§ 7-6-6 Indemnification. – (a) As used in this section:
(1) "Director" means any person who is or was a director ofthe corporation and any person who, while a director of the corporation, is orwas serving at the request of the corporation as a director, officer, partner,trustee, employee, or agent of another foreign or domestic corporation,partnership, joint venture, trust, other enterprise, or employee benefit plan.
(2) "Corporation" includes:
(i) Any corporation whether foreign or domestic, and whethera nonprofit or a for profit corporation all of the profits of which go to anonprofit corporation; and
(ii) Any domestic or foreign predecessory entity of thecorporation in a merger, consolidation, or other transaction in which thepredecessor's existence ceased upon consummation of the transaction.
(3) "Expenses" include attorneys' fees.
(4) "Official capacity" means:
(i) When used with respect to a director, the office ofdirector in the corporation.
(ii) When used with respect to a person other than adirector, as contemplated in subsection (i), the elective or appointive officein the corporation held by the officer or the employment or agency relationshipundertaken by the employee or agent on behalf of the corporation, but in eachcase does not include service for any other foreign or domestic corporation orany partnership, joint venture, trust, other enterprise, or employee benefitplan.
(5) "Party" includes a person who was, is, or is threatenedto be made, a named defendant or respondent in a proceeding.
(6) "Proceeding" means any threatened, pending, or completedaction, suit, or proceeding, whether civil, criminal, administrative, orinvestigative.
(b) A corporation has power to indemnify any person made aparty to any proceeding by reason of the fact that that person is or was adirector if:
(i) He or she conducted himself or herself in good faith; and
(ii) He or she reasonably believed:
(A) In the case of conduct in his or her official capacitywith the corporation, that his or her conduct was in its best interests, and
(B) In all other cases, that his or her conduct was at leastnot opposed to its best interests; and
(iii) In the case of any criminal proceeding, he or she hadno reasonable cause to believe his or her conduct was unlawful.
(2) Indemnification may be made against judgments, penalties,fines, settlements, and reasonable expenses actually incurred by the person inconnection with the proceeding; except that if the proceeding was by or in theright of the corporation, indemnification may be made only against thereasonable expenses and shall not be made in respect of any proceeding in whichthe person has been adjudged to be liable to the corporation. The terminationof any proceeding by judgment, order, settlement, conviction, or upon a plea ofnolo contendere or its equivalent, is not, of itself, determinative that theperson did not meet the requisite standard of conduct set forth in thissubsection.
(c) A director is not indemnified under subsection (b) inrespect of any proceeding charging improper personal benefit to him or her,whether or not involving action in his or her official capacity, in which he orshe has been adjudged to be liable on the basis that personal benefit wasimproperly received by him or her.
(d) Unless limited by the articles of incorporation,
(i) A director who is wholly successful, on the merits orotherwise, in the defense of any proceeding referred to in subsection (b) isindemnified against reasonable expenses incurred by the director in connectionwith the proceeding; and
(ii) A court of appropriate jurisdiction, upon application ofa director and any notice that the court requires, has authority to orderindemnification in the following circumstances:
(A) If it determines a director is entitled to reimbursementunder paragraph (i), the court shall order indemnification, in which case thedirector is also entitled to recover the expenses of securing thereimbursement; or
(B) If it determines that the director is fairly andreasonably entitled to indemnification in view of all the relevantcircumstances, whether or not the director has met the standard of conductdescribed in subsection (b) or has been adjudged liable in the circumstancesdescribed in subsection (c), the court may order any indemnification that theit deems proper, except that indemnification with respect to any proceeding byor in the right of the corporation or in which liability has been adjudged inthe circumstances described in subsection (c) is limited to expenses.
(2) A court of appropriate jurisdiction may be the same courtin which the proceeding involving the director's liability took place.
(e) No indemnification under subsection (b) shall be made bythe corporation unless authorized in the specific case after a determinationhas been made that indemnification of the director is permissible in thecircumstances because the director has met the standard of conduct decribed insubsection (b). The determination shall be made:
(i) By the board of directors by a majority vote of a quorumconsisting of directors not at the time parties to the proceeding;
(ii) If a quorum cannot be obtained, then by a majority voteof a committee of the board, duly designated to act in the matter by a majorityvote of the full board (in which designation directors who are parties mayparticipate), consisting solely of two (2) or more directors not at the timeparties to the proceeding;
(iii) By special legal counsel, selected by the board ofdirectors or a committee of the board by vote as described insubsection(e)(1)(i) or (e)(1)(ii) of this section, or, if the requisite quorumof the full board cannot be obtained for the vote and the committee cannot beestablished, by a majority vote of the full board (in which selection directorswho are parties may participate); or
(iv) By the members.
