Pennsylvania 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 Pennsylvania Indemnification Agreement refers to a legal contract entered into between a corporation and its directors, aiming to outline the terms and conditions regarding indemnification provided to directors in certain situations. This agreement typically establishes a method for determining whether the standards for indemnification have been met in cases where directors may face legal claims or liabilities arising from their roles and responsibilities. The Pennsylvania Indemnification Agreement between a corporation and its directors acts as a safeguard, providing financial protection and legal support to directors who may face litigation or other legal actions due to their actions conducted in good faith within their capacity as directors. This agreement is essential to attract highly skilled individuals to serve on corporate boards, as it protects them from personal financial loss due to legal challenges. To determine whether the standards for indemnification have been met, the Pennsylvania Indemnification Agreement typically includes various provisions. These may encompass a thorough examination of the director's conduct, ensuring it aligns with the prescribed legal and ethical standards. The agreement often outlines specific circumstances under which indemnification will apply, such as legal actions brought against directors by third parties or investigations by regulatory authorities. The Pennsylvania Indemnification Agreement may specify different types or levels of indemnification available to directors under varying circumstances. These variations may include: 1. Mandatory Indemnification: This form of indemnification obligates the corporation to indemnify directors automatically, provided they meet specified criteria, such as conducting their duties in good faith and in the best interest of the corporation. 2. Permissive Indemnification: This type of indemnification grants the corporation the discretion to indemnify directors based on various factors, including the nature of the claims, board approval, or a committee's recommendation. 3. Advancement of Expenses: This provision allows the corporation to advance legal fees and expenses to directors, ensuring they have immediate access to financial resources required for their defense in legal proceedings. 4. Limited Indemnification: In certain situations, the corporation may limit the scope of indemnification, such as excluding indemnification for willful misconduct, bad faith, or acts contrary to the corporation's interests. 5. Indemnification for Settlements: The agreement may address situations where directors reach a settlement prior to a final determination of their liability. The agreement may specify whether and to what extent the corporation will indemnify directors in such scenarios. In conclusion, the Pennsylvania Indemnification Agreement between a corporation and its directors provides a comprehensive framework for determining the eligibility and extent of indemnification. This agreement is essential for corporations to attract and retain talented directors, ensuring they can act confidently and effectively knowing they are protected from potential personal liabilities.