Obtaining or Resisting Advancement: A Practical Guide

Document type: Guide Practice area: Corporate — Corporate Governance Jurisdiction: Delaware, with notes on other states Last reviewed: 5 September 2026

Part one: the individual's side

Step 1 — Assemble the entitlement record, immediately

Before drafting anything, collect:

• The certificate of incorporation as in effect (i) when the conduct occurred and (ii) now;
• The bylaws, same two versions;
• Any indemnification agreement, and any amendment;
• Any board or stockholder resolution granting rights;
• Any employment agreement, offer letter, or separation agreement with indemnification language;
• Any board designation documents for subsidiary or portfolio company service — particularly anything reciting that service was at the corporation's request;
• The D&O insurance program: the primary policy, every excess layer, and any Side A difference-in-conditions policy;
• Minutes confirming the person's election or appointment and the dates of service.

Why both versions of the charter and bylaws. Rights under bylaws generally vest at the time of the conduct, and a company that narrowed its provisions afterward cannot apply the narrowing retroactively unless the earlier provision expressly reserved that power. You need to know which version governs, and the answer is usually the one in effect when the conduct occurred.

Where to get them if the company will not provide them. Public company charters and bylaws are filed publicly. For a private company, a books-and-records demand is available, and a demand seeking the indemnification provisions is about as clearly proper a purpose as exists.

Step 2 — Analyze the entitlement

Answer four questions.

Is the proceeding covered? Check whether the definition includes threatened and investigative matters, and whether it covers a person "otherwise involved," including as a witness. Many disputes are resolved at this line.

Is it "by reason of the fact" of the corporate role? The test is a nexus between the proceeding and the person's position — satisfied where the corporate powers or position were used in or necessary to the alleged conduct. Claims that the person abused the office are covered. Claims arising from purely personal dealings are not.

Is the right mandatory or permissive? "Shall" versus "may." A permissive provision requires a board determination, which a hostile board will not make. A mandatory provision does not.

Is the right conditioned? On an undertaking (standard), on security (unusual), on a good faith affirmation (required in some non-Delaware states), or on a determination.

Step 3 — Deliver the demand

The demand should be short, complete, and immediate.

• Identify the proceeding, the date it commenced, and the claims;
• Identify the person's role and dates of service;
• Cite the operative provisions by section, attaching the governing documents;
• Explain briefly why the proceeding is "by reason of the fact" of the role;
• Attach the executed undertaking;
• Demand advancement of expenses already incurred and on an ongoing basis;
• Propose an invoice and payment protocol;
• Set a response deadline — ten to fifteen business days is reasonable;
• Reserve all rights, including to fees incurred enforcing the right.

Do not argue the merits of the underlying case. They are irrelevant, and engaging with them invites the company to do the same.

Step 4 — Give notice under the D&O policies

In parallel, and on the same day. Claims-made policies require timely notice, and late notice defeats coverage regardless of merit. Notice should go to the primary insurer and to every excess and Side A carrier, in the manner the policies specify.

Notice is a separate obligation from the advancement demand and is frequently forgotten by individuals who assume the company will handle it. Do not assume that. A company adverse to you has no incentive to preserve your coverage.

Step 5 — File promptly if refused

Advancement is enforced by a summary proceeding, which in Delaware means an expedited action decided on a limited record, often within a few months.

What the complaint contains: the governing documents, the undertaking, the demand, the refusal, and the claims in the underlying proceeding. That is nearly all of it.

What not to include: anything about the merits, anything about damages beyond fees, and anything that opens the door to discovery. The value of the proceeding is its speed, and every issue added slows it.

Move for summary judgment early. These cases are decided on documents.

Claim fees on fees, where the documents provide for them.

