Indemnification Indemnifying

• Category: Corporations - Officers and Employees
• State: Multi-State
• Control #: US-0866BG
• Format: Word; Rich Text

Description

Most companies' corporate bylaws or articles of incorporation contain indemnification and advancement provisions. While these provisions provide important protection for corporate executives if the individuals become the target of claims relating to their action undertaken in their corporate capacities, these provisions alone may not be provide sufficient protection. The provisions in the corporate documents may not address all of the issues that can arise and may not provide sufficient protection for the individuals when there are indemnification or advancement disputes and may not protect individuals from changes to corporate bylaws after the individuals have left the company. For these and many other reasons, well-advised corporate executives will want to have their rights memorialized in a separate, written indemnification and advancement agreement with the company. The most important reason for individuals to seek to put a written indemnification agreement in place is that written agreements typically provide more comprehensive protection than corporate bylaws or statutory provisions. Most bylaws, for example, provide for permissive indemnification, whereas most written agreements are written on a mandatory basis. Moreover, the rights enumerated in the agreement are enforceable obligations that cannot be amended or terminated without the individual executive's agreement. Another reason that directors and officers will seek to put contractual indemnification agreements in place is so that if the individuals are the target of claims after they have left the company, they can assert their rights of indemnification notwithstanding the arrival of new management. The contractual indemnification provides them an extra measure of protection and some level of assurance that their rights will be protected if claims arise after they have left the company. A Director’s Indemnification Agreement of Publicly Held Corporation Indemnifying Director and His or Her Spouse is a legal agreement that provides for legal protection and reimbursement of legal expenses in the event a director of a publicly held corporation is sued or held liable for certain actions. This agreement is typically a part of a company’s corporate governance, and it is designed to provide indemnification for directors and their spouses in the event that they incur liabilities related to their role as a director of the corporation. The agreement typically covers all losses, liabilities, damages, and costs incurred by a director, including attorney’s fees, court costs, and other related expenses. It also typically covers any liabilities incurred by the spouse of the director. There are three main types of Director’s Indemnification Agreement of Publicly Held Corporation Indemnifying Director and His or Her Spouse: mandatory indemnification, conditional indemnification, and discretionary indemnification. Mandatory indemnification occurs when a company’s board of directors is required to indemnify a director and his or her spouse for certain liabilities under the terms of the company’s corporate governance documents. Conditional indemnification occurs when a company’s board of directors may choose to indemnify a director and his or her spouse under certain conditions, such as when the director acted in good faith and in the best interests of the company. Discretionary indemnification occurs when a company’s board of directors has the discretion to indemnify a director and his or her spouse for any liabilities the director may incur.

A Director’s Indemnification Agreement of Publicly Held Corporation Indemnifying Director and His or Her Spouse is a legal agreement that provides for legal protection and reimbursement of legal expenses in the event a director of a publicly held corporation is sued or held liable for certain actions. This agreement is typically a part of a company’s corporate governance, and it is designed to provide indemnification for directors and their spouses in the event that they incur liabilities related to their role as a director of the corporation. The agreement typically covers all losses, liabilities, damages, and costs incurred by a director, including attorney’s fees, court costs, and other related expenses. It also typically covers any liabilities incurred by the spouse of the director. There are three main types of Director’s Indemnification Agreement of Publicly Held Corporation Indemnifying Director and His or Her Spouse: mandatory indemnification, conditional indemnification, and discretionary indemnification. Mandatory indemnification occurs when a company’s board of directors is required to indemnify a director and his or her spouse for certain liabilities under the terms of the company’s corporate governance documents. Conditional indemnification occurs when a company’s board of directors may choose to indemnify a director and his or her spouse under certain conditions, such as when the director acted in good faith and in the best interests of the company. Discretionary indemnification occurs when a company’s board of directors has the discretion to indemnify a director and his or her spouse for any liabilities the director may incur.