Exhibit 10.41
Plumas Bancorp
Indemnification Agreement
This Indemnification Agreement (“Agreement”) is made and entered into as of the
                     day of                     , 2002, by and between Plumas
Bancorp, a California corporation (“Bancorp”), and
                                        , (the “Indemnitee”), a director (and/or
officer) of Bancorp.
RECITALS
A. Bancorp and the Indemnitee recognize that statutes, regulations, court
opinions and Bancorp’s Articles of Incorporation and Bylaws are indefinite in
providing Bancorp’s directors and officers with adequate protection from
liabilities to which they may become personally exposed as a result of
performing their duties in good faith for Bancorp;
B. Bancorp and the Indemnitee are aware of the large number of lawsuits filed
against corporate directors and officers;
C. Bancorp and the Indemnitee recognize that the cost of defending against such
lawsuits may be beyond the financial resources of most directors and officers of
Bancorp;
D. Bancorp and the Indemnitee recognize that the potential risks and liabilities
of being a director and/or officer pose a significant deterrent and increased
reluctance on the part of experienced and capable individuals to serve as a
director and/or officer of Bancorp;
E. Bancorp has investigated the availability and sufficiency of liability
insurance for its directors and officers with adequate protection against
potential liabilities and has determined that such insurance provides inadequate
protection to its directors and officers, and, thus, it would be in the best
interests of Bancorp and its shareholders to contract with the Indemnitee, to
indemnify him/her to the fullest extent permitted by law against personal
liability for actions taken in the good faith performance of his/her duties to
Bancorp;
F. Section 317 of the California Corporations Code (“Section 317”) sets forth
certain provisions relating to the mandatory and permissive indemnification of
directors and officers (among others) of a California corporation by such
corporation;
G. As inducement and encouragement for experienced and capable persons such as
the Indemnitee to continue to serve as a director and/or officer of Bancorp, the
Board of Directors of Bancorp has determined, after due consideration and
investigation, that this Agreement is a reasonable and prudent means to promote
and ensure the best interests of Bancorp and its shareholders; and
H. Bancorp desires to have the Indemnitee continue to serve as a director or
officer of Bancorp free from undue concern for unpredictable, inappropriate or
unreasonable legal risks and personal liabilities by reason of his/her acting in
good faith in the performance of his/her duty to Bancorp; and the Indemnitee
desires to continue to serve as a director or officer of Bancorp; provided, and
on the express condition, that the Indemnitee is furnished with the indemnity
set forth hereinafter.

 

 

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AGREEMENT
NOW, THEREFORE, in consideration of the mutual covenants and agreements set
forth below and based on the premises set forth above, Bancorp and the
Indemnitee do hereby agree as follows:
1. Agreement to Serve. The Indemnitee will serve or continue to serve as a
director or officer of Bancorp to the best of his/her abilities at the will of
Bancorp for so long as the Indemnitee is duly elected or appointed or until such
time as the Indemnitee tenders his/her resignation in writing.
2. Definitions. As used in this Agreement:
(a) The term “Proceeding” shall include any threatened, pending or completed
action, suit or proceeding, whether brought in the right of Bancorp or otherwise
and whether of a civil, criminal, administrative or investigative nature,
including, but not limited to, actions, suits or proceedings brought under
and/or predicated upon the Securities Act of 1933, as amended, and/or the
Securities Exchange Act of 1934, as amended, and/or their respective state
counterparts, and/or any rule or regulation promulgated thereunder, in which the
Indemnitee may be or may have been involved as a party or otherwise, by reason
of the fact that the Indemnitee is or was a director or officer of Bancorp, by
reason of any action taken by him/her or of any inaction on his/her part while
acting as such director or officer or by reason of the fact that he/she is or
was serving at the request of Bancorp as a director, officer, employee or agent
of another corporation, partnership, joint venture, trust or other enterprise,
whether or not he/she is serving in such capacity at the time any liability or
expense is incurred for which indemnification or reimbursement can be provided
under this Agreement.
(b) The term “Expenses” includes, without limitation thereto, expenses of
investigations, of judicial or administrative proceedings or appeals, attorneys’
fees and disbursements and any expenses of establishing a right to
indemnification under Paragraph 7 of this Agreement, but shall not include the
amount of judgments, settlements, fines or penalties actually levied against the
Indemnitee.
3. Indemnity in Third Party Proceedings. Bancorp shall indemnify the Indemnitee
in accordance with the provisions of this section if the Indemnitee is a party
to or threatened to be made a party to or otherwise involved in any Proceeding
(other than a Proceeding by or in the right of Bancorp to procure a judgment in
its favor), by reason of the fact that the Indemnitee is or was a director,
officer, employee or agent of Bancorp or is or was serving at the request of
Bancorp as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, against all Expenses,
judgments, fines, settlements and other amounts actually and reasonably incurred
by the Indemnitee in connection with such Proceeding, provided it is determined
pursuant to Paragraph 7 of this Agreement or by the court before which such
action was brought or by the shareholders of Bancorp in the manner prescribed by
Section 317, that the Indemnitee acted in good faith and in a manner which
he/she reasonably believed to be in the best interests of Bancorp and, in the
case of a criminal proceeding, in addition, had no reasonable cause to believe
that his/her conduct was unlawful. The termination of any such Proceeding by
judgment, order of court, settlement, conviction, or upon a plea of nolo
contendere, or its equivalent, shall not, of itself, create a presumption that
the Indemnitee did not act in good faith and in a manner which he/she reasonably
believed to be in the best interests of Bancorp, and with respect to any
criminal proceeding, that such person had reasonable cause to believe that
his/her conduct was unlawful.

