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| Public Act 097-0881
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| SB1127 Enrolled | LRB097 04845 AEK 44884 b |
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AN ACT concerning corporations.
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Be it enacted by the People of the State of Illinois, |
represented in the General Assembly:
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Section 5. The Business Corporation Act of 1983 is amended |
by changing Section 8.75 as follows:
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(805 ILCS 5/8.75) (from Ch. 32, par. 8.75)
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Sec. 8.75. Indemnification of officers, directors, |
employees and agents;
insurance.
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(a) A corporation may indemnify any person who was or is a |
party,
or is threatened to be made a party to any threatened, |
pending or completed
action, suit or proceeding, whether civil, |
criminal, administrative or
investigative (other than an |
action by or in the right of the corporation)
by reason of the |
fact that he or she is or was a director, officer, employee
or |
agent of the corporation, or who is or was serving at the |
request of the
corporation as a director, officer, employee or |
agent of another corporation,
partnership, joint venture, |
trust or other enterprise, against expenses
(including |
attorneys' fees), judgments, fines and amounts paid in |
settlement
actually and reasonably incurred by such person in |
connection with such action,
suit or proceeding, if such person |
acted in good faith and in a manner he or
she reasonably |
believed to be in, or not opposed to the best interests of the
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corporation, and, with respect to any criminal action or |
proceeding, had no
reasonable cause to believe his or her |
conduct was unlawful. The termination
of any action, suit or |
proceeding by judgment, order, settlement, conviction,
or upon |
a plea of nolo contendere or its equivalent, shall not, of |
itself,
create a presumption that the person did not act in |
good faith and in a manner
which he or she reasonably believed |
to be in or not opposed to the best
interests of the |
corporation or, with respect to any criminal action or
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proceeding, that the person had reasonable cause to believe |
that his or her
conduct was unlawful.
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(b) A corporation may indemnify any person who was or is
a |
party, or is threatened to be made a party to any threatened,
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pending or completed action or suit by or in the right of the
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corporation to procure a judgment in its favor by reason
of the |
fact that such person is or was a director, officer, employee
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or agent of the corporation, or is or was serving at the |
request
of the corporation as a director, officer, employee or |
agent
of another corporation, partnership, joint venture, |
trust or other
enterprise, against expenses (including |
attorneys' fees) actually
and reasonably incurred by such |
person in connection with the defense
or settlement of such |
action or suit, if such person acted in good faith
and in a |
manner he or she reasonably believed to be in, or not
opposed |
to, the best interests of the corporation, provided that no
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indemnification shall be made with respect to any claim, issue, |
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or matter as to
which such person has been adjudged to have |
been liable to the corporation,
unless, and only to the extent |
that the court in which such action or suit was
brought shall |
determine upon application that, despite the adjudication of
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liability, but in view of all the circumstances of the case, |
such person is
fairly and reasonably entitled to indemnity for |
such expenses as the court
shall deem proper.
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(c) To the extent that a present or former director, |
officer or employee
of a corporation has been successful, on |
the merits or otherwise,
in the defense of any action, suit or |
proceeding referred to in
subsections (a) and (b), or in |
defense of any claim, issue or matter
therein, such person |
shall be indemnified against expenses (including
attorneys' |
fees) actually and reasonably incurred by such person in |
connection
therewith, if the person acted in good faith and in |
a manner he or she
reasonably believed to be in, or not opposed |
to, the best interests of the
corporation.
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(d) Any indemnification under subsections (a), and (b), or |
(c) (unless ordered
by a court) shall be made by the |
corporation only as authorized in the specific
case, upon a |
determination that indemnification of the present or former
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director, officer,
employee or agent is proper in the |
circumstances because he or she has met
the applicable standard |
of conduct set forth in subsections (a), (b), or (c) (b). Such
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determination shall be made with respect to a person who is a |
director or
officer of the corporation at the time of the |
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determination: (1) by the majority vote of the
directors who |
are not parties to such action, suit or
proceeding, even though |
less than a quorum, (2) by a committee of such the
directors |
who are not parties to such action, suit, or proceeding, even |
though less than a quorum, designated by a majority vote of |
such the directors,
(3) if there are no such directors, or if |
such the directors so
direct, by independent legal
counsel
in a |
written opinion, or (4) by the shareholders.
