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EXHIBIT 99.1
INDEMNIFICATION AGREEMENT
This Indemnification Agreement made this ___ day of _________, 2001,
between Middlefield Banc Corp., an Ohio corporation (the "Corporation") and
________________________, a director, officer, employee, agent or representative
(as hereinafter defined) of the Corporation (the "Indemnitee").
RECITALS:
A. The Corporation and the Indemnitee are each aware of the exposure to
litigation of officers, directors, employees, agents and representatives of the
Corporation as such persons exercise their duties to the Corporation;
B. The Corporation and the Indemnitee are also aware of conditions in
the insurance industry that have affected and may continue to affect the
Corporation's ability to obtain appropriate liability insurance on an
economically acceptable basis;
C. The Corporation desires to continue to benefit from the services of
highly qualified, experienced and otherwise competent persons such as the
Indemnitee;
D. The Indemnitee desires to serve or to continue to serve the
Corporation as a director, officer, employee, or agent or as a director,
officer, employee, agent, or trustee of another corporation, joint venture,
trust or other enterprise in which the Corporation has a direct or indirect
ownership interest, for so long as the Corporation continues to provide, on an
acceptable basis, adequate and reliable indemnification against certain
liabilities and expenses that may be incurred by the Indemnitee.
NOW, THEREFORE, in consideration of the foregoing premises and the
mutual covenants herein contained, the parties hereto agree as follows:
1. INDEMNIFICATION. Subject to the exclusions contained in Section 9 of
this Agreement, the Corporation shall indemnify the Indemnitee with respect to
his activities as a director, officer, employee or agent of the Corporation
and/or as a person who is serving or has served at the request of the
Corporation ("representative") as a director, officer, employee, agent or
trustee of another corporation, joint venture trust or other enterprise,
domestic or foreign, in which the Corporation has a direct or indirect ownership
interest (an "affiliated entity") against expenses (including, without
limitation, attorneys' fees, judgments, fines and amounts paid in settlement)
actually and reasonably incurred by him ("Expenses") in connection with any
claim against Indemnitee that is the subject of any threatened, pending or
completed action, suit or other type of proceeding, whether civil, criminal,
administrative, investigative or otherwise and whether formal or informal (a
"Proceeding"), to which Indemnitee was, is or is threatened to be made a party
by reason of facts which include Indemnitee's being or having been such a
director, officer, employee, agent or representative, to the extent of the
highest and most advantageous to the Indemnitee, as determined by the
Indemnitee, of one or any combination of the following:
(a) The benefits provided by the Corporation's Second Amended and
Restated Articles of Incorporation ("Articles") or
Regulations, or the Articles of Incorporation/Association or
Code of Regulations/Bylaws of an affiliated entity of which
the Indemnitee serves as a representative, in each case as in
effect on the date hereof;
(b) The benefits provided by the Corporation's Articles or
Regulations, or the Articles of Incorporation/Association or
Code of Regulations/Bylaws of an affiliated entity of which
the Indemnitee serves as a representative, in each case as in
effect at the time Expenses are incurred by the Indemnitee;
(c) The benefits allowable under Ohio law in effect at the date
hereof;
(d) The benefits allowable under the law of the jurisdiction under
which the Corporation exists at the time Expenses are incurred
by the Indemnitee;
(e) The benefits available under any liability insurance obtained
by the Corporation in effect at the date hereof;
(f) The benefits available under any liability insurance obtained
by the Corporation in effect at the time Expenses are incurred
by the Indemnitee; and
(g) Such other benefits as are or may be otherwise available to
Indemnitee.
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Combination of two or more of the benefits provided by (a) through (g)
shall be available to the extent that the Applicable Document (as hereafter
defined) does not require that the benefits provided therein be exclusive of
other benefits. The document or law providing for the benefits listed in items
(a) through (g) above is called the "Applicable Document" in this Agreement.
Corporation hereby undertakes to use its best efforts to assist Indemnitee, in
all proper and legal ways, to obtain the benefits selected by Indemnitee under
item (a) through (g) above.
For purposes of this Agreement, references to "other enterprises" shall
include employee benefit plans for employees of the Corporation or of any
affiliated entity, without regard to ownership of such plans; references to
"fines" shall include any excise taxes assessed on the Indemnitee with respect
to any employee benefit plan; references to "serving at the request of the
Corporation" shall include any service as a director, officer, employee or agent
of the Corporation which imposes duties on, or involves services by, the
Indemnitee with respect to an employee benefit plan, its participants or
beneficiaries; references to the masculine shall include the feminine;
references to the singular shall include the plural and vice versa; and if the
Indemnitee acted in good faith and in a manner he reasonably believed to be in
the interest of the participants and beneficiaries of an employee benefit plan,
he shall be deemed to have acted in a manner consistent with the standards
required for indemnification by the Corporation under the Applicable Documents.
