§414-244 - Advance for expenses.

[§414-244] Advance for expenses. (a)
A corporation, before final disposition of a proceeding, may advance funds to
pay for or reimburse the reasonable expenses incurred by a director who is a
party to a proceeding because the director is a director if the director
delivers to the corporation:

(1) A written affirmation of the director's good
faith belief that the director has met the relevant standard of conduct
described in section 414-242 or that the proceeding involves conduct for which
liability has been eliminated under a provision of the articles of
incorporation as authorized by section 414-32(b)(4); and

(2) The director's written undertaking to repay any
funds advanced if the director is not entitled to mandatory indemnification
under section 414-243 and it is ultimately determined under section 414-245 or
414-246 that the director has not met the relevant standard of conduct
described in section 414-242.

(b) The undertaking required by subsection
(a)(2) must be an unlimited general obligation of the director but need not be
secured and may be accepted without reference to the financial ability of the
director to make repayment.

(1) By the board of directors:

(A) If there are two or more disinterested
directors, by a majority vote of all the disinterested directors (a majority of
whom for this purpose, shall constitute a quorum) or by a majority of the
members of a committee of two or more disinterested directors appointed by such
a vote; or

(B) If there are fewer than two disinterested
directors, by the vote necessary for action by the board in accordance with
section 414-215(c), in which authorization directors who do not qualify as
disinterested directors may participate; or

(2) By the shareholders, but shares owned by or voted
under the control of a director who at the time does not qualify as a
disinterested director may not be voted on the authorization. [L 2000, c 244,
pt of §1]