resources / Statutes / Nonprofit Corporations / §10-3853
Title 10 – Corporations and Associations
Chapter 31 – Directors and officers-nonprofit Corporations
Article 5 – Indemnification
- A. A 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 both of the following conditions exist:
- 1. The director furnishes to the corporation a written affirmation of the director’s good faith belief that the director has met the standard of conduct described in section 10-3851 or that the proceeding involves conduct for which liability has been eliminated under a provision of the articles of incorporation pursuant to section 10-3202, subsection B, paragraph 1.
- 2. The director furnishes the corporation with a written undertaking, executed personally or on the director’s behalf, to repay the advance if the director is not entitled to mandatory indemnification under section 10-3852 and it is ultimately determined that the director did not meet the standard of conduct.
- B. The undertaking required by subsection A, paragraph 2 of this section is an unlimited general obligation of the director but need not be secured and may be accepted without reference to financial ability to make repayment.
- C. Authorizations of payments under this section shall be made in a manner consistent with section 10-3830 or 10-3842.
- D. This section does not apply to advancement of expenses to or for the benefit of an outside director. Advances to outside directors shall be made pursuant to section 10-3852.