INDEMNIFICATION AGREEMENT
This Indemnification Agreement ("Agreement") is made as of July 20,
1998 by North Valley Bank, a banking corporation organized and existing under
the laws of the State of California ("Bank"), and North Valley Bancorp, a
corporation organized and existing under the laws of the State of California
("NVB") (Bank and NVB being herein collectively referred to as the "Company"),
for the benefit of the Indemnitees (as defined below).
R E C I T A L S
In order to attract and retain highly qualified persons such as the
Indemnitees to serve as directors or officers of the Company, the Company has
determined that it is in the best interests of the Company and its shareholders
for the Company to contractually obligate itself to indemnify the Indemnitees
and to set forth the details of the indemnification process in this Agreement.
AGREEMENT
THEREFORE, in consideration of the premises and the mutual promises
herein contained, the Company and each Indemnitee hereby covenant and agree as
follows:
1. Definitions. As used in this Agreement:
a. The term "Company," as used herein, unless the content shall
otherwise require, shall be deemed to refer to the Company and any corporation,
partnership or other enterprise controlled by the Company or any corporation,
partnership or other enterprise as to which the Indemnitee is serving as a
director, officer, employee or agent at the request of the Company.
b. The term "Covered Matter" means any threatened, pending or
completed action, suit, arbitration or proceeding of any kind, wherever
brought, whether civil, criminal, administrative or investigative and whether
formal or informal (including actions by or in the right of the Company and any
preliminary inquiry or claim by any person or authority), by reason of or
associated with the fact that the Indemnitee is or was a director, officer,
partner, trustee, employee, consultant or agent of the Company, or is or was
serving at the Company's request, or for the convenience of or otherwise to
benefit or represent the interests of the Company or a subsidiary of the
Company, as a director, officer, employee or agent of another corporation,
limited liability company, partnership, joint venture, trust, employee benefit
plan or other enterprise, whether or not for profit, or by reason of anything
done or not done by the Indemnitee in any such capacity.
c. The term "Expenses" means all direct and indirect costs and
expenses (including, without limitation, attorneys' fees, disbursements and
retainers, accounting and witness fees, expert fees, other professional fees,
court costs, travel and deposition costs, expenses of investigations, judicial
or administrative proceedings and appeals, and any expenses of establishing a
right to indemnification, pursuant to this Agreement or otherwise, provided
that such right to indemnification is in fact established) incurred by the
Indemnitees in connection with a Covered Matter, [together with interest
thereon commencing 30 days after incurrence]. The term "Expenses" does not
include the amount ofjudgments, fines, penalties, settlement amounts paid by or
on behalf of the Indemnitee or excise taxes relating to employee benefit plans
actually levied against the Indemnitee.
d. The term "Indemnitee" shall mean any person who as of the date
hereof is or at any date hereafter shall be serving as a director or officer of
the Company.
e. The term "Indemnified Amounts" shall mean all Expenses,
liabilities, judgements (including punitive and exemplary damages), penalties,
fines (including excise taxes relating to employee benefit plans and civil
penalties) and amounts paid or to be paid in settlement which are incurred by
or imposed upon an Indemnitee in connection with a Covered Matter, including
all interest assessments on any of the foregoing.
f. The term "Change in Control" shall mean the occurrence of any of
the following:
(1) Both (A) any "person" (as defined below) is or becomes the
"beneficial owner" (as defined in Rule 13d-3 under the Securities
Exchange Act of 1934), directly or indirectly, of securities of
NVB representing at least 15% of the total voting power
represented by NVB's then outstanding voting securities; and (B)
the beneficial ownership by such person of securities
representing such percentage has not been approved by a majority
of the "continuing directors" (as defined below); or
(2) Any "person" (as defined below) is or becomes the "beneficial
owner" (as defined in Rule 13d-3 under the Securities Exchange
Act of 1934), directly or indirectly, of securities of NVB
representing at least 50% of the total voting power represented
by NVB's then outstanding voting securities; or
(3) A change in the composition of the Board of Directors of
NVB occurs, as a result of which fewer than two-thirds of the
incumbent directors are directors who either (A) had been
directors of NVB on the "look-back date" (as defined below) (the
"Original Directors") or (B) were elected, or nominated for
election, to the Board of Directors of NVB with the affirmative
votes of at least a majority in the aggregate of the Original
Directors who were still in office at the time of the election
or nomination and directors whose election or nomination was
previously so approved (the "continuing directors"); or
(4) The shareholders of NVB approve a merger or consolidation
of NVB with any other corporation, if such merger or
consolidation would result in the voting securities of NVB
outstanding immediately prior thereto representing (either by
remaining outstanding or by being converted into voting
securities of the surviving entity) 50% or less of the total
voting power represented by the voting securities of NVB or such
surviving entity outstanding immediately after such merger or
consolidation; or
(5) The shareholders of NVB approve (A) a plan of complete
liquidation of NVB or (B) an agreement for the sale or
disposition by NVB of all or substantially all of NVB's assets.