Step 6 — Administer the payment stream

Once ordered or agreed, advancement runs for the life of the underlying case. Manage it:

• Submit invoices monthly, in the agreed format, with privileged content redacted;
• Bill affirmative claims separately from defensive work — fees for prosecuting your own counterclaims are generally not advanceable;
• Track amounts advanced against any insurance limits;
• Respond to specific objections promptly and in writing;
• Do not let objections delay the undisputed balance — the obligation to pay the unobjected portion is unconditional under a properly drafted protocol.

Step 7 — Convert to indemnification at the end

When the underlying proceeding resolves, determine whether you were successful on the merits or otherwise. A dismissal, an acquittal, a settlement in which you pay nothing, or an abandonment all qualify. If so, indemnification of expenses is mandatory, the advanced amounts need not be repaid, and any unadvanced expenses are owed.

Make the demand in writing, identify the success, and request confirmation that the undertaking is discharged.

Part two: the company's side

Step 1 — Analyze before refusing

Run the same four questions the individual runs, honestly, before taking a position. Then add two more:

What does refusal cost if we lose? The advancement, the individual's fees in the advancement proceeding, our own fees, and a published decision. In most cases this is a poor bet.

What does refusal signal? Directors read these decisions. A company known for contesting advancement recruits worse boards.

Step 2 — Identify the arguments that actually work

Arguments that generally succeed:

• No nexus. The claims arise from personal conduct with no connection to the corporate role — a personal investment, a family dispute, conduct wholly after departure.
• Not a covered person. The individual was never an officer as the documents define the term, or served only in a capacity the documents do not cover.
• No such right. The documents grant permissive indemnification only, with no advancement, and no agreement exists.
• Affirmative claims. Fees incurred prosecuting the individual's own claims are not advanceable.
• Allocation. Where a proceeding genuinely involves separable covered and uncovered matters, allocation is appropriate — though where the work is intertwined, courts lean toward advancing the whole.
• Specific unreasonable charges, raised through the protocol rather than by withholding.

Arguments that generally fail:

• "The allegations are of bad faith." Advancement does not depend on the merits.
• "The company is the plaintiff." Irrelevant. This is the paradigm case the right is designed for.
• "They cannot repay." The undertaking need not be secured or supported by any showing of ability to repay.
• "Their counsel is too expensive." Reasonableness review considers the stakes, and rate objections rarely succeed.
• "We amended the bylaws." Rights generally vest at the time of the conduct.
• "They were terminated for cause." Not a statutory or, usually, a contractual condition.

Step 3 — If you will advance, do it properly

Agree a protocol at the outset: invoice format and redaction; monthly submission; payment within twenty to thirty days; specific objections within a stated period, with the balance paid; a neutral to resolve disputes; and periodic reporting of cumulative amounts.

This is cheaper than the alternative. Companies that withhold entire invoices over line items end up in court quarterly and pay fees on fees each time.

Step 4 — Manage the insurance

• Give notice under every policy, promptly and in the specified manner.
• Determine whether the retention applies. Where the company indemnifies, Side B responds above the retention. Where it does not, Side A may respond with no retention.
• Check the insured-versus-insured exclusion if the company is the claimant, and its carve-backs.
• Coordinate consent requirements. Most policies require the insurer's consent to defense counsel and to settlement; an indemnification agreement giving the individual control of the defense can conflict.
• Track erosion. Defense costs erode the tower. In a multi-defendant matter the limits can be exhausted before resolution, and the individuals should know.

Step 5 — Make the indemnification determination at the end

Where the person was not "successful," permissive indemnification requires a determination that the conduct standard was met, made by disinterested directors, a committee of them, independent counsel in a written opinion, or the stockholders.

Treat this as a real procedural step. Convene the disinterested directors, present the record, take advice, decide, and minute it. Companies routinely skip this and then cannot demonstrate that the determination was made.

Allocation in practice

Allocation is where most advancement matters actually spend their money after the entitlement question is resolved, and it deserves more attention than it usually gets.

The three allocation problems.

