Montana Code 35-2-447. Authority to indemnify
35-2-447. Authority to indemnify. (1) Except as provided in subsection (4), an individual made a party to a proceeding because the individual is or was a director may be indemnified against liability incurred in the proceeding if the individual:
Terms Used In Montana Code 35-2-447
- Conviction: A judgement of guilt against a criminal defendant.
- Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
- Corporation: means a public benefit corporation, mutual benefit corporation, or religious corporation. See Montana Code 35-2-114
- Individual: includes the estate of an incompetent individual. See Montana Code 35-2-114
- Nolo contendere: No contest-has the same effect as a plea of guilty, as far as the criminal sentence is concerned, but may not be considered as an admission of guilt for any other purpose.
- Plea: In a criminal case, the defendant's statement pleading "guilty" or "not guilty" in answer to the charges, a declaration made in open court.
- Proceeding: includes a civil suit and a criminal, administrative, and investigatory action. See Montana Code 35-2-114
- Settlement: Parties to a lawsuit resolve their difference without having a trial. Settlements often involve the payment of compensation by one party in satisfaction of the other party's claims.
(a)engaged in good faith conduct;
(b)reasonably believed:
(i)in the case of conduct in the individual’s official capacity with the corporation, that the conduct was in its best interests; and
(ii)in all other cases, that the conduct was at least not opposed to its best interests; and
(c)in the case of any criminal proceeding, 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 and beneficiaries of the plan is conduct that satisfies the requirements of subsection (1)(b)(ii).
(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, a determination that the director did not meet 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 the director was adjudged liable to the corporation; or
(b)in connection with any other proceeding that charges improper personal benefit to the director, whether or not involving action in the director’s official capacity, in which the director was adjudged liable on the basis that personal benefit was improperly received by the director.
(5)Indemnification permitted under this section in connection with a proceeding by or in the right of the corporation is limited to reasonable expenses incurred in connection with the proceeding.