exhibit10_10.htm

This Indemnification Agreement (this “Agreement”) is made as of the Effective Date set forth above, between Michigan Commerce Bancorp Limited, a Michigan corporation (the “Company”), whose address is Capitol Bancorp Center, 222 Washington Square North, Suite One, Lansing, MI 48933, and [Insert Name] (the “Indemnitee”), whose address is [Insert Address].

The Company recognizes that in order to attract and retain highly competent persons to serve as members (the “Directors”) of the Board of Directors of the Company (the “Board”) and/or in other executive capacities with the Company, the Company must provide adequate and competitive protection against inordinate risks of claims and actions against them arising out of their service to and lawful activities on behalf of the Company.

The Articles of Incorporation (the “Articles of Incorporation”) and Bylaws of the Company (the “Bylaws”), and the Michigan Business Corporation Act (the “MBCA”), expressly provide that the indemnification provisions set forth therein are not exclusive and thereby contemplate that contracts may be entered into between the Company and members of the Board, officers and certain other persons with respect to indemnification.

Although the Articles of Incorporation and Bylaws currently require indemnification of the Indemnitee to the fullest extent permitted by law, any amendment to or revocation of such Articles of Incorporation or Bylaws could result in this protection becoming unavailable to the Indemnitee in the future.

It is reasonable, prudent and necessary for the Company contractually to obligate itself to indemnify, and to advance expenses on behalf of, Officers or Directors of the Company to the fullest extent permitted by applicable law so that they will serve or continue to serve the Company free from undue concern that they will not be so indemnified.

The Company wishes to provide the Indemnitee with specific contractual assurance that the protections currently provided by the Articles of Incorporation or Bylaws will remain available to the Indemnitee, regardless of any future changes in the Articles of Incorporation or Bylaws, or in the management and control of the Company. The Company therefore wishes to provide in this Agreement for the indemnification of

This Agreement is a supplement to and in furtherance of the Articles of Incorporation and Bylaws and any resolutions adopted pursuant to the Articles of Incorporation or Bylaws and will not be deemed a substitute therefore, nor to diminish or abrogate any other rights the Indemnitee may have by law or otherwise to indemnification.

(a) Any person, as that term is used in Section 13(d) and Section 14(d)(2) of the Exchange Act, becomes, is discovered to be, or files a report on Schedule 13D or 14D-1 (or any successor schedule, form or report) disclosing that such person is, a beneficial owner (as defined in Rule 13d-3 under the Exchange Act or any successor rule or regulation), directly or indirectly, of securities of the Company representing 20% or more of the total voting power of the Company’s then outstanding Voting Securities (unless such person becomes such a beneficial owner in connection with the initial public offering of the Company);

(b) Individuals who, as of the consummation date of the Company’s initial public offering, constitute the Board cease for any reason to constitute at least a majority of the Board, unless any such change is approved by a unanimous vote of the members of the Board in office immediately prior to such cessation;

(c) The Company, or any material subsidiary of the Company, is merged, consolidated or reorganized into or with an Acquiring Person or securities of the Company are exchanged for securities of an Acquiring Person, and immediately after such merger, consolidation, reorganization or exchange less than a majority of the combined voting power of then outstanding securities of the Acquiring Person immediately after such transaction are held, directly or indirectly, in the aggregate by the holders of Voting Securities immediately prior to such transaction;

(d) The Company, or any material subsidiary of the Company, in any transaction or series of related transactions, sells or otherwise transfers all or substantially all of its assets to an Acquiring Person, and less than a majority of the combined voting power of then outstanding securities of the Acquiring Person

(e) The Company and its subsidiaries, in any transaction or series of related transactions, sell or otherwise transfer business operations that generated 66.67% or more of the consolidated revenues (determined on the basis of the Company’s four most recently completed fiscal quarters) of the Company and its subsidiaries, on a consolidated basis, immediately prior to the closing of such transaction or the last of such series of related transactions;

(f) The Company files a report or proxy statement with the Securities and Exchange Commission pursuant to the Exchange Act disclosing that a Change in Control has occurred or may have occurred or will occur or may occur in the future pursuant to any then existing contract or transaction; or

Notwithstanding the provisions of Section 1.1 hereof, unless otherwise determined in a specific case by majority vote of the Board, a Change in Control will not be deemed to have occurred for purposes of this Agreement solely because (1) the Company, (2) an entity in which the Company directly or indirectly beneficially owns 50% or more of such entity’s voting securities, or (3) any Company-sponsored employee stock ownership plan, or any other employee benefit plan of the Company, either files or becomes obligated to file a report or a proxy statement under or in response to Schedule 13D, Schedule 14D-1, Form 8-K or Schedule 14A (or any successor schedule, form or report or item therein) under the Exchange Act, disclosing beneficial ownership by it of shares of stock of the Company, or because the Company reports that a Change in Control of the Company has or may have occurred or will or may occur in the future by reason of such beneficial ownership.

