The North Carolina Indemnification Agreement between a corporation and its current and future directors is a legally binding contract that aims to protect directors from personal liability arising from their actions or decisions made in their capacity as directors of the corporation. This agreement is crucial for attracting and retaining talented individuals to serve on a corporation's board of directors. One type of North Carolina Indemnification Agreement is the "Standard Indemnification Agreement." This agreement outlines the corporation's commitment to indemnify directors against expenses, judgments, fines, settlements, and legal fees incurred as a result of their service as directors. It also includes provisions related to advancement, which means the corporation will cover legal expenses upfront if a director faces a claim based on their actions as a director. Another type of North Carolina Indemnification Agreement is the "Enhanced Indemnification Agreement." This agreement offers broader protection to directors by expanding the scope of indemnification. It may cover additional expenses, such as taxes, interest, and other costs incurred in successfully defending against claims. The Enhanced Indemnification Agreement can offer greater peace of mind to directors and encourage them to take bold decisions in the corporation's best interest. The North Carolina Indemnification Agreement also emphasizes the importance of "Good Faith" and "Reasonable Belief." It specifies that directors must have acted in good faith and in a manner they reasonably believed to be in the best interest of the corporation. This provision ensures that directors are protected when making tough decisions, even if the outcomes are not favorable. Furthermore, the Indemnification Agreement includes "Severability" and "Force Mature" clauses to address situations where certain provisions may be deemed unenforceable or if circumstances beyond anyone's control hinder compliance with the agreement. These clauses ensure that the remaining provisions remain in effect and protect the interests of both the corporation and its directors. Lastly, the North Carolina Indemnification Agreement highlights its relationship with the corporation's bylaws and the law. It states that the agreement does not limit other indemnification rights provided by the corporation's bylaws or any other applicable laws. This ensures that directors can access maximum protection available under the law, in addition to the specific provisions outlined in the agreement. In summary, the North Carolina Indemnification Agreement between a corporation and its current and future directors is a comprehensive and robust contract that safeguards directors from personal liability. With different types such as the Standard Indemnification Agreement and the Enhanced Indemnification Agreement, corporations can choose the level of protection that best suits their directorial needs. Overall, this agreement allows directors to perform their duties diligently while granting them the confidence to make tough decisions in the corporation's best interest, encouraging overall growth and success.
North Carolina Indemnification Agreement between corporation and its current and future directors
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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.
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.
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 ...
In legal terms, an Act of Indemnity is a statute passed to protect people who have committed some illegal act which would otherwise cause them to be subjected to legal penalties.
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 ...
Indemnity is implicated when a person discharges another's duty: A person who, in whole or in part, has discharged a duty which is owed by him but which as between himself and another should have been discharged by the other, is entitled to indemnity from the other, unless the payor is barred by the wrongful nature of ...
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.
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 ...