NONPROFIT CORPORATION ACT (EXCERPT)
Act 162 of 1982
450.2563 Indemnification against expenses of director, officer, employee, nondirector volunteer, or agent successful in defense of action, suit, or proceeding referred to in MCL 450.2561 or 450.2562; authorization; determination; indemnification for portion of expenses.
(1) Unless otherwise provided by law or its articles of incorporation or bylaws, to the extent that a director, officer, employee, nondirector volunteer, or agent of a corporation has been successful on the merits or otherwise in defense of an action, suit, or proceeding referred to in section 561 or 562, or in defense of a claim, issue, or matter in the action, suit, or proceeding, the successful party shall be indemnified against expenses, including actual and reasonable attorneys' fees, incurred in connection with the action, suit, or proceeding and in any action, suit, or proceeding brought to enforce the mandatory indemnification provided in this subsection.
(2) An indemnification under section 561 or 562, 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 director, officer, employee, nondirector volunteer, or agent is proper in the circumstances because the person has met the applicable standard of conduct set forth in sections 561 and 562. This determination shall be made in any of the following ways:
(a) By a majority vote of a quorum of the board consisting of directors who were not parties to the action, suit, or proceeding.
(b) If the quorum described in subdivision (a) is not obtainable, then by a majority vote of a committee of directors who are not parties to the action. The committee shall consist of not less than 2 disinterested directors.
(c) By independent legal counsel in a written opinion.
(d) By the shareholders or members.
(3) If a person is entitled to indemnification under section 561 or 562 for a portion of expenses including attorneys' fees, judgments, penalties, fines, and amounts paid in settlement but not for the total amount thereof, the corporation may indemnify the person for the portion of the expenses, judgments, penalties, fines, or amounts paid in settlement for which the person is entitled to be indemnified.
History: 1982, Act 162, Eff. Jan. 1, 1983
Am. 1987, Act 170, Eff. Jan. 1, 1988
Am. 1993, Act 129, Imd. Eff. July 22, 1993
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