(a) Except as provided in subsection (d), a corporation may indemnify a former or current director made a party to a proceeding by reason of the fact that the individual was or is a director, against liability incurred in the proceeding if:

non profit

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Terms Used In Hawaii Revised Statutes 414D-160

  • 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 nonprofit corporation unless otherwise specified. See Hawaii Revised Statutes 414D-14
  • Indemnification: In general, a collateral contract or assurance under which one person agrees to secure another person against either anticipated financial losses or potential adverse legal consequences. Source: FDIC
  • Individual: means a natural person. See Hawaii Revised Statutes 414D-14
  • 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 civil suit and criminal, administrative, and investigatory action. See Hawaii Revised Statutes 414D-14
  • 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.
(1) The individual conducted the individual’s self in good faith; and
(2) The individual reasonably believed:

(A) In the case of conduct in an official capacity, that the individual’s conduct was in the corporation‘s best interests;
(B) In all other cases, the individual’s conduct, at a minimum, did not oppose the corporation’s best interests; and
(3) In the case of any criminal proceeding, the individual had no reasonable cause to believe the individual’s conduct was unlawful.
(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 beneficiaries of the plan is conduct that satisfies the requirements of subsection (a)(2)(B).
(c) The termination of a proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, is not by itself determinative of a director’s failure to meet the standard of conduct described in this section.
(d) A corporation may not indemnify a director’s liability under this section where the director’s liability has been determined:

(1) In connection with a proceeding by or in the right of the corporation; or
(2) In connection with any other proceeding whether or not involving action in an official capacity, in which the director was found liable on the basis of the director’s improper receipt of a personal benefit.
(e) 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.

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