Covered versus uncovered claims. A single proceeding may include claims arising from the corporate role and claims arising from personal dealings. Where the claims are genuinely separable — different transactions, different time periods, different conduct — allocation is appropriate. Where the factual investigation and legal work overlap substantially, Delaware courts lean toward advancing the whole, on the reasoning that requiring the indemnitee to disentangle intertwined work imposes a burden the right was meant to remove.

Defending versus prosecuting. Fees incurred defending are advanceable; fees incurred prosecuting the indemnitee's own affirmative claims generally are not. The line is easy to state and harder to apply, because a compulsory counterclaim can be defensive in substance. The workable approach: bill genuinely affirmative claims — a severance claim, a defamation claim — to a separate matter, and treat compulsory counterclaims arising from the same transaction as part of the defense unless the company shows otherwise.

Multiple indemnitees sharing counsel. Where several officers are represented jointly, the fees must be allocated among them, which matters if their entitlements differ or if insurance limits are shared. Agree a methodology at the outset — per capita, by time attributable, or by a stated percentage — rather than arguing about it retroactively.

How to make allocation work.

• Agree the methodology in the protocol, before the first invoice.
• Require separate matter numbers for any category the parties agree is outside the covered scope.
• Use percentage allocations for genuinely mixed work rather than attempting entry-by-entry attribution, which is expensive and inconclusive.
• Provide for periodic true-ups rather than fighting each month.
• Send disputes to a neutral, and provide expressly that the undisputed portion is paid pending resolution.

A caution for companies. Allocation is a legitimate limiting principle and an illegitimate delaying tactic, and courts can tell the difference. A company that raises a genuine allocation issue with a proposed methodology is in a strong position. A company that objects to a large percentage of entries with no methodology, and withholds payment, is not.

What the underlying litigation strategy should account for

Advancement changes the economics of the underlying case for both sides, and litigators frequently fail to build that into their strategy.

For the company as plaintiff. You are funding your adversary. That has three consequences. First, your opponent will not run out of money, which removes attrition as a strategy and makes early motion practice more important than a long war. Second, every month of delay costs you twice — your own fees and theirs. Third, settlement value is affected: a defendant whose defense is funded has less incentive to settle cheaply, and a plaintiff paying both sides has more.

For the individual as defendant. Funding does not mean freedom. The undertaking is real, and a defendant who loses badly may face repayment as well as liability. More practically, insurance limits erode, and a defense funded from a tower shared with other defendants may run out. Understand the limits and the erosion rate early, because a defense strategy premised on unlimited funding can strand you in year three.

For both. Advancement disputes and the underlying case run on different clocks. The advancement proceeding is summary and resolves in months; the underlying case takes years. Resolve advancement first and separately. Attempting to negotiate advancement as part of a global settlement discussion is how both get delayed.

A tactical note. Companies occasionally attempt to use advancement as leverage in settlement discussions — offering to stop contesting it in exchange for concessions on the merits. This rarely works and frequently backfires, because the indemnitee's response is simply to file the summary proceeding and win it, at the company's expense, while the merits case is unaffected.

A worked sequence: both sides of the Okonjo matter

The facts. Halloran Devices terminates its General Counsel, Chidi Okonjo, and sues him in Delaware alleging he approved related-party contracts benefiting a supplier owned by his brother-in-law, and concealed the relationship. Damages sought: $12 million. Halloran's bylaws grant mandatory indemnification and advancement to officers to the fullest extent permitted, with a fees-on-fees clause.

Day 1, Okonjo's counsel. Requests the charter and bylaws as in effect on the dates of the contracts and today, the indemnification agreement (there is none), the board minutes electing him, and the D&O program. Halloran provides the current bylaws and refuses the rest.

Day 3. Counsel obtains the historical bylaws from the company's public filings. They are identical in the relevant respects, which removes the vesting question.

Day 4. Demand delivered with an executed undertaking, citing the bylaw sections, explaining the nexus — the claims concern contracts he approved as General Counsel — and proposing an invoice protocol. Same day, notice given to the primary D&O carrier and the Side A excess carrier.

