1. I. Except as provided in paragraph II, and subject to such standards and restrictions, if any, as are set forth in its operating agreement, a limited liability company may, and shall have the power to, indemnify any member or manager or other person made a party to a proceeding or threatened to be made a named defendant or respondent in a proceeding because the member, manager, or other person acted on behalf of the limited liability company, against liability for a judgment, settlement, penalty, fine, including an excise tax assessed with respect to an employee benefit plan, or reasonable expenses incurred with respect to a proceeding, if:

   1. (a) The member, manager, or person conducted himself or herself in accordance with contractual good faith; and
   2. (b) The member, manager, or person reasonably believed his or her conduct was not opposed to the best interest of the limited liability company.

2. II. A limited liability company may not indemnify a member, manager, or other person under paragraph I:

   1. (a) In connection with a proceeding by or in the right of the limited liability company in which the person was judged liable to the limited liability company; or
   2. (b) In connection with any other proceeding charging the person with a breach of the duty of loyalty, whether or not involving action on behalf of the limited liability company, in which the person was adjudged liable for the breach.

Source. 2012, 232:2, eff. Jan. 1, 2013.