For purposes of Subsection (1) above, the term "person" shall
have the same meaning as when used in Sections 13(d) and 14(d) of
the Securities Exchange Act of 1934, but shall exclude (x) a
trustee or other fiduciary holding securities under an employee
benefit plan of the Company or of a parent or subsidiary of the
Company or (y) a corporation owned directly or indirectly by
the shareholders of the Company in substantially the same
proportions as their ownership of the common stock of the
Company.
For purposes of Subsection (3) above, the term "look-back date"
shall mean the later of (x) the date of this Agreement or (y)
the date 24 months prior to the date of the event that may
constitute a "Change in Control."
The term "Change in Control" shall not include (1) a transaction,
if undertaken at the election of the Company, the result of which
is to sell all or substantially all of the assets of the Company
to another corporation (the "surviving corporation"); provided
that the surviving corporation is owned directly or indirectly
by the shareholders of the Company immediately following such
transaction in substantially the same proportions as their
ownership of the Company's common stock immediately preceding
such transaction; and provided, further, that the surviving
corporation expressly assumes this Agreement; or (2) an
acquisition of voting and other rights on outstanding shares by a
voting trustee who is approved (and the agreement under which he
acts is approved) by the continuing directors, but not any
subsequent Change of Control effected by the voting trustee or
otherwise.
2. Basis for Indemnification. This Agreement is extended by the Company to
each Indemnitee in consideration of his or her agreement to serve as a director
or officer of the Company. The Indemnitee, if a director of the Company, will
continue to serve as a member of the Board of Directors of the Company so long
as the director is duly elected and qualified to so serve and until the
director resigns or is removed from the Company's Board of Directors. The
Indemnitee, if an officer of the Company, will continue to serve as an
officer of the Company so long as the officer is duly appointed and qualified
to so serve and until the officer resigns or is removed from office. No
provision hereof shall be deemed to create any right to continued service as a
director or officer of the Company on the part of any Indemnitee.
3. Indemnification.
a. The Company shall indemnify and hold harmless each Indemnitee to
the fullest extent permitted under applicable law (including, without
limitation, Section 28(k) of the Federal Deposit Insurance Act and Part 359 of
the Rules and Regulations of the Federal Deposit Insurance Commission
(collectively, the "FDIC Rules")) if the Indemnitee was or is a party to any
Covered Matter. Such indemnification will cover all Indemnified Amounts.
b. The Indemnitee will be so indemnified for all Indemnified Amounts
and the Company will defend the Indemnitee against claims (including threatened
claims and investigations) which are Covered Matters, including claims brought
by or on behalf of the Company, except if it is finally determined by the court
of last resort (or by a lower court if not timely appealed) that the payment is
prohibited by applicable law.
c. If the Indemnitee is entitled under this Agreement to indemn-
ification for less than all of the amounts incurred by the Indemnitee in
connection with a Covered Matter, the Company will indemnify the Indemnitee for
the indemnifiable amount.