2. INSURANCE. The Corporation shall maintain liability insurance for so
long as Indemnitee's services are covered hereunder, provided and to the extent
that such insurance is available on a basis acceptable to the Corporation.
However, the Corporation agrees that the provisions hereof shall remain in
effect regardless of whether liability or other insurance coverage is at any
time obtained or retained by the Corporation; but payments made to Indemnitee
under an insurance policy obtained or retained by the Corporation shall reduce
the obligation of the Corporation to make payments hereunder by the amount of
the payments made under any such insurance policy.
3. PAYMENT OF EXPENSES. At Indemnitee's request, after receipt of
written notice under Section 5 hereof and an undertaking in the form of Exhibit
A attached hereto by or on behalf of Indemnitee to repay such amounts so paid on
Indemnitee's behalf if it shall ultimately be determined under the Applicable
Document that Indemnitee is not entitled to be indemnified by the Corporation
for such Expenses, the Corporation shall pay the Expenses as and when incurred
by Indemnitee. That portion of Expenses representing attorneys' fees and other
costs incurred in defending any proceeding shall be paid by the Corporation
within 30 days after the Corporation receives the request and reasonable
documentation evidencing the amount and nature of the Expenses, subject to its
also having received such a notice and undertaking.
4. ADDITIONAL RIGHTS. The indemnification provided in this Agreement
shall not be exclusive of any other indemnification or right to which Indemnitee
may be entitled and shall continue after Indemnitee has ceased to occupy a
position as an officer, director, employee, agent or representative as described
in Section 1 above with respect to Proceedings relating to or arising out of
Indemnitee's acts or omissions during his service in such position. The benefits
provided to Indemnitee under this Agreement for the Indemnitee's service as a
representative shall be payable if and only if and only to the extent that
reimbursement to Indemnitee by the affiliated entity with which Indemnitee has
served as a representative, whether pursuant to agreement, applicable law,
articles of incorporation or association, by-laws or regulations of the entity,
or insurance maintained by such affiliated entity, is insufficient to compensate
Indemnitee for Expenses actually incurred and otherwise payable by the
Corporation under this Agreement. Any payments in fact made to or on behalf of
the Indemnitee directly or indirectly by the affiliated entity with which
Indemnitee served as a representative shall reduce the obligation of the
Corporation hereunder.
5. NOTICE TO CORPORATION. Indemnitee shall provide to the Corporation
prompt written notice of any Proceeding brought, threatened, asserted or
commenced against Indemnitee with respect to which Indemnitee may assert a right
to indemnification hereunder; provided, however, that failure to provide such
notice shall not in any way limit Indemnitee's rights under this Agreement.
6. COOPERATION IN DEFENSE AND SETTLEMENT. Indemnitee shall not make any
admission or effect any settlement without the Corporation's written consent
unless Indemnitee shall have determined to undertake his own defense in such
matter and has waived the benefits of this Agreement. The Corporation shall not
settle any Proceeding to which Indemnitee is a party in a manner that would
impose any Expense on Indemnitee without his written consent. Neither Indemnitee
nor the Corporation will unreasonably withhold consent to the proposed
settlement. Indemnitee and the Corporation shall cooperate to the extent
reasonably possible with each other and with the Corporation's insurers in
attempts to defend and/or settle such Proceeding.
7. ASSUMPTION OF DEFENSE. Except as otherwise provided below, the
Corporation jointly with any other indemnifying party similarly notified may
assume Indemnitee's defense in any Proceeding, with counsel mutually
satisfactory to Indemnitee and the Corporation. After notice from the
Corporation to Indemnitee of the Corporation's election to assume such defense,
the Corporation will not be liable to Indemnitee under this
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Agreement for Expenses subsequently incurred by Indemnitee in connection with
the defense thereof, other than reasonable costs of investigation or as
otherwise provided below. Indemnitee shall have the right to employ counsel in
such Proceeding, but the fees and expenses of such counsel incurred after notice
from the Corporation of its assumption of the defense thereof shall be at
Indemnitee's expense unless:
(a) The employment of counsel by Indemnitee has been authorized by
the Corporation;
(b) Counsel employed by the Corporation initially is unacceptable
or later becomes unacceptable to Indemnitee and such
unacceptability is reasonable under then existing
circumstances;
(c) Indemnitee shall have reasonably concluded that there may be a
conflict of interest between Indemnitee and the Corporation
(or another party being represented jointly with the
Corporation) in the conduct of the defense of such Proceeding;
or
(d) The Corporation shall not have employed counsel promptly to
assume the defense of such Proceeding,
in each of which cases the fees and expenses of counsel shall be at the expense
of the Corporation and subject to payment pursuant to this Agreement. The
Corporation shall not be entitled to assume the defense of Indemnitee in any
Proceeding brought by or on behalf of the Corporation or as to which Indemnitee
shall have made either of the conclusions provided for in clauses (b) or (c)
above.
