Readers interested in learning more about written indemnification agreements would like to read the May 26, 2015 article on the Securities Matters blog by the law firm Mintz Levin (here), which describes the importance of a separate written compensation agreement for senior executives and discusses the key features that this type of agreement should contain. An earlier note from the law firm Alston & Bird dealing with compensation and development in general and the need for written compensation agreements in particular can be found here. While some corporate laws contain provisions relating to the remuneration of officers and directors, senior executives should not simply rely on these general provisions to protect themselves. The indemnification provisions contained in the articles may be permissive or vague or may not cover any potential problems that may arise. 13. Non-exclusive contractual rights. The Rights of the Director under this Agreement apply in addition to, but not exclusively, any other rights conferred by the Director under any other agreement, the resolution of pepsiCo`s shareholders or board of directors, any provision of PepsiCo`s reformulated articles or articles of association, or any law or rule of law providing for compensation; a. in force now or after. 7.

Failure to grant the exemption. If a claim for payment of any liability, expense or advance under this Agreement or any other agreement, a resolution of PepsiCo`s shareholders or board of directors, a provision of PepsiCo`s revised articles or articles of association, or any law or regulation providing for compensation is now or in the future in effect, is not paid in full within thirty days, in the case of liabilities and expenses, or within five days in the case of advances, after PepsiCo has received a written request for payment, the Director may bring an action against PepsiCo to recover the outstanding amount of such claim as well as interest thereon. This is a defense against such a claim (other than a claim for an advance request) that the Administrator has failed to meet the standard of conduct that allows PepsiCo under applicable law to indemnify the Administrator for the amount claimed, provided, however, that the burden of proof for this defense is on PepsiCo and that the Director has the right to: Receive advances in accordance with Section 5 of this Agreement. unless such a defence is finally decided by a court. First, a written compensation agreement may contain definitions of important terms. For example, the written agreement may include a complete definition of the types of « expenses » for which compensation and an advance are available and the types of « procedures » in which the person is entitled to advancement. For example, a written indemnification agreement could specify that the person is entitled to compensation or transportation even if they are only a witness in a trial, not just if they are a designated party. The definition of « officer » under section 3114(b) is limited to (1) the President, Chief Executive Officer, Chief Operating Officer, Chief Financial Officer, Chief Legal Officer, Controller, Treasurer or Chief Accounting Officer of the Company, (2) a person identified in public records as one of the Company`s highest-paid officers, or (3) a person who, by written agreement with the Company, has agreed to be identified as an officer within the meaning of section 3114(b). Providing D&O insurance is another topic that is often addressed in the written indemnification agreement. The agreement includes a commitment by the company to continue to obtain D&O insurance coverage for the individual as long as it is commercially available. The written indemnification agreement may also provide that the insurance protects the person to the same extent as the current directors and officers of the corporation.

9. Change of Control. In the event of a change in control (as defined below) by PepsiCo, the acquiring person or subsequent (as defined below) (the « Successor ») may in no way diminish or limit the indemnification rights available to the Administrator immediately prior to such change of control, whether or not such rights are available under this Agreement. or pursuant to any other agreement, resolution of PepsiCo`s shareholders or board of directors, any provision of PepsiCo`s amended articles or articles of association, or any law or statute providing for compensation now or in the future. Such successor shall not cancel, limit or reduce in any way the rights or coverage granted to the Administrator under one or more PepsiCo insurance policies immediately prior to such change of control. For assistance with issues arising from the compensation provisions in management agreements, please contact Clouse Brown PLLC. In both cases, if the director or officer of a Delaware corporation is ultimately determined to have acted in bad faith, no compensation is available. Even in the absence of a legal provision, legal provision or indemnification agreement granting Ds&Os the right to compensation, a company is required by law to indemnify directors and certain officers for expenses actually and reasonably incurred in defending a suit or proceeding relating to the Service as d&O if it was successful in the matter or otherwise.4 Different from required. Compensation, however, Delaware companies are not required to grant Ds&Os the right to compensation, and further development of Ds&O`s expenses is never required. This is purely permissive.5 Within these parameters, Delaware companies have a lot of leeway to define the parameters for clearing Ds&O.

In addition, compensation allows a company to build trust between its officers and directors by providing a high level of commitment and support to its officers. It is often in the best interest of the company that the manager has competent legal counsel. The advance compensation provisions may allow the employer to retain some degree of control over the choice of lawyer, hourly rates and expenses. Companies that offer compensation may seek to reduce their liability by including a clause that limits the types of expenses for which compensation is available, or by setting a monetary cap on the total amount the company may be required to pay. .