48-18-504 - Advance for expenses. - Tennessee Statutes

48-18-504. Advance for expenses.

(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:

     (1)  The director furnishes the corporation a written affirmation of the director's good faith belief that the director has met the standard of conduct described in § 48-18-502;

     (2)  The director furnishes the corporation a written undertaking, executed personally or on the director's behalf, to repay the advance if it is ultimately determined that the director is not entitled to indemnification; and

     (3)  A determination is made that the facts then known to those making the determination would not preclude indemnification under this part.

(b)  The undertaking required by subdivision (a)(2) must be 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)  Determinations and authorizations of payments under this section shall be made in the manner specified in § 48-18-506.

[Acts 1986, ch. 887, § 8.53; 1987, ch. 273, § 33.]