The North Carolina Indemnification Agreement is a legal document that outlines the terms and conditions for indemnifying the directors of a corporation in the state of North Carolina. This agreement provides important protection to the corporation's directors in the event of a legal action or lawsuit against them. The agreement sets forth the method for determining whether the standards for indemnification have been met. It establishes a clear process that must be followed before indemnification can be granted. This includes a thorough review of the director's actions and decisions regarding their role within the corporation. Keywords: North Carolina, Indemnification Agreement, corporation, directors, method, determining, standards, indemnification, legal action, lawsuit, protection, terms, conditions, review, actions, decisions, role. There are two main types of North Carolina Indemnification Agreements commonly used between corporations and their directors: 1. Indemnification Agreement — Non-Exculpatory Clause: This type of agreement provides indemnification to the directors, but it does not include an exculpatory clause. An exculpatory clause would absolve the directors of liability for certain actions or decisions. In this agreement, the determination of whether the standards for indemnification have been met is done by evaluating the director's actions and decisions, taking into consideration the appropriate standards, laws, and regulations. 2. Indemnification Agreement — Exculpatory Clause: In this type of agreement, an exculpatory clause is included, which provides broader protection to the directors. The exculpatory clause limits the liability of the directors for any actions or decisions made in good faith and within the scope of their duties. Under this agreement, the determination of whether the standards for indemnification have been met is similar to the non-exculpatory clause, considering the director's actions and decisions in compliance with relevant standards, laws, and regulations. Both types of agreements aim to safeguard the directors and ensure they are protected from personal financial burdens resulting from legal actions. The determination of whether the standards for indemnification have been met in both types is crucial for the corporation to honor its obligations and provide appropriate indemnification to the directors.
North Carolina Indemnification Agreement between corporation and its directors regarding method for determining whether standards for indemnification have been met
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How to fill out North Carolina Indemnification Agreement Between Corporation And Its Directors Regarding Method For Determining Whether Standards For Indemnification Have Been Met?
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What Are the Types of Indemnity Clauses? Bare Indemnity. Here, the supplier must compensate the affected party to cover losses caused by circumstances predefined in the contract. ... Third-party Indemnity. A third-party indemnity applies to third-party claims made against one of the parties. ... Inter-party Indemnity.
There are three main types of express indemnity clauses: broad form, intermediate form, and limited form. Broad form express indemnity clauses require the indemnitor to hold the indemnitee harmless for all liability, even if the indemnitee is solely at fault.
Methods of Providing Indemnity Cash payment. Replacement. Reinstatement. Repair.
In the indemnity clause, one party commits to compensate another party for any prospective loss or damage. More common is in insurance contracts, in exchange for premiums paid by the insured to the insurer, the insurer offers to compensate the insured for any potential damages or losses.
Indemnification is, generally speaking, a reimbursement by a company of its Ds&Os for expenses or losses they have incurred in connection with litigation or other proceedings relating to their service to the company.
Level One: Broad Form Indemnification. Broad form indemnification requires the indemnitor to pay not only for losses for which it is responsible but also for losses solely caused by the indemnitee. ... Level Two: Intermediate Form Indemnification. ... Level Three: Limited Form Indemnification.
What Is an Indemnification Clause? An indemnification clause is a legally binding agreement between two parties specifying that one party (the indemnifying party) will compensate the other party (the indemnified party) for any losses or damages that may arise from a particular event or circumstance.
North Carolina's anti-indemnity statute declares that any provision in a construction or design professional contract that requires a party (promisor) to indemnify another (promisee) for the promisee's or its derivative parties' own negligence, whether in whole or in part, is against public policy, void, and ...