Indemnification Agreement for a Delaware Corporation
What this document covers
The Indemnification Agreement for a Delaware Corporation is a legal document designed to protect directors and officers from personal liability arising from their roles within the corporation. This agreement outlines the terms under which a company will indemnify its directors and officers against expenses, liabilities, and claims that may arise in connection with their duties. It is critical for attracting capable individuals to these positions by providing them with assurance against litigation risks, distinguishing it from standard corporate governance documents.
Key components of this form
- Agreement Date: Specify the effective date of the agreement.
- Parties Involved: Identify the corporation (Company) and the individual seeking indemnification (Indemnitee).
- Definitions Section: Clarifies terms like Claim, Indemnifiable Event, and Expenses, essential for understanding the indemnification scope.
- Indemnification Clause: Outlines the obligations of the Company to indemnify the Indemnitee against claims and expenses.
- Change in Control Provisions: Addresses how indemnification rights change if there is a change in company control.
- Legal Counsel Selection: Details the process for selecting independent legal counsel in case of disputes over indemnification.
When this form is needed
This form should be utilized when forming a new Delaware corporation that seeks to protect its directors and officers from potential legal claims arising in the course of their duties. It's particularly important in todayâs litigious environment where directors and officers face increased risks of lawsuits. Companies planning to recruit or retain qualified leadership should adopt this agreement to assure potential candidates of their legal protections.
Who this form is for
- Delaware corporations intending to indemnify their directors and officers.
- Existing companies seeking to strengthen their bylaws regarding indemnification.
- Individuals who serve or plan to serve as directors or officers and want contractual assurance of their indemnification rights.
How to prepare this document
- Identify the parties by entering the name of the Delaware corporation and the Indemnitee.
- Specify the effective date of the agreement.
- Review and define any terms to ensure clarity on indemnification rights and obligations.
- Ensure all necessary signatures from the authorized representatives of the Company and the Indemnitee are obtained.
- Consult legal counsel if necessary to confirm compliance with applicable laws.
Does this document require notarization?
Notarization is generally not required for this form. However, certain states or situations might demand it. You can complete notarization online through US Legal Forms, powered by Notarize, using a verified video call available anytime.
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Make edits, fill in missing information, and update formatting in US Legal Forms—just like you would in MS Word.
Download a copy, print it, send it by email, or mail it via USPS—whatever works best for your next step.
Sign and collect signatures with our SignNow integration. Send to multiple recipients, set reminders, and more. Go Premium to unlock E-Sign.
If this form requires notarization, complete it online through a secure video call—no need to meet a notary in person or wait for an appointment.
We protect your documents and personal data by following strict security and privacy standards.
Typical mistakes to avoid
- Failing to specify the effective date of the agreement.
- Not clearly defining the roles of the parties involved.
- Neglecting to obtain all required signatures, which could invalidate the agreement.
- Overlooking state-specific indemnification requirements.
Why complete this form online
- Immediate access to a professionally drafted indemnification agreement.
- Easy customization features allow users to modify details according to their needs.
- Convenient download options facilitate quick and efficient record-keeping.
- Reliable document storage for future references and compliance checks.
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FAQ
Indemnification clauses are clauses in contracts that set out to protect one party from liability if a third-party or third entity is harmed in any way. It's a clause that contractually obligates one party to compensate another party for losses or damages that have occurred or could occur in the future.
What does "Corporate Indemnification" mean?In the context of business organizations, a limited liability company or corporation will often indemnify its officers and directors, covering their expenses (including legal fees) and judgment amounts incurred by such persons as a result of their service to the entity.
A company can indemnify its directors against personal liability so long as the indemnity does not cover:other liabilities (such as legal costs) in criminal cases where the director is convicted, or in civil cases brought by the company where the final judgment goes against the director.
Indemnification. Indemnification is an undertaking by the company to defend the director and officer against the cost of certain claims, including legal fees, litigation awards and settlement costs.
For investment companies like mutual funds, corporate indemnification of a director is not permitted under Section 17(h) of the Investment Company Act of 1940 (1940 Act) for willful misfeasance, bad faith, gross negligence or reckless disregard of the duties involved in the conduct of his sic officeso called
To indemnify someone is to absolve that person from responsibility for damage or loss arising from a transaction. Indemnification is the act of not being held liable for or being protected from harm, loss, or damages, by shifting the liability to another party.
Indemnity is defined by Black's Law Dictionary as a duty to make good any loss, damage, or liability incurred by another. Indemnity has a general meaning of holding one harmless; that is to say, that one party holds the other harmless for some loss or damage.
Identify Time Periods for Asserting Indemnification Rights. Provide Notice in a Timely Fashion. Notify All Concerned Parties. Understand Limitations on Recovery. Exclusive Remedy. Scope of Damages. Claims Process/Dispute Resolution.
When the term indemnity is used in the legal sense, it may also refer to an exemption from liability for damages. Indemnity is a contractual agreement between two parties. In this arrangement, one party agrees to pay for potential losses or damages caused by another party.