2023 Colorado Revised Statutes › Title 7 - CORPORATIONS AND ASSOCIATIONS (§§ 7-1-101 — 7-137-301) › CORPORATIONS - CONTINUED (§§ 7-101-101 — 7-137-301) › COLORADO BUSINESS CORPORATIONS (§§ 7-101-101 — 7-117-105) › Article 109 - INDEMNIFICATION (§§ 7-109-101 — 7-109-111) › Section 7-109-102 - Authority to indemnify directors

(1)
Except as provided in subsection (4) of this section, a corporation may indemnify an individual made a party to a proceeding, because the individual is or was a director, against liability incurred in the proceeding if:
(a)
The individual's conduct was in good faith; and
(b)
The individual reasonably believed:
(I)
In the case of conduct in an official capacity with the corporation, that the conduct was in the corporation's best interests; and
(II)
In all other cases, that the conduct was at least not opposed to the corporation's best interests; and
(c)
In the case of any criminal proceeding, the individual had no reasonable cause to believe the individual's conduct was unlawful.
(2)
A director's conduct with respect to an employee benefit plan for a purpose the director reasonably believed to be in the interests of the participants in or beneficiaries of the plan is conduct that satisfies the requirement of subparagraph (II) of paragraph (b) of subsection (1) of this section. A director's conduct with respect to an employee benefit plan for a purpose that the director did not reasonably believe to be in the interests of the participants in or beneficiaries of the plan shall be deemed not to satisfy the requirements of paragraph (a) of subsection (1) of this section.
(3)
The termination of a proceeding by judgment, order, settlement, or conviction or upon a plea of nolo contendere or its equivalent does not, of itself, create a presumption that the director did not meet the relevant standard of conduct described in this section.
(4)
A corporation may not indemnify a director under this section:
(a)
In connection with a proceeding by or in the right of the corporation in which the director was adjudged liable to the corporation except for reasonable expenses incurred in connection with the proceeding if it is determined that the director has met the relevant standard of conduct under subsection (1) of this section; or
(b)
In connection with any other proceeding charging that the director derived an improper personal benefit, whether or not involving action in an official capacity, in which proceeding the director was adjudged liable on the basis that the director derived an improper personal benefit.
(5)
Indemnification permitted under this section in connection with a proceeding by or in the right of the corporation is limited to reasonable expenses incurred in connection with the proceeding.
Amended by 2019 Ch. 166, § 38, eff. 7/1/2020.
L. 93: Entire article added, p. 790, § 1, effective 7/1/1994. L. 2004: (1) and (4) amended, p. 1500, § 265, effective July 1. L. 2019: (1), (3), and (4)(a) amended, (SB 19-086), ch. 1937, p. 1937, § 38, effective 7/1/2020.
Section 72 of chapter 166 (SB 19-086), Session Laws of Colorado 2019, provides that the act changing this section applies to conduct occurring on or after July 1, 2020.