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(e) Expenses (including attorney's fees) incurred by an |
officer or
director of the corporation in defending a civil or |
criminal action, suit or
proceeding may be paid by the |
corporation in advance of the final disposition
of such action, |
suit or proceeding upon receipt of an undertaking by or on
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behalf of such the director or officer to repay
such amount if |
it
shall ultimately be determined that such person is not
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entitled to be indemnified
by the corporation as authorized in |
this Section.
Such expenses (including attorney's fees) |
incurred by former directors and
officers or other employees |
and agents of the corporation or by persons serving at the |
request of the corporation as directors, officers, employees or |
agents of another corporation, partnership, joint venture, |
trust or other enterprise may be so paid on such terms and
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conditions, if any, as the corporation deems appropriate.
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(f) The indemnification and advancement of expenses |
provided by or
granted under the other subsections of this |
Section shall not be
deemed exclusive of any other rights to |
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which those seeking
indemnification or advancement of expenses |
may be entitled under any
by-law, agreement, vote of |
shareholders or disinterested directors, or
otherwise, both as |
to action in his or her official capacity and as to action
in |
another capacity while holding such office. A right to
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indemnification or to advancement of expenses arising under a |
provision of the articles of
incorporation or a by-law shall |
not be eliminated or impaired by an amendment to such provision
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after the occurrence of the act or omission that is the subject |
of the civil, criminal, administrative
or investigative |
action, suit or proceeding for which indemnification or |
advancement of expenses
is sought, unless the provision in |
effect at the time of such act or omission explicitly |
authorizes
such elimination or impairment after such act or |
omission has occurred.
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(g) A corporation may purchase and maintain insurance on |
behalf of
any person who is or was a director, officer, |
employee or agent of the
corporation, or who is or was serving |
at the request of the corporation as a
director, officer, |
employee or agent of another corporation, partnership,
joint |
venture, trust or other enterprise, against any liability |
asserted
against such person and incurred by such person in any |
such capacity, or
arising out of his or her status as such, |
whether or not the corporation would
have the power to |
indemnify such person against such liability under the
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provisions of this Section.
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(h) If a corporation indemnifies or advances expenses to a
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director or officer under subsection (b) of this Section, the |
corporation shall report the
indemnification or advance in |
writing to the shareholders with or before the
notice of the |
next shareholders meeting.
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(i) For purposes of this Section, references to "the |
corporation" shall
include, in addition to the surviving |
corporation, any merging corporation
(including any |
corporation having merged with a merging corporation) absorbed
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in a merger which, if its separate existence had continued, |
would have had
the power and authority to indemnify its |
directors, officers, and employees
or agents, so that any |
person who was a director, officer, employee or agent
of such |
merging corporation, or was serving at the request of such |
merging
corporation as a director, officer, employee or agent |
of another corporation,
partnership, joint venture, trust or |
other enterprise, shall stand in the
same position under the |
provisions of this Section with respect to
the surviving |
corporation as such person would have with respect to such
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merging corporation if its separate existence had continued.
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(j) For purposes of this Section, references to "other |
enterprises" shall
include employee benefit plans; references |
to "fines" shall include any
excise taxes assessed on a person |
with respect to an employee benefit plan;
and references to |
"serving at the request of the corporation" shall include
any |
service as a director, officer, employee or agent of the |
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corporation
which imposes duties on, or involves services by |
such director, officer,
employee, or agent with respect to an |
employee benefit plan, its participants,
or beneficiaries. A |
person who acted in good faith and in a manner he or
she |
reasonably believed to be in the best interests of the |
participants
and beneficiaries of an employee benefit plan |
shall be deemed to have acted
in a manner "not opposed to the |
best interest of the corporation" as referred
to in this |
Section.
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(k) The indemnification and advancement of expenses |
provided by or granted
under this Section shall, unless |
otherwise provided when authorized or
ratified, continue as to |
a person who has ceased to be a director, officer,
employee, or |
agent and shall inure to the benefit of the heirs, executors, |
and
administrators of that person.
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(l) The changes to this Section made by this amendatory Act |
of the 92nd
General Assembly apply only to actions commenced on |
or after the
effective date of this amendatory Act of the 92nd |
General Assembly.
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(Source: P.A. 94-889, eff. 1-1-07.)
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Section 10. The General Not For Profit Corporation Act of |
1986 is amended by changing Section 108.75 as follows:
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(805 ILCS 105/108.75) (from Ch. 32, par. 108.75)
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Sec. 108.75.
