Arkansas Indemnification Agreement between corporation and its current and future directors

• Category: Corporations - Public - Indemnification
• State: Multi-State
• Control #: US-CC-17-197C
• Format: Word; Rich Text

Description

17-197C 17-197C . . . Indemnification Agreement to be entered into between corporation and its current and future directors and such current and future officers and other agents as directors may designate. The proposal includes description of procedural and substantive matters in Indemnification Agreements that are not addressed, or are addressed in less detail, in California law An Arkansas Indemnification Agreement between a corporation and its current and future directors is a legal document that outlines the corporation's commitment to providing financial protection and legal defense to its directors in the event they face lawsuits or other legal actions related to their duties and responsibilities. This agreement serves as a crucial protection mechanism for directors as it covers expenses incurred during legal proceedings, such as attorney fees, court costs, and settlements or judgments. The agreement aims to attract and retain capable directors by mitigating their personal financial risk and providing them with a sense of security. Under Arkansas law, there are two main types of indemnification agreements typically used between corporations and their directors, namely: 1. Agreement for Permissive Indemnification: This type allows corporations to choose whether they will indemnify their directors. The agreement must state that indemnification may be provided to a director, subject to certain limitations, conditions, and procedures. 2. Agreement for Mandatory Indemnification: This type obligates the corporation to indemnify its directors in specific situations, such as when the director is successful in the defense of a legal action, or when a court determines that the director acted in good faith and in the best interests of the corporation. Arkansas Indemnification Agreements often include the following key information: 1. Parties involved: The agreement identifies the corporation and all current and future directors who are covered by the indemnification provisions. 2. Indemnification scope: It specifies the types of legal actions or proceedings for which indemnification is provided, such as civil, criminal, administrative, or investigatory proceedings brought by a third party, the corporation itself, or any governmental authority. 3. Expenses covered: The agreement outlines the specific expenses that will be covered, including attorney fees, court costs, reasonable settlements, judgments, and any other costs incurred as a result of legal proceedings. 4. Limitations and exclusions: It may include certain limitations on the indemnification, such as excluding indemnification for intentional misconduct, actions not in good faith, or violations of the director's duty of loyalty to the corporation. 5. Procedures for indemnification: The agreement outlines the process for directors to request indemnification, including notice requirements, documentation, and the timeline for the corporation to respond. 6. Severability clause: This clause states that if any provision of the agreement is held invalid or unenforceable, the remaining provisions will still be effective. 7. Governing law: The agreement specifies that it is governed by the laws of the state of Arkansas, ensuring compliance with the state's indemnification statutes and regulations. In conclusion, an Arkansas Indemnification Agreement between a corporation and its current and future directors is a legally binding document that establishes the corporation's commitment to providing financial protection and legal defense to its directors. By offering indemnification, corporations aim to attract and retain qualified individuals to serve on their boards while safeguarding directors' personal assets in the face of potential legal actions.

An Arkansas Indemnification Agreement between a corporation and its current and future directors is a legal document that outlines the corporation's commitment to providing financial protection and legal defense to its directors in the event they face lawsuits or other legal actions related to their duties and responsibilities. This agreement serves as a crucial protection mechanism for directors as it covers expenses incurred during legal proceedings, such as attorney fees, court costs, and settlements or judgments. The agreement aims to attract and retain capable directors by mitigating their personal financial risk and providing them with a sense of security. Under Arkansas law, there are two main types of indemnification agreements typically used between corporations and their directors, namely: 1. Agreement for Permissive Indemnification: This type allows corporations to choose whether they will indemnify their directors. The agreement must state that indemnification may be provided to a director, subject to certain limitations, conditions, and procedures. 2. Agreement for Mandatory Indemnification: This type obligates the corporation to indemnify its directors in specific situations, such as when the director is successful in the defense of a legal action, or when a court determines that the director acted in good faith and in the best interests of the corporation. Arkansas Indemnification Agreements often include the following key information: 1. Parties involved: The agreement identifies the corporation and all current and future directors who are covered by the indemnification provisions. 2. Indemnification scope: It specifies the types of legal actions or proceedings for which indemnification is provided, such as civil, criminal, administrative, or investigatory proceedings brought by a third party, the corporation itself, or any governmental authority. 3. Expenses covered: The agreement outlines the specific expenses that will be covered, including attorney fees, court costs, reasonable settlements, judgments, and any other costs incurred as a result of legal proceedings. 4. Limitations and exclusions: It may include certain limitations on the indemnification, such as excluding indemnification for intentional misconduct, actions not in good faith, or violations of the director's duty of loyalty to the corporation. 5. Procedures for indemnification: The agreement outlines the process for directors to request indemnification, including notice requirements, documentation, and the timeline for the corporation to respond. 6. Severability clause: This clause states that if any provision of the agreement is held invalid or unenforceable, the remaining provisions will still be effective. 7. Governing law: The agreement specifies that it is governed by the laws of the state of Arkansas, ensuring compliance with the state's indemnification statutes and regulations. In conclusion, an Arkansas Indemnification Agreement between a corporation and its current and future directors is a legally binding document that establishes the corporation's commitment to providing financial protection and legal defense to its directors. By offering indemnification, corporations aim to attract and retain qualified individuals to serve on their boards while safeguarding directors' personal assets in the face of potential legal actions.