Texas 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 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.

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.