California 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 A California Indemnification Agreement is a legal contract between a corporation and its directors that outlines the terms and conditions for indemnification, specifically regarding the method used to determine whether the standards for indemnification have been met. This agreement is essential for protecting directors from personal liability and ensuring they are appropriately reimbursed for any legal costs or damages incurred while acting in their official capacity. The purpose of this agreement is to establish a clear process for evaluating claims made by directors seeking indemnification. It ensures that the corporation's reputation and financial resources are not jeopardized by unjustified claims, while also providing directors with a fair and objective means of determining whether they are entitled to indemnification. The California Indemnification Agreement typically specifies several key elements: 1. Definitions: This section outlines the terms used throughout the agreement, such as "corporation," "director," and "indemnification." 2. Scope of Indemnification: The agreement defines the scope of indemnification, specifying the types of claims, liabilities, expenses, and damages that are covered. It may also include any exclusions or limitations on indemnification, such as actions that involve gross negligence or willful misconduct. 3. Duty to Defend: This clause clarifies the corporation's obligation to provide legal representation and cover legal expenses for directors facing claims arising from their corporate duties. 4. Standard for Determining Indemnification: The agreement outlines the method for determining whether the standards for indemnification have been met. This often involves establishing certain criteria, such as a determination by the corporation's board of directors or independent legal counsel that the director acted in good faith, in a manner believed to be in the corporation's best interest, and with the care that an ordinarily prudent person would exercise. 5. Procedures for Seeking Indemnification: The agreement delineates the procedures directors must follow when seeking indemnification, including the requirement to provide prompt notice of a claim and to cooperate fully in the defense of such claim. 6. Advancement of Expenses: This section addresses the advancement of expenses to cover the costs of defending against claims before a final determination of entitlement to indemnification is made. 7. Severability: The agreement may include a severability clause, stating that if any provision is found to be unenforceable or invalid, it does not affect the validity or enforceability of the remaining provisions. Different types of California Indemnification Agreements may exist, depending on the specific needs and requirements of the corporation. Some variations may include tailored provisions related to specific industries, ownership structures, or corporate governance frameworks. However, regardless of the variations, the fundamental purpose of the agreement remains consistent: to protect directors from personal liability and ensure a fair process for determining indemnification standards are met.

A California Indemnification Agreement is a legal contract between a corporation and its directors that outlines the terms and conditions for indemnification, specifically regarding the method used to determine whether the standards for indemnification have been met. This agreement is essential for protecting directors from personal liability and ensuring they are appropriately reimbursed for any legal costs or damages incurred while acting in their official capacity. The purpose of this agreement is to establish a clear process for evaluating claims made by directors seeking indemnification. It ensures that the corporation's reputation and financial resources are not jeopardized by unjustified claims, while also providing directors with a fair and objective means of determining whether they are entitled to indemnification. The California Indemnification Agreement typically specifies several key elements: 1. Definitions: This section outlines the terms used throughout the agreement, such as "corporation," "director," and "indemnification." 2. Scope of Indemnification: The agreement defines the scope of indemnification, specifying the types of claims, liabilities, expenses, and damages that are covered. It may also include any exclusions or limitations on indemnification, such as actions that involve gross negligence or willful misconduct. 3. Duty to Defend: This clause clarifies the corporation's obligation to provide legal representation and cover legal expenses for directors facing claims arising from their corporate duties. 4. Standard for Determining Indemnification: The agreement outlines the method for determining whether the standards for indemnification have been met. This often involves establishing certain criteria, such as a determination by the corporation's board of directors or independent legal counsel that the director acted in good faith, in a manner believed to be in the corporation's best interest, and with the care that an ordinarily prudent person would exercise. 5. Procedures for Seeking Indemnification: The agreement delineates the procedures directors must follow when seeking indemnification, including the requirement to provide prompt notice of a claim and to cooperate fully in the defense of such claim. 6. Advancement of Expenses: This section addresses the advancement of expenses to cover the costs of defending against claims before a final determination of entitlement to indemnification is made. 7. Severability: The agreement may include a severability clause, stating that if any provision is found to be unenforceable or invalid, it does not affect the validity or enforceability of the remaining provisions. Different types of California Indemnification Agreements may exist, depending on the specific needs and requirements of the corporation. Some variations may include tailored provisions related to specific industries, ownership structures, or corporate governance frameworks. However, regardless of the variations, the fundamental purpose of the agreement remains consistent: to protect directors from personal liability and ensure a fair process for determining indemnification standards are met.