§ 7-129-102 — Authority to indemnify directors

Colorado § 7-129-102

• Jurisdiction: Colorado
• Title 07: Corporations
• Art.: Indemnification

Text

(1) Except as provided in
subsection (4) of this section, a nonprofit corporation may indemnify a person made
a party to a proceeding because the person is or was a director against liability
incurred in the proceeding if:

(a) The person's conduct was in good faith; and

(b) The person reasonably believed:

(I) In the case of conduct in an official capacity with the nonprofit
corporation, that the conduct was in the nonprofit corporation's best interests; and

(II) In all other cases, that the conduct was at least not opposed to the
nonprofit corporation's best interests; and

(c) In the case of any criminal proceeding, the person had no reasonable
cause to believe the conduct was unlawful.

(2) A director's conduct with respect to an employee benefit plan for a
purpose the director reasonably believed to be in the interests of the participants in
or beneficiaries of the plan is conduct that satisfies the requirement of
subparagraph (II) of paragraph (b) of subsection (1) of this section. A director's
conduct with respect to an employee benefit plan for a purpose that the director
did not reasonably believe to be in the interests of the participants in or
beneficiaries of the plan shall be deemed not to satisfy the requirements of
paragraph (a) of subsection (1) of this section.

(3) The termination of a proceeding by judgment, order, settlement, or
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 an 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.

Legislative History

Source: L. 97: Entire article added, p. 702, � 3, effective July 1, 1998.