EXHIBIT 10.29
APPENDIX J
FORM OF INDEMNIFICATION AGREEMENT
THIS AGREEMENT dated 199 , for reference purposes, is entered into
between Greater Bay Bancorp, a California corporation ("Bancorp"), and
("Indemnitee"), with reference to the following facts.
RECITALS
A. Bancorp believes that it is essential to its best interests to attract
and retain highly capable persons to serve as directors, and officers of
Bancorp.
B. Indemnitee is or has been selected to be a director and/or officer of
Bancorp.
C. Bancorp and Indemnitee recognize the increased risk of litigation and
other claims being asserted against directors of corporations.
D. In recognition of Indemnitee's need for substantial protection against
personal liability, in order to enhance Indemnitee's continued service to
Bancorp, and in order to induce Indemnitee to continue to provide services to
Bancorp as a director and/or officer, Bancorp wishes to provide in this
Agreement for the indemnification of and the advancement of expenses to
Indemnitee to the fullest extent permitted by law as set forth in this
Agreement, and to the extent applicable insurance is maintained, for the
coverage of Indemnitee under Bancorp's policies of directors' and officers'
liability insurance.
IN CONSIDERATION of the foregoing and of Indemnitee's continuing to provide
services to Bancorp directly or, at its request, with another enterprise, the
parties agree as follows:
Section 1. DEFINITIONS
(a) Board: the Board of Directors of Bancorp
(b) Change in Control: a state of affairs that shall be deemed to have
occurred if:
(i) any person is or becomes the "beneficial owner" (as that term is
defined in Rule 13d-3 under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), directly or indirectly, of securities representing 20 percent
or more of the total voting power of Bancorp's then-outstanding voting
securities; or
(ii) during any period of two consecutive years, individuals who, at the
beginning of such period, constitute the Board together with any new director
whose election by the Board or nomination for election by Bancorp's shareholders
was approved by a vote of at least two thirds of the directors then in office
who either were directors at the beginning of the two-year period, or whose
election or nomination was previously so approved, cease for any reason to
constitute a majority of the Board, provided that, prior service as a director
of Mid-Peninsula Bancorp or Cupertino National Bancorp, California corporations,
shall be counted in the calculation of such two-year period; or
(iii) the shareholders of Bancorp approve a merger or consolidation of
Bancorp with any other corporation, other than a merger or consolidation that
would result in the voting securities of Bancorp outstanding immediately prior
to such merger or consolidation continuing to represent (either by remaining
outstanding or by being converted into voting securities of the surviving
entity) at least 80 percent of the total voting power represented by the voting
securities of Bancorp or such surviving entity outstanding immediately after
such merger or consolidation; or
(iv) the shareholders of Bancorp approve a plan of complete liquidation
of Bancorp, or an agreement for the sale or disposition by Bancorp (whether in
one transaction or a series of transactions) of all or substantially all of
Bancorp's assets.
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(c) Expenses:
(i) Any expense, liability, or loss, including attorneys' fees,
judgments, fines, ERISA excise taxes and penalties, amounts paid or to be
paid in settlement;
(ii) any interest, assessments, or other charges imposed on any of
the items in part (i) of this subsection (c); and
(iii) any federal, state, local, or foreign taxes imposed as a result
of the actual or deemed receipt of any payment xxxxxx this Agreement paid
or incurred in connection with investigating, defending, being a witness
in, or participating in (including on appeal), or preparing for any of the
foregoing in, any Proceeding relating to any Indemnifiable Event.
(d) Indemnifiable Event: any event or occurrence that takes place either
before or after the execution of this Agreement and that is related to
(i) the fact that Indemnitee is or was a director or an officer of
Bancorp, or while a director or officer is or was serving at the request of
Bancorp as a director, officer, employee, trustee, agent, or fiduciary of
another foreign or domestic corporation, partnership, joint venture,
employee benefit plan, trust or other enterprise, or was a director,
officer, employee or agent of a foreign or domestic corporation that was a
predecessor corporation of Bancorp or another enterprise at the request of
such predecessor corporation, or
(ii) anything done or not done by Indemnitee in any such capacity,
whether or not the basis of the Proceeding is an alleged action in an
official capacity as a director, officer, employee, or agent, or in any
other capacity while serving as a director, officer, employee, or agent of
Bancorp, as described in this subsection(d).