1.3 “Expenses” include attorneys’ fees and all other costs, fees, expenses and obligations of any nature whatsoever paid or incurred in connection with investigating, defending, being a witness in or participating in (including appeal), or preparing to defend, be a witness in or participate in any Claim relating to any Indemnifiable Event. Expenses also include all federal, state, local or foreign taxes payable by the Indemnitee as a result of the actual or deemed receipt of any payments of Expenses, judgments, fines, penalties and amounts paid under this Agreement.

1.4 “Indemnifiable Event” means any event or occurrence (whether before or after the date hereof) related to the fact that the Indemnitee is or was a Director, Officer, employee, consultant, agent or fiduciary of or to the Company, or is or was serving at the request of the Board as a Director, Officer, employee, trustee, agent or fiduciary of another corporation, partnership, joint venture, employee benefit plan, trust or other enterprise, or by reason of anything done or not done by the Indemnitee in any such capacity.

1.5 “Reviewing Party” means, if there has not been a Change in Control, (i) the Board (provided that a majority of Directors are not parties to the particular Claim for which the Indemnitee is seeking indemnification) or (ii) any other person or body appointed by the Board, who is not a party to the particular Claim for which the Indemnitee is seeking indemnification; or, if there has been a Change in Control other than a Change in Control approved by two thirds or more of the Board who were Directors prior to the Change in Control, the independent Special Counsel referred to in Sections 1.6 and 4 hereof.

1.6 “Special Counsel” means an independent attorney or law firm designated to advise the Company, after a Change in Control (other than a Change in control approved by two thirds or more of the Board who were Directors prior to the Change in Control), on all matters concerning the rights of the Indemnitee to indemnity payments and Expense Advances under this Agreement or any other agreement, the Bylaws or Articles of Incorporation now or hereafter in effect relating to Claims for Indemnifiable Events.

2.1 General. Subject to the terms of this Agreement, if the Indemnitee was, is or is threatened to be made a party to or witness or other participant in a Claim by reason of (or arising in part out of) an Indemnifiable Event, the Company will indemnify the Indemnitee to the fullest extent permitted by law as soon as practicable, but no later than 30 days after written demand is presented to the Company, against any and all Expenses, judgments, fines, penalties and amounts paid in settlement (including all interest, assessments and other charges paid or payable in connection therewith) of a Claim actually and reasonably incurred by or on behalf of the Indemnitee in connection with such Claim.

2.3 Non-Indemnifiable Claims. The indemnification obligations of the Company under Section 2.1 hereof will be subject to the condition that the Reviewing Party will not have determined that the Indemnitee would not be permitted to be indemnified under applicable law. However, if the Indemnitee has commenced legal proceedings in the a court in the State of Michigan (a “Michigan Court”) to secure a determination that the Indemnitee should be indemnified under applicable law, any determination made by the Reviewing Party that the Indemnitee would not be permitted to be indemnified under applicable law will not be binding and the Indemnitee will not be required to reimburse the Company for any Expense Advance (as defined in Section 3.2 hereof) or other advance by the Company until a final judicial determination is made with respect thereto (as to which all rights of appeal therefrom have been exhausted or lapsed).

2.5 Selection of Reviewing Party. If there has not been a Change in Control, or if there has been a Change in Control approved by two-thirds (rounded downward to the nearest whole number) or more of the Board who were Directors prior to the Change in Control, the Reviewing Party will be selected by the Board, and if there has been such a Change in Control, the Reviewing Party will be the independent Special Counsel referred to in Section 4 hereof.

2.6 Court Proceeding by the Indemnitee. If there has been no determination by the Reviewing Party or if the Reviewing Party determines that the Indemnitee substantively would not be permitted to be indemnified in whole or in part under applicable law, the Indemnitee will have the right to commence litigation in the Michigan Court seeking an initial determination by the court or challenging any such determination by the Reviewing Party or any aspect thereof and the Company hereby consents to service of process and to appear in any such proceeding. Absent a final

2.7 Partial Indemnity. If the Indemnitee is entitled under any provisions of this Agreement to indemnification by the Company of some or a portion of the Expenses, liabilities, judgments, fines, penalties and amounts paid in settlement of a Claim but not, however, for all of the total amount thereof, the Company will nevertheless indemnify the Indemnitee for the portion thereof to which the Indemnitee is entitled.

3.1 Reimbursement for Expenses. To the extent that the Indemnitee has been successful on the merits or otherwise in defense of any or all Claims relating in whole or in part to an Indemnifiable Event or in defense of any issue or matter therein, including dismissal without prejudice, the Indemnitee will be indemnified against all Expenses incurred in connection therewith.

