(a) Definitions.  As used in this section:

(1)  “Director” or “officer” means any individual who is or was a director or officer of the corporation and any individual who, while a director or officer of the corporation, is or was serving at the request of the corporation as a director, officer, partner, trustee, employee, or agent of another foreign or domestic corporation, limited liability company, partnership, joint venture, trust, other enterprise, employee benefit plan, or other entity. A director or officer is considered to be serving an employee benefit plan at the corporation’s request if his or her duties to the corporation also impose duties on, or otherwise involve services by, him or her to the plan or participants on or beneficiaries of the plan. “Director” or “officer” includes, unless the context requires otherwise, the estate or personal representative of the director or officer.

(2)  “Corporation” includes:

(i)  Any domestic or foreign corporation, profit or nonprofit;

(ii)  Any domestic or foreign predecessor entity of the corporation in a merger or other transaction in which the predecessor’s existence ceased upon consummation of the transaction; and

(iii)  Any of the classes of quasi public corporations with purposes enumerated as exceptions in § 7-1.2-301 to the extent that the corporations are not subject to other provisions of the general laws or special acts authorizing indemnification of their directors and officers.

(3)  “Expenses” include attorneys’ fees.

(4)  “Liability” means the obligation to pay a judgment, penalties, fines (including an excise tax assessed with respect to an employee benefit plan), settlements, or reasonable expenses actually incurred by the person in connection with the proceeding.

(5)  “Official capacity” means:

(i)  When used with respect to a director, the office of director in the corporation; and

(ii)  When used with respect to an officer, as contemplated in subsection (i), the office in a corporation held by the officer. “Official capacity” does not include service for an individual other than a director, as contemplated in subsection (a)(1), the elective or appointive office in the corporation held by the officer or the employment or agency relationship undertaken by the employee or agent on behalf of the corporation, but in each case does not include service for any other foreign or domestic corporation or any partnership, joint venture, trust, other enterprise, or employee benefit plan.

(6)  “Party” includes an individual who was, is, or is threatened to be made, a named defendant or respondent in a proceeding.

(7)  “Proceeding” means any threatened, pending or completed action, suit, or proceeding, whether civil, criminal, administrative, or investigative.

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(b) Permissible indemnification.

(1)  Except as otherwise provided in this section, a corporation has power to indemnify any individual made a party to any proceeding by reason of the fact that he or she is or was a director if:

(i)  He or she conducted himself or herself in good faith; and

(ii)  He or she reasonably believed:

(A)  In the case of conduct in his or her official capacity with the corporation, that his or her conduct was in its best interests; and

(B)  In all other cases, that his or her conduct was at least not opposed to the corporation’s best interests; and

(iii)  In the case of any criminal proceeding, he or she had no reasonable cause to believe his or her conduct was unlawful; or

(iv)  He or she engaged in conduct for which broader indemnification has been made permissible or obligatory under a provision of the articles of incorporation.

(2)  A director’s conduct with respect to an employee benefit plan for a purpose he or she reasonably believed to be in the interests of the participants and beneficiaries of the plan is deemed to be for a purpose which is not opposed to the best interests of the corporation in accordance with (b)(1)(ii)(B).

(3)  The termination of any proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, is not, of itself, determinative that the individual did not meet the requisite standard of conduct set forth in this subsection.

(4)  Unless ordered by a court under subsection (d) of this section, a corporation may not indemnify a director:

(i)  In connection with a proceeding by or in the right of the corporation, except for reasonable expenses incurred in connection with the proceeding (if it is determined that the director has met the relevant standard of conduct under (b)(1)(i) and (ii)); or

(ii)  In connection with any proceeding for which the director was adjudged liable to the corporation on the basis that he or she received an improper personal benefit, whether or not involving action in his or her official capacity.

(c) Mandatory indemnification.  Unless limited by the articles of incorporation, a director who has been wholly successful, on the merits or otherwise, in the defense of any proceeding referred to in subsection (b) of this section is indemnified against reasonable expenses incurred by him or her in connection with the proceeding.

(d) Court-ordered indemnification.

(1)  A court of appropriate jurisdiction, upon application of a director and any notice that the court requires, has authority to order indemnification in the following circumstances:

(i)  If the court determines a director is entitled to reimbursement under subsection (c) of this section, the court shall order indemnification, in which case the director is also entitled to recover the expenses of securing the reimbursement; or

(ii)  If the court determines that the director is fairly and reasonably entitled to indemnification in view of all the relevant circumstances, whether or not he or she has met the standard of conduct set forth in subsection (b)(1) or (b)(2) or has been adjudged liable in the circumstances described in subsection (b)(4)(ii), the court may order such indemnification as the court shall deem proper, except that indemnification with respect to any proceeding by or in the right of the corporation or in which liability has been adjudged in the circumstances described in subsection (b)(4)(i) is limited to expenses.