(e) Independent Counsel: the person or body appointed in connection with
section 3.
(f) Person: "person" (as that term is used in sections 13(d) and 14(d) of
the Exchange Act), other than a trustee or other fiduciary holding securities
under an employee benefit plan of Bancorp acting in such capacity, or a
corporation owned directly or indirectly by the shareholders of Bancorp in
substantially the same proportions as their ownership of shares of Bancorp at
the date of this Agreement.
(g) Participant: a person who is a party to, or witness or other
participant (including on appeal) in, a Proceeding.
(h) Potential Change in Control: a state of affairs that shall be deemed
to exist if:
(i) Bancorp enters into an agreement or arrangement, the
consummation of which would result in the occurrence of a Change in
Control; or
(ii) any Person (including Bancorp) announces publicly an intention
to take or to consider taking actions that, if consummated, would
constitute a Change in Control; or
(iii) any Person who is or becomes the beneficial owner, directly or
indirectly, of securities of Bancorp representing 10 percent or more of the
combined voting power of Bancorp's then-outstanding voting securities ,
increases his or her beneficial ownership of such securities by 5 percent
or more over the percentage owned by such Person on the date of this
Agreement; or
(iv) the Board adopts a resolution to the effect that, for purposes
of this Agreement, a Potential Change in Control has occurred.
(i) Proceeding: any threatened, pending, or completed action, suit, or
proceeding, or any inquiry, hearing, or investigation, whether conducted by
Bancorp or any other party, that Indemnitee in good faith believes might lead to
the institution or any such action, suit, or proceeding, whether civil,
criminal, administrative, investigative,or other.
(j) Reviewing Party: the person or body appointed in accordance with
section 3.
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(k) Voting Securities: any securities of Bancorp that have the right to
vote generally in the election of directors.
Section 2. AGREEMENT TO INDEMNIFY
(a) General Agreement. In the meantime Indemnitee was, is, or becomes a
Participant in, or is threatened to be made a Participant in, a Proceeding by
reason of (or arising in part out of) an Indemnifiable Event, Bancorp shall
indemnify Indemnitee from and against any and all Expenses to the fullest extent
permitted by law, as the same exists or may hereafter be amended or interpreted
(but in the case of any such amendment or interpretation, only to the extent
that such amendment or interpretation permits Bancorp to provide broader
indemnification rights than were permitted prior to that amendment or
interpretation). The parties to this Agreement intend that this Agreement shall
provide for indemnification in excess of that expressly permitted by the
California Corporations Code, including, without limitation, any indemnification
provided by Bancorp's articles of incorporation, its bylaws, a vote of its
shareholders or disinterested directors, or applicable law. Without limiting the
generality of the foregoing, in a Proceeding initiated by a third party, or by
or in the right of Bancorp, the Indemnitee shall be entitled to indemnification
if the Indemnitee acted in a manner he or she did not believe to be contrary to
the best interests of Bancorp. In addition, in any proceeding initiated by or in
the right of Bancorp which is settled with respect to the Indemnitee, Bancorp
shall indemnify the Indemnitee against any and all Expenses if the Indemnitee
met the standards of conduct set forth in the sentence immediately above, and
court approval of such indemnification will not be required.
(b) Initiation of Proceeding. Notwithstanding anything in this Agreement
to the contrary, Indemnitee shall not be entitled to Indemnification under this
Agreement in connection with any Proceeding initiated by Indemnitee against
Bancorp or any director or officer of Bancorp unless:
(i) Bancorp has joined in or the Board has consented to the
initiation of such Proceeding;
(ii) the Proceeding is one to enforce indemnification rights under
section 5; or
(iii) the Proceeding is instituted after a Change in Control and
Independent Counsel has approved its initiation.
