Public Act 097-0881
 
SB1127 EnrolledLRB097 04845 AEK 44884 b

    AN ACT concerning corporations.
 
    Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
 
    Section 5. The Business Corporation Act of 1983 is amended
by changing Section 8.75 as follows:
 
    (805 ILCS 5/8.75)  (from Ch. 32, par. 8.75)
    Sec. 8.75. Indemnification of officers, directors,
employees and agents; insurance.
    (a) A corporation may indemnify any person who was or is a
party, or is threatened to be made a party to any threatened,
pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative (other than an
action by or in the right of the corporation) by reason of the
fact that he or she is or was a director, officer, employee or
agent of the corporation, or who is or was serving at the
request of the corporation as a director, officer, employee or
agent of another corporation, partnership, joint venture,
trust or other enterprise, against expenses (including
attorneys' fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred by such person in
connection with such action, suit or proceeding, if such person
acted in good faith and in a manner he or she reasonably
believed to be in, or not opposed to the best interests of the
corporation, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his or her
conduct was unlawful. The termination of any action, suit or
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 he or she reasonably believed
to be in or not opposed to the best interests of the
corporation or, with respect to any criminal action or
proceeding, that the person had reasonable cause to believe
that his or her conduct was unlawful.
    (b) A corporation may indemnify any person who 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
corporation to procure a judgment in its favor by reason of the
fact that such person is or was a director, officer, employee
or agent of the corporation, or is or was serving at the
request of the corporation as a director, officer, employee or
agent of another corporation, partnership, joint venture,
trust or other enterprise, against expenses (including
attorneys' fees) actually and reasonably incurred by such
person in connection with the defense or settlement of such
action or suit, if such person acted in good faith and in a
manner he or she reasonably believed to be in, or not opposed
to, the best interests of the corporation, provided that no
indemnification shall be made with respect to any claim, issue,
or matter as to which such person has been adjudged to have
been liable to the corporation, unless, and only to the extent
that the court in which such 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,
such person is fairly and reasonably entitled to indemnity for
such expenses as the court shall deem proper.
    (c) To the extent that a present or former director,
officer or employee of a corporation has been successful, on
the merits or otherwise, in the defense of any action, suit or
proceeding referred to in subsections (a) and (b), or in
defense of any claim, issue or matter therein, such person
shall be indemnified against expenses (including attorneys'
fees) actually and reasonably incurred by such person in
connection therewith, if the person acted in good faith and in
a manner he or she reasonably believed to be in, or not opposed
to, the best interests of the corporation.
    (d) Any indemnification under subsections (a), and (b), or
(c) (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 present or former
director, officer, employee or agent is proper in the
circumstances because he or she has met the applicable standard
of conduct set forth in subsections (a), (b), or (c) (b). Such
determination shall be made with respect to a person who is a
director or officer of the corporation at the time of the
determination: (1) by the majority vote of the directors who
are not parties to such action, suit or proceeding, even though
less than a quorum, (2) by a committee of such the directors
who are not parties to such action, suit, or proceeding, even
though less than a quorum, designated by a majority vote of
such the directors, (3) if there are no such directors, or if
such the directors so direct, by independent legal counsel in a
written opinion, or (4) by the shareholders.
    (e) Expenses (including attorney's fees) incurred by an
officer or director of the corporation in defending a civil or
criminal action, suit or proceeding may be paid by the
corporation in advance of the final disposition of such action,
suit or proceeding upon receipt of an undertaking by or on
behalf of such the director or officer to repay such amount if
it shall ultimately be determined that such person is not
entitled to be indemnified by the corporation as authorized in
this Section. Such expenses (including attorney's fees)
incurred by former directors and officers or other employees
and agents of the corporation or by persons serving at the
request of the corporation as directors, officers, employees or
agents of another corporation, partnership, joint venture,
trust or other enterprise may be so paid on such terms and
conditions, if any, as the corporation deems appropriate.
    (f) The indemnification and advancement of expenses
provided by or granted under the other subsections of this
Section shall not be deemed exclusive of any other rights to
which those seeking indemnification or advancement of expenses
may be entitled under any by-law, agreement, vote of
shareholders or disinterested directors, or otherwise, both as
to action in his or her official capacity and as to action in
another capacity while holding such office. A right to
indemnification or to advancement of expenses arising under a
provision of the articles of incorporation or a by-law shall
not be eliminated or impaired by an amendment to such provision
after the occurrence of the act or omission that is the subject
of the civil, criminal, administrative or investigative
action, suit or proceeding for which indemnification or
advancement of expenses is sought, unless the provision in
effect at the time of such act or omission explicitly
authorizes such elimination or impairment after such act or
omission has occurred.
    (g) A corporation may purchase and maintain insurance on
behalf of any person who is or was a director, officer,
employee or agent of the corporation, or who is or was serving
at the request of the corporation as a director, officer,
employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, against any liability
asserted against such person and incurred by such person in any
such capacity, or arising out of his or her status as such,
whether or not the corporation would have the power to
indemnify such person against such liability under the
provisions of this Section.
    (h) If a corporation indemnifies or advances expenses to a
director or officer under subsection (b) of this Section, the
corporation shall report the indemnification or advance in
writing to the shareholders with or before the notice of the
next shareholders meeting.
    (i) For purposes of this Section, references to "the
corporation" shall include, in addition to the surviving
corporation, any merging corporation (including any
corporation having merged with a merging corporation) absorbed
in a merger which, if its separate existence had continued,
would have had the power and authority to indemnify its
directors, officers, and employees or agents, so that any
person who was a director, officer, employee or agent of such
merging corporation, or was serving at the request of such
merging corporation as a director, officer, employee or agent
of another corporation, partnership, joint venture, trust or
other enterprise, shall stand in the same position under the
provisions of this Section with respect to the surviving
corporation as such person would have with respect to such
merging corporation if its separate existence had continued.
    (j) For purposes of this Section, references to "other
enterprises" shall include employee benefit plans; references
to "fines" shall include any excise taxes assessed on a person
with respect to an employee benefit plan; and references to
"serving at the request of the corporation" shall include any
service as a director, officer, employee or agent of the
corporation which imposes duties on, or involves services by
such director, officer, employee, or agent with respect to an
employee benefit plan, its participants, or beneficiaries. A
person who acted in good faith and in a manner he or she
reasonably believed to be in the best interests of the
participants and beneficiaries of an employee benefit plan
shall be deemed to have acted in a manner "not opposed to the
best interest of the corporation" as referred to in this
Section.
    (k) The indemnification and advancement of expenses
provided by or granted under this Section shall, unless
otherwise provided when authorized or ratified, continue as to
a person who has ceased to be a director, officer, employee, or
agent and shall inure to the benefit of the heirs, executors,
and administrators of that person.
    (l) The changes to this Section made by this amendatory Act
of the 92nd General Assembly apply only to actions commenced on
or after the effective date of this amendatory Act of the 92nd
General Assembly.
(Source: P.A. 94-889, eff. 1-1-07.)
 