(2) Authorization of indemnification and determination as toreasonableness of expenses shall be made in the same manner as thedetermination that indemnification is permissible, except that if thedetermination that indemnification is permissible is made by special legalcounsel, authorization of indemnification and determination as toreasonableness of expenses shall be made in a manner specified in subdivision(e)(1)(iii) for the selection of counsel. Directors who are parties to theproceeding shall not, as members, vote on the subject matter under thissubsection.
(f) Reasonable expenses incurred by a director who is a partyto a proceeding may be paid or reimbursed by the corporation in advance of thefinal disposition of the proceedings upon receipt by the corporation of:
(1) A written affirmation by the director of the director'sgood faith belief that the director has met the standard of conduct necessaryfor indemnification by the corporation as authorized in this section; and
(2) A written undertaking by or on behalf of the director torepay the amount if it is ultimately determined that the director has not metthe standard of conduct, and after a determination that the facts then known tothose making the determination would not preclude indemnification under thissection. The undertaking required by this subdivision is an unlimited generalobligation of the director but need not be secured and may be accepted withoutreference to financial ability to make repayment. Determinations andauthorizations of payments under this subsection shall be made in the mannerspecified in subsection (e).
(g) The indemnification provided by this section is notdeemed exclusive of any other rights to which those seeking indemnification areentitled under any bylaw, agreement, vote of members or disinteresteddirectors, or otherwise, both as to action in his or her official capacity andas to action in another capacity while holding office, and continues as to aperson who ceases to be a director, officer, partner, trustee, employee, oragent and inures to the benefit of the heirs, executors, and administrators ofthe person. Nothing contained in this section limits the corporation's power topay or reimburse expenses incurred by a director in connection with his or herappearance as a witness in a proceeding at a time when he or she has not beennamed a defendant or respondent in the proceeding.
(h) For purposes of this section, the corporation is deemedto have requested a director to service an employee benefit plan whenever theperformance by the director of the director's duties to the corporation alsoimposes duties on, or otherwise involves services by, the director to the planor participants or beneficiaries of the plan; excise taxes assessed on adirector regarding an employee benefit plan pursuant to applicable law aredeemed "fines"; and action taken or omitted by the director regarding anemployee benefit plan in the performance of the director's duties for a purposereasonably believed by the director to be in the interest of the participantsand beneficiaries of the plan are deemed to be for a purpose which is notopposed to the best interests of the corporation.
(i) Unless limited by the articles of incorporation:
(1) An officer of the corporation is indemnified to the sameextent provided in subsection (d) for a director and is entitled to the sameextent as a director to seek indemnification pursuant to the provisions ofsubsection (d);
(2) A corporation has the power to indemnify and to advanceexpenses to an officer, employee, or agent of the corporation to the sameextent that it may indemnify and advance expenses to directors pursuant to thissection; and
(3) A corporation, in addition, has the power to indemnifyand to advance expenses to an officer, employee, or agent who is not a directorto any further extent, consistent with law, that is provided by its articles ofincorporation, bylaws, general or specific action of its board of directors, orcontract.
(j) A corporation has power to purchase and maintaininsurance on behalf of any person who is or was a director, officer, employee,or agent of the corporation, or who, while a director, officer, employee, oragent of the corporation, is or was serving at the request of the corporationas a director, officer, partner, trustee, employee, or agent of another foreignor domestic corporation, partnership, joint venture, trust, other enterprise,or employee benefit plan, against any liability asserted against the directorand incurred by the director in any capacity or arising out of the director'sstatus as director, whether or not the corporation would have the power toindemnify the director against liability under the provisions of this section.
(k) Any indemnification of, or advance of expenses to, adirector in accordance with this section, if arising out of a proceeding by orin the right of the corporation, shall be reported, in writing, to the memberswith or before the notice of the next members' meeting.