 

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4. Indemnity in Proceedings by or in the Right of Bancorp. Bancorp shall
indemnify the Indemnitee in accordance with the provisions of this section if
the Indemnitee is a party to or threatened to be made a party to or otherwise
involved in any Proceeding by or in the right of Bancorp to procure a judgment
in its favor by reason of the fact that the Indemnitee is or was a director,
officer, employee or agent of Bancorp or is or was serving at the request of
Bancorp as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise against all Expenses
actually and reasonably incurred by the Indemnitee in connection with the
defense or settlement of such Proceeding, provided it is determined pursuant to
Paragraph 7 of this Agreement or by the court before which such action was
brought or by the shareholders of Bancorp in the manner prescribed by
Section 317, that the Indemnitee acted in good faith and in a manner which
he/she believed to be in the best interests of Bancorp and its shareholders.
Notwithstanding the foregoing, no indemnification shall be made under this
Paragraph 4:
(a) in respect of any claim, issue or matter as to which the Indemnitee shall
have been adjudged to be liable to Bancorp, unless and only to the extent that
the court in which such Proceeding is or was pending shall determine upon
application that, in view of all the circumstances of the case, the Indemnitee
is fairly and reasonably entitled to indemnity for such Expenses as such court
shall determine;
(b) of amounts paid in settling or otherwise disposing of a pending action
without court approval;
(c) of Expenses incurred in defending a pending action which is settled or
otherwise disposed of without court approval; or
(d) in respect of any act, omission or transaction set forth in
Section 204(a)(10)(A)(i)-(vii) of the California Corporations Code.
5. Indemnification of Expenses of Successful Party. Notwithstanding any other
provision of this Agreement, to the extent that the Indemnitee has been
successful on the merits in defense of any Proceeding or in defense of any
claim, issue or matter therein, the Indemnitee shall be indemnified against all
Expenses actually and reasonably incurred in connection therewith.
6. Advances of Expenses. The Expenses incurred by the Indemnitee pursuant to
Paragraphs 3 and 4 in defending any Proceeding shall be paid by Bancorp in
advance of the final disposition of such Proceeding at the written request of
the Indemnitee, if the Indemnitee shall provide an undertaking in the form
attached hereto as Exhibit “A” to Bancorp to repay such amount unless it is
ultimately determined that the Indemnitee is entitled to the payment of
Expenses. The written request to Bancorp shall include a description of the
nature of the Proceeding and be accompanied by copies of any documents filed
with a court relating to the Proceeding.
Notwithstanding the foregoing or any other provision of this Agreement, no
advance shall be made by Bancorp if a determination is reasonably and promptly
made by the Board of Directors by a majority vote of a quorum of disinterested
directors, or (if such a quorum is not obtainable or, even if obtainable, a
quorum of disinterested directors so directs) by independent legal counsel,
that, based upon the facts known to the Board of Directors or counsel at the
time such determination is made, (a) the Indemnitee acted in bad faith or
deliberately breached his/her duty to Bancorp or its shareholders, and (b) as a
result of such actions by the Indemnitee, it is more likely than not that it
will ultimately be determined that the Indemnitee is not entitled to
indemnification under the terms of this Agreement.

 

