New York 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 New York Indemnification Agreement serves as a legally binding contract between a corporation and its directors, aiming to protect the directors from potential liabilities arising from their roles and responsibilities within the company. This agreement outlines the methods to determine whether the standards for indemnification have been met, providing a framework for resolving such matters. The New York Indemnification Agreement typically includes the following key elements: 1. Scope of Indemnification: The agreement clearly defines the scope of indemnification, specifying the types of claims and liabilities that are covered. These may include legal expenses, judgments, fines, settlements, and other costs incurred by the director during the course of their duties. 2. Standard of Conduct: The agreement defines the standards that need to be met by the directors to be eligible for indemnification. These standards usually align with the applicable state laws, corporate bylaws, or provisions set forth by the corporation in accordance with the New York Business Corporation Law (BCL). Directors are typically protected if they have acted in good faith, with reasonable belief that their actions were in the best interest of the company. 3. Determination Process: The agreement outlines the procedure for assessing whether the director has met the standards for indemnification. It may establish an internal committee, composed of independent directors or legal advisors, responsible for determining the eligibility and appropriateness of indemnification in specific cases. This committee will evaluate the director's conduct and decide whether to grant indemnification. 4. Notice and Cooperation: The agreement may include provisions requiring the director to promptly notify the corporation of any pending claims or legal actions. This notice is crucial to initiate the indemnification process and enable the corporation to assess the situation. The agreement may also stipulate that the director must cooperate fully with the corporation during any legal proceedings. 5. Advancement of Expenses: The indemnification agreement may provide for the advancement of expenses incurred by the directors in defending against claims or legal actions. This provision ensures that the directors have immediate access to necessary funds for legal representation and related costs. Different types or variations of New York Indemnification Agreements may exist based on the unique circumstances or requirements of corporations. These variations may include specific clauses related to claims arising from corporate transactions, litigation involving shareholders, derivative actions, or protection in the event of a change of control or merger. These variations may be named accordingly, such as "M&A Indemnification Agreement," "Shareholder Litigation Indemnification Agreement," or "Change of Control Indemnification Agreement." In conclusion, a New York Indemnification Agreement for a corporation and its directors acts as a critical tool to mitigate risks and provide legal protection to directors. It establishes the standards, procedures, and criteria necessary to determine whether indemnification is warranted, helping ensure the smooth functioning and effective governance of the corporation.

A New York Indemnification Agreement serves as a legally binding contract between a corporation and its directors, aiming to protect the directors from potential liabilities arising from their roles and responsibilities within the company. This agreement outlines the methods to determine whether the standards for indemnification have been met, providing a framework for resolving such matters. The New York Indemnification Agreement typically includes the following key elements: 1. Scope of Indemnification: The agreement clearly defines the scope of indemnification, specifying the types of claims and liabilities that are covered. These may include legal expenses, judgments, fines, settlements, and other costs incurred by the director during the course of their duties. 2. Standard of Conduct: The agreement defines the standards that need to be met by the directors to be eligible for indemnification. These standards usually align with the applicable state laws, corporate bylaws, or provisions set forth by the corporation in accordance with the New York Business Corporation Law (BCL). Directors are typically protected if they have acted in good faith, with reasonable belief that their actions were in the best interest of the company. 3. Determination Process: The agreement outlines the procedure for assessing whether the director has met the standards for indemnification. It may establish an internal committee, composed of independent directors or legal advisors, responsible for determining the eligibility and appropriateness of indemnification in specific cases. This committee will evaluate the director's conduct and decide whether to grant indemnification. 4. Notice and Cooperation: The agreement may include provisions requiring the director to promptly notify the corporation of any pending claims or legal actions. This notice is crucial to initiate the indemnification process and enable the corporation to assess the situation. The agreement may also stipulate that the director must cooperate fully with the corporation during any legal proceedings. 5. Advancement of Expenses: The indemnification agreement may provide for the advancement of expenses incurred by the directors in defending against claims or legal actions. This provision ensures that the directors have immediate access to necessary funds for legal representation and related costs. Different types or variations of New York Indemnification Agreements may exist based on the unique circumstances or requirements of corporations. These variations may include specific clauses related to claims arising from corporate transactions, litigation involving shareholders, derivative actions, or protection in the event of a change of control or merger. These variations may be named accordingly, such as "M&A Indemnification Agreement," "Shareholder Litigation Indemnification Agreement," or "Change of Control Indemnification Agreement." In conclusion, a New York Indemnification Agreement for a corporation and its directors acts as a critical tool to mitigate risks and provide legal protection to directors. It establishes the standards, procedures, and criteria necessary to determine whether indemnification is warranted, helping ensure the smooth functioning and effective governance of the corporation.