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You recently purchased stock and you are becoming more and more involved in the actions of the
board of directors in the various corporations which you hold stock. And you are hearing
terms like indemnification and hold harmless with respect to what the board of directors
are doing and it doesn't make any sense to you. Hello I'm Robert Todd and I'm here to
answer the question what is indemnification. Well in the context of the board of directors
of a corporation, indemnification has to do with the corporation agreeing to indemnify
the board of directors for the actions that they engage in on behalf of the corporation.
In other words if the board of directors engage in activities that give rise to lawsuits being
filed against them and alleged damages the corporations says, they are going to indemnify
the board of directors. That is they are going to either provide for the legal fees, and
the legal costs that are incurred by the board of directors in defending themselves against
these claims. And in some instances the indemnification encompasses actually the corporation agreeing
to indemnify the board of directors for any damages that may be assessed against the board
of directors. In that case it would mean the corporation would actually pay the damages
themselves. I'm Robert Todd and thank you for watching.