8. ENFORCEMENT. If a dispute or controversy arises under this Agreement
between Indemnitee and the Corporation with respect to whether the Indemnitee is
entitled to indemnification for any Proceeding or for Expenses incurred, then
for each such dispute or controversy the Indemnitee may seek to enforce the
Agreement through legal action or, at Indemnitee's sole option and written
request, through arbitration. If the Indemnitee requests arbitration, the
dispute or controversy shall be submitted by the parties to binding arbitration
in the Village of Middlefield, State of Ohio before a single arbitrator
agreeable to both parties; provided, however, that indemnification for any
claim, issue or matter in a Proceeding brought against Indemnitee by or in the
right of the Corporation and as to which Indemnitee is adjudged liable for
negligence or misconduct in the performance of his duty to the Corporation shall
be submitted to arbitration only to the extent permitted under the Applicable
Document and applicable law then in effect. If the parties cannot agree on a
designated arbitrator within 15 days after arbitration is requested in writing
by the Indemnitee, the arbitration shall proceed in the Village of Middlefield,
State of Ohio before an arbitrator appointed by the American Arbitration
Association. In either case, the arbitration proceeding shall commence promptly
under the rules then in effect of that Association. And the arbitrator agreed to
by the parties or appointed by that Association shall be an attorney other than
an attorney who has or is associated with a firm having associated with it an
attorney who has been retained by or performed services for the Corporation or
Indemnitee at any time during the five years preceding commencement of
arbitration. The award shall be rendered in such form that judgment may be
entered thereon in any court having jurisdiction thereof. The prevailing party
shall be entitled to prompt reimbursement of any costs and expenses (including,
without limitation, reasonable attorneys' fees) incurred in connection with such
legal action or arbitration; provided, however, that the Indemnitee shall not be
required to reimburse the Corporation unless the arbitrator or court resolving
the dispute determines that Indemnitee acted in bad faith in bringing the action
or arbitration.
9. EXCLUSIONS. Notwithstanding the scope of indemnification available
to Indemnitees from time to time under any Applicable Document, no
indemnification, reimbursement or payment shall be required of the Corporation
hereunder with respect to:
(a) Any claim or any part thereof as to which Indemnitee shall
have been determined by a court of competent jurisdiction,
from which no appeal is or can be taken, by clear and
convincing evidence, to have acted with deliberate intent to
cause injury to the Corporation or with reckless disregard for
the best interests of the Corporation;
(b) Any claim or any part thereof arising under Section 16(b) of
the Securities Exchange Act of 1934 pursuant to which
Indemnitee shall be obligated to pay any penalty, fine,
settlement or judgment;
(c) Any obligation of Indemnitee based upon or attributable to the
Indemnitee gaining in fact any personal gain, profit or
advantage to which he was not entitled; or
(d) Any proceeding initiated by Indemnitee without the consent or
authorization of the Board of Directors of the Corporation,
provided that this exclusion shall not apply with respect to
any claims brought by Indemnitee (1) to enforce his rights
under this Agreement or (2) in any Proceeding initiated by
another person or entity whether or not such claims were
brought by Indemnitee against a person or entity who was
otherwise a party to such proceeding.
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Nothing in this Section 9 shall eliminate or diminish Corporation's
obligations to advance that portion of Indemnitee's Expenses representing
attorneys' fees and other costs incurred in defending any proceeding pursuant to
Section 3 of this Agreement.
Furthermore, anything herein to the contrary notwithstanding, nothing
in this Agreement requires indemnification, reimbursement or payment by the
Corporation, and the Indemnitee shall not be entitled to demand indemnification,
reimbursement or payment under this Agreement, if and to the extent
indemnification, reimbursement or payment constitutes a "prohibited
indemnification payment" within the meaning of Federal Deposit Insurance
Corporation Rule 359.1(l)(1) [12 CFR 359.1(l)(1)].
10. EXTRAORDINARY TRANSACTIONS. The Corporation covenants and agrees
that in the event of any merger, consolidation or reorganization in which the
Corporation is not the surviving entity, any sale of all or substantially all of
the assets of the Corporation or any liquidation of the Corporation (each such
event is hereinafter referred to as an "extraordinary transaction"), the
Corporation shall:
(a) Have the obligations of the Corporation under this Agreement
expressly assumed by the survivor, purchaser or successor, as
the case may be, in such extraordinary transaction; or
(b) Otherwise adequately provide for the satisfaction of the
Corporation's obligations under this Agreement, in a manner
acceptable to Indemnitee.