4. Presumption Regarding Standards of Conduct; Determination of Right to
Indemnification. The Indemnitee shall be conclusively presumed to have met any
required standard of conduct established by applicable law, if any, for
indemnification pursuant to this Agreement, unless a determination is made in a
written opinion by independent counsel to the Company that applicable law
(including the FDIC Rules) permits indemnification in a Covered Matter only
as authorized in the specific case upon a determination that indemnification
is proper in the circumstances because the Indemnitee has met the required
standard of conduct. In such event:
a. The Company will immediately give the Indemnitee notice, with a
copy of counsel's opinion, that an evaluation and determination will be made
under this Section 4.
b. Such evaluation and determination will be made, as promptly as
possible and in good faith, by a majority vote of the members of the Company's
Board of Directors who are not parties or threatened to be made parties to the
Covered Matter in question or, if so requested by the Indemnitee, in a written
opinion by independent counsel to the Company (who shall not be the same as the
counsel referred to above) or by a court of competent jurisdiction, or by such
other procedure as the Company and the Indemnitee agree.
c. The Indemnitee will be entitled to present information, and to be
represented by counsel, in connection with such evaluation and determination.
d. The Indemnitee will be presumed to have met the required standard
of conduct unless it is conclusively demonstrated to the determining firm or
body that the Indemnitee has not met the required standard of conduct. If the
Indemnitee is successful (which includes a settlement without admission of
liability) on the merits or otherwise or in the defense of any claim, issue or
matter therein, he or she shall be conclusively presumed to have met the
required standard of conduct.
e. The cost of any evaluation and determination under this Section 4
(including attorneys' fees and other expenses incurred by the Indemnitee) will
be borne by the Company.
f. If the requested indemnification falls within the scope of the FDIC
Rules, the FDIC Rules will also be observed.
The termination of any Covered Matter by judgment, order, settlement,
arbitration award or conviction, or upon a plea of nolo contendere or its
equivalent, shall not affect this presumption or, except as determined by a
judgment or other final adjudication adverse to the Indemnitee, establish a
presumption with regard to any factual matter relevant to determining the
Indemnitee's rights to indemnification hereunder.
5. Indemnification Procedure.
a. The Indemnitee will give the Company written notice of any claim
for indemnification under this Agreement. The omission to so notify the
Company will not affect the Indemnitee's rights hereunder. Payment requests
will include a schedule setting forth in reasonable detail the amount requested
and will be accompanied (or, if necessary, followed) by copies of the relevant
invoices or other documentation. The Company will pay Indemnified Amounts
directly without requiring the Indemnitee to make any prior payment.
b. The Indemnitee will be presumed to be entitled to indemnification
under this Agreement and will receive such indemnification, subject to Section
4 above, irrespective of whether the Covered Matter involves allegations of
gross negligence or intentional misconduct, alleged violations of Section 10(b)
of the Securities Exchange Act of 1934 (including Rule 10b-5 thereunder),
alleged breach of the Indemnitee's fiduciary duties (including duties of
loyalty or care) or any other claim.
c. Determination of Indemnitee's entitlement to indemnification shall
be made not later than thirty (30) days after the Company's receipt of his or
her written request for such indemnification, provided that any request for
indemnification for Indemnified Amounts, other than amounts paid in settlement,
shall have been made after a determination thereof in a Covered Matter. If the
person or persons so empowered to make a determination pursuant to Section 4
hereof shall have failed to make the requested determination within ninety (90)
days after any judgment, order, settlement, dismissal, arbitration award,
conviction, acceptance of a plea of nolo contendere or its equivalent, or other
disposition or partial disposition of any Covered Matter or any other event
which could enable the Company to determine Indemnitee's entitlement to
indemnification, the requisite determination that Indemnitee is entitled to
indemnification shall be deemed to have been made.
6. Advance of Expenses.
a. Subject to Sections 6(b) and (c), and notwithstanding Section 4,
before final adjudication of a Covered Matter, upon the Indemnitee's request
pursuant to Section 5 above, the Company will promptly advance Expenses
directly; provided, however, if the Indemnitee has already paid any Expenses,
the Company will promptly reimburse the Indemnitee for all such Expenses.
b. If, in the opinion of counsel to the Company, the FDIC Rules permit
advancement of Expenses with respect to a federal banking agency proceeding or
action only as authorized upon a determination that the Indemnitee has met a
standard of conduct established by the FDIC Rules, the determination will be
made in accordance with Section 4 above (except the Board of Directors shall
make the determination if required by the FDIC Rules).
