights of indemnification. In all other respects, the balance of]
This Agreement shall be effective as of the date set forth on the first page and
may apply to acts or omissions of Indemnitee which occurred prior to such date
if Indemnitee was an officer, director, employee or other agent of the
Corporation, or was serving at the request of the Corporation as a director,
officer, employee or agent of another corporation, partnership, joint venture,
trust or other enterprise, at the time such act or omission occurred.
[The Agreement shall be made and effective simultaneously with the
effectiveness (the "Effective Date") of the sale of the Common Stock of the
Corporation contemplated by that certain Registration Statement on Form S-1
(File No. ________) filed by the Corporation with the Securities and Exchange
Commission on ________, 1997. The Agreement shall to the extent permitted by
law, apply to acts of omissions of the Indemnitee which occurred prior to such
date if the Indemnitee was an officer, director, employee or other agent of the
Corporation, or was serving at the request of the Corporation as a director,
officer, employee or agent of another corporation, partnership, joint venture,
trust or other enterprise, at the time such act or omission occurred.]
16. Severability. Nothing in this Agreement is intended to require or
------------
shall be construed as requiring the Corporation to do or fail to do any act in
violation of applicable law. The Corporation's inability, pursuant to court
order, to perform its obligations under this Agreement shall not constitute a
breach of this Agreement. The provisions of this Agreement shall be severable
as provided in this Section 16. If this Agreement or any portion hereof shall
be invalidated on any ground by any court of competent jurisdiction, then the
Corporation shall nevertheless indemnify Indemnitee to the full extent permitted
by any applicable portion of this Agreement that shall not have been
invalidated, and the balance of this Agreement not so invalidated shall be
enforceable in accordance with its terms.
17. Governing Law. This Agreement shall be interpreted and enforced
-------------
in accordance with the laws of the State of Delaware, except to the extent
federal law is applicable. To the extent permitted by applicable law, the
parties hereby waive any provisions of law which render any provision of this
Agreement unenforceable in any respect.
9
18. Notice. All notices, requests, demands and other communications
------
under this Agreement shall be in writing and shall be deemed duly given (i) if
delivered by hand and receipted for by the party addressee or (ii) if mailed by
certified or registered mail with postage prepaid, on the third business day
after the mailing date. Addresses for notice to either party are as shown on
the signature page of this Agreement, or as subsequently modified by written
notice.
19. Mutual Acknowledgment. Both the Corporation and Indemnitee
---------------------
acknowledge that in certain instances, federal law or applicable public policy
may prohibit the Corporation from indemnifying its directors and officers under
this Agreement or otherwise. Indemnitee understands and acknowledges that the
Corporation 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 Corporation's
right under public policy to indemnify Indemnitee.
20. Subrogation. In the event of payment under this Agreement, the
-----------
Corporation shall be subrogated to the extent of such payment to all of the
rights of recovery of Indemnitee, who shall execute all documents required and
shall do all acts that may be necessary to secure such rights and to enable the
Corporation effectively to bring suit to enforce such rights.
21. Counterparts. This Agreement may be executed in one or more
------------
counterparts, each of which shall constitute an original.
22. Amendment and Termination. No amendment, modification,
-------------------------
termination or cancellation of this Agreement shall be effective unless in
writing signed by both parties hereto.
10
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year set forth above.
UNITED PANAM FINANCIAL CORP.
By:____________________________
[Title]
Address:
INDEMNITEE:
_________________________
(Type Name)
_________________________
(Signature)
_________________________
(Address)
11
