1998 Florida Code
TITLE XXXVI BUSINESS ORGANIZATIONS
Chapter 608 Limited Liability Companies  
608.4363   Indemnification of managing members, managers, officers, employees, and agents.

608.4363  Indemnification of managing members, managers, officers, employees, and agents.--

(1)  A limited liability company shall have power to indemnify any person who was or is a party to any proceeding by reason of the fact that he or she is or was a manager or a managing member of the limited liability company or is or was serving at the request of the limited liability company as a manager, managing member, officer, employee, or agent of another limited liability company, corporation, partnership, joint venture, trust, or other enterprise against liability incurred in connection with such proceeding, including any appeal thereof, if he or she acted in good faith and in a manner he or she reasonably believed to be in, or not opposed to, the best interests of the limited liability company and, with respect to any criminal action or proceeding, had no reasonable cause to believe his or her conduct was unlawful. The termination of any proceeding by judgment, order, settlement, or conviction or upon a plea of nolo contendere or its equivalent shall not, of itself, create a presumption that the person did not act in good faith and in a manner which he or she reasonably believed to be in, or not opposed to, the best interests of the limited liability company, or, with respect to any criminal action or proceeding, had reasonable cause to believe that his or her conduct was unlawful.

(2)  A limited liability company shall have power to indemnify any person, who was or is a party to any proceeding by or in the right of the limited liability company to procure a judgment in its favor by reason of the fact that he or she is or was a manager, managing member, officer, employee, or agent of the limited liability company or is or was serving at the request of the limited liability company as a manager, managing member, director, officer, employee, or agent of another limited liability company, corporation, partnership, joint venture, trust, or other enterprise, against expenses and amounts paid in settlement not exceeding, in the judgment of a majority of the members, the estimated expense of litigating the proceeding to conclusion, actually and reasonably incurred in connection with the defense or settlement of such proceeding, including any appeal thereof. Such indemnification shall be authorized if such person acted in good faith and in a manner he or she reasonably believed to be in, or not opposed to, the best interests of the limited liability company, except that no indemnification shall be made under this subsection in respect of any claim, issue, or matter as to which such person shall have been adjudged to be liable unless, and only to the extent that, the court in which such proceeding was brought, or any other court of competent jurisdiction, shall determine upon application that, despite the adjudication of liability but in view of all circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which such court shall deem proper.

(3)  To the extent that any manager, managing member, officer, employee, or agent of a limited liability company has been successful on the merits or otherwise in defense of any proceeding referred to in subsection (1) or subsection (2), or in defense of any claim, issue, or matter therein, he or she shall be indemnified against expenses actually and reasonably incurred by him or her in connection therewith.

(4)  Any indemnification under subsection (1) or subsection (2), unless pursuant to a determination by a court, shall be made by the limited liability company only as authorized in the specific case upon a determination that indemnification of the manager, managing member, officer, employee, or agent is proper in the circumstances because he or she has met the applicable standard of conduct set forth in subsection (1) or subsection (2). Such determination shall be made in one of the following manners:

(a)  By the members by a majority vote.

(b)  By majority vote of a committee duly designated by the members, in which members who are parties may participate, consisting solely of two or more members not at the time parties to the proceeding.

(c)  By independent legal counsel selected by the members prescribed in paragraph (a) or the committee prescribed in paragraph (b).

(5)  Evaluation of the reasonableness of expenses and authorization of indemnification shall be made in the same manner as the determination that indemnification is permissible. However, if the determination of permissibility is made by independent legal counsel, persons specified by paragraph (4)(c) shall evaluate the reasonableness of expenses and may authorize indemnification.

(6)  Expenses incurred by a manager, managing member, officer, or member, in defending a civil or criminal proceeding may be paid by the limited liability company in advance of the final disposition of such proceeding upon receipt of an undertaking by or on behalf of such manager, managing member, officer, or member, to repay such amount if he or she is ultimately found not to be entitled to indemnification by the limited liability company pursuant to this section. Expenses incurred by other employees and agents may be paid in advance upon such terms or conditions that the members or managers deem appropriate.

