INDEMNIFICATION AGREEMENT
This Agreement made this _____ day of June, 1988, between U. S. Bancorp,
an Oregon corporation ("Bancorp"), and ______________________________
("Director").
WHEREAS, Director is a member of the board of directors ("Board") of
Bancorp and in such capacity is performing a valuable service for Bancorp;
WHEREAS, the shareholders of Bancorp have adopted an amendment to Bancorp's
articles of incorporation providing for the indemnification of directors as
authorized by the Oregon Business Corporation Act ("Act");
WHEREAS, said amendment and Section 60.414 of the Act are by their terms
not exclusive and expressly recognize that agreements may be entered into
between a corporation and its directors with respect to indemnification;
WHEREAS, both Bancorp and Director recognize the increased risk of
litigation and other claims being asserted against directors of public
corporations; and
WHEREAS, Bancorp has determined that it is in the best interests of Bancorp
to enter into this Agreement in recognition of Director's need for substantial
protection against personal liability in order to assure Director's continued
service to Bancorp in an effective manner and to provide contractual assurance
that such protection will be available to Director notwithstanding any amendment
of the Act or Bancorp's articles of incorporation.
NOW, THEREFORE, in consideration of Director's continued service as a
member of the Board after the date of this Agreement, the parties hereto agree
as follows:
1. BASIC INDEMNITY. Subject to the exclusions in Section 6, Bancorp
hereby agrees to hold harmless and indemnify Director and the estate or personal
representative of Director to the full extent authorized or permitted by (i) the
Act or any other applicable law or Bancorp's articles of incorporation or bylaws
as in effect on the date hereof, or (ii) by any amendment thereof or other
statutory provisions authorizing or permitting such indemnification adopted
after the date hereof.
2. MAINTENANCE OF INSURANCE. Bancorp presently has in effect policies of
director and officer liability insurance ("D&O Insurance") in amounts
satisfactory to Director. Subject to Section 3, Bancorp agrees that, so long as
Director continues to serve as a director of Bancorp and thereafter so long as
Director is subject to any possible Claim (as hereinafter defined), it will
purchase and maintain in effect for the benefit of Director one or more valid,
binding and enforceable policies of D&O
Insurance providing coverage at least comparable to the coverage provided by the
existing policies.
3. SELF INSURANCE. Notwithstanding Section 2, Bancorp shall not be
required to maintain in effect policies of D&O Insurance if such insurance is
not reasonably available or if, in the reasonable business judgment of the then
members of the Board, either (i) the premium cost for such insurance is
substantially disproportionate to the amount of coverage or (ii) the coverage
provided by such insurance is so limited by exclusions, deductions or otherwise
that there is insufficient benefit to warrant the cost of maintaining such
insurance. In the event Bancorp does not maintain such insurance in effect,
Bancorp agrees to hold harmless and indemnify Director and the estate and
personal representative of Director to the full extent of the coverage provided
by the existing policies of D&O Insurance. Anything in this Agreement to the
contrary notwithstanding, to the extent and so long as Bancorp or any parent of
Bancorp shall choose to maintain in effect any policy or policies of D&O
Insurance while Director is subject to any possible Claim, Bancorp shall be
required to maintain in effect similar and equivalent policies for the benefit
of Director, whether more or less favorable to Director than the existing
policies of D&O Insurance.
4. ADDITIONAL INDEMNITY. Subject to the exclusions in Section 6 and
without limiting Bancorp's obligations under Section 1, Bancorp hereby agrees to
hold harmless and indemnify Director and the estate and personal representative
of Director against all Liability (as hereinafter defined) incurred in
connection with any Claim including, without limiting the generality of the
foregoing, a Claim by or in the right of Bancorp.
5. ADVANCEMENT OF EXPENSES. Bancorp shall, if requested by Director, pay
all costs and expenses (including attorneys' fees) incurred by Director in
investigating, defending or appealing any Claim in advance of the final
disposition of a Claim. If required by the Act or other applicable statute, any
such request shall be accompanied by a written affirmation of Director's good
faith belief that Director has met the standard of conduct described in Section
60.391 of the Act. Bancorp shall pay any statement for such costs and expenses
within 20 days after receipt of the statement. Director agrees to repay Bancorp
for all costs and expenses paid by Bancorp pursuant to this Section 5 in the
event and only to the extent that it is ultimately determined that Director is
not entitled to be indemnified by Bancorp for such costs and expenses.
