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.
New York Indemnification Agreement between corporation and its directors regarding method for determining whether standards for indemnification have been met
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How to fill out New York Indemnification Agreement Between Corporation And Its Directors Regarding Method For Determining Whether Standards For Indemnification Have Been Met?
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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.
New York's General Obligations Law §5-322.1 prohibits enforcement of an indemnification agreement for damage arising ?out of bodily injuries to persons or damage to property contributed to, caused by, or resulting from the negligence of the promisee, his agents or employees, or indemnitee, whether such negligence be in ...
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.
Under a typical indemnification provision, the employer agrees to indemnify the executive against lawsuits, claims, or demands against the employee resulting from the employee's good faith performance of his or her duties and obligations.
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.
Indemnification is, generally speaking, a reimbursement by a company of its Ds&Os for expenses or losses they have incurred in connection with litigation or other proceedings relating to their service to the company.
There are three main types of express indemnity clauses: broad form, intermediate form, and limited form. Broad form express indemnity clauses require the indemnitor to hold the indemnitee harmless for all liability, even if the indemnitee is solely at fault.
The GOL§ 5-322.1 prohibits a party involved in the construction, alteration, maintenance or repair of a building from contracting with another to indemnify or hold it harmless for injuries arising out of its own negligence.