The Michigan Indemnity Agreement is a legal document that outlines the terms and conditions of indemnification between a corporation and its directors and/or officers. It serves as a contractual agreement that provides protection and financial security to these individuals in the event they are subjected to legal actions, litigation, or claims arising from their roles and responsibilities within the corporation. This agreement aims to mitigate the potential financial risks for directors and officers while performing their duties, ensuring that they can carry out their duties without excessive concern for personal liability. Under the Michigan Indemnity Agreement, corporations are committed to indemnify, defend, and hold harmless their directors and officers against any legal costs, expenses, damages, or liabilities incurred in the course of their official duties, as long as these actions were performed in good faith and in the best interest of the corporation. This indemnification typically covers costs incurred from legal proceedings such as lawsuits, investigations, arbitration, or regulatory actions. The Michigan Indemnity Agreement comprises various types or provisions that corporations and directors and officers can negotiate and include based on their specific requirements and circumstances. Some notable types of Indemnity Agreements in Michigan include: 1. Standard Indemnity Agreement: This agreement includes the basic provisions for indemnification, ensuring the corporation covers legal expenses and damages for directors and officers acting in good faith. 2. Extended Indemnity Agreement: This type of agreement provides an extended scope of coverage, encompassing broader indemnification provisions. It may include coverage for expenses related to settlements, judgments, fines, and penalties, subject to the applicable laws and corporate bylaws. 3. Indemnification Agreement with Advancement of Expenses: This agreement entitles directors and officers to advancement of expenses, wherein the corporation shall pay for legal costs upfront, even before the resolution of the legal proceedings. 4. Indemnification Agreement with Non-Exclusivity Clause: This type of agreement specifies that the indemnification provided by the corporation is not exclusive. Directors and officers may seek additional indemnification or insurance coverage from other sources if permitted by law. By executing a comprehensive Michigan Indemnity Agreement, corporations can provide a reassuring environment for directors and officers to fulfill their duties effectively, knowing that they are protected from potential personal liabilities. It is crucial for both parties to carefully review and understand the terms and conditions of the agreement, seeking legal counsel if necessary, to ensure a fair and appropriate indemnification arrangement that aligns with legal requirements and the corporation's best interests.
Michigan Indemnity Agreement between corporation and directors and / or officers
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How to fill out Michigan Indemnity Agreement Between Corporation And Directors And / Or Officers?
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Section 145(c)(1) provides that to the extent a director has been successful on the merits or otherwise in defense of any action, suit, or proceeding referenced in Section 145(a) or Section 145(b), the director shall be indemnified against expenses actually and reasonably incurred by the director in connection ...
Insurance ? The indemnification agreement typically will require that the company provide D&O liability insurance that protects the indemnitee to the same extent as the most favorably insured of the company's and its affiliates' current directors and officers.
Indemnification Agreement to secure against loss or damage; to give security for the reimbursement of a person in case of an anticipated loss falling upon him. Also to make good; to compensate; to make reimbursement to one of a loss already incurred by him.
Indemnification refers to the right to have a company reimburse current or former directors or officers for all losses, including legal fees, incurred in connection with litigation arising from actions taken in service to the company or at the company's direction.
A company may, however, lend money to a director to fund the director's defence costs. Frequently, an indemnity will include a provision under which the company agrees to lend the director the amounts necessary to fund the director's defence costs.
Indemnification is often very broad, often extending ?to the maximum extent permitted by law?, whereas D&O insurance polices contain numerous exclusions and conditions. In addition, D&O insurance must be renewed each year, with possible changes in terms and conditions.
Indemnification, also referred to as indemnity, is an undertaking by one party (the indemnifying party) to compensate the other party (the indemnified party) for certain costs and expenses, typically stemming from third-party claims.