Indemnification of officers, directors,
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employees and agents; insurance.
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(a) A corporation may
indemnify any person who was or is a |
party, or is threatened
to be made a party to any threatened, |
pending or completed
action, suit or proceeding, whether civil, |
criminal,
administrative or investigative (other than an |
action by or
in the right of the corporation) by reason of the |
fact that
he or she is or was a director, officer, employee or |
agent
of the corporation, or who is or was serving at the |
request
of the corporation as a director, officer, employee or |
agent
of another corporation, partnership, joint venture, |
trust or
other enterprise, against expenses (including |
attorneys'
fees), judgments, fines and amounts paid in |
settlement
actually and reasonably incurred by such person in
|
connection with such action, suit or proceeding, if such
person |
acted in good faith and in a manner he or she
reasonably |
believed to be in, or not opposed to, the best
interests of the |
corporation, and, with respect to any
criminal action or |
proceeding, had no reasonable cause to
believe his or her |
conduct was unlawful. The termination of
any action, suit or |
proceeding by judgment, order,
settlement, conviction, or upon |
a plea of nolo contendere or
its equivalent, shall not, of |
itself, create a presumption
that the person did not act in |
good faith and in a manner
which he or she reasonably believed |
to be in or not opposed
to the best interests of the |
corporation or, with respect to
any criminal action or |
proceeding, that the person had
reasonable cause to believe |
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that his or her conduct was
unlawful.
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(b) A corporation may indemnify any person who was or is a
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party, or is threatened to be made a party to any
threatened, |
pending or completed action or suit by or in the
right of the |
corporation to procure a judgment in its favor
by reason of the |
fact that such person is or was a director,
officer, employee |
or agent of the corporation, or is or was
serving at the |
request of the corporation as a director,
officer, employee or |
agent of another corporation,
partnership, joint venture, |
trust or other enterprise,
against expenses (including |
attorneys' fees) actually and
reasonably incurred by such |
person in connection with the
defense or settlement of such |
action or suit, if such person
acted in good faith and in a |
manner he or she reasonably
believed to be in, or not opposed |
to, the best interests of
the corporation, provided that no |
indemnification shall be
made in respect of any claim, issue or |
matter as to which
such person shall have been adjudged to be |
liable for
negligence or misconduct in the performance of his |
or her
duty to the corporation, unless, and only to the extent |
that
the court in which such action or suit was brought shall
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determine upon application that, despite the adjudication of
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liability, but in view of all the circumstances of the case,
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such person is fairly and reasonably entitled to indemnity
for |
such expenses as the court shall deem proper.
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(c) To the extent that a present or former director, |
officer or
employee of a corporation has been successful, on |
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the merits or
otherwise, in the defense of any action, suit or |
proceeding
referred to in subsections (a) and (b), or in |
defense of any
claim, issue or matter therein, such person |
shall be
indemnified against expenses (including attorneys' |
fees)
actually and reasonably incurred by such person in
|
connection therewith, if that person acted in good faith and in |
a manner he
or she reasonably believed to be in, or not opposed |
to, the best interests of
the corporation.
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(d) Any indemnification under subsections (a), and (b), or |
(c)
(unless ordered by a court) shall be made by the |
corporation
only as authorized in the specific case, upon a
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determination that indemnification of the present or former |
director,
officer,
employee or agent is proper in the |
circumstances because he
or she has met the applicable standard |
of conduct set forth
in subsections (a), (b), or (c) (b). Such |
determination shall be made
with respect to a person who is a |
director or officer of the corporation at the time of the
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determination: (1) by the majority vote of the directors who |
are not parties to such action,
suit or proceeding, even though |
less than a quorum, (2) by a committee of such
the directors |
designated by a majority vote of the directors, even though |
through
less than a quorum, designated by a majority vote of |
such directors, (3) if there are no such directors, or if such |
the directors
so direct, by independent legal
counsel in a |
written opinion, or (4) by the members entitled
to vote, if |
any.
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(e) Expenses (including attorney's fees) incurred by an |
officer or
director of the corporation in defending a civil or |
criminal
action, suit or proceeding may be paid by the |
corporation in
advance of the final disposition of such action, |
suit or
proceeding, as authorized by the board of directors in |
the
specific case, upon receipt of an undertaking by or on
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behalf of such the director or officer to repay
such amount, |
unless it shall ultimately be determined that
such person is |
entitled to be indemnified by the corporation
as authorized in |
this Section.
