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ARTICLE 9. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
9.01. Indemnification
by Corporation.
A. For the purposes of this Section 9.01, "agent" means any person who
is or was a director, officer, employee, or other agent of the Corporation,
or is or was serving at the request of the Corporation as a director,
officer, employee or agent of another foreign or domestic corporation,
partnership, joint venture, trust or other enterprise, or was a director,
officer, employee or agent of a foreign or domestic corporation which
was a predecessor corporation of the Corporation or of another enterprise
at the request of such predecessor corporation; "proceeding" means any
threatened, pending or completed action or proceeding, whether civil,
criminal, administrative or investigative; and "expenses" includes, without
limitation, attorneys' fees, any expenses of a completed action or proceeding,
and any expenses of establishing a right to indemnification under subsection
D or E of this Section 9.01.
B. Subject to any limitations contained in HRS Chapter 421 and in the Hawaii
Nonprofit Corporation Act, the Corporation shall have the power to indemnify
any person who was or is a party or is threatened to be made a party to
any proceeding (other than an action by or in the right of the Corporation)
by reason of the fact that such person is or was an agent of the Corporation,
against expenses, judgments, fines, settlements and other amounts actually
and reasonably incurred in connection with such proceeding 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 Corporation and, with respect
to any criminal proceeding, had no reasonable cause to believe the conduct
of the person was unlawful. The termination of any proceeding by judgment,
order, settlement, conviction or upon a plea of nolo contendere or its equivalent
shall not, of itself, create a presumption that the person did not act in
good faith and in a manner which the person reasonably believed to be in
or not opposed to the best interests of the Corporation or that the person
had reasonable cause to believe that the person's conduct was unlawful.
C. The Corporation shall have power to indemnify any person who was or is
a party or is threatened to be made a party to any threatened, pending or
completed action by or in the right of the Corporation to procure a judgment
in its favor by reason of the fact that the person is or was an agent of
the Corporation, against expenses actually and reasonably incurred by such
person in connection with the defense or settlement of such action if such
person acted in good faith, in a manner such person believed to be in or
not opposed to the best interests of the Corporation. No indemnification
shall be made under this subsection C in respect of any claim, issue or
matter as to which a Director or Officer shall have been adjudged to be
liable for gross negligence or willful misconduct, or as to which any other
person acting on behalf of the Corporation shall have been adjudged to be
liable for negligence or misconduct, in the performance of the person's
duty to the Corporation, unless and only to the extent that the court in
which the action or suit was brought shall determine upon application that,
despite the adjudication of liability but in view of all the circumstances
of the case, the person is fairly and reasonably entitled to indemnity for
the expenses which the court shall deem proper.
D. To the extent that an agent of the Corporation has been successful on
the merits or otherwise in defense of any proceeding referred to in subsection
B or C above, or in defense of any claim, issue or matter therein, the agent
shall be indemnified by the Corporation against expenses actually and reasonably
incurred by the agent in connection therewith.
E. Except as provided in subsection D above, any indemnification under this
Section 9.01 shall be made by the Corporation only as authorized in the
specific case upon a determination that indemnification of the agent is
proper in the circumstances because the agent has met the applicable standard
of conduct set forth in subsection B or C. The determination shall be made:
(1) By the Board of Directors by a majority vote of a quorum consisting
of Directors who were not parties to the proceeding; or
(2) If a quorum is not obtainable, by independent legal counsel in a written
opinion; or
(3) By the court in which the proceeding is or was pending upon application
made by the Corporation or the agent or the attorney or other person rendering
services in connection with the defense, whether or not the application
by the agent, attorney or other person is opposed by the Corporation.
F.
No indemnification or advance shall be made under this Section 9.01, except
as provided in subsection D or subsection E(2) above, in any circumstance
where it appears that:
(1) It would be inconsistent
with a provision of the Articles, the Bylaws or an agreement in effect at
the time of the occurrence of the alleged cause of action asserted in the
proceeding in which the expenses were incurred or other amounts were paid,
which prohibits or otherwise limits indemnification; or
(2) It would be inconsistent with any condition expressly imposed by a court
in approving a settlement.
9.02. Advancing
Expenses. The Corporation may advance to each agent the expenses
actually incurred (and for which invoices or proof of payment have been
submitted) in defending any proceeding referred to in Section 9.01 of these
Bylaws prior to the final disposition of such proceeding upon receipt of
any undertaking by or on behalf of the agent to repay such amount unless
it shall be determined ultimately that the agent is entitled to be indemnified
as authorized in Section 9.01 of these Bylaws.
9.03. Insurance.
The Corporation shall have power to purchase and maintain insurance on behalf
of any agent of the Corporation against any liability asserted against or
incurred by the agent in such a capacity or arising out of the agent's status
as such, whether or not the corporation would have the power to indemnify
the agent against such liability under the provisions of the section.
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