When a court can order a company to pay a director's legal costs

Unless limited by a corporation's articles of incorporation, a director of the corporation who is a party to a proceeding may apply for indemnification to the court conducting the proceeding or to another court of competent jurisdiction. On receipt of an application, the court after giving any notice the court considers necessary may order indemnification in the amount it considers proper if it determines: (1) The director is entitled to mandatory indemnification under section 414D-161, in which case the court shall also order the corporation to pay the director's reasonable expenses incurred to obtain court-ordered indemnification; or (2) The director is fairly and reasonably entitled to indemnification in view of all the relevant circumstances, whether or not the director met the standard of conduct set forth in section 414D-160(a) or was found liable as described in section 414D-160(d), but if the director was found liable indemnification is limited to reasonable expenses incurred.