Montana Code 35-14-855. Determination and authorization of indemnification
35-14-855. Determination and authorization of indemnification. (1) A corporation may not indemnify a director under 35-14-851 unless authorized for a specific proceeding after a determination has been made that indemnification is permissible because the director has met the relevant standard of conduct set forth in 35-14-851.
Terms Used In Montana Code 35-14-855
- Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
- Indemnification: In general, a collateral contract or assurance under which one person agrees to secure another person against either anticipated financial losses or potential adverse legal consequences. Source: FDIC
- Quorum: The number of legislators that must be present to do business.
(2)The determination must be made:
(a)if there are two or more qualified directors, by the board of directors by a majority vote of all the qualified directors, a majority of whom for this purpose constitute a quorum, or by a majority of the members of a committee of two or more qualified directors appointed by a majority vote of all the qualified directors;
(b)by special legal counsel:
(i)selected in the manner prescribed in subsection (2)(a); or
(ii)if there are fewer than two qualified directors, selected by the board of directors, in which directors who are not qualified directors may participate; or
(c)by the shareholders, but shares owned by or voted under the control of a director who at the time is not a qualified director may not be voted on the determination.
(3)Authorization of indemnification must be made in the same manner as the determination that indemnification is permissible, except that if there are fewer than two qualified directors or if the determination is made by special legal counsel, authorization of indemnification must be made by those entitled to select special legal counsel under subsection (2)(b)(ii).