§ 7-6-6 Indemnification. – (a) As used in this section:
(1) "Director" means any person who is or was a director ofthe corporation and any person who, while a director of the corporation, is orwas serving at the request of the corporation as a director, officer, partner,trustee, employee, or agent of another foreign or domestic corporation,partnership, joint venture, trust, other enterprise, or employee benefit plan.
(2) "Corporation" includes:
(i) Any corporation whether foreign or domestic, and whethera nonprofit or a for profit corporation all of the profits of which go to anonprofit corporation; and
(ii) Any domestic or foreign predecessory entity of thecorporation in a merger, consolidation, or other transaction in which thepredecessor's existence ceased upon consummation of the transaction.
(3) "Expenses" include attorneys' fees.
(4) "Official capacity" means:
(i) When used with respect to a director, the office ofdirector in the corporation.
(ii) When used with respect to a person other than adirector, as contemplated in subsection (i), the elective or appointive officein the corporation held by the officer or the employment or agency relationshipundertaken by the employee or agent on behalf of the corporation, but in eachcase does not include service for any other foreign or domestic corporation orany partnership, joint venture, trust, other enterprise, or employee benefitplan.
(5) "Party" includes a person who was, is, or is threatenedto be made, a named defendant or respondent in a proceeding.
(6) "Proceeding" means any threatened, pending, or completedaction, suit, or proceeding, whether civil, criminal, administrative, orinvestigative.
(b) A corporation has power to indemnify any person made aparty to any proceeding by reason of the fact that that person is or was adirector if:
(i) He or she conducted himself or herself in good faith; and
(ii) He or she reasonably believed:
(A) In the case of conduct in his or her official capacitywith the corporation, that his or her conduct was in its best interests, and
(B) In all other cases, that his or her conduct was at leastnot opposed to its best interests; and
(iii) In the case of any criminal proceeding, he or she hadno reasonable cause to believe his or her conduct was unlawful.
(2) Indemnification may be made against judgments, penalties,fines, settlements, and reasonable expenses actually incurred by the person inconnection with the proceeding; except that if the proceeding was by or in theright of the corporation, indemnification may be made only against thereasonable expenses and shall not be made in respect of any proceeding in whichthe person has been adjudged to be liable to the corporation. The terminationof any proceeding by judgment, order, settlement, conviction, or upon a plea ofnolo contendere or its equivalent, is not, of itself, determinative that theperson did not meet the requisite standard of conduct set forth in thissubsection.
(c) A director is not indemnified under subsection (b) inrespect of any proceeding charging improper personal benefit to him or her,whether or not involving action in his or her official capacity, in which he orshe has been adjudged to be liable on the basis that personal benefit wasimproperly received by him or her.
(d) Unless limited by the articles of incorporation,
(i) A director who is wholly successful, on the merits orotherwise, in the defense of any proceeding referred to in subsection (b) isindemnified against reasonable expenses incurred by the director in connectionwith the proceeding; and
(ii) A court of appropriate jurisdiction, upon application ofa director and any notice that the court requires, has authority to orderindemnification in the following circumstances:
(A) If it determines a director is entitled to reimbursementunder paragraph (i), the court shall order indemnification, in which case thedirector is also entitled to recover the expenses of securing thereimbursement; or
(B) If it determines that the director is fairly andreasonably entitled to indemnification in view of all the relevantcircumstances, whether or not the director has met the standard of conductdescribed in subsection (b) or has been adjudged liable in the circumstancesdescribed in subsection (c), the court may order any indemnification that theit deems proper, except that indemnification with respect to any proceeding byor in the right of the corporation or in which liability has been adjudged inthe circumstances described in subsection (c) is limited to expenses.
(2) A court of appropriate jurisdiction may be the same courtin which the proceeding involving the director's liability took place.
(e) No indemnification under subsection (b) shall be made bythe corporation unless authorized in the specific case after a determinationhas been made that indemnification of the director is permissible in thecircumstances because the director has met the standard of conduct decribed insubsection (b). The determination shall be made:
(i) By the board of directors by a majority vote of a quorumconsisting of directors not at the time parties to the proceeding;
(ii) If a quorum cannot be obtained, then by a majority voteof a committee of the board, duly designated to act in the matter by a majorityvote of the full board (in which designation directors who are parties mayparticipate), consisting solely of two (2) or more directors not at the timeparties to the proceeding;
(iii) By special legal counsel, selected by the board ofdirectors or a committee of the board by vote as described insubsection(e)(1)(i) or (e)(1)(ii) of this section, or, if the requisite quorumof the full board cannot be obtained for the vote and the committee cannot beestablished, by a majority vote of the full board (in which selection directorswho are parties may participate); or
(iv) By the members.