(2)  A court of appropriate jurisdiction may be the same court in which the proceeding involving the director’s liability took place.

(e) Advance for expenses.  Reasonable expenses incurred by a director who is a party to a proceeding may be paid or reimbursed by the corporation in advance of the final disposition of the proceeding upon receipt by the corporation of:

(1)  A written affirmation by the director of his or her good faith belief that he or she has met the standard of conduct necessary for indemnification by the corporation as authorized in this section; and

(2)  A written undertaking by or on behalf of the director to repay the amount if the court determines that he or she has not met that standard of conduct, and after a determination that the facts then known to those making the determination would not preclude indemnification under this section. The undertaking required by this subdivision must be an unlimited general obligation of the director but need not be secured and may be accepted without reference to financial ability to make repayment. Determinations and authorizations of payments under this subsection are made in the manner specified in subsection (f).

(f) Determination and authorization of indemnification.

(1)  No indemnification under subsection (b) may be made by the corporation unless authorized in the specific case after a determination has been made that indemnification of the director is permissible in the circumstances because he or she has met the standard of conduct set forth in subsection (b). The determination must be made:

(i)  By the board of directors by a majority vote of a quorum consisting of directors not at the time parties to the proceeding; or

(ii)  If such a quorum cannot be obtained, then by a majority vote of a committee of the board, duly designated to act in the matter by a majority vote of the full board (in which designation directors who are parties may participate), consisting solely of two (2) or more directors not at the time parties to the proceeding; or

(iii)  By special legal counsel, selected by the board of directors or a committee of the board by vote as set forth in subsection (f)(1)(i) or (f)(1)(ii), or, if the requisite quorum of the full board cannot be obtained for the vote and the committee cannot be established, by a majority vote of the full board (in which selection directors who are parties may participate); or

(iv)  By the shareholders.

(2)  Authorization of indemnification and determination as to reasonableness of expenses are made in the same manner as the determination that indemnification is permissible, except that if the determination that indemnification is permissible is made by special legal counsel, authorization of indemnification and determination as to reasonableness of expenses must be made in a manner specified in subsection (f)(1)(iii) for the selection of the counsel. Shares held by directors who are parties to the proceeding may not be voted on the subject matter under this subsection.

(g) Variation by corporate action.  The indemnification provided by this section is not deemed exclusive of any other rights to which those seeking indemnification are entitled under any bylaw, agreement, vote of shareholders or disinterested directors or otherwise, both as to action in his or her official capacity and as to action in another capacity while holding office, and continues as to an individual who has ceased to be a director, officer, partner, trustee, employee, or agent and inures to the benefit of the heirs, executors, and administrators of an individual. Nothing contained in this section limits the corporation’s power to pay or reimburse expenses incurred by a director in connection with his or her appearance as a witness in a proceeding at a time when he or she has not been made a named defendant or respondent in the proceeding.

(h) Officers.  Unless limited by the articles of incorporation:

(1)  An officer of the corporation is indemnified under this section as and to the same extent provided for a director, and is entitled to the same extent as a director to seek indemnification pursuant to the provisions of this section;

(2)  A corporation has the power to indemnify and to advance expenses to an officer, employee, or agent of the corporation to the same extent that it may indemnify and advance expenses to directors pursuant to this section; and

(3)  A corporation, in addition, has the power to indemnify and to advance expenses to an officer, employee, or agent who is not a director to a further extent, consistent with law, that is provided by its articles of incorporation, bylaws, general or specific action of its board of directors, or contract.

(i) Insurance.  A corporation has the power to purchase and maintain insurance on behalf of any individual who is or was a director, officer, employee, or agent of the corporation, or who, while a director, officer, employee, or agent of the corporation, is or was serving at the request of the corporation as a director, officer, partner, trustee, employee, or agent of another foreign or domestic corporation, partnership, joint venture, trust, other enterprise, or employee benefit plan, against any liability asserted against him or her and incurred by him or her in any corporate capacity or arising out of his or her status as a director, officer, employee, or agent of the corporation, whether or not the corporation would have the power to indemnify him or her against the liability under the provisions of this section.

(j) Shareholder approval.  Any indemnification of, or advance of expenses to, a director in accordance with this section, if arising out of a proceeding by or in the right of the corporation, must be reported, in writing, to the shareholders with or before the notice of the next shareholders’ meeting.