6. EXCLUSIONS. No indemnity pursuant to Sections 1 or 4 shall be paid by
Bancorp:
6.1. If a final decision by a court having jurisdiction in the matter
shall determine that such indemnification is not lawful.
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6.2. On account of acts or omissions by Director which are finally
adjudged to have been not in good faith or to have involved intentional
misconduct or a knowing violation of law.
6.3. On account of any Liability arising under Section 16(b) of the
Securities Exchange Act of 1934 and amendments thereto or any similar
provision of federal or state statutory law.
7. NOTIFICATION AND DEFENSE OF CLAIMS. Promptly after receipt by Director
of notice of the commencement of any action, suit or proceeding, Director will,
if a claim in respect thereof is to be made under this Agreement, notify Bancorp
of the commencement thereof; but the omission so to notify Bancorp will not
relieve it from its obligations to Director under this Agreement unless Bancorp
shall be prejudiced by reason of such omission. With respect to any such
action, suit or proceeding as to which Director notifies Bancorp of the
commencement thereof:
7.1. Bancorp shall be entitled to participate therein at its own
expense.
7.2. Except as otherwise provided below, Bancorp jointly with any
other indemnifying party similarly notified will be entitled to assume the
defense thereof, with counsel reasonably satisfactory to Director. After
notice from Bancorp to Director of its election to assume the defense
thereof, Bancorp will not be liable to Director under this Agreement for
any legal or other expenses subsequently incurred by Director in connection
with the defense thereof other than reasonable costs of investigation or as
otherwise provided below. Director shall have no right to employ counsel
in such action, suit or proceeding, but the fees and expenses of such
counsel incurred after notice from Bancorp of its assumption of the defense
thereof shall be at the expense of Director unless (i) the employment of
counsel by Director has been authorized by Bancorp, (ii) Director shall
have reasonably concluded that there may be a conflict of interest between
Bancorp and Director in the conduct of the defense of such action or (iii)
Bancorp shall not in fact have employed counsel reasonably satisfactory to
Director to assume the defense of such action, in each of which cases the
fees and expenses of counsel employed by Director shall be at the expense
of Bancorp. Bancorp shall not be entitled to assume the defense of any
action, suit or proceeding brought by or on behalf of Bancorp or as to
which Director shall have the right to employ counsel at Bancorp's expense
pursuant to clause (ii) or (iii) above.
7.3. Bancorp shall not be liable to indemnify Director under this
Agreement for any amounts paid in settlement of any Claim effected without
its written consent. Bancorp shall not settle any Claim in any manner
which would impose any penalty or limitation on Director without Director's
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written consent. Neither Bancorp nor Director will unreasonably withhold
their consent to any proposed settlement.
8. PARTIAL INDEMNITY; BURDEN OF PROOF. If Director is entitled under any
provision of this Agreement to indemnification by Bancorp for a portion of the
Liability incurred in connection with a Claim but not, however, for the total
amount thereof, Bancorp shall nevertheless indemnify Director for the portion
thereof to which Director is entitled. Moreover, notwithstanding any other
provision of this Agreement, to the extent that Director has been successful on
the merits or otherwise in defense of any Claim or in defense of any issue or
matter therein, including dismissal without prejudice, Director shall be
indemnified against all expenses incurred in connection therewith. In
connection with any determination by the Board or otherwise as to whether
Director is entitled to be indemnified under this Agreement, the burden of proof
shall be on Bancorp to establish that Director is not so entitled.
9. NO PRESUMPTION. For purposes of this Agreement, the termination of any
Claim by judgment, order, settlement (whether with or without court approval) or
conviction, or upon a plea of nolo contendere, or its equivalent, shall not
create a presumption that Director 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.
10. NONEXCLUSIVITY, ETC. The rights of Director hereunder shall be in
addition to any other rights Director may have under the articles of
incorporation or bylaws of Bancorp, the Act or otherwise.