(2) Authorization of indemnification and determination as toreasonableness of expenses shall be made in the same manner as thedetermination that indemnification is permissible, except that if thedetermination that indemnification is permissible is made by special legalcounsel, authorization of indemnification and determination as toreasonableness of expenses shall be made in a manner specified in subdivision(e)(1)(iii) for the selection of counsel. Directors who are parties to theproceeding shall not, as members, vote on the subject matter under thissubsection.
(f) Reasonable expenses incurred by a director who is a partyto a proceeding may be paid or reimbursed by the corporation in advance of thefinal disposition of the proceedings upon receipt by the corporation of:
(1) A written affirmation by the director of the director'sgood faith belief that the director has met the standard of conduct necessaryfor indemnification by the corporation as authorized in this section; and
(2) A written undertaking by or on behalf of the director torepay the amount if it is ultimately determined that the director has not metthe standard of conduct, and after a determination that the facts then known tothose making the determination would not preclude indemnification under thissection. The undertaking required by this subdivision is an unlimited generalobligation of the director but need not be secured and may be accepted withoutreference to financial ability to make repayment. Determinations andauthorizations of payments under this subsection shall be made in the mannerspecified in subsection (e).
(g) The indemnification provided by this section is notdeemed exclusive of any other rights to which those seeking indemnification areentitled under any bylaw, agreement, vote of members or disinteresteddirectors, or otherwise, both as to action in his or her official capacity andas to action in another capacity while holding office, and continues as to aperson who ceases to be a director, officer, partner, trustee, employee, oragent and inures to the benefit of the heirs, executors, and administrators ofthe person. Nothing contained in this section limits the corporation's power topay or reimburse expenses incurred by a director in connection with his or herappearance as a witness in a proceeding at a time when he or she has not beennamed a defendant or respondent in the proceeding.
(h) For purposes of this section, the corporation is deemedto have requested a director to service an employee benefit plan whenever theperformance by the director of the director's duties to the corporation alsoimposes duties on, or otherwise involves services by, the director to the planor participants or beneficiaries of the plan; excise taxes assessed on adirector regarding an employee benefit plan pursuant to applicable law aredeemed "fines"; and action taken or omitted by the director regarding anemployee benefit plan in the performance of the director's duties for a purposereasonably believed by the director to be in the interest of the participantsand beneficiaries of the plan are deemed to be for a purpose which is notopposed to the best interests of the corporation.
(i) Unless limited by the articles of incorporation:
(1) An officer of the corporation is indemnified to the sameextent provided in subsection (d) for a director and is entitled to the sameextent as a director to seek indemnification pursuant to the provisions ofsubsection (d);
(2) A corporation has the power to indemnify and to advanceexpenses to an officer, employee, or agent of the corporation to the sameextent that it may indemnify and advance expenses to directors pursuant to thissection; and
(3) A corporation, in addition, has the power to indemnifyand to advance expenses to an officer, employee, or agent who is not a directorto any further extent, consistent with law, that is provided by its articles ofincorporation, bylaws, general or specific action of its board of directors, orcontract.
(j) A corporation has power to purchase and maintaininsurance on behalf of any person who is or was a director, officer, employee,or agent of the corporation, or who, while a director, officer, employee, oragent of the corporation, is or was serving at the request of the corporationas a director, officer, partner, trustee, employee, or agent of another foreignor domestic corporation, partnership, joint venture, trust, other enterprise,or employee benefit plan, against any liability asserted against the directorand incurred by the director in any capacity or arising out of the director'sstatus as director, whether or not the corporation would have the power toindemnify the director against liability under the provisions of this section.
(k) Any indemnification of, or advance of expenses to, adirector in accordance with this section, if arising out of a proceeding by orin the right of the corporation, shall be reported, in writing, to the memberswith or before the notice of the next members' meeting.
