16-6a-902. Authority to indemnify
directors.
(1) Except as provided in Subsection (4), a nonprofit
corporation may indemnify an individual made a party to a proceeding because
the individual is or was a director, against liability incurred in the
proceeding if:
(a) the individual's conduct was in good faith;
(b) the individual reasonably believed that the
individual's conduct was in, or not opposed to, the corporation's best
interests; and
(c) in the case of any criminal proceeding, the
individual had no reasonable cause to believe the individual's conduct was
unlawful.
(2) A director's conduct with respect to any employee
benefit plan for a purpose the director reasonably believed to be in or not
opposed to the interests of the participants in and beneficiaries of 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 a plea of nolo contendere or its equivalent is
not, of itself, determinative that the director did not meet the standard of
conduct described in this section.
(4) A nonprofit corporation may not indemnify a director
under this section:
(a) in connection with a proceeding by or in the right
of the nonprofit corporation in which the director was adjudged liable to the
nonprofit corporation; or
(b) in connection with any other proceeding charging
that the director derived an improper personal benefit, whether or not
involving action in the director's official capacity, in which proceeding the
director was adjudged liable on the basis that the director derived an improper
personal benefit.
(5) Indemnification permitted under this section in
connection with a proceeding by or in the right of the nonprofit corporation is
limited to reasonable expenses incurred in connection with the
proceeding.
Enacted by Chapter 300, 2000 General Session