(a) A corporation, by a provision in its articles of incorporation or bylaws or in a resolution adopted or a contract approved by its board of directors or shareholders, may obligate itself in advance of the act or omission giving rise to a proceeding to provide indemnification in accordance with § 414-242 or advance funds to pay for or reimburse expenses in accordance with § 414-244. Any such obligatory provision shall be deemed to satisfy the requirements for authorization referred to in section 414-244(c) and 414-246(c). Any such provision that obligates the corporation to provide indemnification to the fullest extent permitted by law shall be deemed to obligate the corporation to advance funds to pay for or reimburse expenses in accordance with § 414-244 to the fullest extent permitted by law, unless the provision specifically provides otherwise.
Terms Used In Hawaii Revised Statutes 414-249
Articles of incorporation: include amended and restated articles of incorporation and articles of merger. See Hawaii Revised Statutes 414-3
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 Hawaii Revised Statutes 414-3
(b) Any provision pursuant to subsection (a) shall not obligate the corporation to indemnify or advance expenses to a director of a predecessor of the corporation, pertaining to conduct with respect to the predecessor, unless otherwise specifically provided. Any provision for indemnification or advance for expenses in the articles of incorporation, bylaws, or a resolution of the board of directors or shareholders of a predecessor of the corporation in a merger or in a contract to which the predecessor is a party, existing at the time the merger takes effect, shall be governed by section 414-316(a)(3).(c) A corporation, by a provision in its articles of incorporation, may limit any of the rights to indemnification or advance for expenses created by or pursuant to this subpart.(d) This subpart does not limit a corporation’s power to pay or reimburse expenses incurred by a director or an officer in connection with the director’s or officer’s appearance as a witness in a proceeding at a time when the officer or director is not a party.(e) This subpart does not limit a corporation’s power to indemnify, advance expenses to, or provide or maintain insurance on behalf of an employee or agent.