[(c) Letter of Credit. In order to secure the obligations of the
Company to indemnify and advance Expenses to the Indemnitee pursuant to this
Agreement, the Company shall obtain at the time of any Change in Control an
irrevocable standby letter of credit naming Indemnitee as the sole beneficiary
(the "Letter of Credit"). The Letter of Credit shall be in an appropriate
amount not less than one million dollars ($1,000,000), shall be issued by a
commercial bank headquartered in the United States having assets in excess
of $10 billion and capital according to its most recent published reports
equal to or greater than the then applicable minimum capital standards
promulgated by such bank's primary federal regulator and shall contain terms
and conditions reasonably acceptable to the Indemnitee. The Letter of Credit
shall provide that the Indemnitee may from time to time draw certain amounts
thereunder, upon written certification by the Indemnitee to the issuer of the
Letter of Credit that (i) the Indemnitee has made written request upon the
Company for an amount not less than the amount he or she is drawing under the
Letter of Credit and that the Company has failed or refused to provide him or
her with such amount in full within thirty (30) days after receipt of the
request, and (ii) the Indemnitee believes that he or she is entitled under
the terms of this Agreement to the amount which he or she is drawing upon
under the Letter of Credit. The issuance of the Letter of Credit shall not
in any way diminish the Company's obligation to indemnify the Indemnitee
against Expenses and Indemnified Amounts to the full extent required by this
Agreement.
d. Term of Letter of Credit. Once the Company has obtained the
Letter of Credit, the Company shall maintain and renew the Letter of Credit
or a substitute letter of credit meeting the criteria of Section 6(c) during
the term of this Agreement so that the Letter of Credit shall have an initial
term of five years, be renewed for successive five-year terms, and always
have at least one year of its term remaining.]
e. The Indemnitee will repay any Expenses that are advanced under
this Section 6 if so required by the FDIC Rules or if it is ultimately
determined, in a final, nonappealable judgment rendered by the court of last
resort (or by a lower court if not timely appealed) that the Indemnitee is
not entitled to be indemnified against such Expenses and repayment is required.
7. Defense of Claim.
a. With respect to any Covered Matter for which indemnification is
requested, the Company, jointly with any other indemnifying party, will be
entitled to assume the defense thereof; provided, however, the Company shall
not be entitled to assume such defense if there has been a Change in Control or
the Indemnitee is entitled herein to employ the Indemnitee's own counsel, in
which case both parties shall be entitled to participate in the defense.
b. Counsel selected by the Company to defend any Covered Matter will
be subject to the Indemnitee's advance written approval.
c. Neither the Company nor the Indemnitee will settle any Covered
Matter without the other's written consent, which will not be unreasonably
withheld.
d. If the Indemnitee is required to testify (in court proceedings,
depositions, informal interviews or otherwise), consult with counsel, furnish
documents or take any other reasonable action in connection with a Covered
Matter, the Company will reimburse the Indemnitee's reasonable expenses in
connection therewith and also pay the Indemnitee reasonable compensation for
time spent by the Indemnitee for which the Indemnitee is otherwise not
compensated by the Company.
e. After notice from the Company to the Indemnitee of its election to
assume the defense of a Covered Matter, the Company will not be liable to the
Indemnitee under this Agreement for any Expenses subsequently incurred by the
Indemnitee in connection with the defense thereof, other than as provided
below. Except as provided in subsection (c) above, the Company may, in its
sole discretion, decide and determine whether any claim, liability, suit or
judgment made or brought against any Indemnitee shall or shall not be paid,
compromised, resisted, defended, tried or appealed, and the Company's decision
thereon, if made in good faith, shall be final and binding.
f. The Indemnitee shall have the right to employ his or her own
counsel in any Covered Matter and will be fully reimbursed therefor if (i) the
employment of counsel by the Indemnitee has been approved in writing by the
Company, or (ii) either (A) the Indemnitee shall have reasonably concluded that
there may be a conflict of interest between the Company and the Indemnitee or
between the Indemnitee and other parties represented by counsel employed by the
Company to represent the Indemnitee in such action, or (B) the Company shall
not in fact have employed counsel reasonably satisfactory to the Indemnitee to
assume the defense of such Covered Matter promptly after the Indemnitee's
request.