(7)  The indemnification and advancement of expenses provided pursuant to this section are not exclusive, and a limited liability company may make any other expenditure for further indemnification or advancement of expenses of any of its managing members, managers, officers, employees, or agents, under the articles of organization or the regulations, vote of members, or otherwise, both as to action in his or her official capacity and as to action in another capacity while holding such office. However, indemnification or advancement of expenses shall not be made to or on behalf of any manager, managing member, officer, employee, or agent if a judgment or other final adjudication establishes that his or her actions, or omissions to act, were material to the cause of action so adjudicated and constitute any of the following:

(a)  A violation of the criminal law, unless the managing member, manager, officer, employee, or agent had no reasonable cause to believe his or her conduct was unlawful.

(b)  A transaction from which the managing member, manager, officer, employee, or agent derived an improper personal benefit.

(c)  In the case of a manager or managing member, a circumstance under which the liability provisions of s. 608.426 are applicable.

(d)  Willful misconduct or a conscious disregard for the best interests of the limited liability company in a proceeding by or in the right of the limited liability company to procure a judgment in its favor or in a proceeding by or in the right of a member.

(8)  Indemnification and advancement of expenses as provided in this section shall continue, unless otherwise provided when authorized or ratified, as to a person who has ceased to be a managing member, manager, officer, employee, or agent and shall inure to the benefit of the heirs, executors, and administrators of such a person, unless otherwise provided when authorized or ratified.

(9)  Unless the limited liability company's articles of organization or regulations provide otherwise, notwithstanding the failure of a limited liability company to provide indemnification, and despite any contrary determination of the members in the specific case, a managing member, manager, officer, employee, or agent of the limited liability company who is or was a party to a proceeding may apply for indemnification or advancement of expenses, or both, to the court conducting the proceeding, to the circuit court, or to another court of competent jurisdiction. On receipt of an application, the court, after giving any notice that it considers necessary, may order indemnification and advancement of expenses, including expenses incurred in seeking court-ordered indemnification or advancement of expenses, if it determines that any of the following apply:

(a)  The managing member, manager, officer, employee, or agent is entitled to mandatory indemnification under subsection (3), in which case the court shall also order the limited liability company to pay the person reasonable expenses incurred in obtaining court-ordered indemnification or advancement of expenses.

(b)  The managing member, manager, director, officer, employee, or agent is entitled to indemnification or advancement of expenses, or both, by virtue of the exercise by the limited liability company of its power pursuant to subsection (7).

(c)  The managing member, manager, director, officer, employee, or agent is fairly and reasonably entitled to indemnification or advancement of expenses, or both, in view of all the relevant circumstances, regardless of whether such person met the standard of conduct set forth in subsection (1), subsection (2), or subsection (7).

(10)  For the purposes of this section:

(a)  The term "other enterprises" includes employee benefit plans.

(b)  The term "expenses" includes counsel fees, including those for appeal.

(c)  The term "liability" includes obligations to pay a judgment, settlement, penalty, fine, including an excise tax assessed with respect to any employee benefit plan, and expenses actually and reasonably incurred with respect to a proceeding.

(d)  The term "proceeding" includes any threatened, pending, or completed action, suit, or other type of proceeding, whether civil, criminal, administrative, or investigative, and whether formal or informal.

(e)  The term "agent" includes a volunteer.

(f)  The term "serving at the request of the limited liability company" includes any service as a manager, managing member, officer, employee, or agent of the limited liability company that imposes duties on such persons, including duties relating to an employee benefit plan and its participants or beneficiaries.

(g)  The term "not opposed to the best interest of the limited liability company" describes the actions of a person who acts in good faith and in a manner he or she reasonably believes to be in the best interests of the participants and beneficiaries of an employee benefit plan.

(11)  A limited liability company shall have power to purchase and maintain insurance on behalf of any person who is or was a managing member, manager, officer, employee, or agent of the limited liability company or is or was serving at the request of the limited liability company as a manager, managing member, director, officer, employee, or agent of another limited liability company, corporation, partnership, joint venture, trust, or other enterprise against any liability asserted against the person and incurred by him or her in any such capacity or arising out of his or her status as such, whether or not the limited liability company would have the power to indemnify the person against such liability under the provisions of this section.

History.--s. 38, ch. 93-284; s. 59, ch. 97-102.