§ 7-6-6 Indemnification. – (a) As used in this section:
(1) "Director" means any person who is or was a director ofthe corporation and any person who, while a director of the corporation, is orwas serving at the request of the corporation as a director, officer, partner,trustee, employee, or agent of another foreign or domestic corporation,partnership, joint venture, trust, other enterprise, or employee benefit plan.
(2) "Corporation" includes:
(i) Any corporation whether foreign or domestic, and whethera nonprofit or a for profit corporation all of the profits of which go to anonprofit corporation; and
(ii) Any domestic or foreign predecessory entity of thecorporation in a merger, consolidation, or other transaction in which thepredecessor's existence ceased upon consummation of the transaction.
(3) "Expenses" include attorneys' fees.
(4) "Official capacity" means:
(i) When used with respect to a director, the office ofdirector in the corporation.
(ii) When used with respect to a person other than adirector, as contemplated in subsection (i), the elective or appointive officein the corporation held by the officer or the employment or agency relationshipundertaken by the employee or agent on behalf of the corporation, but in eachcase does not include service for any other foreign or domestic corporation orany partnership, joint venture, trust, other enterprise, or employee benefitplan.
(5) "Party" includes a person who was, is, or is threatenedto be made, a named defendant or respondent in a proceeding.
(6) "Proceeding" means any threatened, pending, or completedaction, suit, or proceeding, whether civil, criminal, administrative, orinvestigative.
(b) A corporation has power to indemnify any person made aparty to any proceeding by reason of the fact that that person is or was adirector if:
(i) He or she conducted himself or herself in good faith; and
(ii) He or she reasonably believed:
(A) In the case of conduct in his or her official capacitywith the corporation, that his or her conduct was in its best interests, and
(B) In all other cases, that his or her conduct was at leastnot opposed to its best interests; and
(iii) In the case of any criminal proceeding, he or she hadno reasonable cause to believe his or her conduct was unlawful.
(2) Indemnification may be made against judgments, penalties,fines, settlements, and reasonable expenses actually incurred by the person inconnection with the proceeding; except that if the proceeding was by or in theright of the corporation, indemnification may be made only against thereasonable expenses and shall not be made in respect of any proceeding in whichthe person has been adjudged to be liable to the corporation. The terminationof any proceeding by judgment, order, settlement, conviction, or upon a plea ofnolo contendere or its equivalent, is not, of itself, determinative that theperson did not meet the requisite standard of conduct set forth in thissubsection.
(c) A director is not indemnified under subsection (b) inrespect of any proceeding charging improper personal benefit to him or her,whether or not involving action in his or her official capacity, in which he orshe has been adjudged to be liable on the basis that personal benefit wasimproperly received by him or her.
(d) Unless limited by the articles of incorporation,
(i) A director who is wholly successful, on the merits orotherwise, in the defense of any proceeding referred to in subsection (b) isindemnified against reasonable expenses incurred by the director in connectionwith the proceeding; and
(ii) A court of appropriate jurisdiction, upon application ofa director and any notice that the court requires, has authority to orderindemnification in the following circumstances:
(A) If it determines a director is entitled to reimbursementunder paragraph (i), the court shall order indemnification, in which case thedirector is also entitled to recover the expenses of securing thereimbursement; or
(B) If it determines that the director is fairly andreasonably entitled to indemnification in view of all the relevantcircumstances, whether or not the director has met the standard of conductdescribed in subsection (b) or has been adjudged liable in the circumstancesdescribed in subsection (c), the court may order any indemnification that theit deems proper, except that indemnification with respect to any proceeding byor in the right of the corporation or in which liability has been adjudged inthe circumstances described in subsection (c) is limited to expenses.
(2) A court of appropriate jurisdiction may be the same courtin which the proceeding involving the director's liability took place.
(e) No indemnification under subsection (b) shall be made bythe corporation unless authorized in the specific case after a determinationhas been made that indemnification of the director is permissible in thecircumstances because the director has met the standard of conduct decribed insubsection (b). The determination shall be made:
(i) By the board of directors by a majority vote of a quorumconsisting of directors not at the time parties to the proceeding;
(ii) If a quorum cannot be obtained, then by a majority voteof a committee of the board, duly designated to act in the matter by a majorityvote of the full board (in which designation directors who are parties mayparticipate), consisting solely of two (2) or more directors not at the timeparties to the proceeding;
(iii) By special legal counsel, selected by the board ofdirectors or a committee of the board by vote as described insubsection(e)(1)(i) or (e)(1)(ii) of this section, or, if the requisite quorumof the full board cannot be obtained for the vote and the committee cannot beestablished, by a majority vote of the full board (in which selection directorswho are parties may participate); or
(iv) By the members.
