Ratification and approval of directors and officers insurance indemnity fund with copy of agreement
Understanding this form
This Ratification and Approval of Directors and Officers Insurance Indemnity Fund form is a legal document used by corporations to formally establish an indemnity fund protecting directors and officers against legal expenses incurred as a result of their roles within the organization. Unlike regular corporate insurance policies, this form creates a dedicated fund to ensure that directors and officers have financial support in case of legal claims related to their actions in office.
Key parts of this document
- Establishment of the Indemnity Fund: Formal approval to create a fund for indemnifying directors and officers.
- Agreement with Counsel: A documented agreement between the corporation and independent counsel to manage the fund.
- Limitations of Coverage: Specific circumstances under which indemnification is provided are clearly defined.
- Duration and Termination: Details on how long the fund will remain active and the conditions for its termination.
- Exclusions: Certain liabilities and claims for which the fund does not provide indemnification are specified.
State-specific compliance details
This is a general form suitable for multiple states. Review and modify it as needed to reflect your jurisdiction’s rules.
When this form is needed
This form should be used when a corporation aims to protect its directors and officers from personal liability during their tenure. Common scenarios include instances where the corporation has faced difficulties in obtaining adequate liability insurance or when there are legal claims against directors related to their corporate duties. It is particularly vital when existing insurance policies have been determined not to be renewed.
Intended users of this form
This form is intended for:
- Corporations looking to establish an indemnity fund for their directors and officers.
- Board members seeking protection from liabilities arising from their decisions and actions.
- Legal counsel involved in corporate governance and risk management.
Steps to complete this form
- Identify the corporation's name and address at the top of the form.
- Include the date of ratification and approval by the Board of Directors.
- Attach the detailed agreement with independent counsel outlining the management of the indemnity fund.
- Specify the maximum amount to be deposited into the fund and how it will be financed.
- Collect signatures from the current directors and officers to confirm their approval of the indemnity fund's terms.
Is notarization required?
In most cases, this form does not require notarization. However, some jurisdictions or signing circumstances might. US Legal Forms offers online notarization powered by Notarize, accessible 24/7 for a quick, remote process.
Typical mistakes to avoid
- Failing to clearly define the terms for indemnification and coverage, leading to confusion.
- Not obtaining the required majority vote from stockholders for ratification.
- Neglecting to attach the necessary legal agreement with independent counsel.
Why use this form online
- Convenient access to a professionally drafted legal document tailored to your needs.
- Edit and customize the form directly to fit your corporation's specific circumstances.
- Instant access to updates and legal advice to ensure compliance with changing laws.
Legal use & context
- The indemnity fund protects directors and officers against personal losses resulting from litigation connected to their official duties.
- Establishing this fund may provide assurance to existing and future directors, potentially impacting corporate governance positively.
- While this form provides a framework for indemnity, it does not absolve directors from all forms of liability, especially in cases of misconduct.