Such expenses (including attorney's fees) |
incurred by former directors and
officers or other employees |
and agents of the corporation or by persons serving at the |
request of the corporation as directors, officers, employees or |
agents of another corporation, partnership, joint venture, |
trust or other enterprise may be so paid on such terms and
|
conditions, if any, as the corporation deems appropriate.
|
(f) The indemnification and advancement of expenses |
provided by or granted under the other subsections of this the |
Section shall not
be deemed exclusive of any other rights to |
which those
seeking indemnification or advancement of expenses |
may be entitled under any by-law bylaw,
agreement, vote of |
members or disinterested directors, or
otherwise, both as to |
action in his or her official capacity
and as to action in |
another capacity while holding such
office, and shall continue |
as to a person who has ceased to
be a director, officer, |
employee or agent, and shall inure
to the benefit of the heirs, |
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executors and administrators of
such a person. A right to |
indemnification or to advancement of expenses arising under a |
provision of the articles
of incorporation or a by-law shall |
not be eliminated or impaired by an amendment to such
provision |
after the occurrence of the act or omission that is the subject |
of the civil, criminal,
administrative or investigative |
action, suit or proceeding for which indemnification or
|
advancement of expenses is sought, unless the provision in |
effect at the time of such act or
omission explicitly |
authorizes such elimination or impairment after such act or |
omission has
occurred.
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(g) A corporation may purchase and maintain insurance on
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behalf of any person who is or was a director, officer,
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employee or agent of the corporation, or who is or was
serving |
at the request of the corporation as a director,
officer, |
employee or agent of another corporation,
partnership, joint |
venture, trust or other enterprise,
against any liability |
asserted against such person and
incurred by such person in any |
such capacity, or arising out
of his or her status as such, |
whether or not the corporation
would have the power to |
indemnify such person against such
liability under the |
provisions of this Section.
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(h) In the case of a corporation with members entitled to
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vote, if a corporation indemnifies or advances
expenses under |
subsection (b) of this Section to a director or
officer, the |
corporation shall report the indemnification
or advance in |
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writing to the members entitled to vote with
or before the |
notice of the next meeting of the members
entitled to vote.
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(i) For purposes of this Section, references to "the
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corporation" shall include, in addition to the surviving
|
corporation, any merging corporation (including any
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corporation having merged with a merging corporation)
absorbed |
in a merger which, if its separate existence had
continued, |
would have had the power and authority to
indemnify its |
directors, officers, employees or agents, so
that any person |
who was a director, officer, employee or
agent of such merging |
corporation, or was serving at the
request of such merging |
corporation as a director, officer,
employee or agent of |
another corporation, partnership, joint
venture, trust or |
other enterprise, shall stand in the same
position under the |
provisions of this Section with respect
to the surviving |
corporation as such person would have with
respect to such |
merging corporation if its separate
existence had continued.
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(j) For purposes of this Section, references to "other
|
enterprises" shall include employee benefit plans;
references |
to "fines" shall include any excise taxes
assessed on a person |
with respect to an employee benefit
plan; and references to |
"serving at the request of the
corporation" shall include any |
service as a director,
officer, employee or agent of the |
corporation which imposes
duties on, or involves services by |
such director, officer,
employee, or agent with respect to an |
employee benefit plan,
its participants, or beneficiaries. A |
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person who acted in
good faith and in a manner he or she |
reasonably believed to
be in the best interests of the |
participants and
beneficiaries of an employee benefit plan |
shall be deemed to
have acted in a manner "not opposed to the |
best interests of
the corporation" as referred to in this |
Section.
|
(k) The indemnification and advancement of expenses |
provided by or granted under
this Section shall, unless |
otherwise provided when authorized or ratified, continue as to |
a person
who has ceased to be a director, officer, employee, or |
agent and shall inure to the benefit of the
heirs, executors |
and administrators of that person. |
(l) (k) The changes to this Section made by this amendatory |
Act of the 92nd
General Assembly apply only to actions |
commenced on or after the
effective date of this amendatory Act |
of the 92nd General Assembly.
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(Source: P.A. 92-33, eff. 7-1-01.)
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