§ 55-8-51. Authority to indemnify.
§55‑8‑51. Authority to indemnify.
(a) Except as providedin subsection (d), a corporation may indemnify an individual made a party to aproceeding because he is or was a director against liability incurred in theproceeding if:
(1) He conducted himselfin good faith; and
(2) He reasonablybelieved (i) in the case of conduct in his official capacity with thecorporation, that his conduct was in its best interests; and (ii) in all othercases, that his conduct was at least not opposed to its best interests; and
(3) In the case of anycriminal proceeding, he had no reasonable cause to believe his conduct wasunlawful.
(b) A director'sconduct with respect to an employee benefit plan for a purpose he reasonablybelieved to be in the interests of the participants in and beneficiaries of theplan is conduct that satisfies the requirement of subsection (a)(2)(ii).
(c) The termination ofa proceeding by judgment, order, settlement, conviction, or upon a plea of nocontest or its equivalent is not, of itself, determinative that the directordid not meet the standard of conduct described in this section.
(d) A corporation maynot indemnify a director under this section:
(1) In connection with aproceeding by or in the right of the corporation in which the director wasadjudged liable to the corporation; or
(2) In connection withany other proceeding charging improper personal benefit to him, whether or notinvolving action in his official capacity, in which he was adjudged liable onthe basis that personal benefit was improperly received by him.
(e) Indemnificationpermitted under this section in connection with a proceeding by or in the rightof the corporation that is concluded without a final adjudication on the issueof liability is limited to reasonable expenses incurred in connection with theproceeding.
(f) The authorization,approval or favorable recommendation by the board of directors of a corporationof indemnification, as permitted by this section, shall not be deemed an act orcorporate transaction in which a director has a conflict of interest, and nosuch indemnification shall be void or voidable on such ground. (1955,c. 1371, s. 1; 1969, c. 797, s. 2; 1973, c. 469, s. 6; 1985 (Reg. Sess., 1986),c. 1027, s. 39; 1989, c. 265, s. 1.)