8. Disputes; Enforcement.
a. If there is a dispute relating to the validity or enforceability of
this Agreement or a denial of indemnification, advance of Expenses or payment
of any other amounts due under this Agreement or the Company's Articles of
Incorporation or Bylaws, the Company will provide such indemnification, advance
of Expenses or other payment until a final, nonappealable judgment that the
Indemnitee is not entitled to such indemnification, advance of Expenses or
other payment has been rendered by the court of last resort (or by a lower
court if not timely appealed). The Indemnitee will repay such amounts if such
final, nonappealable judgment so requires.
b. In the event that (i) a determination pursuant to Section 4 hereof
is made that Indemnitee is not entitled to indemnification, (ii) advances of
Expenses are not made pursuant to this Agreement, (iii) payment has not been
timely made following a determination of entitlement to indemnification
pursuant to this Agreement, or (iv) the Indemnitee otherwise seeks enforcement
of this Agreement, the Indemnitee shall be entitled to a final adjudication in
an appropriate judicial proceeding in the State of California of the remedy
sought. Alternatively, unless (A) the determination was made by a panel of
arbitrators pursuant to Section 4(b) hereof, or (B) court approval is required
by law for the indemnification sought by the Indemnitee, the Indemnitee at his
or her option may seek an award in arbitration to be conducted by a single
arbitrator pursuant to the commercial arbitration rules of the American
Arbitration Association now in effect, which award is to be made within ninety
(90) days following the filing of the demand for arbitration. The Company
shall not oppose the Indemnitee's right to seek any such adjudication or
arbitration award. In any such proceeding or arbitration the Indemnitee shall
be presumed to be entitled to indemnification and advancement of Expenses under
this Agreement and the Company shall have the burden of proof to overcome that
presumption.
c. In the event that a determination that the Indemnitee is not
entitled to indemnification, in whole or in part, has been made pursuant to
Section 4 hereof, the decision in the judicial proceeding provided in paragraph
(a) of this Section 8 shall be made de novo and the Indemnitee shall not be
prejudiced by reason of a determination that he or she is not entitled to
indemnification. If a determination that the Indemnitee is entitled to
indemnification has been made pursuant to Section 4 hereof, or is deemed to
have been made pursuant to Section 4 hereof or otherwise pursuant to the terms
of this Agreement, the Company shall be bound by such determination in the
absence of a misrepresentation of a material fact by the Indemnitee in
connection with such determination. The Company shall be precluded from
asserting that the procedures and presumptions of this Agreement are not valid,
binding and enforceable. The Company shall stipulate in any such court that
the Company is bound by all the provisions of this Agreement and is
precluded from making any assertion to the contrary.
d. The Company will reimburse all of the Indemnitee's reasonable
expenses (including attorneys' fees) in pursuing an action to enforce the
Indemnitee's rights under this Agreement unless a final, nonappealable
judgment against the Indemnitee has been rendered in such action by the court
of last resort (or by a lower court if not timely appealed), or unless the FDIC
Rules otherwise require to the same effect as set forth in Section 6(e). At
the Indemnitee's request, such expenses will be advanced by the Company to the
Indemnitee as incurred before final resolution of such action by the court of
last resort; such expenses will be repaid by the Indemnitee if a final,
nonappealable judgment in the Company's favor is rendered in such action by the
court of last resort (or by a lower court if not timely appealed) to the
same effect as set forth in Section 6(e).