Day 18, Halloran refuses, on the grounds that Okonjo acted for personal benefit rather than in his corporate capacity, that his conduct was in bad faith, and that he has insufficient assets to repay.

Day 22. Okonjo files a summary advancement action. The complaint is eleven pages and attaches five exhibits.

Halloran's position analyzed. All three arguments are weak. The nexus is present because the approval authority he allegedly abused was the authority of his office — Delaware does not withhold advancement because the claim is that the role was misused. Bad faith allegations go to indemnification at the end, not advancement now. And the undertaking need not be secured.

Week 9. Halloran's counsel, having briefed the issue, advises settlement. The parties agree: advancement at agreed rates, monthly invoices with privileged redaction, payment within twenty-five days, objections to specific entries within ten days without withholding the balance, and disputes to a special master. Halloran pays Okonjo's fees in the advancement proceeding.

Month 7, an allocation issue. Okonjo counterclaims against Halloran for unpaid severance. Halloran objects to the fees. Halloran is right on this one — prosecuting an affirmative claim is not defending a proceeding by reason of the corporate role. Okonjo's counsel begins billing the counterclaim to a separate matter number. This is the objection that succeeds, and it succeeds because it is correct.

Month 31, resolution. The case settles. Okonjo pays nothing; Halloran releases him; there is no admission. He has been successful on the merits or otherwise.

The consequences. Indemnification of expenses becomes mandatory. The undertaking is discharged and the $4.1 million advanced is not repayable. Okonjo demands, and receives, the modest amount of unadvanced expenses.

Halloran's total cost: $4.1 million of Okonjo's defense, roughly $2.6 million of its own fees, $340,000 in the advancement proceeding including Okonjo's fees, and no recovery. The D&O tower absorbed part of it above the retention, and the tower is now substantially eroded for the remainder of the policy period.

The lesson for the board. The question "should we sue our former General Counsel?" should have been presented with these numbers attached. Advancement exposure is a cost of the decision to litigate, and it belongs in the authorization discussion.

Special situations

The company is insolvent or in bankruptcy

An indemnification claim against a debtor is generally a prepetition unsecured claim, and advancement obligations are unreliable once a case is filed. The automatic stay complicates enforcement, and a request to compel a debtor to fund a defense competes with every other creditor.

What actually protects the individual is Side A coverage, which responds where the company does not indemnify — including because it cannot. Individuals should confirm, before trouble arrives, that a Side A policy exists, that it is a separate policy rather than merely a coverage part sharing the tower's limits, and that its terms do not condition coverage on the company's solvency.

A second protection worth negotiating: a funded trust or letter of credit securing indemnification obligations, sometimes used for directors of companies in known financial distress. Rare, but available, and worth asking for when joining a troubled board.

The individual served at multiple entities

A director designated by a sponsor to a portfolio company board may have rights from the portfolio company, from the sponsor, and from the sponsor's insurance. Sort the priority in advance:

• The portfolio company should be the indemnitor of first resort, with its obligation primary and non-contributory;
• The sponsor's obligation secondary and excess;
• The portfolio company waives subrogation against the sponsor;
• The portfolio company's insurance responds before the sponsor's.

Without this, the sponsor's carrier pays and then seeks recovery from the portfolio company, and the individual is the one caught between them.

The proceeding is a government investigation

Confirm the definition of "proceeding" includes investigative matters and covers persons "otherwise involved," including witnesses. Give notice under the policies immediately — investigations are frequently the trigger for a claims-made policy, and delay can cost coverage. Expect the company's and the individual's interests to diverge if the company decides to cooperate; separate counsel and a joint defense agreement with a clean termination mechanism should be in place from the start.

The individual has left and the company has been acquired

Rights survive if the documents say so, and a merger agreement's survival covenant is the usual protection. Confirm three things: that the covenant exists and runs for a stated period, typically six years; that the covered individuals are named as third-party beneficiaries with the right to enforce; and that a tail policy was actually bound before closing, with a term matching the covenant. A covenant without a bound policy is a promise from an entity the individual no longer has any relationship with.