(c) Expense Advances. If so requested by Indemnitee, Bancorp shall,
within ten business days of such request, advance all Expenses to Indemnitee (an
"Expense Advance"). Notwithstanding the foregoing, to the extent that the
Reviewing Party determines that Indemnitee would not be permitted to be so
indemnified under applicable law, Bancorp shall be entitled to be reimbursed by
Indemnitee for all such amounts, and Indemnitee hereby agrees to reimburse
Bancorp promptly for the same. If Indemnitee has commenced legal proceedings in
a court of competent jurisdiction to secure a determination that Indemnitee
should be indemnified under applicable law, as provided in section 4, any
determination made by the Reviewing Party that Indemnitee would not be permitted
to be indemnified under applicable law shall not be binding, and Indemnitee
shall not be required to reimburse Bancorp for any Expense Advance until a final
judicial determination is made with respect thereto and all rights of appeal
therefrom have been exhausted or have lapsed. Indemnitee's obligations to
reimburse Bancorp for Expense Advances shall be unsecured and no interest shall
be charged thereon.
(d) Mandatory Indemnification. Notwithstanding any other provision of
this Agreement, to the extent that Indemnitee has been successful on the merits
in defense of any Proceeding relating in whole or in part to an Indemnifiable
Event or in defense of any issue or matter in such Proceeding, Indemnitee shall
be indemnified against all Expenses incurred in connection with that Proceeding.
(e) Partial Indemnification. The Indemnitee also shall be entitled to
indemnification by Bancorp for a portion of Expenses of Indemnitee is not
entitled to full indemnification under any applicable law.
(f) Prohibited Indemnification. No indemnification under this Agreement
shall be paid by Bancorp on account of any Proceeding (i) in which judgment is
rendered against Indemnitee for an accounting of profits made from the purchase
or sale by Indemnitee or securities of Bancorp under the
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provisions of section 16(b) of the Exchange Act, or similar provisions of any
federal, state or local laws, or (ii) if Bancorp is expressly prohibited from
making payments under this Agreement pursuant to any applicable federal or state
statutes, or any rules or regulations adopted by the FDIC or any other federal
or state governmental agency which as the power to regulate Bancorp's business.
Section 3. REVIEWING PARTY
Before any Change in Control, the Reviewing Party shall be any appropriate
person or body consisting of a member or members of the Board or any other
person or body appointed by the Board who is not a party to the Proceeding for
which Indemnitee is seeking indemnification; after a Change in Control, the
Reviewing Party shall be the Independent Counsel. On all matters arising after a
Change in Control (other than a Change in Control approved by a majority of the
directors of the Board who were directors immediately before such a Change in
Control) concerning the rights of Indemnitee to indemnity payments and Expense
Advances under this Agreement, any other agreement, applicable law, or Bancorp's
articles of incorporation or bylaws now or hereafter in effect relating to
indemnification for Indemnifiable Events, Bancorp shall seek legal advice only
from Independent Counsel selected by Indemnitee and approved by Bancorp (which
approval shall not be unreasonably withheld), and who has not otherwise
performed services for Bancorp or the Indemnitee (other than in connection with
indemnification matters) within the previous five years. The Independent Counsel
shall not include any person who, under the applicable standards of professional
conduct then prevailing, would have a conflict of interest in representing
either Bancorp or Indemnitee in an action to determine Indemnitee's rights under
this Agreement. Such counsel, among other things, shall render a written opinion
to Bancorp and Indemnitee on whether and to what extent the Indemnitee should be
permitted to be indemnified under applicable law. Bancorp agrees to pay the
reasonable fees of the Independent Counsel and to indemnify fully such counsel
against any and all Expenses, including attorneys' fees, claims, liabilities,
loss, and damages arising out of or relating to this Agreement or the engagement
of Independent Counsel under this Agreement.
Section 4. INDEMNIFICATION PROCESS AND APPEAL
(a) INDEMNIFICATION PAYMENT. Indemnitee shall receive indemnification of
Expenses from Bancorp in accordance with this Agreement as soon as practicable
after Indemnitee has made written demand on Bancorp for indemnification, unless
the Reviewing Party has given a written opinion to Bancorp that Indemnitee is
not entitled to indemnification under this Agreement or applicable law.
