Pennsylvania Indemnification Agreement between Corporation and Its Directors and Non-Director Officers at Vice President Level and Above: Keywords: Pennsylvania, Indemnification Agreement, Corporation, Directors, Non-Director Officers, Vice President Level and Above. Introduction: A Pennsylvania Indemnification Agreement is a legally binding contract that ensures protection and financial security for directors and non-director officers of a corporation operating within the state of Pennsylvania, specifically those holding positions at the vice president level and higher. This agreement establishes the corporation's commitment to indemnify and hold these key employees harmless in cases of legal actions or claims arising from their corporate duties. Types of Pennsylvania Indemnification Agreements: 1. Standard Pennsylvania Indemnification Agreement: This agreement outlines the general terms and conditions under which the corporation will indemnify its directors and non-director officers at the vice president level and above. It covers legal fees, expenses, judgments, and any other costs related to defending against claims made against these individuals as a result of their corporate activities. 2. Expanded Pennsylvania Indemnification Agreement: Similar to the standard agreement, this particular type expands the scope of indemnification provisions and may provide additional protections and benefits. It could include provisions for reimbursement of lost wages, advancement of legal expenses, coverage for settlements, and coverage for derivative actions. 3. Small Corporation Indemnification Agreement: Designed specifically for small corporations, this agreement provides similar indemnification protections but may have modified terms to suit the size and capacity of the corporation. It may offer specific limits on indemnification amounts or adjust certain provisions based on the corporation's financial capabilities. Key Elements of a Pennsylvania Indemnification Agreement: 1. Parties: Clearly identifies the participating parties, including the corporation, its directors, and non-director officers at the vice president level and above. 2. Indemnification Scope: Describes the extent and conditions under which the corporation will indemnify the covered individuals, ensuring they are protected against legal claims arising from their corporate duties. 3. Legal Expenses: Specifies that the corporation will cover reasonable legal expenses, including attorneys' fees, court costs, and other related expenses incurred during the defense of claims. 4. Advancement of Expenses: Addresses whether the corporation will advance funds to the covered individuals to cover legal expenses during the ongoing defense, potentially allowing them immediate access to necessary financial resources. 5. Indemnification Limits: Outlines any specific limits or conditions on the corporation's indemnification obligations to directors and non-director officers at the vice president level and above, considering factors such as corporate finances and legal requirements. 6. Procedure for Indemnification: Details the process by which a covered individual must submit their indemnification claims and clarifies the corporation's responsibility to promptly review and respond to such requests. 7. Guarantees and Representations: Includes guarantees and representations from both the corporation and the covered individuals, ensuring the accuracy and validity of the agreement. Conclusion: Pennsylvania Indemnification Agreements between corporations and their directors and non-director officers at the vice president level and above play a crucial role in providing financial protection and peace of mind. By outlining the scope of indemnification and specifying the terms and conditions, these agreements serve as an essential tool in managing and mitigating potential legal risks within the corporate landscape.
Pennsylvania Indemnification Agreement between Corporation and Its Directors and Non-Director Officers at Vice President Level and Above
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FAQ
It's a legally binding promise to protect another person against loss from an event or series of events: they are indemnified and protected from liability. Sometimes, indemnities are implied into the terms of contracts automatically, due to the nature of the legal relationship between the two parties.
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 ...
Under Pennsylvania law, courts follow the ?Perry-Ruzzi? rule, under which ?provisions to indemnify for another party's negligence are to be narrowly construed, requiring a clear and unequivocal agreement before a party may transfer its liability to another party.? See Bernotas v. Super Fresh Food Markets, 963 A.
Under Pennsylvania law, courts follow the ?Perry-Ruzzi? rule, under which ?provisions to indemnify for another party's negligence are to be narrowly construed, requiring a clear and unequivocal agreement before a party may transfer its liability to another party.? See Bernotas v. Super Fresh Food Markets, 963 A.
For example, an indemnification provision may exclude indemnification for claims or losses that result from the indemnified party's: Negligence or gross negligence. Improper use of the products. Bad faith failure to comply with its obligations in the agreement.
In the indemnification agreement, the corporation agrees to reimburse the director or officer for losses incurred in legal proceedings related to their service as a corporate director or officer to the maximum extent permitted by law.
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.
Are indemnification clauses enforceable? Indemnification clauses are generally enforceable, but there are important qualifications. Some courts hold that broad form or ?no fault? indemnifications, which are blind to fault on the part of either party, violate public policy.