16-6a-904. Advance of expenses for directors

(1) A nonprofit corporation may pay for or reimburse the reasonable expenses incurred by a directorfn1 who is a party to a proceeding in advance of final disposition of the proceeding if:
     (a) the director furnishes the nonprofit corporation a written affirmation of the director's good faith belief that the director has met the applicable standard of conduct described in Section 16-6a-902;
     (b) the director furnishes the nonprofit corporation a written undertaking, executed personally or on the director's behalf, to repay the advance, if it is ultimately determined that the director did not meet the standard of conduct; and
     (c) a determination is made that the facts then known to those making the determination would not preclude indemnification under this part.

(2) The undertaking required by Subsection (1)(b):
     (a) shall be an unlimited general obligation of the director;
     (b) need not be secured; and
     (c) may be accepted without reference to financial ability to make repayment.

(3) Determinations and authorizations of payments under this section shall be made in the manner specified in Section 16-6a-906

Enacted by Chapter 300, 2000 General Session

Footnote 1:  Officers, Employees, Agents Included.  Unless the articles of incorporation provide otherwise, a nonprofit corporation may indemnify and advance expenses to an officer, employee, fiduciary, or agent of the nonprofit corporation to the same extent as to a director; and if the individual is not a director, to a greater extent if not inconsistent with public policy, and provided for by: (i) its articles of incorporation or bylaws; (ii) general or specific action of its board of directors; or (iii) contract.   

See Section 16-6a-907.

Comment 1: 

Indemnification Provisions in Governing Documents.

The Condo Act and Community Association Act authorize an association's

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Comment 2:  Liability.  What liability do directors and officers have under the law? 

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