The Virginia Indemnity Agreement is a legal contract designed to provide protection and financial security to corporations and their directors, officers, employees, and agents in the event of legal actions or liabilities arising from their roles within the organization. This agreement serves as an assurance that the corporation will indemnify its representatives, ensuring that they are not personally liable for any losses incurred during the execution of their duties. The primary purpose of the Virginia Indemnity Agreement is to safeguard individuals who act on behalf of the corporation, such as directors, officers, employees, and agents, from any legal expenses, judgments, settlements, or fines that may arise due to their actions or decisions made within the scope of their corporate responsibilities. There are several types of Virginia Indemnity Agreements that cater to different situations and roles within a corporation, some of which include: 1. Director Indemnity Agreement: This type of agreement provides protection to directors of the corporation, shielding them from potential liabilities arising from their actions or decisions made in good faith while discharging their duties. 2. Officer Indemnity Agreement: Officers, who hold executive positions within the corporation, benefit from this specific type of indemnity agreement. It ensures they are protected from liabilities or legal actions resulting from their corporate role. 3. Employee Indemnity Agreement: This agreement provisions protection for employees of the corporation who may face legal actions or liabilities arising from their duties performed within the company's scope of work. 4. Agent Indemnity Agreement: Agents, acting as representatives of the corporation, receive protection from this agreement against any potential liabilities or legal actions resulting from their actions or decisions made while representing the company. The Virginia Indemnity Agreement includes various key provisions that safeguard both the corporation and its representatives. These provisions commonly encompass: 1. Indemnification: The agreement clearly states that the corporation will indemnify its representatives, including directors, officers, employees, and agents, against any legal expenses, liabilities, damages, or losses incurred during the course of their official duties. 2. Standard of Conduct: It outlines the requirements for indemnification, specifying that the individual seeking protection must have acted in good faith, reasonably believed their actions were in the corporation's best interest, and did not engage in willful misconduct or gross negligence. 3. Advancement of Expenses: The agreement may include a provision allowing the corporation to advance funds to individuals requiring legal representation or financial resources during legal proceedings until the final resolution is reached. 4. Reservation of Rights: This provision states that the corporation reserves the right to review and determine the validity of any indemnification claims made by its representatives, ensuring they meet the specified criteria and conditions. It is essential for all corporations in Virginia to have comprehensive indemnity agreements in place to protect their directors, officers, employees, and agents from potential legal liabilities. These agreements provide a sense of security, enabling individuals to execute their duties without fear of personal financial consequences, ultimately fostering trust and encouraging effective corporate governance.
Virginia Indemnity Agreement between corporation and directors officers employees and agents of corporation
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FAQ
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.
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.
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 Agreement to secure against loss or damage; to give security for the reimbursement of a person in case of an anticipated loss falling upon him. Also to make good; to compensate; to make reimbursement to one of a loss already incurred by him.
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.
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.
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.
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.