(2) Authorization of indemnification and determination as toreasonableness of expenses shall be made in the same manner as thedetermination that indemnification is permissible, except that if thedetermination that indemnification is permissible is made by special legalcounsel, authorization of indemnification and determination as toreasonableness of expenses shall be made in a manner specified in subdivision(e)(1)(iii) for the selection of counsel. Directors who are parties to theproceeding shall not, as members, vote on the subject matter under thissubsection.
(f) Reasonable expenses incurred by a director who is a partyto a proceeding may be paid or reimbursed by the corporation in advance of thefinal disposition of the proceedings upon receipt by the corporation of:
(1) A written affirmation by the director of the director'sgood faith belief that the director has met the standard of conduct necessaryfor indemnification by the corporation as authorized in this section; and
(2) A written undertaking by or on behalf of the director torepay the amount if it is ultimately determined that the director has not metthe standard of conduct, and after a determination that the facts then known tothose making the determination would not preclude indemnification under thissection. The undertaking required by this subdivision is an unlimited generalobligation of the director but need not be secured and may be accepted withoutreference to financial ability to make repayment. Determinations andauthorizations of payments under this subsection shall be made in the mannerspecified in subsection (e).
(g) The indemnification provided by this section is notdeemed exclusive of any other rights to which those seeking indemnification areentitled under any bylaw, agreement, vote of members or disinteresteddirectors, or otherwise, both as to action in his or her official capacity andas to action in another capacity while holding office, and continues as to aperson who ceases to be a director, officer, partner, trustee, employee, oragent and inures to the benefit of the heirs, executors, and administrators ofthe person. Nothing contained in this section limits the corporation's power topay or reimburse expenses incurred by a director in connection with his or herappearance as a witness in a proceeding at a time when he or she has not beennamed a defendant or respondent in the proceeding.
(h) For purposes of this section, the corporation is deemedto have requested a director to service an employee benefit plan whenever theperformance by the director of the director's duties to the corporation alsoimposes duties on, or otherwise involves services by, the director to the planor participants or beneficiaries of the plan; excise taxes assessed on adirector regarding an employee benefit plan pursuant to applicable law aredeemed "fines"; and action taken or omitted by the director regarding anemployee benefit plan in the performance of the director's duties for a purposereasonably believed by the director to be in the interest of the participantsand beneficiaries of the plan are deemed to be for a purpose which is notopposed to the best interests of the corporation.
(i) Unless limited by the articles of incorporation:
(1) An officer of the corporation is indemnified to the sameextent provided in subsection (d) for a director and is entitled to the sameextent as a director to seek indemnification pursuant to the provisions ofsubsection (d);
(2) A corporation has the power to indemnify and to advanceexpenses to an officer, employee, or agent of the corporation to the sameextent that it may indemnify and advance expenses to directors pursuant to thissection; and
(3) A corporation, in addition, has the power to indemnifyand to advance expenses to an officer, employee, or agent who is not a directorto any further extent, consistent with law, that is provided by its articles ofincorporation, bylaws, general or specific action of its board of directors, orcontract.
(j) A corporation has power to purchase and maintaininsurance on behalf of any person who is or was a director, officer, employee,or agent of the corporation, or who, while a director, officer, employee, oragent of the corporation, is or was serving at the request of the corporationas a director, officer, partner, trustee, employee, or agent of another foreignor domestic corporation, partnership, joint venture, trust, other enterprise,or employee benefit plan, against any liability asserted against the directorand incurred by the director in any capacity or arising out of the director'sstatus as director, whether or not the corporation would have the power toindemnify the director against liability under the provisions of this section.
(k) Any indemnification of, or advance of expenses to, adirector in accordance with this section, if arising out of a proceeding by orin the right of the corporation, shall be reported, in writing, to the memberswith or before the notice of the next members' meeting.
