South Dakota Codified Laws 47-1A-856. Indemnification of officers
A corporation may indemnify and advance expenses under §§ 47-1A-850 to 47-1A-859, inclusive, to an officer of the corporation who is a party to a proceeding by reason of being an officer of the corporation:
(1) To the same extent as a director; and
Terms Used In South Dakota Codified Laws 47-1A-856
- Contract: A legal written agreement that becomes binding when signed.
- 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.
- 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
- Proceeding: includes civil suit and criminal, administrative, and investigatory action. See South Dakota Codified Laws 47-1A-140
(2) If the officer is not also a director, to such further extent as may be provided by the articles of incorporation, the bylaws, a resolution of the board of directors, or contract except for:
(a) Liability in connection with a proceeding by or in the right of the corporation other than for reasonable expenses incurred in connection with the proceeding; or
(b) Liability arising out of conduct that constitutes:
(i) Receipt of a financial benefit to which the officer is not entitled;
(ii) An intentional infliction of harm on the corporation or the shareholders; or
(iii) An intentional violation of criminal law.
The provisions of subdivision (2) apply to an officer who is also a director if the basis on which the officer is made a party to the proceeding is an act or omission solely as an officer.
An officer of a corporation who is not also a director is entitled to mandatory indemnification under § 47-1A-852, and may apply to a court under § 47-1A-854 for indemnification or an advance for expenses, in each case to the same extent to which a director may be entitled to indemnification or advance for expenses under those provisions.
Source: SL 2005, ch 239, § 179.