Title: Understanding the Texas Indemnification Agreement: A Comprehensive Overview of Standards and Methods for Determining Eligibility Introduction: The Texas Indemnification Agreement is a legally binding contract designed to protect directors of corporations from financial liabilities arising out of their services to the company. This detailed description aims to provide a comprehensive understanding of the agreement, highlighting the methods employed to ascertain whether the standards for indemnification have been met. Keywords: Texas Indemnification Agreement, corporation, directors, indemnification, standards, determination, eligibility 1. Types of Texas Indemnification Agreements: a. General Indemnification Agreement: This form of agreement covers indemnification for directors against all liabilities arising from their corporate duties. b. Limited Indemnification Agreement: An agreement that provides indemnification coverage up to specific limits and excludes certain liabilities. 2. Purpose of the Texas Indemnification Agreement: The primary objective of the agreement is to offer financial protection to directors against potential legal actions or expenses incurred while acting in their official capacity. It encourages qualified individuals to serve as directors by mitigating the risks associated with their roles. 3. Eligibility Standards for Indemnification: a. Determination of Good Faith: The agreement requires directors to demonstrate that their actions were taken in good faith, in the best interests of the corporation, and without any personal benefit or conflict of interest. b. Reasonable Belief: Directors must show that they reasonably believed their conduct was lawful and aligned with their fiduciary duties. c. Non-Adverse Conduct: Directors must not have been found liable for misconduct or negligence in the performance of their duties. d. Satisfied Duty of Loyalty: Directors should have acted in a manner consistent with their fiduciary duty of loyalty towards the corporation. e. Not Prohibited by Law: The indemnification agreement must not violate any restrictions imposed by state or federal laws. 4. Determination Methods for Indemnification Eligibility: a. Board Determination: The corporation's board of directors, excluding those seeking indemnification, will evaluate the director's eligibility on a case-by-case basis, considering the standards mentioned above. b. Independent Legal Counsel: In certain circumstances, the board may seek the advice of independent legal counsel to assess validity and eligibility for indemnification. c. Shareholder Approval: Some agreements require shareholders' approval for indemnification under specific conditions or when the amounts exceed predetermined limits. Conclusion: The Texas Indemnification Agreement safeguards directors by providing indemnification for qualified actions taken within their official roles. The agreement's eligibility standards and determination methods ensure fair assessment and protection, promoting the engagement and commitment of capable individuals in corporate governance. Keywords: Texas Indemnification Agreement, corporation, directors, indemnification, standards, determination, eligibility, Texas corporation indemnification agreement types.
Texas Indemnification Agreement between corporation and its directors regarding method for determining whether standards for indemnification have been met
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Texas Oilfield Anti-Indemnity Act Prac. & Rem. Code § 127.003. The act provides that any agreement to indemnify pertaining to an oil and gas well is void if it purports to indemnify a person against damage caused by the sole or concurrent negligence of the indemnitee.
TEXAS ANTI-INDEMNITY ACT Prohibits and makes void broad form and intermediate form indemnity agreements (claims involving the sole or concurrent negligence of indemnitee) for construction projects, if the Act applies to your contract.
An anti-indemnity statute is a law defining how much risk can be transferred between parties in a contract and is oftentimes used in construction contracts. An anti-indemnity statute protects sub-contractors from risks they take on from a primary contractor.
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.
Texas Insurance Code § 151.102 and Indemnity in Texas Indemnity clauses are contractual provisions that commit one party to compensate the other for losses arising out of a commercial contract.
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.
The Anti-Indemnity Provisions of Chapter 151 Section 151.101 states that Subchapter C, the Anti-Indemnity Act, applies to a construction contract for a construction project for which an indemnitor is provided or procures insurance subject to Chapter 151 (a CIP) or Title 10 of the Texas Insurance Code.
Texas Insurance Code § 151.102 and Indemnity in Texas Indemnity clauses are contractual provisions that commit one party to compensate the other for losses arising out of a commercial contract.