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| Public Act 097-0881 | ||||
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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, | ||
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 | ||
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 | ||
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 | ||
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 | ||
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
| ||
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 | ||
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
| ||
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
| ||
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.
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(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, | ||
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,
| ||
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 | ||
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
| ||
corporation" shall include, in addition to the surviving
| ||
corporation, any merging corporation (including any
| ||
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.
| ||
(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 | ||
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.
| ||
(Source: P.A. 92-33, eff. 7-1-01.)
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Section 99. Effective date. This Act takes effect upon | ||
becoming law. | ||