    Section 10. The General Not For Profit Corporation Act of
1986 is amended by changing Section 108.75 as follows:
 
    (805 ILCS 105/108.75)  (from Ch. 32, par. 108.75)
    Sec. 108.75. Indemnification of officers, directors,
employees and agents; insurance.
    (a) A corporation may indemnify any person who was or is a
party, or is threatened to be made a party to any threatened,
pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative (other than an
action by or in the right of the corporation) by reason of the
fact that he or she is or was a director, officer, employee or
agent of the corporation, or who is or was serving at the
request of the corporation as a director, officer, employee or
agent of another corporation, partnership, joint venture,
trust or other enterprise, against expenses (including
attorneys' fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred by such person in
connection with such action, suit or proceeding, if such person
acted in good faith and in a manner he or she reasonably
believed to be in, or not opposed to, the best interests of the
corporation, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his or her
conduct was unlawful. The termination of any action, suit or
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 he or she reasonably believed
to be in or not opposed to the best interests of the
corporation or, with respect to any criminal action or
proceeding, that the person had reasonable cause to believe
that his or her conduct was unlawful.
    (b) A corporation may indemnify any person who 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
corporation to procure a judgment in its favor by reason of the
fact that such person is or was a director, officer, employee
or agent of the corporation, or is or was serving at the
request of the corporation as a director, officer, employee or
agent of another corporation, partnership, joint venture,
trust or other enterprise, against expenses (including
attorneys' fees) actually and reasonably incurred by such
person in connection with the defense or settlement of such
action or suit, if such person acted in good faith and in a
manner he or she reasonably believed to be in, or not opposed
to, the best interests of the corporation, provided that no
indemnification shall be made in respect of any claim, issue or
matter as to which such person shall have been adjudged to be
liable for negligence or misconduct in the performance of his
or her duty to the corporation, unless, and only to the extent
that the court in which such 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,
such person is fairly and reasonably entitled to indemnity for
such expenses as the court shall deem proper.
    (c) To the extent that a present or former director,
officer or employee of a corporation has been successful, on
the merits or otherwise, in the defense of any action, suit or
proceeding referred to in subsections (a) and (b), or in
defense of any claim, issue or matter therein, such person
shall be indemnified against expenses (including attorneys'
fees) actually and reasonably incurred by such person in
connection therewith, if that person acted in good faith and in
a manner he or she reasonably believed to be in, or not opposed
to, the best interests of the corporation.
    (d) Any indemnification under subsections (a), and (b), or
(c) (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 present or former
director, officer, employee or agent is proper in the
circumstances because he or she has met the applicable standard
of conduct set forth in subsections (a), (b), or (c) (b). Such
determination shall be made with respect to a person who is a
director or officer of the corporation at the time of the
determination: (1) by the majority vote of the directors who
are not parties to such action, suit or proceeding, even though
less than a quorum, (2) by a committee of such the directors
designated by a majority vote of the directors, even though
through less than a quorum, designated by a majority vote of
such directors, (3) if there are no such directors, or if such
the directors so direct, by independent legal counsel in a
written opinion, or (4) by the members entitled to vote, if
any.
    (e) Expenses (including attorney's fees) incurred by an
officer or director of the corporation in defending a civil or
criminal action, suit or proceeding may be paid by the
corporation in advance of the final disposition of such action,
suit or proceeding, as authorized by the board of directors in
the specific case, upon receipt of an undertaking by or on
behalf of such the director or officer to repay such amount,
unless it shall ultimately be determined that such person is
entitled to be indemnified by the corporation as authorized in
this Section. Such expenses (including attorney's fees)
