Montana Code 35-14-853. Advance for expenses
35-14-853. Advance for expenses. (1) A corporation may, before final disposition of a proceeding, advance funds to pay for or reimburse expenses incurred in connection with the proceeding by an individual who is a party to the proceeding because that individual is a director if the director delivers to the corporation a signed, written undertaking of the director to repay any funds advanced if:
Terms Used In Montana Code 35-14-853
- Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
- Indemnification: In general, a collateral contract or assurance under which one person agrees to secure another person against either anticipated financial losses or potential adverse legal consequences. Source: FDIC
- Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.
- Quorum: The number of legislators that must be present to do business.
(a)the director is not entitled to mandatory indemnification under 35-14-852; and
(b)it is ultimately determined under 35-14-854 or 35-14-855 that the director is not entitled to indemnification.
(2)The undertaking required by subsection (1) 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.
(3)Authorizations under this section must be made:
(a)by the board of directors in the following manner:
(i)if there are two or more qualified directors, by a majority vote of all the qualified directors, a majority of whom for this purpose constitute a quorum, or
(ii)by a majority of the members of a committee consisting solely of two or more qualified directors appointed by a majority vote of all the qualified directors; or
(b)by special legal counsel:
(i)selected in the manner prescribed in subsection (3)(a); or
(ii)if there are fewer than two qualified directors, selected by the board of directors, in which directors who are not qualified directors may participate; or
(c)by the shareholders, but shares owned by or voted under the control of a director who at the time is not a qualified director may not be voted on the authorization.