2006 Code of Virginia § 13.1-876 - Authority to indemnify

13.1-876. Authority to indemnify.

A. Except as provided in subsection D of this section, a corporation mayindemnify an individual made a party to a proceeding because he is or was adirector against liability incurred in the proceeding if:

1. He conducted himself in good faith;

2. He believed:

a. In the case of conduct in his official capacity with the corporation, thathis conduct was in the best interests of the corporation; and

b. In all other cases, that his conduct was at least not opposed to the bestinterests of the corporation; and

3. In the case of any criminal proceeding, he had no reasonable cause tobelieve that his conduct was unlawful.

B. A director's conduct with respect to an employee benefit plan for apurpose he believed to be in the interests of the participants in andbeneficiaries of the plan is conduct that satisfies the requirement of item bof subdivision 2 of subsection A of this section.

C. The termination of a proceeding by judgment, order, settlement orconviction is not of itself determinative that the director did not meet thestandard of conduct described in this section.

D. A corporation may not indemnify a director under this section:

1. In connection with a proceeding by or in the right of the corporation inwhich the director was adjudged liable to the corporation; or

2. In connection with any other proceeding charging improper personal benefitto him, whether or not involving action in his official capacity, in which hewas adjudged liable on the basis that personal benefit was improperlyreceived by him.

E. Indemnification permitted under this section in connection with aproceeding by or in the right of the corporation is limited to reasonableexpenses incurred in connection with the proceeding.

(Code 1950, 13.1-205.1; 1968, c. 689; 1975, c. 500; 1981, c. 57; 1985, c.522.)