Document ID: chunk:federal_register_of_legislation:C2004A04707:front:0:p40
Version: federal_register_of_legislation:C2004A04707
Segment Type: other
Provision Reference: 
Character Range: 102899–105645

apply if the company is the insurer.".

2. Subsections 241(1), (2) and (3):

  Omit the subsections, substitute:

  "(1) A company or a related body corporate must not:

    (a) indemnify a person who is or has been an officer or auditor of the company against a liability incurred by the person as such an officer or auditor; or

  (b) exempt such a person from such a liability.

"(1A) A memorandum, articles, or any other instrument, or an agreement or arrangement, is void in so far as it provides for a body corporate to do something that subsection (1) prohibits.

"(2) Subsection (1) does not prevent a person from being indemnified against a liability to another person (other than the company or a related body corporate) unless the liability arises out of conduct involving a lack of good faith.

"(3) Subsection (1) does not prevent a person from being indemnified against a liability for costs and expenses incurred by the person:

    (a) in defending proceedings, whether civil or criminal, in which judgment is given in favour of the person or in which the person is acquitted; or

    (b) in connection with an application, in relation to such proceedings, in which the Court grants relief to the person under this Law.".

3. Subsection 241(4) (paragraph (a) of the definition of "officer"):

Omit ", executive officer or employee", substitute "or executive officer".

4. Subsection 241(4):

  Insert:

SCHEDULE 3—continued

" 'indemnify' includes indemnify indirectly through one or more interposed entities;".

5. After section 241:

  Insert:

Company not to pay insurance premiums in respect of certain liabilities of officer or auditor

"241A.(1) A company or a related body corporate must not pay, or agree to pay, a premium in respect of a contract insuring a person who is or has been an officer or auditor of the company against a liability:

  (a) incurred by the person as such an officer or auditor; and

  (b) arising out of conduct involving:

      (i) a wilful breach of duty in relation to the company; or

        (ii) without limiting subparagraph (i), a contravention of subsection 232(5) or (6).

"(2) If subsection (1) is contravened, the contract is void in so far as it insures the person against such a liability.

"(3) Subsections (1) and (2) do not apply to a liability for costs and expenses incurred by a person in defending proceedings, whether civil or criminal and whatever their outcome.

  "(4) In this section:

'officer' has the same meaning as in section 241;

'pay' includes pay indirectly through one or more interposed entities.".

6. After subsection 243K(7):

  Insert:

"(7A) A financial benefit given by a body corporate to a person who is an officer of the body by way of indemnifying