16-10a-902 - Authority to indemnify directors.
16-10a-902. Authority to indemnify directors.
(1) Except as provided in Subsection (4), a corporation may indemnify an individualmade a party to a proceeding because he is or was a director, against liability incurred in theproceeding if:
(a) his conduct was in good faith; and
(b) he reasonably believed that his conduct was in, or not opposed to, the corporation'sbest interests; and
(c) in the case of any criminal proceeding, he had no reasonable cause to believe hisconduct was unlawful.
(2) A director's conduct with respect to any employee benefit plan for a purpose hereasonably believed to be in or not opposed to the interests of the participants in and beneficiariesof the plan is conduct that satisfies the requirement of Subsection (1)(b).
(3) The termination of a proceeding by judgment, order, settlement, conviction, or upon aplea of nolo contendere or its equivalent is not, of itself, determinative that the director did notmeet the standard of conduct described in this section.
(4) A corporation may not indemnify a director under this section:
(a) in connection with a proceeding by or in the right of the corporation in which thedirector was adjudged liable to the corporation; or
(b) in connection with any other proceeding charging that the director derived animproper personal benefit, whether or not involving action in his official capacity, in whichproceeding he was adjudged liable on the basis that he derived an improper personal benefit.
(5) Indemnification permitted under this section in connection with a proceeding by or inthe right of the corporation is limited to reasonable expenses incurred in connection with theproceeding.
Enacted by Chapter 277, 1992 General Session