Nevada Indemnification Agreement between corporation and its directors regarding method for determining whether standards for indemnification have been met

• Category: Corporations - Public - Indemnification
• State: Multi-State
• Control #: US-CC-17-158
• Format: Word; Rich Text

Description

17-158 17-158 . . . Indemnification Agreement between corporation and its directors and/or officers including future directors and officers containing detailed provisions relating to method for determining whether standards for indemnification or reimbursement have been met and making corporation responsible for all costs of determining whether a person is entitled to indemnification or reimbursement regardless of whether person is ultimately found to be entitled to indemnification

A Nevada Indemnification Agreement is a legally binding document that outlines the terms and conditions under which a corporation agrees to indemnify its directors against certain liabilities or damages incurred while acting in their capacity as directors. This agreement is crucial in providing protection and security to directors, encouraging talented individuals to take on directorial roles in corporations. It also serves as a mechanism to determine whether the standards for indemnification have been met. The method for determining whether the standards for indemnification have been met in a Nevada Indemnification Agreement typically involves a careful evaluation of the director's conduct and actions. The agreement may include specific criteria or guidelines that determine the eligibility for indemnification. These criteria often revolve around the director's adherence to their fiduciary duties, compliance with the company's policies, and conformity with relevant state and federal laws. The Nevada Indemnification Agreement may name different types of indemnification provisions depending on the circumstances. These provisions include: 1. Mandatory Indemnification: This provision ensures that the corporation must indemnify directors to the fullest extent permitted by law when certain conditions are met. Typically, these conditions involve a successful final judgment or settlement in favor of the director, or the absence of any adverse judgments or findings of misconduct. 2. Permissive Indemnification: Under this provision, the corporation has the discretion to choose whether to indemnify directors or not. The decision usually depends on a determination by the board of directors or an independent committee that the director acted in good faith, with the belief that their actions were in the best interest of the corporation. 3. Advancement of Expenses: This provision entitles directors to the advancement of legal fees and expenses incurred in the defense of any proceedings arising from their directorial duties. The agreement may specify the process for seeking reimbursement and the circumstances in which it can be requested. 4. Indemnification for Settlements: This provision allows directors to be indemnified for settlements reached in legal proceedings if it is determined that they acted in good faith and in the corporation's best interest. This provision ensures that directors are not discouraged from pursuing reasonable settlements to avoid costly litigation. 5. Limits and Exclusions: The Nevada Indemnification Agreement may also include provisions outlining the limits and exclusions in which indemnification will not be provided. This may include cases where the director acted fraudulently, engaged in intentional misconduct, or violated applicable laws knowingly. In conclusion, a Nevada Indemnification Agreement between a corporation and its directors plays a crucial role in defining the method for determining whether standards for indemnification have been met. By including specific criteria and provisions, the agreement protects directors while ensuring that indemnification is only provided when the director's actions align with their fiduciary duties and legal obligations.