Hawaii Indemnification of Corporate Director

• Category: Corporations - Officers and Employees
• State: Multi-State
• Control #: US-13374BG
• Format: Word; Rich Text

Description

Indemnification is where the company reimburses a director or officer for the attorneys' fees and costs, and potentially judgments, incurred in connection with claims arising out of the director's or officer's service to the company. Hawaii Indemnification of Corporate Director: Explained in Detail In Hawaii, the indemnification of corporate directors serves as an essential mechanism to protect directors against potential liabilities arising from their responsibilities and actions performed on behalf of a corporation. It offers financial security and reassurance to directors who are entrusted with making important decisions for the company's success. This detailed description aims to provide an overview of Hawaii's indemnification laws for corporate directors, including its types and significance, while incorporating relevant keywords. Key Features of Hawaii Indemnification of Corporate Director: 1. Statutory Provisions: Hawaii's corporate statutes, specifically Section 414D-158 of the Hawaii Revised Statutes (HRS), outline the indemnification provisions for corporate directors. It establishes the obligations of a corporation to indemnify directors as well as their rights to receive indemnification. 2. Mandatory Indemnification: Under Hawaii law, a corporation is obligated to indemnify a corporate director in any proceeding, provided the director was not found liable and acted in good faith, with the belief that their actions were in the best interest of the corporation. This type of indemnification is crucial to ensure directors can perform their duties fearlessly. 3. Permissive Indemnification: Hawaii law also allows a corporation to provide discretionary indemnification to its directors in situations where the director has been found liable or engaged in misconduct, as long as the board approves it after determining that the director acted in good faith and reasonably. 4. Advancement of Expenses: In addition to indemnification, corporations in Hawaii have the authority to advance reasonable expenses (e.g., legal fees) to directors involved in a proceeding, even before the final outcome becomes apparent. 5. Limits and Restrictions: Indemnification in Hawaii may be subject to certain limitations. It may not extend to situations where the director has been found liable due to their receipt of improper personal benefits or willful misconduct. However, the specific conditions and exceptions are outlined within the relevant statutory provisions. 6. Insurance Coverage: To enhance the protection of corporate directors, Hawaii law permits corporations to purchase and maintain insurance coverage for directors against liabilities arising from their roles in the company. This provision further reinforces their financial security and helps attract competent individuals to serve as directors. Significance and Benefits of Hawaii Indemnification for Corporate Directors: 1. Enhanced Director Confidence: The availability of indemnification provisions significantly enhances directors' confidence, allowing them to perform their duties without the constant fear of personal financial loss or being held personally liable. 2. Attracting Qualified Directors: The existence of robust indemnification provisions, along with insurance coverage, attracts competent individuals to assume directorial positions, ensuring the company benefits from skilled expertise and capable leadership. 3. Retention of Experienced Directors: By offering indemnification, corporations can successfully retain experienced directors who might otherwise be concerned about potential liabilities, encouraging their continued involvement in shaping the company's strategic decisions. 4. Promotes Innovation: Indemnification fosters an atmosphere that encourages directors to take reasonable risks and pursue innovative strategies, as they are shielded from unwarranted personal liability arising from well-intentioned decisions. In summary, Hawaii's indemnification of corporate directors aims to protect and support these vital individuals in their decision-making roles, enabling them to act in the best interests of the corporation without constant personal liability concerns. Mandatory and permissive indemnification provisions, including the advancement of expenses and the option to secure insurance coverage, contribute to creating an environment that attracts and retains highly qualified directors. This promotes the overall success and growth of corporations across Hawaii.

Hawaii Indemnification of Corporate Director: Explained in Detail In Hawaii, the indemnification of corporate directors serves as an essential mechanism to protect directors against potential liabilities arising from their responsibilities and actions performed on behalf of a corporation. It offers financial security and reassurance to directors who are entrusted with making important decisions for the company's success. This detailed description aims to provide an overview of Hawaii's indemnification laws for corporate directors, including its types and significance, while incorporating relevant keywords. Key Features of Hawaii Indemnification of Corporate Director: 1. Statutory Provisions: Hawaii's corporate statutes, specifically Section 414D-158 of the Hawaii Revised Statutes (HRS), outline the indemnification provisions for corporate directors. It establishes the obligations of a corporation to indemnify directors as well as their rights to receive indemnification. 2. Mandatory Indemnification: Under Hawaii law, a corporation is obligated to indemnify a corporate director in any proceeding, provided the director was not found liable and acted in good faith, with the belief that their actions were in the best interest of the corporation. This type of indemnification is crucial to ensure directors can perform their duties fearlessly. 3. Permissive Indemnification: Hawaii law also allows a corporation to provide discretionary indemnification to its directors in situations where the director has been found liable or engaged in misconduct, as long as the board approves it after determining that the director acted in good faith and reasonably. 4. Advancement of Expenses: In addition to indemnification, corporations in Hawaii have the authority to advance reasonable expenses (e.g., legal fees) to directors involved in a proceeding, even before the final outcome becomes apparent. 5. Limits and Restrictions: Indemnification in Hawaii may be subject to certain limitations. It may not extend to situations where the director has been found liable due to their receipt of improper personal benefits or willful misconduct. However, the specific conditions and exceptions are outlined within the relevant statutory provisions. 6. Insurance Coverage: To enhance the protection of corporate directors, Hawaii law permits corporations to purchase and maintain insurance coverage for directors against liabilities arising from their roles in the company. This provision further reinforces their financial security and helps attract competent individuals to serve as directors. Significance and Benefits of Hawaii Indemnification for Corporate Directors: 1. Enhanced Director Confidence: The availability of indemnification provisions significantly enhances directors' confidence, allowing them to perform their duties without the constant fear of personal financial loss or being held personally liable. 2. Attracting Qualified Directors: The existence of robust indemnification provisions, along with insurance coverage, attracts competent individuals to assume directorial positions, ensuring the company benefits from skilled expertise and capable leadership. 3. Retention of Experienced Directors: By offering indemnification, corporations can successfully retain experienced directors who might otherwise be concerned about potential liabilities, encouraging their continued involvement in shaping the company's strategic decisions. 4. Promotes Innovation: Indemnification fosters an atmosphere that encourages directors to take reasonable risks and pursue innovative strategies, as they are shielded from unwarranted personal liability arising from well-intentioned decisions. In summary, Hawaii's indemnification of corporate directors aims to protect and support these vital individuals in their decision-making roles, enabling them to act in the best interests of the corporation without constant personal liability concerns. Mandatory and permissive indemnification provisions, including the advancement of expenses and the option to secure insurance coverage, contribute to creating an environment that attracts and retains highly qualified directors. This promotes the overall success and growth of corporations across Hawaii.