Multiple indemnitees, one tower

Where several officers and directors face the same matter, defense costs erode a shared limit. Model the erosion early. Consider whether separate counsel is necessary or whether joint representation is possible, and understand that a conflict emerging in year two may require new counsel at a point when the limits are largely gone. Individuals with the most exposure should consider whether the Side A excess policy provides them a dedicated limit.

Errors to avoid

Individuals.

• Delaying the demand while assessing the underlying case
• Failing to give insurance notice, or assuming the company will
• Arguing the merits in the advancement demand
• Failing to obtain the historical charter and bylaws
• Failing to bill affirmative claims separately
• Accepting a protocol that permits the company to withhold entire invoices over specific objections
• Neglecting to convert to indemnification, and to seek discharge of the undertaking, at resolution

Companies.

• Refusing on arguments that do not work, and paying fees on fees for the privilege
• Withholding whole invoices over line items
• Demanding unredacted invoices that reveal the adversary's strategy
• Failing to document subsidiary board service as at the corporation's request
• Failing to give notice under every policy layer
• Skipping the indemnification determination at the end
• Authorizing litigation against a former officer without presenting the advancement exposure to the board

The summary proceeding: what it looks like in practice

Because advancement's entire value is speed, the procedure deserves description.

The pleading. Short. A complaint of ten to fifteen pages attaching the governing documents, the undertaking, the demand, the refusal, and the underlying complaint. It pleads the right, the predicate, and the breach. It does not plead the merits of the underlying case, and a complaint that wanders into them invites discovery that defeats the purpose.

Expedition. Move for expedited treatment with the complaint. Delaware routinely grants it in advancement cases, and the schedule that follows is typically measured in weeks.

Discovery. Minimal or none. The question is what the documents say and whether the claims arise by reason of the corporate role, both of which are answered on the face of the papers. Resist any attempt to take discovery into the underlying conduct — that discovery belongs in the underlying case and would let the company relitigate the merits in a proceeding designed to avoid them.

Summary judgment. The standard vehicle. Cross-motions are common and the court frequently decides on the papers.

The order. A well-drafted order does more than declare entitlement. It should specify: the categories of covered fees; the invoice format and redaction standard; the submission and payment schedule; the objection mechanism and the requirement that undisputed amounts be paid; the appointment of a special master or other neutral for disputes; and the treatment of fees on fees. Ask for all of it. A bare declaration of entitlement produces a second proceeding about implementation.

Fees on fees. Where the documents provide for them, request them in the complaint and prove them at the end. This is what makes the proceeding economically viable for an individual who is, by definition, spending money they may not have.

Duration. From filing to decision, two to four months is typical for a straightforward case. That is the entire point: a right that took two years to enforce would be worthless.

A note on other jurisdictions. Not every state provides an equivalent summary procedure, and in some the individual must bring an ordinary action that takes as long as the underlying case. This is a reason to prefer a Delaware entity, and a reason to include a contractual provision in an indemnification agreement providing for expedited resolution and for fee shifting to the prevailing indemnitee.

For in-house counsel: building the program before you need it

The company that handles an advancement demand well is the one that prepared for it, and preparation is inexpensive.

Documents. Bylaws granting mandatory indemnification and advancement to the fullest extent permitted, with express coverage of investigative and threatened proceedings, of persons "otherwise involved" including witnesses, of service at another entity at the corporation's request, and of fees on fees. A vesting provision. A definition of "officer" that matches the people you intend to cover. And individual indemnification agreements for directors and senior officers, because a contract cannot be amended unilaterally.

The subsidiary designation resolution. A standing board resolution stating that any employee or director who serves at the request of the corporation as a director, officer, manager, trustee, or agent of another entity does so at the corporation's request within the meaning of the bylaws, and directing the secretary to maintain a schedule of such designations. Maintain the schedule. It is the document that answers the question years later.

