§ 3062 - Authority to indemnify - Vermont Statutes

§ 3062. Authority to indemnify

(a) Except as provided in subsection (d) of this section, a limited liability company may indemnify a person made a party to a proceeding because the person is or was a manager or member against liability incurred in the proceeding if:

(1) the person conducted himself or herself in good faith; and

(2) the person reasonably believed:

(A) in the case of conduct in the person's official capacity with the limited liability company, that the person's conduct was in the company's best interests; and

(B) in all other cases, that the person's conduct was at least not opposed to the company's best interests; and

(3) in the case of any proceeding brought by a governmental entity, the person had no reasonable cause to believe his or her conduct was unlawful, and the person is not finally found to have engaged in a reckless or intentional unlawful act.

(b) A person's conduct, with respect to an employee benefit plan for a purpose the person reasonably believed to be in the interests of the participants in and beneficiaries of the plan, is conduct that satisfies the requirement of subdivision (a)(2)(B) of this section.

(c) 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 person did not meet the standard of conduct described in this section.

(d) Notwithstanding subsection (c) of this section, a limited liability company may not indemnify a person under this section:

(1) in connection with a proceeding by or in the right of the limited liability company in which the person was adjudged liable to the limited liability company; or

(2) in connection with any other proceeding charging improper personal benefit to the person, whether or not involving action in the person's official capacity, in which the person was adjudged liable on the basis that personal benefit was improperly received by the person.

(e) Indemnification permitted under this section in connection with a proceeding by or in the right of the limited liability company is limited to reasonable expenses incurred in connection with the proceeding.

(f) The limited liability company may indemnify an employee or agent of the limited liability company who is not a manager or member to the same extent that it may indemnify a manager or member. (Added 1995, No. 179 (Adj. Sess.), § 4.)