9. Limitations on Indemnification; Limitations of Actions.
a. Notwithstanding the provisions hereof, the Company shall not be
obligated pursuant to the terms of this Agreement:
i. To indemnify or advance funds to the Indemnitee with respect to
proceedings or claims initiated or brought voluntarily by the
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 California law (provided
that such right to indemnification is in fact established), but
such indemnification or advancement of expenses may be provided
by the Company in specific cases if the Board of Directors has
approved the initiation or bringing of such suit;
ii.To indemnify the Indemnitee for any expenses or liabilities of
any type whatsoever (including, but not limited to, judgments,
fines, ERISA excise taxes or penalties and amounts in
settlement) which have been paid directly to the Indemnitee
by an insurance carrier under D&O Insurance maintained
by the Company;
iii. To indemnify the Indemnitee for any expenses incurred by the
Indemnitee with respect to any proceeding instituted by the
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;
iv. If such payments shall be prohibited by the Articles of
Incorporation or Bylaws of the Company or by the General
Corporation Law of the State of California, subject, however,
to Section 20 hereof;
v. To make any indemnification payment contrary to the FDIC Rules;
or
vi. To indemnify the Indemnitee for expenses or liabilities incurred
by the Indemnitee under Section 16 of the Securities Exchange
Act of 1934.
b. No action will be brought by or on behalf of the Company against
the Indemnitee or the Indemnitee's heirs or personal representatives relating
to the Indemnitee's service as a director or officer of the Company, after the
expiration of one year from the date the Indemnitee ceases (for any reason) to
serve as a director or officer of the Company, and any claim or cause of action
of the Company will be extinguished and deemed released unless asserted by the
filing of a legal action before the expiration of such period.
10. Maintenance of Liability Insurance.
a. The Company hereby covenants and agrees that, as long as each
Indemnitee continues to serve as a director or officer of the Company and
thereafter as long as the Indemnitee may be subject to any possible Covered
Matter, the Company subject to subsection (c) below, shall maintain in full
force and effect directors' and officers' liability insurance ("D&O Insurance")
from established and reputable insurers in amounts not less than, and with
coverages comparable to, those in effect as of the date of this Agreement[, or
such greater amount as is equal to at least 25% of the aggregate market
competitive value of the Company].
b. In all D&O Insurance policies, 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 the most favorably insured of the Company's directors
and officers.
c. Notwithstanding the foregoing, the Company will not be required to
obtain or maintain D&O Insurance if the Board of Directors of the Company
determines, after diligent inquiry, that (i) such insurance is not available,
(ii) the premium costs for such insurance are disproportionate to the amount of
coverage and the premiums paid by other corporations similarly situated, or
(iii) the coverage provided by such insurance is so limited by exclusions that
it provides an insufficient benefit. The Board of Directors of the Company
will, from time to time, in good faith review any decision not to maintain D&O
Insurance and will purchase such insurance at any time that the conditions of
this Section 10(c) cease to apply.
d. The parties will cooperate to obtain advances of Expenses,
indemnification payments and consents from D&O Insurance carriers in any
Covered Matter to the full extent of applicable D&O Insurance. The existence
of D&O Insurance coverage will not diminish or limit the Company's obligation
to make indemnification payments to the Indemnitee. Amounts paid directly to
the Indemnitee with respect to a Covered Matter by the Company's D&O Insurance
carriers will be credited to the amounts payable by the Company to the
Indemnitee under this Agreement.
e. Payments under any D&O Insurance policies shall be subject to the
FDIC Rules.
11. Indemnification Hereunder Not Exclusive. The indemnification provided to
the Indemnitee under this Agreement shall not be deemed exclusive of, and will
be in addition to, any other indemnification provided to any Indemnitee by any
law, Board resolution, provision of the Articles of Incorporation or Bylaws,
agreement, vote of shareholders or disinterested directors, or otherwise;
provided that this Agreement shall be deemed to supersede the Agreement of NVB
executed in November of 1985 relating to indemnity for officers and directors
of [Bank]. If applicable laws, rules or regulations are amended after the date
of this Agreement to permit indemnification of a type or to an extent beyond or
greater than that provided by this Agreement, the Indemnitee shall be entitled
to indemnification hereunder of such further types or to such further extent as
is then permitted; provided, however, that no such amendment shall in any way
restrict or limit the rights of the Indemnitee hereunder and the term
"applicable law" shall refer only to the same as amended to the extent such
amendment permits the Company to provide such further or greater
indemnification.
12. Subrogation. Upon payment of any Indemnified Amount under this Agreement,
the Company will be subrogated to the extent of such payment to all of the
Indemnitee's rights of recovery therefor and the Indemnitee will take all
reasonable actions requested by the Company (at no cost or penalty to the
Indemnitee) to secure the Company's rights under this Section 12, including
executing documents.