The protocol. A written advancement administration procedure, adopted in advance, covering invoice format, redaction, submission, payment period, objections, and dispute resolution. Adopting it before a dispute means it looks like process rather than resistance.

The insurance file. Current copies of every layer, a summary of the retentions and key exclusions, the notice provisions and addresses, and a standing instruction that notice goes out on any claim or investigation touching a covered person. Review the insured-versus-insured exclusion and its carve-backs annually.

The onboarding packet. New directors and officers should receive, at appointment: the charter and bylaw provisions, the indemnification agreement for execution, the D&O program summary, and confirmation of any subsidiary designations. This takes an hour and prevents most disputes.

The board briefing. Before authorizing litigation against a former director or officer, present the advancement exposure: the likely defense cost the company will fund, the company's own cost, the insurance treatment, and the collectability of any judgment. Boards make different decisions with those numbers in front of them, and presenting them is the general counsel's job.

Negotiating an indemnification agreement

For an individual joining a board or taking an officer role, the agreement is the moment of maximum leverage. The terms worth insisting on:

Mandatory indemnification and advancement to the fullest extent permitted by law, not "as determined by the board."

A broad definition of "Proceeding" — threatened, pending, or completed; civil, criminal, administrative, arbitrative, or investigative; formal or informal; and including any inquiry, subpoena, or request for information.

Coverage for being "otherwise involved," including as a witness or a person required to produce documents.

Advancement on an unsecured undertaking, with a stated payment period — twenty days is common — and an express statement that advancement is not conditioned on any determination, on the individual's ability to repay, or on the company's view of the merits.

Fees on fees, expressly, for any proceeding to enforce the agreement, and — worth asking for — payable regardless of outcome where the individual is substantially successful.

A presumption in the individual's favor, providing that on any determination, the individual is presumed entitled and the company bears the burden of overcoming the presumption by clear and convincing evidence.

A deemed-approval mechanism: if the company does not make a required determination within a stated period, the determination is deemed made in the individual's favor.

No amendment without consent, and a statement that the agreement survives termination of service and any change in the charter, bylaws, or control of the company.

A survival period running to the expiry of all applicable limitations periods, not a fixed short term.

Insurance covenants: the company will maintain D&O coverage in stated amounts, including Side A, will provide copies on request, will give notice of any claim, and will notify the individual if coverage is cancelled or materially changed.

Indemnitor of first resort language, where the individual is designated by a fund or another entity.

Expedited resolution and fee shifting for disputes, particularly where the entity is not chartered in a jurisdiction with a summary procedure.

A note on realism. Companies will not agree to all of this, and the negotiation should prioritize: the scope of "Proceeding" including investigations, unconditional advancement with a payment period, fees on fees, no unilateral amendment, and the insurance covenant. Those five carry most of the value.

Timeline: an advancement matter from demand to discharge

The two entries most often missed are the day-three insurance notice, which an individual assumes the company will handle and a company adverse to the individual has no reason to prioritize, and the final indemnification determination, which companies skip and then cannot demonstrate was ever made.

Frequently contested points, answered

"Can the company condition advancement on the individual cooperating with it?" Not unless the governing documents so provide. A cooperation covenant is negotiable in an indemnification agreement and is common in settlement agreements, but it cannot be imposed after the fact on a mandatory right.

"Can the company choose the individual's counsel?" Not where the right is unconditional and the company is the adversary — that would be untenable. Where the company and the individual are aligned and the D&O insurer has consent rights over panel counsel, joint representation is common and sensible. Where interests diverge, separate counsel is required, and the individual's choice is theirs subject only to reasonableness of rates.

"What if the individual refuses to sign an undertaking?" Then advancement is not required. The undertaking is the statutory condition, and it costs the individual nothing to sign. An individual who resists signing is creating a problem for no benefit.