(b) SUIT TO ENFORCE RIGHTS. Regardless of any action by the Reviewing
Party, if Indemnitee has not received full indemnification within 30 days after
making a demand in accordance with section 4(a), Indemnitee shall have the right
to enforce its indemnification rights under this Agreement by commencing
litigation in any court in the State of California seeking an initial
determination by the court or challenging any determination by the Reviewing
Party or any aspect thereof. Bancorp hereby consents to service of process and
to appear in any such Proceeding. Any determination by the Reviewing Party not
challenged by the Indemnitee shall be binding on Bancorp and Indemnitee. The
remedy provided for in this section 4 shall be in addition to any other remedies
available to Indemnitee in law or equity.
(c) DEFENSE TO INDEMNIFICATION, BURDEN OF PROOF AND PRESUMPTIONS. It
shall be a defense to any action brought by Indemnitee against Bancorp to
enforce this Agreement (other than an action brought to enforce a claim for
Expenses incurred in defending a Proceeding in advance of its final disposition)
that it is not permissible, under this Agreement or applicable law, for Bancorp
to indemnify Indemnitee for the amount claimed. In connection with any such
action or any determination by the Reviewing Party or otherwise on whether
Indemnitee is entitled to be indemnified under this Agreement, the burden of
proving such a defense or determination shall be on Bancorp. Neither the
failure of the Reviewing Party or Bancorp (including its Board, independent
legal counsel, or its shareholders) to have made a determination before the
commencement of such action by Indemnitee that indemnification is proper under
the circumstances because the Indemnitee has met the standard of conduct set
forth in this Agreement or under applicable law, as the case may be, nor an
actual
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determination by the Reviewing Party or Bank (including its Board, independent
legal counsel, or its shareholders) that the Indemnitee has not 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.
For purposes of this Agreement, the termination of any claim, action, suite, or
proceeding, by judgment, order settlement (whether with or without court
approval), conviction, or on a plea of nolo contendere, or its equivalent, shall
not create a presumption that Indemnitee did not meet any particular standard of
conduct or have any particular belief or that a court has determined that
indemnification is not permitted by applicable law.
Section 5. INDEMNIFICATION FOR EXPENSES INCURRED IN ENFORCING RIGHTS.
Bancorp shall indemnify Indemnitee against any and all Expenses incurred by
the Indemnitee in enforcing his or her rights under this Agreement. If
requested by Indemnitee, Bancorp shall, within ten business days of such
request, advance to Indemnitee such Expenses as are incurred by Indemnitee in
connection with any claim asserted against or action brought by Indemnitee for:
(a) Indemnification of Indemnitee by Bancorp under this Agreement, or
any other agreement, or under applicable law, or Bancorp's articles of
incorporation or bylaws now or hereafter in effect relating to
indemnification for Indemnifiable Events, and/or
(b) recovery under directors' and officers' liability insurance
policies maintained by Bancorp, for amounts paid in settlement if the
Independent Counsel has approved the settlement.
Bancorp shall not settle any Proceeding in any manner that would impose any
penalty or limitation on Indemnitee without Indemnitee's written consent.
Neither Bancorp nor the Indemnitee will unreasonably withhold its consent to any
proposed settlement. Bancorp shall not be liable to indemnify the Indemnitee
under this Agreement with regard to any judicial award if Bancorp was not given
a reasonable and timely opportunity, at its expense, to participate in the
defense of such action; however, Bancorp's liability under this Agreement shall
not be excused if participation in the Proceeding by Bancorp was barred by this
Agreement.
Section 6. ESTABLISHMENT OF TRUST
In the event of a Change in Control or a Potential Change in Control,
Bancorp shall, on written request by Indemnitee, create a trust for the benefit
of the Indemnitee ("the Trust") and from time to time on written request of
Indemnitee shall fund the 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, participating in, and/or
defending any Proceeding relating to an Indemnifiable Event. The amount or
amounts to be deposited in the Trust under the foregoing funding obligation
shall be determined by the Reviewing Party. The terms of the Trust shall
provide that on a Change in Control:
(a) The Trust shall not be revoked or the principal invaded without
the written consent of the Indemnitee.
(b) The Trustee shall advance, within ten business days of a request
by Indemnitee, all Expenses to the Indemnitee (provided that the Indemnitee
hereby agrees to reimburse the Trust under the same circumstances for which
the Indemnitee would be required to reimburse Bancorp under section 2(c) of
this Agreement).
