(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:
Terms Used In Hawaii Revised Statutes 414-244
Articles of incorporation: include amended and restated articles of incorporation and articles of merger. See Hawaii Revised Statutes 414-3
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.
Proceeding: includes civil suit and criminal, administrative, and investigatory action. See Hawaii Revised Statutes 414-3
Shares: means the units into which the proprietary interests in a corporation are divided. See Hawaii Revised Statutes 414-3
(1) A written affirmation of the director’s good faith belief that the director has met the relevant standard of conduct described in § 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 § 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 § 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.(c) Authorizations under this section shall be made:
(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.