"Does a settlement in which the individual pays something defeat the mandatory indemnification right?" It generally defeats "success" as to the claims settled with payment. Delaware analyzes claim by claim, so a person who obtains dismissal of six claims and settles a seventh with payment may be mandatorily entitled as to the six.

"Can the company recover advanced amounts if the individual settles?" Only if it is ultimately determined the individual was not entitled to indemnification. A settlement without an adjudication of liability usually does not establish that, which is one reason companies rarely recover.

"Does an exculpation provision in the charter affect advancement?" No. Exculpation limits monetary liability of directors for certain duty-of-care breaches; it does not address who funds a defense, and it does not protect officers to the same extent.

"Are fees incurred responding to a books-and-records demand advanceable?" Where the individual is a respondent in a proceeding by reason of their role, generally yes. Where the individual is merely producing documents at the company's request, the analysis depends on whether the documents cover persons "otherwise involved."

"What about arbitration?" A well-drafted definition of "Proceeding" includes arbitrative proceedings. Many older provisions do not, which is a gap worth closing.

A closing observation on posture

Advancement disputes are unusual in that the party with the stronger legal position is often the party with less money, and the party with the weaker position is often the one paying its lawyers by the hour to make it.

That asymmetry has a practical implication for how each side should behave.

For companies: the honest analysis usually produces the answer "we must advance." Reaching that answer in week two, and then negotiating a sensible protocol, costs a small fraction of reaching it in month six after a published decision. The value of contesting advancement is almost always negative, and the exceptions — no nexus, not a covered person, no such right — are identifiable in an afternoon by reading the documents. Read them first, decide honestly, and spend the effort on the underlying case instead.

For individuals: move fast and stay narrow. The demand goes out in days, the insurance notice goes out the same day, and the summary action follows quickly if refused. Every issue you add — the merits, your severance claim, your view of the company's motives — slows a proceeding whose only virtue is speed. Win the narrow thing quickly, get the payment stream running, and fight the real case with funded counsel.

For both: agree a protocol. The single largest source of recurring cost in this area is not the entitlement dispute, which is decided once, but the monthly friction over invoices, which repeats for years. Twenty minutes spent agreeing an invoice format, a payment period, and a neutral to resolve objections will save both sides more than any argument either of them is contemplating.

Checklist of documents to assemble on day one

For the individual.

1. Certificate of incorporation, as in effect when the conduct occurred and as in effect now
2. Bylaws, both versions
3. Indemnification agreement and any amendments
4. Employment agreement, offer letter, and separation agreement
5. Board resolutions electing or appointing the individual, with dates
6. Any resolution or letter designating subsidiary or portfolio board service at the corporation's request
7. The underlying complaint, subpoena, or notice of investigation
8. The primary D&O policy and every excess and Side A layer
9. Any prior correspondence with the company about indemnification
10. A list of any co-defendants and their counsel, for joint defense purposes

For the company.

1. The same governing documents, confirmed against the corporate minute book
2. The schedule of subsidiary and portfolio board designations
3. The covered-persons list and the individual's dates and titles of service
4. The D&O program, with retentions, exclusions, and notice requirements
5. Prior advancement matters and how they were handled, for consistency
6. Any prior determination regarding this individual
7. The board authorization for any litigation the company has brought
8. An estimate of the likely advancement exposure, for the board

Then, both sides, answer the same four questions in writing: is the proceeding covered; is it by reason of the fact of the role; is the right mandatory or permissive; and is it conditioned on anything beyond an undertaking. Where both sides answer honestly, the parties usually reach the same conclusion, and the dispute becomes about protocol rather than entitlement — which is where it should be.

Related documents

• Indemnification and advancement for directors and officers: the fight that starts before the merits
• Indemnification and advancement checklist
• Indemnification toolkit: charter and bylaw provisions, indemnity agreements, and undertakings
• Directors and officers and cyber insurance: towers, triggers, allocation, and the claim you must notice
• Books-and-records demands: Section 220, proper purpose, and the documents you actually get