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Director Indemnification Agreement Template for United States

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Key Requirements PROMPT example:

Director Indemnification Agreement

"I need a Director Indemnification Agreement for our newly appointed board member of our healthcare technology startup, with specific provisions for regulatory compliance and enhanced coverage for cybersecurity-related incidents."

Document background
Director Indemnification Agreements are essential corporate governance documents used to attract and retain qualified individuals to serve on corporate boards. These agreements, governed by U.S. federal and state laws, provide directors with assured protection beyond what is typically included in corporate bylaws or D&O insurance. The agreement details specific circumstances under which the company will defend and protect directors from personal liability, including the advancement of legal expenses. Companies typically implement these agreements when appointing new directors or updating their governance framework.
Suggested Sections

1. Parties: Identifies the corporation and the director being indemnified

2. Background: Explains the context and purpose of the agreement, including director's role

3. Definitions: Defines key terms including 'Proceedings', 'Expenses', 'Indemnifiable Events'

4. Indemnification Rights: Core section detailing the scope and extent of indemnification

5. Advancement of Expenses: Terms for advancing legal and other expenses to director

6. Procedures for Claims: Process for making and determining indemnification claims

7. Limitations and Exclusions: Circumstances where indemnification doesn't apply

8. D&O Insurance: Provisions regarding insurance coverage

9. Duration: Term of the agreement and survival of rights

Optional Sections

1. Subrogation Rights: Company's rights to recover payments from third parties when company wants to preserve right to recover from other parties

2. Change in Control: Special provisions for corporate transactions, typically used for public companies or those likely to undergo ownership changes

3. Contribution: Rights to contribution from other indemnified persons when multiple directors might be involved in same proceeding

4. Severability: Provisions for partial invalidity, standard but optional in some jurisdictions

Suggested Schedules

1. Form of Undertaking: Standard form for director to request expense advancement

2. Insurance Schedule: Details of D&O insurance coverage

3. Notice Requirements: Specific procedures for providing notice of claims

Authors

Alex Denne

Head of Growth (Open Source Law) @ ¶¶Òõ¶ÌÊÓÆµ | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

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Industries

Federal Securities Acts: Securities Act of 1933 and Securities Exchange Act of 1934 - fundamental federal laws governing securities transactions and establishing disclosure requirements

Sarbanes-Oxley Act: 2002 federal law establishing enhanced corporate governance standards, particularly Section 402 regarding corporate responsibility

Dodd-Frank Act: Wall Street Reform and Consumer Protection Act providing additional corporate governance and financial regulation requirements

State Corporate Laws: State-specific laws governing corporate operations, particularly Delaware General Corporation Law (DGCL) Section 145 for indemnification provisions

Fiduciary Duties: Legal principles including duty of care, duty of loyalty, and business judgment rule that govern director conduct

Case Law Precedents: Relevant court decisions establishing interpretation of 'good faith' and 'best interests of the corporation' in context of director indemnification

Regulatory Requirements: SEC regulations and stock exchange listing requirements affecting corporate governance and indemnification provisions

Corporate Documents: Company-specific documents including Articles of Incorporation and Bylaws that may contain existing indemnification provisions

Indemnification Scope: Parameters defining extent of protection, including advancement of expenses, eligibility determination, exclusions, and insurance provisions

Procedural Requirements: Process-related elements including notice requirements, claim procedures, and duration of protection under the indemnification agreement

Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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