Article VII – Indemnification of Officers

section 1: expenses, judgements, fines, settlements, pleas of nolo contendere, general

The Corporation shall indemnify any person who was or is a party, or is threatened to be made a party, to a threatened, pending, or completed action, suit, or other proceeding whether civil, criminal, administrative, or investigative, and whether formal or informal, (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 is or was serving at the request of the Corporation as a director, officer, partner, trustee, employee, or agent of another foreign or domestic corporation, partnership, joint venture, trust or other enterprise (whether for profit or not), against expenses, including attorney’s fees, judgments, penalties, fines, and amounts paid in settlement actually and reasonably incurred by him or her in connection with the action, suit, or proceeding, 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 and its shareholders, and with respect to a criminal action or proceeding, if the person had no reasonable cause to believe his or her conduct was unlawful. The termination of an action, suit, or proceeding judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent does 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 interest of the Corporation or its shareholders and with respect to a criminal action or proceeding had reasonable grounds to believe his or her conduct was unlawful.

section 2: expenses incurred in defense of settlement of litigation by or in the right of the corporation

The Corporation shall indemnify any person who was or is threatened to be, make a party to a 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 he or she 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, partner, trustee, employee, or agent of another foreign or domestic corporation, partnership, joint venture, trust, or other enterprise (whether for profit or not), against expenses, including actual and reasonable attorney’s fees and amounts paid in settlement incurred by the person in connection with the action or the suit, if the persons acted in good faith and in a manner that person reasonably believed to be in, or not opposed to, the best interests of the Corporation or its shareholders. Indemnification, however, shall not be made for a claim, issue, or matter in which the person to be indemnified has been found liable to the Corporation, unless, and only to the extent the court in which the action or suit was brought has determined upon application that, despite the adjudication of liability but in view of all circumstances of the case, that person is fairly and reasonably, entitled to indemnification for the expenses which the court considered proper.

section 3: success on merits in defense of litigation

  1. To the extent that a director, officer, employee, or agent of the Corporation has been successful on the merits or otherwise in the defense of an action, suit, or proceeding referred to in Section 1 or 2 above, or in defense of a claim, issue, or matter in the action, suit, or proceeding, he or she shall be indemnified against expense, including actual and reasonable attorney’s fee, incurred by him or her in connection with the action, suit or proceeding, and an action, suit, or proceeding brought to enforce the mandatory indemnification provided in this subsection.
  1. An indemnification under Section 1 or 2, 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 director, officer, employee, or agent is proper in the circumstances because he or she has met the applicable standard of conduct set forth in Section 1 or 2. This determination shall be made in any of the following ways:
    1. By a majority vote of a quorum of the Board of Directors consisting of directors who were not parties to the action, suit, or proceeding.
    2. If the quorum described in Subdivision 1 above is not obtainable, then by a majority vote of a committee of directors who are not parties to the action. The committee shall consist of not less than two disinterested directors.
    3. By independent legal counsel in a written opinion.
    4. By the shareholders or members.
  1. If a person is entitled to indemnification under Section 1 or 2 above for a portion of expenses including attorney’s fees, judgments, penalties, fines, and amounts paid in settlement, but not for the total amount thereof, the Corporation shall indemnify the person for the portion of the expenses, judgments, penalties, fines, or amounts paid in settlement for which the person is entitled to be indemnified.

section 4: payment of expenses in advance of final disposition of proceedings

Expenses incurred in defending a civil or criminal action, suit, or proceeding described in Section 1 or 2 may be paid by the Corporation in advance of the final disposition of the action, suit, or proceeding upon receipt of an undertaking by or on behalf of the director, officer, employee, or agent to repay the expenses if it is ultimately determined that the person is not entitled to be indemnified by the Corporation. The undertaking shall be by unlimited general obligation of the person on whose behalf advances are made, but not be secured.

section 5: extent of indemnification

  1. The indemnification or advancement of expenses provided under this Article is not exclusive of other rights to which a person may be entitled under the Articles of Incorporation or a contractual agreement. The total amount of expenses advanced or indemnified from all sources combined, however, shall not exceed the amount of actual expenses incurred by the person.
  1. The indemnification provided for in the Article shall continue as to a person who ceases to be a director, officer, employee, or agent and shall inure to the benefit of the heirs, executers, and administrators of the person.

section 6: insurance

The 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 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 him or her and incurred by him or her in any such capacity, or arising out of his or her status as such, whether the Corporation would have had the power to indemnify him or her against such liability under the provisions of the Section.

section 7: consolidation, merger, etc.

For purposes of this Article the term “corporation” includes all constituent corporations absorbed in a consolidation or merger and the resulting or surviving corporation, so that a person who is or was a director, officer, employee, or agent of the constituent corporation or is or was serving at the request of the constituent corporation as a director, officer, partner, trustee, employee, or agent of another foreign or domestic corporation, partnership, joint venture, trust, or other enterprise, (whether for profit or not) shall stand in the same position under the provisions of this Section with respect to the resulting or surviving corporation as the person would if he or she had served the resulting or surviving corporation in the same capacity.


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