North Carolina Indemnity Agreement is a legally binding contract that establishes the terms and conditions for indemnifying directors, officers, employees, and agents of a corporation in the state of North Carolina. This agreement provides financial protection and covers the costs incurred in defending against legal claims or actions arising from their position within the corporation. Indemnity agreements are crucial means for ensuring the corporate leadership can effectively carry out their duties without fear of personal financial liability. The North Carolina Indemnity Agreement encompasses various types, including: 1. Director Indemnification: This agreement type specifically focuses on shielding directors from potential legal consequences resulting from their actions undertaken on behalf of the corporation. It covers legal expenses incurred while defending against claims or lawsuits arising from negligent or wrongful acts. 2. Officer Indemnification: Officers play a crucial role in corporate decision-making, and this agreement type aims to safeguard them from personal financial exposure resulting from their official duties. It provides indemnification for legal costs incurred in defending against claims arising from their actions, decisions, or omissions. 3. Employee Indemnification: Employees serve the corporation across various levels, and this agreement type ensures their protection from personal liability. It covers costs associated with legal defense for claims arising from their employment activities, such as negligence or breach of duty. 4. Agent Indemnification: Agents, including independent contractors and consultants, contribute to a corporation's daily operations. The Agent Indemnification Agreement offers them protection from potential legal claims and suits arising from their work on behalf of the corporation. Each of these North Carolina Indemnity Agreement types is designed to provide insurance-like protection to directors, officers, employees, and agents by covering their legal expenses, judgments, settlements, and other costs incurred while defending against claims. However, it is essential to note that the specific terms and provisions may vary depending on the agreement's details and the corporation involved. In conclusion, the North Carolina Indemnity Agreement acts as a safeguard for corporations and their executives, ensuring they can effectively carry out their duties without facing the risk of personal financial liability. By understanding the different types of agreements, corporations can tailor the indemnification terms to suit their specific needs and protect their leadership team appropriately.
North Carolina Indemnity Agreement between corporation and directors officers employees and agents of corporation
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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.
The indemnity may cover liability incurred by the director to any person other than the company or an associated company. This may include both legal costs and the financial costs of an adverse judgement. But the indemnity must not cover liabilities to the company or to any associated company (subsection (2)).
North Carolina's anti-indemnity statute declares that any provision in a construction or design professional contract that requires a party (promisor) to indemnify another (promisee) for the promisee's or its derivative parties' own negligence, whether in whole or in part, is against public policy, void, and ...
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.
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 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.
In corporate law, an indemnity agreement serves to hold Board Directors and company executives free from personal liability if the company becomes sued or suffers damages.