Washington 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

Washington Indemnification Agreement between a corporation and its directors is a legally binding document that outlines the method for establishing whether the standards for indemnification have been fulfilled. This agreement provides protection for directors against potential liabilities arising from their involvement in the corporation's activities. It guarantees that directors will be indemnified for any losses, damages, or legal expenses incurred while acting within their official capacity, as long as they meet specific criteria. The Washington Indemnification Agreement typically consists of several key elements, including: 1. Scope of Indemnification: This section defines the extent of indemnification provided by the corporation to its directors. It specifies the types of claims or lawsuits covered, such as judgments, settlements, or defense costs, and mentions any limitations or exclusions applicable. 2. Standard of Conduct: The agreement establishes the criteria directors must meet to avail indemnification. It outlines the required standards of conduct, which may include acting in good faith, with reasonable care, and in a manner believed to be in the best interest of the corporation. Compliance with applicable laws and regulations is also typically included. 3. Determination Process: The agreement describes the method for determining whether the standards for indemnification have been met. It often involves a two-step process: an initial determination by the corporation (or its board) and a subsequent independent evaluation, if requested by the director. This ensures a fair assessment of the director's actions and eligibility for indemnification. 4. Procedures and Notice: Details regarding the procedures for asserting a claim for indemnification are included to guide directors through the process. This may encompass providing prompt written notice to the corporation, cooperating with any investigations, and furnishing necessary documentation to support their claim. 5. Advancement of Expenses: The agreement specifies whether the corporation will advance funds to cover the director's legal expenses incurred during the defense of a claim until the final determination of their entitlement to indemnification. This provision enables directors to access necessary resources without undue financial burden. Within the realm of Washington Indemnification Agreements, two types are commonly acknowledged: 1. Indemnification Agreement with Permissive Indemnification: This type goes beyond the minimum requirements set by Washington law, offering directors a greater level of protection. It allows the corporation to indemnify directors for losses and expenses they incur in actions where they are not found liable. 2. Indemnification Agreement with Mandatory Indemnification: This agreement type strictly follows the provisions outlined in Washington law regarding indemnification. It ensures directors are indemnified for losses, damages, or expenses only when they are successful in defending themselves against claims or lawsuits. In summary, the Washington Indemnification Agreement between a corporation and its directors establishes the protocol for determining whether the standards for indemnification have been satisfied. By outlining the scope, standard of conduct, determination process, procedures, and expense advancement, this agreement offers directors the necessary assurances and safeguards, promoting their effective participation in the corporation's affairs.