Ohio § 1729.031

§ 1729.031.

(A)(1) Subject to divisions (A)(2) and (3) of this section, an association may indemnify

or agree to indemnify any person that was or is a party, or is threatened to be made

a party, to any threatened, pending, or completed civil, criminal, administrative,

or investigative action, suit, or proceeding, other than an action or suit by or in

the right of the association, because the person is or was a director, officer, employee,

agent, or volunteer of the association or is or was serving at the request of the

association as a trustee, director, officer, employee, member, manager, agent, or

volunteer of another association, entity, partnership, joint venture, trust, or other

enterprise.  The indemnification described in division (A)(1) of this section shall be for expenses,

including attorney's fees, judgments, fines, and amounts paid in settlement actually

and reasonably incurred by the person in connection with the action, suit, or proceeding

described in division (A)(1) of this section. (2) With respect to any noncriminal action or proceeding, the indemnification described

in division (A)(1) of this section shall be made if the person acted in good faith

and in a manner the person reasonably believed to be in or not opposed to the best

interests of the association as described in division (D) of section 1729.23 of the Revised Code . (3) With respect to any criminal action or proceeding, the indemnification described

in division (A)(1) of this section shall be made if the person acted in good faith

and in a manner the person reasonably believed to be in or not opposed to the best

interests of the association as described in division (D) of section 1729.23 of the Revised Code , and the person had no reasonable cause to believe the conduct was unlawful. (4) For purposes of divisions (A)(2) and (3) of this section, the termination of any

action, suit, or proceeding by judgment, order, settlement, or conviction or a plea

of nolo contendere or its equivalent does not create, of itself, a presumption that

the person did not act in good faith and in a manner the person reasonably believed

to be in or not opposed to the best interests of the association or that the person

had reasonable cause to believe that the conduct was unlawful. (B)(1) Subject to division (B)(2) of this section and provided the person acted in good

faith and in a manner the person reasonably believed to be in or not opposed to the

best interests of the association, an association may indemnify or agree to indemnify

any person that was or is a 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 association to procure

a judgment in its favor, because the person is or was a director, officer, employee,

agent, or volunteer of the association or is or was serving at the request of the

association as a trustee, director, officer, employee, member, manager, agent, or

volunteer of another association, entity, partnership, joint venture, trust, or other

enterprise.  The indemnification described in division (B)(1) of this section shall be for expenses,

including attorney's fees, actually and reasonably incurred by the person in connection

with the defense or settlement of an action or suit described in division (B)(1) of

this section. (2) If a person is adjudged to be liable for negligence or misconduct in the performance

of a duty to the association, the indemnification described in division (B)(1) of

this section shall be made for any claim, issue, or matter only to the extent that

the court of common pleas or the court in which the action or suit was brought determines,

upon application, that despite the adjudication of liability and in view of all the

circumstances of the case, the person fairly and reasonably is entitled to indemnity

for expenses that the court of common pleas or court in which the action or suit was

brought considers proper. (C) Notwithstanding division (A) or (B) of this section, to the extent that a person

has been successful on the merits or otherwise in defense of any action, suit, or

proceeding described in division (A) or (B) of this section, the person shall be indemnified

against expenses, including attorney's fees, actually and reasonably incurred in connection

with that action, suit, or proceeding. (D) Unless ordered by a court or division (C) of this section applies, the association

shall make any indemnification under division (A) or (B) of this section only as authorized

in the specific case, upon a determination that indemnification of the person is proper

in the circumstances because the person has met the applicable standard of conduct

set forth in division (A) or (B) of this section.  This determination shall be made in any of the following manners: (1) By a majority vote of a quorum consisting of directors of the indemnifying association

that were not and are not parties to or threatened with the action, suit, or proceeding

described in division (A) or (B) of this section; (2) Whether or not a quorum as described in division (D)(1) of this section is obtainable,

and if a majority of a quorum of disinterested directors so directs, in a written

opinion by independent legal counsel other than an attorney or a firm of attorneys

associated with that attorney, that within the past five years has been retained by

or has performed services for the association or has performed services for any person

to be indemnified; (3) By the members. (E)(1) The association shall pay the expenses, including attorney's fees, incurred by the

person in defending the action, suit, or proceeding described in division (A) or (B)

of this section, unless either of the following applies: (a) At the time of a person's act or omission that is the subject of an action, suit,

or proceeding described in division (A) or (B) of this section, the articles or bylaws

of the association state, by specific reference to divisions (A) and (B) of this section,

that division (A) and (B) of this section do not apply to the association. (b) The only liability asserted against a person in an action, suit, or proceeding described

in division (A) or (B) of this section is pursuant to section 1729.25 of the Revised Code . (2) Upon receipt of a request from a person, the association may pay expenses, including

attorney's fees, incurred by a person in defending any action, suit, or proceeding

described in division (A) or (B) of this section as the expenses are incurred in advance

of the final disposition of the action, suit, or proceeding, if the board authorizes

this payment in the specific case and upon receipt of an undertaking by or on behalf

of the person to repay the amount if it ultimately is determined that the person is

not entitled to be indemnified by the association. (F) Both of the following apply to the indemnification authorized by this section: (1) It is not exclusive of and is in addition to any other rights granted to a person

seeking indemnification pursuant to the articles or bylaws of the association, any

agreement, a vote of members or disinterested directors of the association, or otherwise,

for action taken in the person's official capacity and action taken in another capacity

while holding their office or position. (2) It continues as to a person that has ceased to be a director, officer, employee,

member, manager, agent, or volunteer and inures to the benefit of the heirs, executors,

and administrators of that person. (G) As used in this section, “ association ” includes all constituent associations and entities in a consolidation or merger

and the new or surviving association or entity.  Any person that is or was a director, officer, employee, agent, or volunteer of

a constituent association or is or was serving at the request of a constituent association

as a trustee, director, officer, employee, member, manager, agent, or volunteer of

another association, entity, partnership, joint venture, trust, or other enterprise

stands in the same position under this section with respect to the new or surviving

association or entity as the person would if the person had served the new or surviving

association or entity in the same capacity. (H)(1) An association may purchase and maintain insurance or furnish similar protection,

including, but not limited to, trust funds, letters of credit, or self-insurance,

for or on behalf of any person that is or was a director, officer, employee, agent,

or volunteer of the association or is or was serving at the request of the association

as a trustee, director, officer, employee, member, manager, agent, or volunteer of

another association, entity, partnership, joint venture, trust, or other enterprise.  The insurance or similar protection described in division (H)(1) of this section

shall be against any liability asserted against the person and incurred by the person

in any such capacity, whether or not the association would have the power to indemnify

the person against that liability under this section. (2) Insurance described in division (H)(1) of this section may be purchased from or maintained

with a person in which the association has a financial interest.