(c) The Trust shall continue to be funded by Bancorp in accordance
with the funding obligation set forth in this section 6.
(d) The Trustee shall promptly pay to the Indemnitee all amounts for
which the Indemnitee shall be entitled to indemnification under this
Agreement or otherwise.
(e) All unexpended funds in the Trust shall revert to Bancorp on a
final determination by the Reviewing Party or a court of competent
jurisdiction that the Indemnitee has been fully indemnified under the terms
of this Agreement.
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The Trustee shall be chosen by the Indemnitee subject to the approval of the
Reviewing Party. Nothing in this section 6 shall relieve Bancorp of any of its
obligations under this Agreement. All income earned on the assets held in the
Trust shall be reported as income by Bancorp for federal, state, local and
foreign tax purposes. Bancorp shall pay all costs of establishing and
maintaining the Trust and shall indemnify the Trustee against any and all
Expenses, including attorneys' fees, claims, liabilities, loss, and damages
arising out of or relating to this Agreement or the establishment and
maintenance of the Trust.
Section 7. NOTIFICATION AND DEFENSE OF CLAIM
Promptly after receipt by Indemnitee of notice of the commencement of any
Proceeding against Indemnitee for which Indemnitee will seek indemnification
under this Agreement, Indemnitee will notify Bancorp of the commencement
thereof; but the omission to so notify Bancorp will not relieve it from any
liability which it may have to Indemnitee otherwise than under this Agreement.
With respect to any Proceeding as to which Indemnitee so notifies Bancorp:
(a) Bancorp will be entitled to participate in the Proceeding at its
own expense.
(b) Except as otherwise provided below, to the extent that it may
wish, Bancorp jointly with any other indemnifying party similarly notified,
will be entitled, provided it is advancing to Indemnitee all of the costs
and expenses required under this Agreement, to assume the defense of the
Proceeding with counsel satisfactory to Indemnitee. After notice from
Bancorp to Indemnitee of its election to assume the defense of the
Proceeding, Bancorp will not be liable to Indemnitee under this Agreement
for any legal or other expenses subsequently incurred by Indemnitee in
connection such defense other than reasonable costs of investigation or as
otherwise provided below. Indemnitee shall have the right to employ his or
her counsel in such Proceeding, but the fees and expenses of such counsel
incurred after notice from Bancorp of its assumption of such defense shall
be at the expense of Indemnitee unless (i) the employment of counsel by
Indemnitee has been authorized by Bancorp, (ii) Indemnitee shall have
reasonably concluded that there may be a conflict of interest between
Bancorp and Indemnitee in the conduct of the defense of the proceeding or
(iii) Bancorp shall not, in fact, have employed counsel to assume the
defense of the Proceeding, in each of which cases the fees and expenses of
counsel shall be at the expense of Bancorp. Bancorp shall not be entitled
to assume the defense of any Proceeding brought by or on behalf of Bancorp
or as to which Indemnitee shall have made the conclusion provided for in
(ii) above.
(c) Bancorp shall not be liable to indemnify Indemnitee under this
Agreement for any amounts paid in settlement of any Proceeding without
Bancorp's written consent. Bancorp shall not settle any action or claim in
any manner which would impose any obligation or limitation on Indemnitee
without Indemnitee's written consent. Neither Bancorp nor Indemnitee will
unreasonably withhold its/his/her consent to any proposed settlement.
Section 8. NONEXCLUSIVITY
The rights of Indemnitee under this Agreement shall be in addition to any
other rights Indemnitee may have under Bancorp's articles of incorporation,
bylaws, applicable law, or otherwise. To the extent that a change in applicable
law (whether by statute or judicial decision) permits greater indemnification by
agreement than would be afforded currently under Bancorp's articles of
incorporation, bylaws, applicable law, or this Agreement, it is the intent of
the parties that Indemnitee enjoy by this Agreement the greater benefits
afforded by such change.
Section 9. LIABILITY INSURANCE
To the extent Bancorp maintains an insurance policy or policies providing
directors' and officers' liability insurance, Indemnitee shall be covered by
such policy or policies, in accordance with its or their terms, to the maximum
extent of the coverage available for any Bank director or officer.
