13.1-699 - Advance for expenses. - Virginia Statutes

§ 13.1-699. Advance for expenses.

A. A corporation may pay for or reimburse the reasonable expenses incurred bya director who is a party to a proceeding in advance of final disposition ofthe proceeding if:

1. The director furnishes the corporation a signed written statement of hisgood faith belief that he has met the standard of conduct described in §13.1-697; and

2. The director furnishes the corporation a signed written undertaking,executed personally or on his behalf, to repay any funds advanced if thedirector is not entitled to mandatory indemnification under § 13.1-698 and itis ultimately determined under § 13.1-700.1 or 13.1-701 that the director hasnot met the relevant standard of conduct.

B. The undertaking required by subdivision A 2 shall be an unlimited generalobligation of the director but need not be secured and may be acceptedwithout reference to financial ability to make repayment.

C. Authorizations of payments under this section shall be made by:

1. The board of directors:

a. If there are two or more disinterested directors, by a majority vote ofall the disinterested directors, a majority of whom shall for such purposeconstitute a quorum, or by a majority of the members of a committee of two ormore disinterested directors appointed by such a vote; or

b. If there are fewer than two disinterested directors, by the vote necessaryfor action by the board in accordance with subsection C of § 13.1-688, inwhich authorization directors who do not qualify as disinterested directorsmay participate; or

2. By the shareholders, but shares owned by or voted under the control of adirector who at the time does not qualify as a disinterested director may notbe voted on the authorization.

(Code 1950, § 13.1-3.1; 1968, c. 570; 1975, c. 500; 1979, c. 99; 1985, c.522; 2005, c. 765; 2010, c. 782.)