Vermont Statutes Title 11 Sec. 906
Terms Used In Vermont Statutes Title 11 Sec. 906
- Board of directors: means the board of directors of a mutual benefit enterprise. See
- Conviction: A judgement of guilt against a criminal defendant.
- Director: means a director of a mutual benefit enterprise. 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
- 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.
- 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.
- Voting power: means the total current power of members to vote on a particular matter for which a vote may or is to be taken. See
§ 906. Determination and authorization of indemnification
(a) Except as provided in section 904 of this title, an enterprise may not indemnify a director under section 902 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 902 of this title.
(b) The determination required by subsection (a) of this section, in accordance with the terms of section 902 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) of this subsection and a committee cannot be designated under subdivision (2) of this subsection, selected by majority vote of the full board of directors (in which selection directors who are parties may participate); or
(4) by the members, but voting power exercised by or 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 2011, No. 84 (Adj. Sess.), § 1, eff. April 20, 2012.)