Director Indemnification Agreement

Director Indemnification Agreement

Drafts an enforceable director indemnification agreement under the state of incorporation with clear advancement and determination procedures.

Quick Start

Gather before drafting:

1. State of incorporation and governing statute
2. Charter and bylaws (indemnification/advancement provisions)
3. Board authorization status or resolutions
4. Director name, titles, start date, covered capacities (subsidiaries, affiliates, benefit plans)
5. D&O insurance policies and coordination preferences
6. Prior indemnification agreements or house style template

Intake Checklist

• [ ] Governing law matches state of incorporation
• [ ] Coverage scope: director only, or also officer/employee roles
• [ ] Retroactive to prior service or prospective only
• [ ] Advancement timing (default: 30 days from request)
• [ ] Determination method order and deadlines
• [ ] Presumption in favor of indemnification: yes/no
• [ ] Fee shifting on enforcement actions: yes/no
• [ ] Insurance priority: company primary (default) or insurance primary
• [ ] Term and post-service survival period

Required Definitions

Agreement Structure

1. Definitions
2. Indemnification
3. Advancement of Expenses
4. Procedure for Advancement Requests
5. Procedure for Indemnification Determinations
6. Presumptions and Burdens
7. Enforcement; Fee Shifting
8. Notice of Proceedings; Defense and Settlement
9. Non-Exclusivity; Subrogation; Survival
10. Insurance
11. Contribution; Partial Indemnification
12. Term; Successors
13. Governing Law; Forum
14. Severability; Amendment; Notices; Counterparts

Core Clauses

Decision Defaults

Pitfalls

• Verify state statute terminology for conduct standards and limits; flag uncertain citations with [VERIFY] (e.g., DGCL 145 [VERIFY])
• Never promise indemnification for acts prohibited by law, bad faith, or improper personal benefit
• Align with charter/bylaws — do not conflict with exculpation or indemnification limitations
• Keep advancement independent from ultimate entitlement determination
• Include explicit retroactivity rule if covering past service
• For public or regulated companies, add required board/committee approvals and securities law constraints
• Avoid cooperation clauses that undermine defense strategy or waive privilege