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Do stockholders need to approve indemnification agreements?

If a corporations indemnification agreement needs to be updated, a decision must be made as to which corporate constituency will approve the revised agreementthe corporations shareholders or its board of directors.

Do directors have the right to indemnification?

Yes it does. In a lawsuit or proceeding brought by a third party those outside of the company and not in a derivative manner on behalf of the corporation directors and officers may be indemnified for actual and reasonably incurred expenses, including attorneys fees, judgments, fees and amounts paid in settlement.

What is the right to indemnification?

Indemnification is a legal agreement by one party to hold another party blameless not liable for potential losses or damages. It is similar to a liability waiver but is usually more specific, applicable only to particular items, circumstances, or situations, or in regard to a particular contract.

What is the purpose of an indemnification clause?

To indemnify means to compensate someone for his/her harm or loss. In most contracts, an indemnification clause serves to compensate a party for harm or loss arising in connection with the other partys actions or failure to act. The intent is to shift liability away from one party, and on to the indemnifying party.

Who does an indemnification clause protect?

In a one-way indemnification, only one party provides this indemnity in favor of the other party. The primary benefit of an indemnification provision is to protect the indemnified party against losses from third party claims related to the contract.

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What is director indemnification?

Indemnification is where the company reimburses the director or officer for the attorneys fees and costs, and potentially judgments, incurred in connection with claims arising out of the directors or officers service to the company.

What is indemnification of board members?

Indemnification. Indemnification is an undertaking by the company to defend the director and officer against the cost of certain claims, including legal fees, litigation awards and settlement costs.

Can a company indemnify its directors?

Accordingly, a company may provide certain indemnities to its directors for any liability arising out of any act done in his professional capacity, excluding intentional criminal conduct.

What is indemnification of board members?

Indemnification. Indemnification is an undertaking by the company to defend the director and officer against the cost of certain claims, including legal fees, litigation awards and settlement costs.

What is an indemnification agreement for directors?

These agreements promise to (1) advance legal fees, and (2) pay loss (indemnification) on behalf of an individual should he or she be named in a lawsuit in his or her capacity as a director or officer of the company.

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Get the up-to-date Articles of Incorporation with Indemnification 2024 now

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Got questions?

Do stockholders need to approve indemnification agreements?

Do directors have the right to indemnification?

What is the right to indemnification?

What is the purpose of an indemnification clause?

Who does an indemnification clause protect?

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Can a company indemnify its directors?

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