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David A. Katz, a partner at Wachtell, Lipton, Rosen & Katz, and Laura A. McIntosh, a consulting attorney for the firm, write that due to a recent Chancery Court decision, it is now quite clear that in Delaware, unless otherwise provided in the bylaws or agreed by contract, a director's right to advancement of expenses does not vest until the company's obligation is triggered. This may leave former directors, in particular, vulnerable to bylaw amendments affecting their right to advancement of expenses. Companies should take this opportunity to ensure that their indemnification bylaws are appropriately drafted.
July 24, 2008 at 12:00 AM
1 minute read
Presented by BigVoodoo
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