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Section 10. PERIOD OF LIMITATIONS
No legal action shall be brought, and no cause of action shall be asserted,
by or on behalf of Bancorp or any affiliate of Bancorp against Indemnitee,
Indemnitee's spouse, heirs, executors, or personal or legal representatives,
after the expiration of two years from the date of accrual of such cause of
action, or such longer period as may be required by state law under the
circumstances. Any claim or cause of action of Bancorp or its affiliate shall
be extinguished and deemed released unless asserted by the timely filing of a
legal action within such period; provided, that if any shorter period of
limitations is otherwise applicable to any such cause of action, this shorter
period shall govern.
Section 11. AMENDMENT OF THIS AGREEMENT
No supplement, modification, or amendment of this Agreement shall be
binding unless executed in writing by both of the parties to it. No waiver of
any of the provisions of this Agreement shall operate was a waiver of any other
provisions of this Agreement (whether or not similar), nor shall such waiver
constitute a continuing waiver. Except as specifically provided in this
Agreement, no failure to exercise or delay in exercising any right or remedy
under it shall constitute a waiver of the right or remedy.
Section 12. SUBROGATION
In the event of payment under this Agreement, Bancorp shall be subordinated
to the extent that payment to all of the rights or recovery of Indemnitee, who
shall execute all papers required and shall do everything that may be necessary
to secure such rights, including the execution of any documents necessary to
enable Bancorp effectively to bring suit to enforce such rights.
Section 13. NO DUPLICATION OF PAYMENTS
Bancorp shall not be liable under this Agreement to make any payment in
connection with any claim made against Indemnitee to the extent Indemnitee has
otherwise received payment (under any insurance policy, bylaw, or otherwise) of
the amounts otherwise indemnifiable under this Agreement.
Section 14. BINDING EFFECT
This Agreement shall be binding on and inure to the benefit of and be
enforceable by the parties to it and their respective successors (including any
direct or indirect successor by purchase, merger, consolidation, or otherwise to
all or substantially all of Bancorp's business or assets or both), assigns,
spouses, heirs, and personal and legal representatives. Bancorp shall require
and cause any successor (whether direct or indirect, by purchase, merger,
consolidation, or otherwise) to all, substantially all, or a substantial part,
of Bancorp's business or assets or both, by written agreement in form and
substance satisfactory to Indemnitee, expressly to assume and agree to perform
this Agreement in the same manner and to the same extent that Bancorp would be
required to perform if no such succession had taken place. The indemnification
provided under this Agreement shall continue for Indemnitee for any action taken
or not taken while serving in an indemnified capacity pertaining to an
Indemnifiable Event even though Indemnitee may have ceased to serve in such
capacity at the time of any proceeding.
Section 15. SEVERABILITY
If any portion of this Agreement shall be held by a court of competent
jurisdiction to be invalid, void, or otherwise unenforceable, the remaining
provisions shall remain enforceable to the fullest extent permitted by law.
Furthermore, to the fullest extent possible, the provisions of this Agreement
(including, without limitation, each portion of this Agreement containing any
provision held to be invalid, void, or otherwise unenforceable, that is not
itself invalid, void or unenforceable) shall be construed so as to give effect
to the intent manifested by the provision held invalid, void, or unenforceable.
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SECTION 16. GOVERNING LAW
This Agreement shall be governed by and construed and enforced in
accordance with the laws of the State of California applicable to contracts made
and to be performed in such State without giving effect to the principles of
conflicts of laws.
SECTION 17. NOTICES
All notices, demands, and other communications required or permitted under
this Agreement shall be made in writing and shall be deemed to have been duly
given if delivered by hand against receipt, or mailed, first class postage
prepaid, certified or registered mail; return receipt requested and addressed to
Bancorp at:
000 Xxxxxx Xxxxxx
Xxxx Xxxx, Xxxxxxxxxx 00000-0000
Attn: Chairman of the Board
and to Indemnitee at:
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, California 9
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Notice of change of address shall be effective only when given in accordance
with this section. All notices complying with this section shall be deemed to
have been received on the date of delivery or on the third business day after
mailing.
IN WITNESS WHEREOF, the parties hereto have duly executed and delivered
this Agreement as of the day specified above.
GREATER BAY BANCORP INDEMNITEE
By:
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Its:
