Pennsylvania Indemnification Agreement between corporation and its current and future directors is a legally binding contract that outlines the terms of protection and reimbursement for directors serving or who will serve on the board of a Pennsylvania-based corporation. This agreement is designed to shield directors from personal liabilities arising from their corporate duties, encouraging individuals to take up positions on the board and make decisions on behalf of the corporation without fear of financial loss. The Pennsylvania Indemnification Agreement provides protection to directors in case they face any legal claims, lawsuits, investigations, or legal proceedings related to their actions or decisions made in their capacity as a director. It aims to indemnify directors for reasonable expenses, legal fees, judgments, settlements, and other costs incurred during the defense or resolution of such claims. In Pennsylvania, there are three significant types of Indemnification Agreements commonly used: 1. Agreements with "Permissive" Indemnification: This type of agreement allows a corporation to indemnify its directors, officers, and other corporate agents to the extent permitted under Pennsylvania's statutory regulations. It typically covers expenses incurred during legal proceedings, other costs reasonably incurred, and settlements or judgments awarded against the directors or officers. 2. Agreements with "Mandatory" Indemnification: These agreements provide indemnification to directors, officers, and other corporate agents to the fullest extent permitted by law. It offers broader protection compared to "permissive" indemnification, covering all reasonable expenses, legal fees, and liabilities incurred in connection with their duties as a director. However, directors must meet specific conditions, such as acting in good faith and in a manner they reasonably believe is in the corporation's best interest. 3. Agreements with "Advancement of Expenses": This type of indemnification agreement allows corporations to advance funds to directors, officers, and other corporate agents for legal expenses before the final resolution of the claims brought against them. If permitted and subject to certain terms and conditions, these agreements can provide financial support to directors promptly, ensuring they have immediate access to resources required for their legal defense. It is essential for corporations to carefully review and customize their Indemnification Agreements to align with the unique needs and circumstances of the organization and its directors. Understanding the specific type of indemnification agreement in effect is crucial for both the corporation and its directors to ensure compliance with Pennsylvania laws and regulations. Overall, a Pennsylvania Indemnification Agreement is a crucial legal tool that offers financial protection to current and future directors, fostering a supportive environment for effective corporate governance and decision-making.
Pennsylvania Indemnification Agreement between corporation and its current and future directors
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How to fill out Pennsylvania Indemnification Agreement Between Corporation And Its Current And Future Directors?
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FAQ
Many company constitutions set out rights of indemnity for directors, and often also include provision for directors and officers (D&O) insurance. Alternatively, they may simply provide that the company may indemnify directors. The deed of indemnity is an agreement between the company and a director.
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.
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 ...
Indemnification refers to the right to have a company reimburse current or former directors or officers for all losses, including legal fees, incurred in connection with litigation arising from actions taken in service to the company or at the company's direction.
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.
--A corporation may indemnify a person acting as a director, officer, employee or agent of the corporation or acting at the request of the corporation as a director, officer, employee or agent of another person against liability and legal expenses, including attorney fees, judgments, fines and settlements, reasonably ...
Indemnification is often very broad, often extending ?to the maximum extent permitted by law?, whereas D&O insurance polices contain numerous exclusions and conditions. In addition, D&O insurance must be renewed each year, with possible changes in terms and conditions.