3.3 Indemnification for Additional Expenses. The Company will indemnify the Indemnitee against any and all expenses (including attorneys’ fees) and, if requested by the Indemnitee in writing, will (within ten business days of such written request), subject to Section 3.4 hereof, advance these expenses to it, which are incurred by the Indemnitee in connection with any Claim asserted against or action brought by the Indemnitee for:

3.4 Undertaking by the Indemnitee. The obligation of the Company to make an Expense Advance pursuant to Section 3.2 hereof or to advance other expenses pursuant to Section 3.3 hereof will be subject to the condition that the Company receives an undertaking that, if, when and to the extent that the Reviewing Party or other appropriate authority determines that the Indemnitee would not be permitted to be so

indemnified under applicable law, the Company will be entitled to be reimbursed by the Indemnitee (who hereby agrees to reimburse the Company) for all such amounts theretofore paid. The Indemnitee’s obligation to reimburse the Company for Expense Advances will be unsecured and no interest will be charged thereon.

4.1 Special Counsel. If there is a Change in Control of the Company (other than a Change in Control which has been approved by two-thirds or more of the Board who were Directors immediately prior to such Change in Control) then, with respect to all matters thereafter arising concerning the rights of the Indemnitee to indemnity payments and Expense Advances under this Agreement or any other agreement, or under the Bylaws or Articles of Incorporation now or hereafter in effect relating to Claims for Indemnifiable Events, the Company will seek legal advice only from independent Special Counsel. Such counsel, among other things, will, within 90 days after its retention, render its written opinion to the Company and the Indemnitee as to whether and to what extent the Indemnitee would be permitted to be indemnified under applicable law.

4.2 Selection of Special Counsel. Special Counsel will be selected by the Indemnitee and approved by the Company (which approval will not be unreasonably withheld or delayed) among counsel who has not otherwise performed services for the Company within the last five years (other than in connection with such matters for which retained as provided in this Agreement) or for the Indemnitee.

4.3 Dispute Resolution for Selection of Special Counsel. If the Indemnitee and the Company are unable to agree on the selection of Special Counsel, the Special Counsel will be selected by lot from among at least five law firms with offices in the State of Michigan having more than fifty attorneys, having a rating of “av” or better in then-current Martindale Hubbell Law Directory and having attorneys which specialize in corporate law. The selection will be made in the presence of the Indemnitee (and the Indemnitee’s legal counsel or either of them, as the Indemnitee may elect).

4.4 Fees of Special Counsel. The Company will pay on a timely basis the reasonable fees of the Special Counsel and will fully indemnify Special Counsel against any and all expenses (including attorneys’ fees), claims, liabilities, and damages arising out of or relating to this Agreement or its engagement pursuant hereto.

5. No Presumption. For purposes of this Agreement, the termination of any action, suit or proceeding by judgment, order, settlement (whether with or without court approval) or conviction, or upon a plea of nolo contendere, or its equivalent, will not create a presumption that the Indemnitee did not meet any particular standard of conduct or have any particular belief.

6.1 Notification. Within 30 days after receipt by the Indemnitee of notice of the commencement of a Claim which may involve an Indemnifiable Event, the Indemnitee will, if a claim in respect thereof is to be made against the Company under this Agreement, submit to the Company a written notice identifying the proceeding. The Indemnitee’s omission to notify the Company within 30 days will not relieve it from any liability which it may have to the Indemnitee under this Agreement unless and to the extent that the Company can establish that is has been materially prejudiced by such lack of notice.

6.3 Assumed Claims: Right of the Indemnitee to Employ Separate Counsel. The Indemnitee will have the right to employ the Indemnitee’s own counsel in connection with any Claim as to which the Company has provided written confirmation that it has assumed the defense. The fees and expenses of the Indemnitee’s counsel incurred after notice from the Company of its assumption of the defense will be at the expense of the Indemnitee unless:

6.4 Settlement. The Company will not be liable to indemnify the Indemnitee under this Agreement for any amounts paid in settlement of any action or claim affected without the Company’s written consent. The Company will not settle any action or claim in any manner which would impose any penalty or limitation on the Indemnitee without the Indemnitee’s written consent. Neither the Company nor the Indemnitee will unreasonably withhold or delay their consent to any proposed settlement.

7. Non-Exclusivity. The rights of the Indemnitee hereunder will be in addition to any other rights the Indemnitee may have under the Articles of Incorporation, the Bylaws, the MBCA, any other agreement, a vote of the shareholders, a resolution of Directors or otherwise. No amendment, alteration or repeal of this Agreement or of any provision hereof will limit or restrict any right of the Indemnitee under this Agreement in respect of any action taken or omitted by such the Indemnitee acting on behalf of the Company and at the request of the Company prior to such amendment, alteration or repeal. To the extent that a change in the MBCA (whether by statute or judicial decision), the Articles of Incorporation or the Bylaws permits greater indemnification by agreement than would be afforded currently under the Articles of Incorporation, the Bylaws and this Agreement, it is the intent of the parties hereto that the Indemnitee will enjoy by this Agreement the greater benefits so afforded by such change. No right or remedy conferred by this Agreement is intended to be exclusive of any other right or remedy, and every other right and remedy will be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or employment of any right or remedy hereunder, or otherwise, will not prevent the concurrent assertion or employment of any other right or remedy.

