When a company can pay a director's legal costs

(a) Except as provided in subsection (d), a corporation may indemnify a former or current director made a party to a proceeding by reason of the fact that the individual was or is a director, against liability incurred in the proceeding if: (1) The individual conducted the individual's self in good faith; and (2) The individual reasonably believed: (A) In the case of conduct in an official capacity, that the individual's conduct was in the corporation's best interests; (B) In all other cases, the individual's conduct, at a minimum, did not oppose the corporation's best interests; and (3) In the case of any criminal proceeding, the individual had no reasonable cause to believe the individual's conduct was unlawful. (b) 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 and beneficiaries of the plan is conduct that satisfies the requirements of subsection (a)(2)(B). (c) The termination of a proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, is not by itself determinative of a director's failure to meet the standard of conduct described in this section. (d) A corporation may not indemnify a director's liability under this section where the director's liability has been determined: (1) In connection with a proceeding by or in the right of the corporation; or (2) In connection with any other proceeding whether or not involving action in an official capacity, in which the director was found liable on the basis of the director's improper receipt of a personal benefit. (e) 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.