DIY Legal Forms

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Bylaw Indemnification of Officers and Directors

1. Parties to Be Indemnified. The corporation (Corporation) shall indemnify each of its Directors and officers, the Board of Directors, and the members of any committee of the Board appointed pursuant to these Bylaws (collectively referred to as its Agents) for any liability arising due to the actions or inactions of such persons or entities on behalf of Corporation, in accordance with the terms of this Article.

2. Rights and Limitations on Indemnification. An Agent shall be entitled to indemnification provided that the Agent acted in good faith and in a manner reasonably believed to be in the best interest of Corporation and, in a criminal action or proceeding, provided that the Agent had no reasonable cause to believe the Agent's conduct was unlawful. No right of indemnification shall exist for any act or inaction that constitutes gross negligence or willful misconduct, or that constitutes a breach of fiduciary duty on the part of the Agent. Specifically, no right of indemnification shall exist as to (a) any matter in which the Agent has been finally adjudged guilty of gross negligence, willful misconduct, or breach of fiduciary duty in any action or proceeding or (b) any settlement of any action or proceeding, unless the Board, or independent counsel selected by the Board, has determined that there is no reasonable ground for such Agent to be adjudged guilty of gross negligence, willful misconduct, or breach of fiduciary duty.

3. Cost Items Covered. The right of indemnification under this Article shall extend to all costs, expenses, and liabilities actually and reasonably incurred by an Agent in connection with any claim, action, or proceeding (whether civil, criminal, administrative, or other) in connection with which the Agent acted or failed to act in the Agent's capacity as agent of Corporation.

4. Determination That Indemnification Is Proper. If any Agent has been successful on the merits in the defense of any such action or proceeding, then the Agent shall be entitled to indemnification. In all other situations, the Agent shall be entitled to indemnification as specified in Section 2 or upon adoption of a duly adopted resolution of the Board or the shareholders approving a claim for indemnification. Any such resolution must be adopted by the Board by a majority vote of a quorum consisting of Directors who were not parties to the action or proceeding, or by the shareholders.

5. Advance Payment of Expenses. Expenses incurred by an Agent in defending any action or proceeding may be paid by Corporation in advance of the final disposition of such action or proceeding. In each instance, such advance payment must be authorized by the Board, and such authorization may only be granted after receipt of an undertaking by the Agent to repay the amount advanced, unless it is ultimately determined that the Agent is entitled to indemnification in accordance with the provisions of Section 2.

6. Continuation of Right to Indemnification. Such right to indemnification shall continue as to a person who has ceased to be a member of the Board or an officer or member of such committee, and shall inure to the benefit of the heirs, executors, and administrators of such a person.

7. Other Remedies. The indemnification provided by these Bylaws shall not be deemed exclusive of any other rights to which those seeking indemnification may be entitled under any statute, agreement, vote by members of Corporation or disinterested members of the Board, or otherwise.

8. Insurance. Corporation may purchase and maintain insurance on behalf of any or all of its Agents against any liability, or settlement based on an asserted liability, incurred by them by reason of being, or having been, an Agent of Corporation, whether or not Corporation would have the power to indemnify them against such liability or settlement, under the provisions of Corporation's charter or these Bylaws.