351.355. Officer, director, employee, or agent of corporation indemnified, when, methods authorized.
Officer, director, employee, or agent of corporation indemnified,when, methods authorized.
351.355. 1. A corporation created under the laws of this state mayindemnify any person who was or is a party or is threatened to be made aparty to any threatened, pending or completed action, suit, or proceeding,whether civil, criminal, administrative or investigative, other than anaction by or in the right of the corporation, by reason of the fact that heor she is or was a director, officer, employee or agent of the corporation,or is or was serving at the request of the corporation as a director,officer, employee or agent of another corporation, partnership, jointventure, trust or other enterprise, against expenses, including attorneys'fees, judgments, fines and amounts paid in settlement actually andreasonably incurred by him in connection with such action, suit, orproceeding if he or she acted in good faith and in a manner he or shereasonably believed to be in or not opposed to the best interests of thecorporation, and, with respect to any criminal action or proceeding, had noreasonable cause to believe his or her conduct was unlawful. Thetermination of any action, suit, or proceeding by judgment, order,settlement, conviction, or upon a plea of nolo contendere or itsequivalent, shall not, of itself, create a presumption that the person didnot act in good faith and in a manner which he or she reasonably believedto be in or not opposed to the best interests of the corporation, and, withrespect to any criminal action or proceeding, had reasonable cause tobelieve that his or her conduct was unlawful.
2. The corporation may indemnify any person who was or is a party oris threatened to be made a party to any threatened, pending or completedaction or suit by or in the right of the corporation to procure a judgmentin its favor by reason of the fact that he or she is or was a director,officer, employee or agent of the corporation, or is or was serving at therequest of the corporation as a director, officer, employee or agent ofanother corporation, partnership, joint venture, trust or other enterpriseagainst expenses, including attorneys' fees, and amounts paid in settlementactually and reasonably incurred by him in connection with the defense orsettlement of the action or suit if he or she acted in good faith and in amanner he or she reasonably believed to be in or not opposed to the bestinterests of the corporation; except that no indemnification shall be madein respect of any claim, issue or matter as to which such person shall havebeen adjudged to be liable for negligence or misconduct in the performanceof his or her duty to the corporation unless and only to the extent thatthe court in which the action or suit was brought determines uponapplication that, despite the adjudication of liability and in view of allthe circumstances of the case, the person is fairly and reasonably entitledto indemnity for such expenses which the court shall deem proper.
3. Except as otherwise provided in the articles of incorporation orthe bylaws, to the extent that a director, officer, employee or agent ofthe corporation has been successful on the merits or otherwise in defenseof any action, suit, or proceeding referred to in subsections 1 and 2 ofthis section, or in defense of any claim, issue or matter therein, he orshe shall be indemnified against expenses, including attorneys' fees,actually and reasonably incurred by him in connection with the action,suit, or proceeding.
4. Any indemnification under subsections 1 and 2 of this section,unless ordered by a court, shall be made by the corporation only asauthorized in the specific case upon a determination that indemnificationof the director, officer, employee or agent is proper in the circumstancesbecause he or she has met the applicable standard of conduct set forth inthis section. The determination shall be made by the board of directors bya majority vote of a quorum consisting of directors who were not parties tothe action, suit, or proceeding, or if such a quorum is not obtainable, oreven if obtainable a quorum of disinterested directors so directs, byindependent legal counsel in a written opinion, or by the shareholders.
5. Expenses incurred in defending any civil, criminal,administrative, or investigative action, suit or proceeding may be paid bythe corporation in advance of the final disposition of the action, suit, orproceeding as authorized by the board of directors in the specific caseupon receipt of an undertaking by or on behalf of the director, officer,employee or agent to repay such amount unless it shall ultimately bedetermined that he or she is entitled to be indemnified by the corporationas authorized in this section.
6. The indemnification provided by this section shall not be deemedexclusive of any other rights to which those seeking indemnification may beentitled under the articles of incorporation or bylaws or any agreement,vote of shareholders or disinterested directors or otherwise, both as toaction in his or her official capacity and as to action in another capacitywhile holding such office, and shall continue as to a person who has ceasedto be a director, officer, employee or agent and shall inure to the benefitof the heirs, executors and administrators of such a person.
