Oregon Statutes 707.746 – Authority to indemnify directors
(1) Except as provided in subsection (4) of this section, a banking institution may indemnify an individual made a party to a proceeding because the individual is or was a director against liability incurred in the proceeding if:
Terms Used In Oregon Statutes 707.746
- Conviction: A judgement of guilt against a criminal defendant.
- 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
- 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.
- 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.
(a) The conduct of the individual was in good faith;
(b) The individual reasonably believed that the individual’s conduct was in the best interests of the banking institution, or at least not opposed to its best interests; and
(c) In the case of any criminal proceeding, the individual had no reasonable cause to believe the individual’s conduct was unlawful.
(2) A director’s conduct with respect to an employee benefit plan for a purpose the director reasonably believed to be in the best interests of the participants in and beneficiaries of the plan is conduct that satisfies the requirement of subsection (1)(b) of this section.
(3) The termination of a proceeding by judgment, order, settlement, conviction or upon a plea of nolo contendere or its equivalent is not, of itself, determinative that the director did not meet the standard of conduct described in this section.
(4) A banking institution may not indemnify a director under this section:
(a) In connection with a proceeding by or in the right of the banking institution in which the director was adjudged liable to the banking institution; or
(b) In connection with any other proceeding charging improper personal benefit to the director in which the director was adjudged liable on the basis that personal benefit was improperly received by the director.
(5) Indemnification permitted under this section in connection with a proceeding by or in the right of the banking institution is limited to reasonable expenses incurred in connection with the proceeding. [1989 c.324 § 18; 1997 c.631 § 107]