85-1510.

Community college area; power to indemnify; liability insurance; purchase.

(1) A community college area may indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending, or completed action, suit, or proceeding, whether civil, criminal, administrative, or investigative, other than an action by or in the right of the community college area, by reason of the fact that he or she is or was a board member or an officer, employee, or agent of the community college area, against expenses, including attorney's fees, judgments, fines, and amounts paid in settlement actually and reasonably incurred by him or her in connection with such action, suit, or proceeding if such person acted in good faith and in a manner which he or she reasonably believed to be in or not opposed to the best interests of the community college area and, with respect to any criminal action or proceeding, had no reasonable cause to believe that his or her conduct was unlawful. The termination of any action, suit, or proceeding by judgment, order, settlement, or conviction or upon a plea of nolo contendere or its equivalent shall not of itself create a presumption that such 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 interests of the community college area and, with respect to any criminal action or proceeding, had reasonable cause to believe that his or her conduct was unlawful.

(2) A community college area may indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending, or completed action or suit by or in the right of the community college area to procure a judgment in its favor by reason of the fact that he or she is or was a board member or an officer, employee, or agent of the community college area, against expenses, including attorney's fees, actually and reasonably incurred by him or her in connection with the defense or settlement of such action or suit if such 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 community college area, except that no indemnification shall be made in respect of any claim, issue, or matter as to which such person was adjudged to be liable for negligence or misconduct in the performance of his or her duty to the community college area unless and only to the extent that the court in which such action or suit was brought determines upon application that, despite the adjudication of liability but in view of all circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which such court deems proper.

(3) To the extent that a board member or an officer, employee, or agent of a community college area has been successful on the merits or otherwise in defense of any action, suit, or proceeding referred to in subsections (1) and (2) of this section or in defense of any claim, issue, or matter in such action, suit, or proceeding, such person shall be indemnified against expenses, including attorney's fees, actually and reasonably incurred by him or her in connection with such defense.

(4) Any indemnification under such subsections, unless ordered by a court, shall be made by the community college area only as authorized in the specific case upon a determination that indemnification of the board member or the officer, employee, or agent of the community college area is proper in the circumstances because he or she has met the applicable standard of conduct set forth in such subsections. Such determination shall be made by the board members by a majority vote of a quorum consisting of board members who were not parties to such action, suit, or proceeding or, if such a quorum is not obtainable or even if obtainable a quorum of disinterested board members so directs, by independent legal counsel in a written opinion.

(5) Expenses incurred in defending a civil or criminal action, suit, or proceeding may be paid by a community college area in advance of the final disposition of such action, suit, or proceeding as authorized in the manner provided in subsection (4) of this section upon receipt of an undertaking by or on behalf of the board member or officer, employee, or agent of the community college area to repay such amount unless it is ultimately determined that he or she is entitled to be indemnified by the community college area as authorized in this section.

(6) The indemnification provided by this section shall not be deemed exclusive of any other rights to which the person indemnified may be entitled under any agreement, either as to action in his or her official capacity or as to action in another capacity while holding such office, and shall continue as to a person who has ceased to be a board member or an officer, employee, or agent of a community college area and shall inure to the benefit of the heirs, executors, and administrators of such person.

(7) A community college area may purchase and maintain insurance on behalf of any person who is or was a board member or an officer, employee, or agent of a community college area 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 or not the community college area would have the power to indemnify him or her against such liability under this section.