13. Continuation of Indemnity. All of the Company's obligations under this
Agreement will continue as long as the Indemnitee is subject to any actual or
possible Covered Matter, notwithstanding the Indemnitee's termination of
service as a director or officer, and in any event for at least five (5) years
subsequent to the date when the Indemnitee ceases to be a director or
officer of the Company.
14. Successors and Assigns. This Agreement shall be binding upon, and shall
inure to the benefit of the parties hereto and their respective heirs, legal
representatives and assigns. The obligations of the Bank and NVB hereunder
shall be joint and several. No provision of this Agreement shall be applicable
in respect of any acts, omissions or transactions of any person while serving
as a director, officer, employee or agent of any corporation which shall have
been or shall hereafter be merged into or otherwise combined with the Company,
or of another enterprise in respect of which such person was serving as a
director, officer, employee or agent at the request of any such other
corporation, or of any enterprise controlling, controlled by or under common
control with any such other corporation, unless specifically approved by a
majority vote of the Board of Directors of the Company and by a separate
instrument executed by the Bank and NVB. The Company will require any
successor (whether direct or indirect, by purchase, merger, consolidation or
otherwise) to all or substantially all of the business or assets of the Company
to assume all of the Company's obligations under this Agreement. Such
assumption will not release the Company from its obligations under this
Agreement.
15. Severability. Each and every paragraph, sentence, term and provision of
this Agreement will be deemed severable, such that if any paragraph, sentence,
term or provision hereof shall be held to be illegal, void, invalid or
unenforceable under applicable law, such provision may be modified to the
extent reasonably necessary to make the provision, as so modified, legal,
valid and binding. If any provision of this Agreement is held illegal, void
or invalid in its entirety, the remaining provisions of the Agreement will not
in any way be affected or impaired but will remain binding in accordance with
their terms.
16. Savings Clause. If this Agreement or any paragraph, sentence, term or
provision hereof is invalidated on any ground by any court of competent
jurisdiction, the Company shall nevertheless indemnify the Indemnitee as to any
Expenses, judgments, fines, penalties or ERISA excise taxes incurred with
respect to any Covered Matter to the full extent permitted by any applicable
paragraph, sentence, term or provision of this Agreement that has not been
invalidated or by any other applicable provision of California law.
17. Notices. All notices given under this Agreement will be in writing and
delivered either personally, by registered or certified mail (return receipt
requested, postage prepaid), by recognized overnight courier or by telecopy (if
promptly followed by a copy delivered personally, by registered or certified
mail or overnight courier), as follows:
If to the Indemnitee: Name/Address
If to the Company: North Valley Bancorp
880 E. Cypress Avenue
Redding, California 96002
Attn: Chief Executive Officer
If to the Bank: North Valley Bank
880 E. Cypress Avenue
Redding, California 96002
Attn: President
or to such other address as any party furnishes to the others in writing.
18. Counterparts. This Agreement may be signed in counterparts, each of which
shall be deemed to be an original instrument, but all of which together shall
constitute one and the same instrument.
19. Governing Law. This Agreement shall be governed by and interpreted in
accordance with the laws of the State of California.
20. Amendments. No amendment, waiver, modification, termination or
cancellation of this Agreement shall be effective as to any Indemnitee unless
consented thereto in writing by the Indemnitee. The indemnification rights
afforded to the Indemnitee hereby shall be presumed to have been relied upon by
the Indemnitee in serving or continuing to serve as a director or officer
and shall be enforceable as contract rights. Neither the Company's
Articles of Incorporation nor its Bylaws will be changed to increase liability
of directors or officers or to limit the Indemnitee's indemnification. The
Indemnitee's rights or the Company's obligations under this Agreement shall not
be diminished, eliminated or otherwise affected by any repeal or modification
of the Company's Articles of Incorporation or Bylaws or any repeal or
modification of the relevant provisions of any applicable law, rules or
regulations, or by other agreements, including D&O Insurance policies.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date indicated above.
NORTH VALLEY BANK
By ________________________
Its ________________________
NORTH VALLEY BANCORP
By ________________________
Its ________________________
[INDEMNITEE]
By ________________________