INDEMNIFICATION

INITIATED: March 23, 1999

APPROVED: October 21, 1999

PURPOSE

To establish guidelines for the indemnification of those individuals who have an action, claim, or proceeding brought against them as a result of their good faith performance of duties on behalf of, or at the direction of, Northern Michigan University.

APPLICABILITY

This policy applies to the following individuals or classes of individuals:

1. Members of the Board of Trustees.
2. Employees, including officers, faculty, staff, and student employees.
3. Students performing duties on behalf of and under the direction of Northern Michigan University.
4. Volunteers as authorized in advance and in writing by the President or authorized representative.

POLICY

Except as prohibited by law, (and subject to paragraph 3 above, in the case of students) the University will indemnify individuals against whom an action, claim, or proceeding is brought or threatened as a result of their good faith performance of duties on behalf of, or at the direction of, Northern Michigan University.

This indemnification will be against expenses, including attorney's fees, judgments, penalties, fines, and amounts in settlement actually and reasonably incurred by the individual in connection with the action, suit, or proceeding.

This indemnification will be made only as authorized in a specific case upon application by an individual and after a determination that indemnification is proper in the circumstances and the individual has met the applicable standards of conduct set forth herein.  This determination will be made by a committee of three employees appointed by the President.  no members of the committee may be a party to the action, suit, or proceeding.

For indemnification to be provided:

1. The individual must have acted in good faith and in a manner that he/she reasonably believed to be in the best interests of the University, and
2. With respect to criminal action or proceeding, the individual must have had no reasonable cause to believe that his/her conduct was unlawful.

Indemnification for the expenses of defense may be in advance of the final disposition of the action, suit, or proceeding.  The individual to be indemnified may be required to furnish a general, unsecured obligation to repay the University if it is ultimately decided by the University, wholly at its discretion, that the individual is not entitled to be indemnified.

Indemnification will be made only to the extent that the individual is not made whole for his/her losses and expenses from all other sources, including insurance.  In no case will indemnification be in an amount which, when combined with the indemnification from all other sources, exceeds the actual amount of expenses, including attorney's fees, judgments, penalties, fines, and amounts paid in settlement.

Indemnification will not take place for any of the following:

1. A breach of duty of loyalty to the University.
2. An act or omission not in good faith or that involves intentional misconduct or a knowing violation of the law.
3. A transaction from which the individual derived an improper personal benefit.
4.  An act or omission that is grossly negligent.

REFERENCES

None.

INITIATING DEPARTMENT/DIVISION

Risk and Insurance, ext. 2745

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