8. Liability Insurance. To the extent the Company maintains an insurance policy or policies providing Directors’ and Officers’ liability insurance, the Indemnitee will be covered by such policy or policies in accordance with its or their terms to the maximum extent of the coverage available for any Director or Officer. If, at the time the Company receives notice from any source of a Claim as to which the Indemnitee is a party or a participant (as a witness or otherwise), the Company has Director and Officer liability insurance in effect, the Company will give prompt notice of such Claim to the insurers in accordance with the procedures set forth in the respective policies. The Company will thereafter take all necessary or desirable action to cause such insurers to pay, on behalf of the Indemnitee, all amounts payable as a result of such Claim in accordance with the terms of such policies.

9. Amendments, Termination and Waiver. No supplement, modification, amendment or termination of this Agreement will be binding unless executed in writing by both of the parties hereto. No waiver of any of the provisions of this Agreement will be deemed or will constitute a waiver of any other provisions hereof (whether or not similar) nor will such waiver constitute a continuing waiver.

10. Subrogation. In the event of payment under this Agreement, the Company will be subrogated to the extent of such payment to all of the rights of recovery of the Indemnitee, who will execute all papers required and will do everything that may be necessary to secure such rights, including the execution of such documents necessary to enable the Company effectively to bring suit to enforce such rights.

11. No Duplication of Payments. The Company will not be liable under this Agreement to make any payment in connection with any Claim made against the Indemnitee to the extent the Indemnitee has otherwise actually received payment (under an insurance policy, the Articles of Incorporation, the Bylaws, or otherwise) of the amounts otherwise indemnifiable hereunder.

12. Binding Effect. This Agreement will be binding upon and inure to the benefit of and be enforceable by the parties hereto and their respective successors, assigns, including any direct or indirect successor by purchase, merger, consolidation or otherwise to all or substantially all of the business and/or assets of the Company, and the spouse, heirs, executors, administrators, and personal and legal representatives of the Indemnitee. This Agreement will continue in effect as to coverage time period when regardless of whether the Indemnitee continues to serve as a Director or Officer (or in one of the capacities enumerated in Section 1.4 hereof) of the Company or of any other enterprise at the Board’s request.

13. Severability. The provisions of this Agreement will be severable in the event that any of the provisions hereof (including any provision within a single Section, paragraph or sentence) are held by a court of competent jurisdiction to be invalid, void or otherwise unenforceable, and the remaining provisions will remain enforceable to the fullest extent permitted by law.

14. Governing Law; Consent to Jurisdiction, Waiver of Jury Trial. This Agreement shall be governed by and construed in accordance with the internal laws of the State of Michigan, without regard to its principles of conflicts of laws. Each of the parties hereto irrevocably submits to the exclusive jurisdiction of the courts of the State of Michigan located in Ingham County and the United States District Court for the Western District of Michigan for the purpose of any suit, action, proceeding or judgment relating to or arising out of this Agreement and the transactions contemplated hereby. Service of process in connection with any such suit, action or proceeding may be served on each party hereto anywhere in the world by the same methods as are specified for the giving of notices under this Agreement. Each of the

parties hereto irrevocably consents to the jurisdiction of any such court in any such suit, action or proceeding and to the laying of venue in such court. Each party hereto irrevocably waives any objection to the laying of venue of any such suit, action or proceeding brought in such courts and irrevocably waives any claim that any such suit, action or proceeding brought in any such court has been brought in an inconvenient forum. EACH OF THE PARTIES HERETO WAIVES ANY RIGHT TO REQUEST A TRIAL BY JURY IN ANY LITIGATION WITH RESPECT TO THIS AGREEMENT AND REPRESENTS THAT COUNSEL HAS BEEN CONSULTED SPECIFICALLY AS TO THIS WAIVER.

15. Subsequent Legislation. If the Michigan Business Corporation Act is amended after adoption of this Agreement to expand further the indemnification permitted to directors or officers, then the Corporation shall indemnify Indemnitee to the fullest extent permitted by the Michigan Business Corporation Act, as so amended.

16. Identical Counterparts. This Agreement may be executed in one or more counterparts, each of which will for all purposes be deemed to be an original but all of which together will constitute one and the same Agreement, and provided that only one such counterpart signed by the party against whom enforceability is sought needs to be produced to evidence the existence of this Agreement.