Utah Code 16-6a-904. Advance of expenses for directors
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(1) A nonprofit corporation may pay for or reimburse the reasonable expenses incurred by a director who is a party to a proceeding in advance of final disposition of the proceeding if:
Terms Used In Utah Code 16-6a-904
- 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.
- Director: includes , unless the context requires otherwise, the estate or personal representative of a director. See Utah Code 16-6a-901
- Expenses: includes attorneys' fees. See Utah Code 16-6a-901
- 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
- Nonprofit corporation: includes any domestic or foreign entity that is a predecessor of a nonprofit corporation by reason of a merger or other transaction in which the predecessor's existence ceased upon consummation of the transaction. See Utah Code 16-6a-901
- Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.
- Party: includes an individual who was, is, or is threatened to be made a named defendant or respondent in a proceeding. See Utah Code 16-6a-901
- Proceeding: means any threatened, pending, or completed action, suit, or proceeding, whether civil, criminal, administrative, or investigative and whether formal or informal. See Utah Code 16-6a-901
(1)(a) the director furnishes the nonprofit corporation a written affirmation of the director’s good faith belief that the director has met the applicable standard of conduct described in Section 16-6a-902;
(1)(b) the director furnishes the nonprofit corporation a written undertaking, executed personally or on the director’s behalf, to repay the advance, if it is ultimately determined that the director did not meet the standard of conduct; and
(1)(c) a determination is made that the facts then known to those making the determination would not preclude indemnification under this part.
(2) The undertaking required by Subsection (1)(b):
(2)(a) shall be an unlimited general obligation of the director;
(2)(b) need not be secured; and
(2)(c) may be accepted without reference to financial ability to make repayment.
(3) Determinations and authorizations of payments under this section shall be made in the manner specified in Section 16-6a-906.