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Louisiana Revised Statutes Tit. 12, § 1-851. Permissible indemnification

Current as of January 01, 2023 | Updated by Findlaw Staff

A. Except as otherwise provided in this Section, a corporation may indemnify an individual who is a party to a proceeding because the individual is a director against liability incurred in the proceeding if the requirements of Paragraph (1) or (2) of this Subsection are met:

(1) The director satisfied the requirements of Subparagraphs (a) and (b) and, if applicable, Subparagraph (c) of this Paragraph:

(a) The director conducted himself or herself in good faith.

(b) The director reasonably believed the relevant one of the following:

(i) In the case of conduct in an official capacity, that his or her conduct was in the best interests of the corporation.

(ii) In all other cases, that the director's conduct was at least not opposed to the best interests of the corporation.

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

(2) The director engaged in conduct for which broader indemnification has been made permissible or obligatory under a provision of the articles of incorporation, as authorized by R.S. 12:1-202(B)(5), for which liability has been eliminated under R.S. 12:1-832.

B. 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 the beneficiaries of, the plan is conduct that satisfies the requirement of Item (A)(1)(a)(ii) of this Section.

C. 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 relevant standard of conduct described in this Section.

D. Unless ordered by a court under R.S. 12:1-854(A)(3), a corporation may not indemnify a director in connection with either of the following:

(1) A proceeding by or in the right of the corporation, except for expenses incurred in connection with the proceeding if it is determined that the director has met the relevant standard of conduct under Subsection A of this Section.

(2) Any proceeding with respect to conduct for which the director was adjudged liable on the basis of receiving a financial benefit to which he or she was not entitled, whether or not involving action in the director's official capacity.

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Cite this article: FindLaw.com - Louisiana Revised Statutes Tit. 12, § 1-851. Permissible indemnification - last updated January 01, 2023 | https://codes.findlaw.com/la/revised-statutes/la-rev-stat-tit-12-sect-1-851/

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