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7. Rights of the Indemnitee to Indemnification Upon Application; Procedure Upon
Application. To the extent a quorum of the Board of Directors of Bancorp
consisting of directors who were or are not parties to a Proceeding is
obtainable, the Board of Directors shall determine within 45 days after receipt
of the written request of the Indemnitee for indemnification whether the
Indemnitee has met the relevant standards for indemnification set forth in
Paragraphs 3 and 4 and, if it determines that such standards have been met, it
shall provide indemnification to the Indemnitee.
Notwithstanding the foregoing, the Indemnitee may request independent counsel or
may bring suit in the court in which such Proceeding is or was pending to
determine whether the Indemnitee is entitled to indemnification as provided by
this Agreement. The Indemnitee’s expenses incurred in connection with
successfully establishing his/her right to indemnification, in whole or in part,
shall also be indemnified by Bancorp.
8. Partial Indemnification. If the Indemnitee is entitled under any provision of
this Agreement to indemnification by Bancorp for some or a portion of the
Expenses, judgments, fines, settlements or other amounts actually and reasonably
incurred by him/her in the investigation, defense, appeal or settlement of any
Proceeding but not, however, for the total amount thereof, Bancorp shall
nevertheless indemnify the Indemnitee for the portion of such Expenses,
judgments, fines, settlements or other amounts to which the Indemnitee is
entitled.
9. Directors’ and Officers’ Liability Insurance. The obtaining of directors’ and
officers’ liability insurance (“D&O Coverage”) at the expense of and by Bancorp
shall in no way limit or diminish the obligation of Bancorp to indemnify the
Indemnitee as provided in this Agreement; provided, however, that any amounts
actually recovered by the Indemnitee from the insurer providing D&O Coverage
shall be applied in reduction of amounts otherwise owing by Bancorp by reason of
its indemnification under this Agreement and if Bancorp pays any amounts to the
Indemnitee pursuant to this Agreement, Bancorp shall be subrogated to the
Indemnitee’s rights and claims against the insurer providing D&O Coverage and
the Indemnitee shall execute such documents as Bancorp shall deem necessary to
reflect such subrogation.
10. Settlement of Claims.
(a) If Bancorp has not obtained D&O Coverage, the Indemnitee shall not settle
any Proceeding for which he/she intends to seek indemnification hereunder
without first attempting to obtain the approval of Bancorp. If the Indemnitee
seeks such approval and such approval is not granted by Bancorp, the Indemnitee
shall be free to settle the Proceeding and pursue any procedures to establish
his/her right to indemnification as provided under this Agreement. If the
Indemnitee seeks such approval and such approval is not granted by Bancorp, but
Bancorp agrees to indemnify the Indemnitee, subject to Paragraph 4 herein,
against any Expenses, judgments, fines, settlements or other amounts actually
and reasonably incurred by the Indemnitee in connection with such Proceeding,
the Indemnitee shall not settle such Proceeding. If, however, under such
circumstances the Indemnitee does settle such Proceeding, the Indemnitee shall
forfeit his/her rights to indemnification under this Agreement.

 

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(b) If Bancorp has obtained D&O Coverage, the Indemnitee shall not settle any
Proceeding for which he/she intends to seek indemnification without first
attempting to obtain any approval required with respect to such settlement by
the insurance carrier of any applicable D&O Coverage. If the Indemnitee seeks
such approval and such approval is not granted by the insurance carrier of any
applicable D&O Coverage, the Indemnitee shall not settle such Proceeding without
then attempting to obtain the approval of Bancorp. In the event the Indemnitee
seeks such approval from Bancorp, Bancorp and the Indemnitee shall have the same
rights and obligations as set forth in Paragraph 10(a). If the Indemnitee seeks
such approval from Bancorp and such approval is granted, Bancorp shall be
subrogated to the Indemnitee’s rights and claims against the insurance carrier
of any applicable D&O Coverage and the Indemnitee shall execute such documents
as Bancorp shall deem necessary to effect such subrogation.
11. Mutual Acknowledgment. Both Bancorp and the Indemnitee acknowledge that in
certain instances, Federal law or applicable public policy may prohibit Bancorp
from indemnifying the Indemnitee under this Agreement or otherwise.
12. Successors and Assigns. This Agreement shall be binding upon Bancorp and its
successors and assigns and shall inure to the benefit of the Indemnitee and the
Indemnitee’s spouse, heirs, executors and administrators.
13. Savings Clause. If this Agreement or any portion thereof be invalidated on
any ground by any court of competent jurisdiction, then Bancorp shall
nevertheless indemnify the Indemnitee as to Expenses, judgments, fines,
settlements or other amounts with respect to any Proceeding to the fullest
extent permitted by any applicable portion of this Agreement that shall not have
been invalidated or by any other applicable law.
14. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of California.
15. Notices. The Indemnitee shall, as a condition precedent to his/her right to
be indemnified under this Agreement, give to Bancorp notice in writing as soon
as practicable of any claim made against him/her for which indemnification will
or could be sought under this Agreement. Notice to Bancorp shall be directed to
Plumas Bancorp, 35 S. Lindan Avenue, Quicny, California 95971, Attention:
President (or such other address as Bancorp shall designate in writing to the
Indemnitee).
16. Modification and Amendment. No amendment, modification, termination or
cancellation of this Agreement, except as permitted pursuant to Section 11
above, shall be effected unless in writing signed by both parties hereto.

 

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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date and
year set forth above.

                      Indemnitee     Plumas Bancorp
 
                   
By: 
        By:       
 
 
 
      Its:  
 
   
 
             
 
   

 

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EXHIBIT A
Plumas Bancorp
Undertaking

     
TO:
                                          , President
 
  Plumas Bancorp
 
  35 S. Lindan Avenue
 
  Quincy, California 95971

I,                     , a director or officer of Plumas Bancorp, a California
corporation, pursuant to Section 317(f) of the California Corporations Code and
the terms of my Indemnification Agreement with Plumas Bancorp agree to repay
Plumas Bancorp for all Expenses advanced on my behalf in defense of any
Proceeding or in defense of any claim, issue or matter therein, prior to the
disposition of such Proceeding, unless it shall be ultimately determined that I
am entitled to indemnification under Section 317 of the California Corporations
Code or Plumas Bancorp’s Articles of Incorporation, Bylaws or my Indemnification
Agreement.
Dated:                                         
Indemnitee
By                                         

 

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