SECTION 7.01—ACTIONS SUBJECT TO INDEMNIFICATION

(A) The church 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, including all appeals (other than an action by or in the right of the church) by reason of the fact that the person is or was a pastor, deacon, officer, employee, or agent of the church, against expenses, including attorneys’ fees, judgments, fines, and amounts paid in settlement actually and reasonably incurred by him in connection with the action, suit, or proceeding; and if that person acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the church and, with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful.

(B) The termination of any action, suit, or proceeding by judgment, order, settlement, conviction, or on a plea of solo contender or its equivalent, shall not, of itself, create a presumption that the person did not act in good faith and in a manner that he reasonably believed to be in or not opposed to the best interests of the church and, with respect to any criminal action or proceeding, had no reasonable cause to believe that his or her conduct was unlawful.

SECTION 7.02—EXPENSES SUBJECT TO INDEMNIFICATION

To the extent that a pastor, deacon, officer, employee, or agent has been successful on the merits or otherwise in defense of any action, suit, or proceeding referred to in this Article, or in defense of any claim, issue, or matter in that action, suit, or proceeding, he or she may be indemnified against expenses, including attorneys’ fees, actually and reasonably incurred by him or her in connection with the action, suit, or proceeding.

SECTION 7.03—LIMITATIONS OF INDEMNIFICATION

Any indemnification made under this Article, may be made by the church only as authorized in the specific case on a determination that indemnification of the pastor, deacon, officer, employee, or agent is proper in the circumstances because he has met the applicable standard of conduct set forth in Section 5.01. The determination shall be made (a) by a majority vote of a quorum consisting of the pastor and deacons who were not and are not parties to or threatened with the action, suit, or proceeding; (b) if the described quorum is not obtainable or if a majority vote of a quorum of disinterested deacons so directs, by independent legal counsel in a written opinion; or (c) by a majority vote of the members of the church.

SECTION 7.04—TIMING OF INDEMNIFICATION

Expenses of each person seeking indemnification under this Article may be paid by the church as they are incurred, in advance of the final disposition of the action, suit, or proceeding, as authorized by the board of deacons in the specific case, so long as the pastor, deacon, officer, employee, or agent agrees to repay the amount if it is ultimately determined that he or she is not qualified to be indemnified by the church.

SECTION 7.05—EXTENT OF INDEMNIFICATION

The indemnification provided by this Article shall be deemed to be discretionary unless otherwise required as a matter of law or under any agreement or provided by insurance purchased by the church, both as to action of each person seeking indemnification under this Article in his official capacity and as to action in another capacity while holding that office, and may continue as to a person who has ceased to be a pastor, deacon, officer, employee, or agent and may inure to the benefit of the heirs, executors, and administrators of that person.

SECTION 7.06—INSURANCE

The church may purchase and maintain insurance on behalf of any person who is or was a pastor, deacon, officer, employee, or agent of the church against any liability asserted against him and incurred by him in that capacity, or arising out of his status in that capacity, whether or not the church would have the power to indemnify him against liability under the provisions of this Article.