Pennsylvania Indemnity Agreement between corporation and directors and/or officers is a legal document designed to protect the directors and officers of a corporation from personal liability for actions taken in their official capacity. This agreement provides indemnification to these individuals, ensuring that they are not held personally responsible for any damages or claims arising out of their performance of corporate duties. One type of Pennsylvania Indemnity Agreement is the Broad Form Indemnification Agreement. This agreement provides comprehensive protection to directors and officers by indemnifying them against all losses, damages, legal expenses, and liabilities incurred while acting in good faith and within the scope of their corporate duties. It covers a wide range of situations, including lawsuits, regulatory investigations, and settlements. Another type is the Narrow Form Indemnification Agreement. This agreement offers a more limited level of protection and covers only specific types of claims, typically excluding cases where the director or officer is found to have acted with intentional misconduct or gross negligence. It provides indemnification for expenses incurred in defending against legal actions and judgments arising from covered claims. Pennsylvania Indemnity Agreements may also include Advancement of Expenses provisions. These clauses enable directors and officers to request the corporation to advance funds to cover legal expenses as soon as a claim is made against them. This provision ensures that directors and officers have access to financial resources to mount a legal defense without bearing the immediate burden of these costs. Moreover, the Pennsylvania Indemnity Agreement may contain Indemnification for Derivative Actions. This provision extends indemnification to directors and officers against claims brought by shareholders on behalf of the corporation itself, commonly known as derivative suits. It covers legal expenses, settlements, and judgments resulting from such actions, provided the director or officer acted in good faith and in a manner they reasonably believed to be in the best interests of the corporation. In conclusion, the Pennsylvania Indemnity Agreement between corporation and directors and/or officers serves as an essential mechanism to protect these individuals from personal liability. With types such as Broad Form and Narrow Form Indemnification Agreements, including provisions like Advancement of Expenses and Indemnification for Derivative Actions, this agreement offers various levels and forms of indemnification tailored to meet the specific needs of corporations and their directors and officers.
Pennsylvania Indemnity Agreement between corporation and directors and / or officers
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How to fill out Indemnity Agreement Between Corporation And Directors And / Or Officers?
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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 Pennsylvania law, courts follow the ?Perry-Ruzzi? rule, under which ?provisions to indemnify for another party's negligence are to be narrowly construed, requiring a clear and unequivocal agreement before a party may transfer its liability to another party.? See Bernotas v. Super Fresh Food Markets, 963 A.
A director and officer indemnification agreement is a contract that allows executives to protect themselves from claims made against them while performing job. Indemnification means that in the event a lawsuit is filed against a company, the indemnified party is "held harmless" from claims.
Many company constitutions set out rights of indemnity for directors, and often also include provision for directors and officers (D&O) insurance. Alternatively, they may simply provide that the company may indemnify directors. The deed of indemnity is an agreement between the company and a director.
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.
Section 145(b) empowers a corporation to indemnify its directors against expenses incurred in connection with the defense or settlement of an action brought by or in the right of the corporation, subject to the standard of conduct determination, and except that no indemnification may be made as to any claim to which ...
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.
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.