Current through the 2021 Legislative Session
Section 79-4-8.51 - Authority to indemnify(a) Except as otherwise provided in subsection (d) of this section, a corporation may indemnify an individual who is a party to a proceeding because he is a director against liability incurred in the proceeding if: (1)(i) He conducted himself in good faith; and(ii) He reasonably believed: (A) In the case of conduct in his official capacity, that his conduct was in the best interests of the corporation; and(B) In all other cases, that his conduct was at least not opposed to the best interests of the corporation; and(iii) In the case of any criminal proceeding, he had no reasonable cause to believe his conduct was unlawful; or(2) He engaged in conduct for which broader indemnification has been made permissible or obligatory under a provision of the articles of incorporation as authorized by Section 79-4-2.02(b)(5).(b) A director's conduct with respect to an employee benefit plan for a purpose he reasonably believed to be in the interest of the participants in and beneficiaries of the plan is conduct that satisfies the requirement of subsection (a)(1)(ii)(B).(c) The termination of a proceeding by judgment, order, settlement, conviction or upon a plea of nolo contendere or its equivalent is not, of itself, determinative that the director did not meet the relevant standard of conduct described in this section.(d) Unless ordered by a court under Section 79-4-8.54(a)(3), a corporation may not indemnify a director under this section: (1) In connection with a proceeding by or in the right of the corporation, except for reasonable expenses incurred in connection with the proceeding if it is determined that the director has met the relevant standard of conduct under subsection (a); or(2) In connection with any proceeding with respect to conduct for which he was adjudged liable on the basis that he received a financial benefit to which he was not entitled, whether or not involving action in his official capacity.Laws, 1987, ch. 486, § 8.51; Laws, 1996, ch. 459, § 4, eff. 1/1/1997.