7. A corporation created under the laws of this state shall have thepower to give any further indemnity, in addition to the indemnityauthorized or contemplated under other subsections of this section,including subsection 6, to any person who is or was a director, officer,employee or agent, or to any person who is or was serving at the request ofthe corporation as a director, officer, employee or agent of anothercorporation, partnership, joint venture, trust or other enterprise,provided such further indemnity is either (i) authorized, directed, orprovided for in the articles of incorporation of the corporation or anyduly adopted amendment thereof or (ii) is authorized, directed, or providedfor in any bylaw or agreement of the corporation which has been adopted bya vote of the shareholders of the corporation, and provided further that nosuch indemnity shall indemnify any person from or on account of suchperson's conduct which was finally adjudged to have been knowinglyfraudulent, deliberately dishonest or willful misconduct. Nothing in thissubsection shall be deemed to limit the power of the corporation undersubsection 6 of this section to enact bylaws or to enter into agreementswithout shareholder adoption of the same.
8. The corporation may purchase and maintain insurance or anotherarrangement on behalf of any person who is or was a director, officer,employee or agent of the corporation, or is or was serving at the requestof the corporation as a director, officer, employee or agent of anothercorporation, partnership, joint venture, trust or other enterprise againstany liability asserted against him or her and incurred by him or her in anysuch capacity, or arising out of his or her status as such, whether or notthe corporation would have the power to indemnify him against suchliability under the provisions of this section. Without limiting the powerof the corporation to procure or maintain any kind of insurance or otherarrangement the corporation may for the benefit of persons indemnified bythe corporation create a trust fund, establish any form of self insurance,secure its indemnity obligation by grant of a security interest or otherlien on the assets of the corporation, or establish a letter of credit,guaranty, or surety arrangement. The insurance or other arrangement may beprocured, maintained, or established within the corporation or with anyinsurer or other person deemed appropriate by the board of directorsregardless of whether all or part of the stock or other securities of theinsurer or other person are owned in whole or in part by the corporation.In the absence of fraud the judgment of the board of directors as to theterms and conditions of the insurance or other arrangement and the identityof the insurer or other person participating in an arrangement shall beconclusive and the insurance or arrangement shall not be voidable and shallnot subject the directors approving the insurance or arrangement toliability on any ground regardless of whether directors participating inthe approval are beneficiaries of the insurance arrangement.
9. Any provision of this chapter to the contrary notwithstanding, theprovisions of this section shall apply to all existing and new domesticcorporations, including but not limited to banks, trust companies,insurance companies, building and loan associations, savings bank and safedeposit companies, mortgage loan companies, corporations formed forbenevolent, religious, scientific or educational purposes and nonprofitcorporations.
10. For the purpose of this section, references to "the corporation"include all constituent corporations absorbed in a consolidation or mergeras well as the resulting or surviving corporation so that any person who isor was a director, officer, employee or agent of such a constituentcorporation or is or was serving at the request of such constituentcorporation as a director, officer, employee or agent of anothercorporation, partnership, joint venture, trust or other enterprise shallstand in the same position under the provisions of this section withrespect to the resulting or surviving corporation as he or she would if heor she had served the resulting or surviving corporation in the samecapacity.
11. For purposes of this section, the term "other enterprise" shallinclude employee benefit plans; the term "fines" shall include any excisetaxes assessed on a person with respect to an employee benefit plan; andthe term "serving at the request of the corporation" shall include anyservice as a director, officer, employee or agent of the corporation whichimposes duties on, or involves services by, such director, officer,employee, or agent with respect to an employee benefit plan, itsparticipants, or beneficiaries; and a person who acted in good faith and ina manner he or she reasonably believed to be in the interest of theparticipants and beneficiaries of an employee benefit plan shall be deemedto have acted in a manner "not opposed to the best interests of thecorporation" as referred to in this section.
(L. 1949 p. 242 § 45a, A.L. 1972 H.B. 1149, A.L. 1975 S.B. 14, A.L. 1983 S.B. 367, A.L. 1986 S.B. 565, A.L. 2000 S.B. 896, A.L. 2004 H.B. 1664, A.L. 2006 H.B. 1715)