The Delaware Indemnity Agreement is a legally binding contract that outlines the terms and conditions of indemnification for corporation directors and/or officers in the state of Delaware. This agreement serves to protect directors and officers from potential liability or financial loss incurred while acting in their professional capacity for the corporation. Understanding the nuances of this agreement is crucial for both corporation entities and their directors/officers. One type of Delaware Indemnity Agreement is the "Standard Indemnification Agreement," which provides indemnification protection to directors and officers for their acts and omissions within the scope of their corporate duties. It covers expenses such as legal fees, judgments, settlements, and any other costs incurred in lawsuits or investigations related to the directors' or officers' corporate responsibilities. This agreement ensures that directors and officers can carry out their duties without the constant fear of personal financial repercussions. Another variant of the Delaware Indemnity Agreement is the "Advancement of Expenses Agreement." This agreement allows the corporation to provide an upfront payment or advances to directors and officers to cover expenses related to legal proceedings or investigations. The corporation recognizes the necessity for its directors and officers to have immediate access to funds, and this agreement streamlines the process of obtaining financial support during legal challenges. A third type of Delaware Indemnity Agreement is the "Non-Exclusivity Agreement." This agreement is used when a corporation wants to expand upon the indemnification protections provided by Delaware law and the corporation's bylaws. It allows the corporation to agree to indemnify directors and officers for a broader range of actions, including those outside of their corporate duties. By signing this agreement, the corporation demonstrates its commitment to protect directors and officers, even in scenarios where standard indemnification would not typically apply. Furthermore, the Delaware Indemnity Agreement may also include clauses related to the corporation's ability to purchase directors and officers' liability insurance (D&O insurance) on their behalf. This insurance offers an additional layer of protection for directors and officers, ensuring that they can confidently carry out their responsibilities without undue personal risk. In conclusion, the Delaware Indemnity Agreement is a crucial contractual document that outlines the terms and conditions of indemnification for corporation directors and officers. By utilizing various types of agreements, such as the Standard Indemnification Agreement, Advancement of Expenses Agreement, Non-Exclusivity Agreement, and potentially incorporating D&O insurance, corporations can provide comprehensive protection to their directors and officers, creating a safe environment to effectively govern and make decisions for the corporation's success.
Delaware Indemnity Agreement between corporation and directors and / or officers
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Indemnification refers to the right to have a company reimburse current or former directors or officers for all losses, including legal fees, incurred in connection with litigation arising from actions taken in service to the company or at the company's direction.
Indemnification, also referred to as indemnity, is an undertaking by one party (the indemnifying party) to compensate the other party (the indemnified party) for certain costs and expenses, typically stemming from third-party claims.
(a) A corporation shall have power to indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the corporation) by reason of the ...
Indemnification Agreement to secure against loss or damage; to give security for the reimbursement of a person in case of an anticipated loss falling upon him. Also to make good; to compensate; to make reimbursement to one of a loss already incurred by him.
A director and officer indemnification agreement is a contract that allows executives to protect themselves from claims made against them while performing job. Indemnification means that in the event a lawsuit is filed against a company, the indemnified party is "held harmless" from claims.
A company may, however, lend money to a director to fund the director's defence costs. Frequently, an indemnity will include a provision under which the company agrees to lend the director the amounts necessary to fund the director's defence costs.
Insurance ? The indemnification agreement typically will require that the company provide D&O liability insurance that protects the indemnitee to the same extent as the most favorably insured of the company's and its affiliates' current directors and officers.
Section 145(b) empowers a corporation to indemnify its directors against expenses incurred in connection with the defense or settlement of an action brought by or in the right of the corporation, subject to the standard of conduct determination, and except that no indemnification may be made as to any claim to which ...