11. NO PERSONAL LIABILITY. Indemnitee agrees that neither the directors
nor any officer, employee, representative or agent of the Corporation shall be
personally liable for the satisfaction of the Corporation's obligations under
this Agreement, and Indemnitee shall look solely to the assets of the
Corporation for satisfaction of any claims hereunder.
12. SEVERABILITY. If any provision, phrase or other portion of this
Agreement is determined by any court of competent jurisdiction to be invalid,
illegal or unenforceable, in whole or in part, and such determination becomes
final, such provision, phrase or other portion shall be deemed to be severed or
limited, but only to the extent required to render the remaining provisions and
portions of the Agreement enforceable, and the Agreement as thus amended shall
be enforced to give effect to the intention of the parties insofar as that is
possible.
13. SUBROGATION. If any payments are made under this Agreement, the
Corporation shall be subrogated to the extent thereof to all rights to
indemnification or reimbursement against any insurer or other entity or person
vested in the Indemnitee, who shall execute all instruments and take all other
actions as shall be reasonably necessary for the Corporation to enforce such
rights.
14. GOVERNING LAW. The parties hereto agree that this Agreement shall
be construed and enforced in accordance with and governed by the laws of the
State of Ohio.
15. NOTICES. All notices, requests, demands and other communications
hereunder shall be in writing and shall be considered to have been duly given if
delivered by hand and receipted for by the party to whom the notice, request,
demand or other communication shall have been directed, or mailed by certified
mail, return receipt requested, with postage prepaid;
If to the Corporation, to: Middlefield Banc Corp.
00000 Xxxx Xxxx Xxxxxx
Xxxxxxxxxxx, Xxxx 00000-0000
Attention:
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If to Indemnitee, to:
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or to such other or further address as shall be designated from time to time by
the Indemnitee or the Corporation to the other.
16. TERMINATION. This Agreement may be terminated by either party upon
not less than 60 days' prior written notice delivered to the other party, but
such termination shall not diminish the obligations of Corporation hereunder
with respect to Indemnitee's activities before the effective date of
termination.
17. AMENDMENTS AND BINDING EFFECT. This Agreement and the rights and
duties of Indemnitee and the Corporation hereunder may not be amended, modified
or terminated except by written instrument signed and
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delivered by the parties hereto. This Agreement is binding upon and shall inure
to the benefit of the parties hereto and their respective heirs, executors,
administrators, successors and assigns.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the date first above written.
MIDDLEFIELD BANC CORP.
By:
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Its:
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INDEMNITEE
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EXHIBIT A
FORM OF UNDERTAKING
THIS UNDERTAKING has been entered into by ("Indemnitee") pursuant to an
Indemnification Agreement dated , 20 (the "Indemnification Agreement"), between
Middlefield Banc Corp. (the "Corporation"), an Ohio corporation, and Indemnitee.
RECITALS:
A. Under the Indemnification Agreement, Corporation has agreed to pay
Expenses (within the meaning of the Indemnification Agreement) as and when
incurred by Indemnitee in connection with any claim against Indemnitee that is
the subject of any threatened, pending or completed action, suit or proceeding,
whether civil, criminal or investigative, to which Indemnitee was, is or is
threatened to be made a party by reason of facts that include Indemnitee's being
or having been a director, officer or representative (within the meaning of the
Indemnification Agreement) of Corporation;
B. Such a claim has arisen against Indemnitee and Indemnitee has
notified Corporation thereof in accordance with the terms of Section 5 of the
Indemnification Agreement (hereinafter the "Proceeding");
C. Indemnitee believes that Indemnitee should prevail in the
Proceeding, and it is in the interest of both Indemnitee and Corporation to
defend against the claims against Indemnitee thereunder;
NOW, THEREFORE, Indemnitee hereby agrees that in consideration of
Corporation's advance payment of Indemnitee's Expenses incurred before final
disposition of the Proceeding, Indemnitee hereby undertakes to reimburse
Corporation for any and all expenses paid by Corporation on behalf of Indemnitee
before final disposition of the Proceeding if the Indemnitee is determined under
the Applicable Document (within the meaning of the Indemnification Agreement) to
be required to repay such amounts to the Corporation under the Indemnification
Agreement and applicable law, provided that if Indemnitee is entitled under the
Applicable Document to indemnification for some or a portion of such Expenses,
Indemnitee's obligation to reimburse Corporation shall only be for those
Expenses for which Indemnitee is determined to be required to repay such amounts
to the Corporation. Such reimbursement or arrangements for reimbursement by
Indemnitee shall be consummated within 90 days after a determination that
Indemnitee is required to repay such amounts to the Corporation under the
Indemnification Agreement and applicable law.
Further, the Indemnitee agrees to reasonably cooperate with the
Corporation concerning such proceeding.
IN WITNESS WHEREOF, the undersigned has set his hand this ____ day of
___________, 2001.
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Indemnitee
