Exhibit 10.1
INDEMNIFICATION AGREEMENT
     This INDEMNIFICATION AGREEMENT (this “Agreement”) is made as of this      
day of      , 20     , by and between Farmers National Banc Corp, an Ohio
corporation (the “Corporation”), and      , a director, officer, employee,
agent, or representative (as hereinafter defined) of the Corporation (the
“Indemnitee”).
     WHEREAS, the Corporation and the Indemnitee are each aware of the exposure
to litigation officers, directors, employees, agents, and representatives of the
Corporation have as they exercise their duties to the Corporation,
     WHEREAS, 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,
     WHEREAS, the Corporation desires to continue to benefit from the services
of highly qualified, experienced, and otherwise competent persons such as the
Indemnitee, and
     WHEREAS, 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 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 receipt and sufficiency of which are hereby
acknowledged, 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 for the
Indemnitee’s activities as a director, officer, employee, or agent of the
Corporation 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’ and experts’ fees, judgments, fines, and amounts paid or
payable in settlement) actually and reasonably incurred (“Expenses”) in 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 that 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)   indemnification provided by the Corporation’s Articles of Incorporation
(“Articles”) or Regulations, or the Articles of Incorporation or Bylaws or
Regulations of an affiliated entity of which the Indemnitee serves as a
representative, in each case as in effect on the date hereof,

 

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  (b)   indemnification provided by the Corporation’s Articles or Regulations,
or the Articles of Incorporation or Bylaws or Regulations of an affiliated
entity of which the Indemnitee serves as a representative, in each case as in
effect when Expenses are incurred by the Indemnitee,

  (c)   indemnification allowable under Ohio law in effect at the date hereof or
as amended to increase the scope of indemnification,

  (d)   indemnification allowable under the law of the jurisdiction under which
the Corporation exists when Expenses are incurred by the Indemnitee,

  (e)   indemnification available under any liability insurance obtained by the
Corporation in effect when a claim is made against Indemnitee,

  (f)   indemnification available under any liability insurance obtained by the
Corporation in effect when Expenses are incurred by the Indemnitee, and

  (g)   such other indemnification benefits as are or may be otherwise available
to Indemnitee.

     A combination of two or more of the indemnification 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
indemnification benefits listed in items (a) through (g) above is called the
“Applicable Document” in this Agreement. The Corporation hereby undertakes to
use its best efforts to assist Indemnitee in all proper and legal ways to obtain
the indemnification 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 that 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 the Indemnitee reasonably
believed to be in the best interests of the participants and beneficiaries of an
employee benefit plan, the Indemnitee 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

 

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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 the
Corporation 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 the Indemnitee’s service in such position.
The indemnification benefits provided to Indemnitee under this Agreement for the
Indemnitee’s service as a representative of an affiliated entity 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, bylaws 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 for which Indemnitee may assert a right to
indemnification hereunder; provided, however, that failure to provide 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 the Indemnitee’s 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 the Indemnitee’s
written consent. Neither Indemnitee nor the Corporation shall 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 or settle such Proceeding.

 

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     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 shall not be liable to Indemnitee under this Agreement for
Expenses subsequently incurred by Indemnitee in 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 is 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 reasonably concludes that there is 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 does not employ counsel promptly to assume the defense
of the 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 about 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 Mahoning
County, 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
the Indemnitee’s 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 Mahoning County, 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 been or is associated with a firm
having associated with it an attorney who has been retained by or performed
services for the Corporation or

 

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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. Regardless of 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 for —

  (a)   any claim or any part thereof for which Indemnitee is 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 out of acts or omissions for which
applicable law prohibits elimination of liability,

  (c)   any claim or any part thereof arising under section 16(b) of the
Securities Exchange Act of 1934 for which Indemnitee is obligated to pay any
penalty, fine, settlement, or judgment,

  (d)   any obligation of Indemnitee based upon or attributable to the
Indemnitee gaining in fact any improper personal benefit, gain, profit, or
advantage, or

  (e)   any proceeding initiated by Indemnitee without the consent or
authorization of the Corporation’s board of directors, provided that this
exclusion shall not apply to any claims brought by Indemnitee (x) to enforce the
Indemnitee’s rights under this Agreement or (y) in any Proceeding initiated by
another person or entity, regardless of whether the claims were brought by
Indemnitee against a person or entity who was otherwise a party to such
proceeding.

     Nothing in this section 9 shall eliminate or diminish the Corporation’s
obligations to advance that portion of Indemnitee’s Expenses representing
attorneys’ fees and other costs incurred in defending any proceeding under
section 3 of this Agreement.
     Furthermore, despite anything to the contrary in this Agreement, 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
if a merger, consolidation, or reorganization occurs in which the Corporation is
not the surviving entity, if there is a sale of all or substantially all of the
assets of the Corporation, or

 

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if there is a liquidation of the Corporation (each such event being 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 the 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
that are 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 or mailed, certified or registered mail, return receipt
requested, with postage prepaid, to the following addresses or to such other
address as either party may designate by like notice. If to the Corporation,
notice shall be given to the board of directors, Farmers National Banc Corp, 20
South Broad Street, Canfield, Ohio 44406, or to such other or additional person
or persons as the Corporation shall have designated to the Indemnitee in
writing. If to the Indemnitee, notice shall be given to the Indemnitee at the
address of the Indemnitee appearing on the Corporation’s records, or to such
other or additional person or persons as the Indemnitee shall have designated to
the Corporation in writing.
     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 the Corporation hereunder for
the Indemnitee’s activities before the effective date of termination.

 

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     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 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.

            FARMERS NATIONAL BANC CORP
      By:             Its:                       INDEMNITEE
                                  

 

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Exhibit 1
FORM OF UNDERTAKING
     This UNDERTAKING is entered into by       (“Indemnitee”) in accordance with
an Indemnification Agreement dated as of      , 20      (the “Indemnification
Agreement”), by and between Farmers National Banc Corp, an Ohio corporation (the
“Corporation”), and Indemnitee.
RECITALS:
     A. Under the Indemnification Agreement, the Corporation has agreed to pay
Expenses (within the meaning of the Indemnification Agreement) as and when
incurred by Indemnitee for 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 the Corporation,
     B. Such a claim has arisen against Indemnitee and Indemnitee has notified
the Corporation thereof in accordance with the terms of section 5 of the
Indemnification Agreement (hereinafter the “Proceeding”), and
     C. Indemnitee believes that Indemnitee should prevail in the Proceeding,
and it is in the interest of both Indemnitee and the Corporation to defend
against the claims against Indemnitee thereunder.
     NOW, THEREFORE, Indemnitee hereby agrees that in consideration of the
Corporation’s advance payment of Indemnitee’s Expenses incurred before final
disposition of the Proceeding, Indemnitee hereby undertakes to reimburse the
Corporation for any and all expenses paid by the 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 the
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 executed this undertaking this
      day of                     , 20     .

                                 Indemnitee