incurred by former directors and officers or other employees
and agents of the corporation or by persons serving at the
request of the corporation as directors, officers, employees or
agents of another corporation, partnership, joint venture,
trust or other enterprise may be so paid on such terms and
conditions, if any, as the corporation deems appropriate.
    (f) The indemnification and advancement of expenses
provided by or granted under the other subsections of this the
Section shall not be deemed exclusive of any other rights to
which those seeking indemnification or advancement of expenses
may be entitled under any by-law bylaw, agreement, vote of
members or disinterested directors, or otherwise, both as to
action in his or her official capacity and as to action in
another capacity while holding such office, and shall continue
as to a person who has ceased to be a director, officer,
employee or agent, and shall inure to the benefit of the heirs,
executors and administrators of such a person. A right to
indemnification or to advancement of expenses arising under a
provision of the articles of incorporation or a by-law shall
not be eliminated or impaired by an amendment to such provision
after the occurrence of the act or omission that is the subject
of the civil, criminal, administrative or investigative
action, suit or proceeding for which indemnification or
advancement of expenses is sought, unless the provision in
effect at the time of such act or omission explicitly
authorizes such elimination or impairment after such act or
omission has occurred.
    (g) A corporation may purchase and maintain insurance on
behalf of any person who is or was a director, officer,
employee or agent of the corporation, or who is or was serving
at the request of the corporation as a director, officer,
employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, against any liability
asserted against such person and incurred by such person in any
such capacity, or arising out of his or her status as such,
whether or not the corporation would have the power to
indemnify such person against such liability under the
provisions of this Section.
    (h) In the case of a corporation with members entitled to
vote, if a corporation indemnifies or advances expenses under
subsection (b) of this Section to a director or officer, the
corporation shall report the indemnification or advance in
writing to the members entitled to vote with or before the
notice of the next meeting of the members entitled to vote.
    (i) For purposes of this Section, references to "the
corporation" shall include, in addition to the surviving
corporation, any merging corporation (including any
corporation having merged with a merging corporation) absorbed
in a merger which, if its separate existence had continued,
would have had the power and authority to indemnify its
directors, officers, employees or agents, so that any person
who was a director, officer, employee or agent of such merging
corporation, or was serving at the request of such merging
corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or
other enterprise, shall stand in the same position under the
provisions of this Section with respect to the surviving
corporation as such person would have with respect to such
merging corporation if its separate existence had continued.
    (j) For purposes of this Section, references to "other
enterprises" shall include employee benefit plans; references
to "fines" shall include any excise taxes assessed on a person
with respect to an employee benefit plan; and references to
"serving at the request of the corporation" shall include any
service as a director, officer, employee or agent of the
corporation which imposes duties on, or involves services by
such director, officer, employee, or agent with respect to an
employee benefit plan, its participants, or beneficiaries. A
person who acted in good faith and in a manner he or she
reasonably believed to be in the best interests of the
participants and beneficiaries of an employee benefit plan
shall be deemed to have acted in a manner "not opposed to the
best interests of the corporation" as referred to in this
Section.
    (k) The indemnification and advancement of expenses
provided by or granted under this Section shall, unless
otherwise provided when authorized or ratified, continue as to
a person who has ceased to be a director, officer, employee, or
agent and shall inure to the benefit of the heirs, executors
and administrators of that person.
    (l) (k) The changes to this Section made by this amendatory
Act of the 92nd General Assembly apply only to actions
commenced on or after the effective date of this amendatory Act
of the 92nd General Assembly.
(Source: P.A. 92-33, eff. 7-1-01.)
 
    Section 99. Effective date. This Act takes effect upon
becoming law.