Each corporation shall have the power to indemnify any director or officer or former director or officer of the corporation against reasonable expenses, costs, and attorneys' fees actually and reasonably incurred by him in connection with the defense of any action, suit or proceeding, civil or criminal, in which he is made a party by reason of being or having been a director or officer. The indemnification may include any amounts paid to satisfy a judgment or to compromise or settle a claim. The director or officer shall not be indemnified if he shall be adjudged to be liable on the basis that he has breached or failed to perform the duties of his office and the breach or failure to perform constitutes willful misconduct or recklessness. Advance indemnification may be allowed of a director or officer for reasonable expenses to be incurred in connection with the defense of the action, suit or proceeding provided that the director or officer must reimburse the corporation if it is subsequently determined that the director or officer was not entitled to indemnification. Each corporation may make any other indemnification as authorized by the articles of incorporation or bylaws or by a resolution adopted after notice by the members entitled to vote. As used in this section "director" means any person who is or was a director of the corporation and any person who, while a director of the corporation, is or was serving at the request of the corporation as a director, officer, partner, trustee, employee or agent of any foreign or domestic corporation or nonprofit corporation, cooperative, partnership, joint venture, trust, other incorporated or unincorporated enterprise or employee benefit plan or trust.
History: 1978 Comp., § 53-8-26, enacted by Laws 1981, ch. 40, § 1; 1987, ch. 237, § 2; 1987, ch. 238, § 7.
ANNOTATIONSRepeals and reenactments. — Laws 1981, ch. 40, § 1, repealed former 53-8-26 NMSA 1978, relating to indemnification of officers and directors, and enacted a new section.
Cross references. — For indemnification of officers and directors, see 53-4-9.1 NMSA 1978.
1987 amendments. — Laws 1987, ch. 237, § 2, effective June 19, 1987, and Laws 1987, ch. 238, § 7, effective April 9, 1987, enacted different amendments to this section. The section was set out as amended by Laws 1987, ch. 238, § 7. See 12-1-8 NMSA 1978.
Laws 1987, ch. 238, § 7, effective April 9, 1987, inserted "reasonable" preceding "expenses" in the first and fourth sentences, in the third sentence, substituted "shall not be indemnified if he shall be adjudged to be liable on the basis that he has breached or failed to perform the duties of his office and the breach or failure to perform constitutes willful misconduct or recklessness" for "shall not be indemnified if he is guilty of negligence or misconduct in the performance of his duties as a director or officer", deleted "by reason of negligence or misconduct in the performance of his duties" at the end of the fourth sentence, and added the last sentence.
Laws 1987, ch. 237, § 2, effective June 19, 1987, designated the provisions of the former section as present Subsection A, deleted "director or" preceding "officer" in eight places, and added Subsection B.
Law reviews. — For article, "Statutory Adoption of Several Liability in New Mexico: A Commentary and Quasi-Legislative History," see 18 N.M.L. Rev. 483 (1988).
Am. Jur. 2d, A.L.R. and C.J.S. references. — 18B Am. Jur. 2d Corporations §§ 1317, 1897, 1898.