11. 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 Director or the estate or personal representative of Director
after the expiration of two years from the date of accrual of such cause of
action, and 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 two-year period; provided, however, that if any shorter
period of limitations is otherwise applicable to any such cause of action, such
shorter period shall govern.
12. AMENDMENTS, ETC. No supplement, modification or amendment of this
Agreement shall be binding unless executed in writing by both of the parties
hereto. No waiver of any of the provisions of this Agreement shall be deemed or
shall constitute a waiver of any other provisions hereof (whether or not
similar), nor shall such waiver constitute a continuing waiver.
13. SUBROGATION. In the event of payment under this Agreement, Bancorp
shall be subrogated to the extent of such payment to all of the rights of
recovery of
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Director, who shall execute all papers required and shall do everything that may
be necessary to secure such rights, including the execution of such documents
necessary to enable Bancorp effectively to bring suit to enforce such rights.
14. NO DUPLICATION OF PAYMENTS. Bancorp shall not be liable under this
Agreement to make any payment in connection with any Claim to the extent
Director has otherwise actually received payment (under any insurance policy or
otherwise) of the amounts otherwise indemnifiable hereunder.
15. CONTINUATION OF AGREEMENT. All agreements and obligations of Bancorp
contained herein shall continue during the period Director is a director of
Bancorp and shall continue thereafter so long as Director is subject to any
possible Claim.
16. BINDING EFFECT, ETC. This Agreement shall be binding upon and inure
to the benefit of and be enforceable by the parties hereto, the assigns, estate
and personal representative of Director, and the successors and assigns of
Bancorp including any direct or indirect successor by purchase, merger,
consolidation or otherwise to all or a substantial part of the business and/or
assets of Bancorp. Bancorp shall require and cause any successor (whether
direct or indirect by purchase, merger, consolidation or otherwise) to all or a
substantial part of the business and/or assets of Bancorp, by written agreement
in form and substance satisfactory to Director, 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; provided,
however, that the failure of any successor to enter into any such written
agreement shall not prejudice any of the rights of Director hereunder or relieve
such successor of any of its obligations hereunder. This Agreement shall
continue in effect regardless of whether Director continues to serve as a
director of Bancorp.
17. ATTORNEYS' FEES. In the event Director is required to bring any
action to enforce rights or to collect moneys due under this Agreement and is
successful in such action, Bancorp shall reimburse Director for all of
Director's reasonable fees and expenses at trial and on appeal in bringing and
pursuing such action.
18. SEPARABILITY. The parties intend this Agreement to be enforced as
written; however (i) if any portion or provision of this Agreement shall to any
extent be declared illegal or unenforceable by a court having jurisdiction, then
the remainder of this Agreement or the application of such portion or provision
in circumstances other than those as to which it is so declared illegal or
unenforceable, shall not be affected thereby, and each portion and provision of
this Agreement shall be valid and be enforceable to the fullest extent permitted
by laws, and (ii) if any provision, or any part thereof, is held to be
unenforceable because of the scope of indemnification, Bancorp and Director
agree that the court making such
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determination shall have the power to reduce the scope of such provision, and in
its reduced form such provision shall then be enforceable and shall be enforced.
19. CERTAIN DEFINITIONS. For the purposes of this Agreement, the
following terms have the meanings indicated:
19.1. "Claim" means any threatened, pending or completed action, suit
or proceeding, whether civil, criminal, administrative or investigative and
whether formal or informal, arising out of or related to the fact that
Director is or was a director, officer, fiduciary, employee or agent of
Bancorp or is or was serving at Bancorp's request as a director, officer,
partner, fiduciary, employee or agent of another corporation, partnership,
joint venture, trust, employee benefit plan or other enterprises.
19.2. "Liability" means the obligation to pay a judgment, settlement,
penalty or fine, including any excise tax assessed with respect to any
employee benefit plan, or reasonable expenses (including attorneys' fees).
20. GOVERNING LAW. This Agreement shall be governed by and construed and
enforced in accordance with the laws of the state of Oregon without giving
effect to the principles of conflicts of laws.
IN WITNESS WHEREOF, the parties hereto have duly executed and delivered
this Agreement as of the date first above written.
U. S. BANCORP
By
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Bancorp
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Director
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