Vermont Statutes Title 11 Sec. 8-55
Terms Used In Vermont Statutes Title 11 Sec. 8-55
- board of directors: means the board of directors except that no person or group of persons are the board of directors because of powers delegated to that person or group pursuant to section 8. See
- Conviction: A judgement of guilt against a criminal defendant.
- Director: includes , unless the context requires otherwise, the estate or personal representative of a director. See
- Directors: means individuals, designated in the articles or bylaws or elected by the incorporators, and their successors and individuals elected or appointed by any other name or title to act as members of the board. See
- 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
- Mutual benefit corporation: means a domestic corporation which is required to be a mutual benefit corporation pursuant to section 17. See
- Plea: In a criminal case, the defendant's statement pleading "guilty" or "not guilty" in answer to the charges, a declaration made in open court.
- Proceeding: means any threatened, pending, or completed action, suit, or proceeding, whether civil, criminal, administrative, or investigative and whether formal or informal. See
- Public benefit corporation: means a domestic corporation which is required to be a public benefit corporation pursuant to section 17. See
- Quorum: The number of legislators that must be present to do business.
- Settlement: Parties to a lawsuit resolve their difference without having a trial. Settlements often involve the payment of compensation by one party in satisfaction of the other party's claims.
- Special legal counsel: means counsel that has never been an employee of the corporation and who has not, and whose firm has not, performed legal services for the corporation pertaining to the matter for which indemnification is sought for a period of at least two years before retention as special counsel. See
- Vote: includes authorization by written ballot and written consent. See
§ 8.55. Determination and authorization of indemnification
(a) Except as provided in section 8.53 of this title, a corporation may not indemnify a director under section 8.51 of this title prior to the final resolution of a proceeding, whether by judgment, order, settlement, conviction, plea, or otherwise, and unless authorized in the specific case after a determination has been made that indemnification of the director is permissible in the circumstances because the director has met the standard of conduct as set forth in section 8.51 of this title.
(b) The determination shall be made:
(1) by the board of directors by majority vote of a quorum consisting of directors not at the time parties to the proceeding;
(2) if a quorum cannot be obtained under subdivision (1) of this subsection, by majority vote of a committee duly designated by the board of directors (in which designation directors who are parties may participate), consisting solely of two or more directors not at the time parties to the proceeding;
(3) by special legal counsel:
(A) selected by the board of directors or its committee in the manner prescribed in subdivision (1) or (2) of this subsection; or
(B) if a quorum of the board cannot be obtained under subdivision (1) of this subsection and a committee cannot be designated under subdivision (2) of this subsection, selected by majority vote of the full board in which selections directors who are parties may participate; or
(4) by the members of a mutual benefit corporation, but directors who are at the time parties to the proceeding may not vote on the determination.
(c) Authorization of indemnification and evaluation as to reasonableness of expenses shall be made in the same manner as the determination that indemnification is permissible, except that if the determination is made by special legal counsel, authorization of indemnification and evaluation as to reasonableness of expenses shall be made by those entitled under subdivision (b)(3) of this section to select counsel.
(d) A director of a public benefit corporation may not be indemnified until 20 days after the effective date of written notice to the Attorney General of the proposed indemnification. (Added 1995, No. 179 (Adj. Sess.), § 1, eff. Jan. 1, 1997.)
Vermont Statutes Title 11 Sec. 8-55
Terms Used In Vermont Statutes Title 11 Sec. 8-55
- Conviction: A judgement of guilt against a criminal defendant.
- 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
- Plea: In a criminal case, the defendant's statement pleading "guilty" or "not guilty" in answer to the charges, a declaration made in open court.
- Proceeding: includes civil suit and criminal, administrative, and investigatory action. See
- Quorum: The number of legislators that must be present to do business.
- Settlement: Parties to a lawsuit resolve their difference without having a trial. Settlements often involve the payment of compensation by one party in satisfaction of the other party's claims.
§ 8.55. Determination and authorization of indemnification
(a) Except as provided in section 8.53 of this title, a corporation may not indemnify a director under section 8.51 of this title prior to the final resolution of a proceeding, whether by judgment, order, settlement, conviction, plea, or otherwise, and unless authorized in the specific case after a determination has been made that indemnification of the director is permissible in the circumstances because the director has met the standard of conduct set forth in section 8.51.
(b) The determination required by subsection (a) of this section, in accordance with the terms of section 8.51 of this title, shall be made:
(1) by the board of directors by majority vote of a quorum consisting of directors not at the time parties to the proceeding;
(2) if a quorum cannot be obtained under subdivision (1) of this subsection, by majority vote of a committee duly designated by the board of directors (in which designation directors who are parties may participate), consisting solely of two or more directors not at the time parties to the proceeding;
(3) by written opinion of special legal counsel:
(A) selected by the board of directors or its committee in the manner prescribed in subdivision (1) or (2) of this subsection; or
(B) if a quorum of the board of directors cannot be obtained under subdivision (1) and a committee cannot be designated under subdivision (2), selected by majority vote of the full board of directors (in which selection directors who are parties may participate); or
(4) by the shareholders, but shares owned by or voted under the control of directors who are at the time parties to the proceeding may not be voted on the determination.
(c) Authorization of indemnification and evaluation as to reasonableness of expenses shall be made in the same manner as the determination that indemnification is permissible, except that if the determination is made by special legal counsel, authorization of indemnification and evaluation as to reasonableness of expenses shall be made by those entitled under subdivision (b)(3) of this section to select counsel. (Added 1993, No. 85, § 2, eff. Jan. 1, 1994.)