indemnification

Question 1

Define: corporate indemnification

Answer 1

Practice of corporations paying for costs of director or officer defense in litigation

Question 2

Can corporations insure to indemnify?

Answer 2

Yes, D&O insurance common

Question 3

When is indemnification required?

Answer 3

Corporation ALWAYS required to pay costs of defense if director/officer SUCCESSFULLY DEFENDS the case

Question 4

When is indemnification prohibited?

Answer 4

When director/officer is liable for receiving IMPROPER BENEFIT

Question 4

When MAY corporation indemnify? (optional)

Answer 4

If 1) director/officer acted in good faith with no intent to harm corp OR
2) had no reasonable cause to believe conduct was illegal