1. Conditions. A corporation may, before final disposition of a proceeding, advance funds to pay for or reimburse the expenses incurred in connection with the proceeding by an individual who is a party to the proceeding because that individual is a member of the board of directors, if the individual delivers to the corporation:
A. A signed written affirmation of the individual’s good faith belief that the individual has met the relevant standard of conduct described in section 852, subsection 1 or that the proceeding involves conduct for which liability has been eliminated under a provision of the corporation’s articles of incorporation as authorized by section 202, subsection 2, paragraph D; and [PL 2011, c. 274, §33 (AMD).]
B. The individual’s signed written undertaking to repay any funds advanced if the individual is not entitled to mandatory indemnification under section 853 and it is ultimately determined under section 855 or 856 that the individual has not met the relevant standard of conduct described in section 852. [PL 2011, c. 274, §33 (AMD).]

[PL 2011, c. 274, §33 (AMD).]

Terms Used In Maine Revised Statutes Title 13-C Sec. 854

  • Corporation: includes any domestic or foreign predecessor entity of a corporation in a merger. See Maine Revised Statutes Title 13-C Sec. 851
  • 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
  • Liability: means the obligation to pay a judgment, settlement, penalty, fine, including an excise tax assessed with respect to an employee benefit plan, or expenses incurred with respect to a proceeding. See Maine Revised Statutes Title 13-C Sec. 851
  • Majority: when used in reference to age shall mean the age of 18 and over. See Maine Revised Statutes Title 1 Sec. 72
  • 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.
  • Party: means an individual who was, is or is threatened to be made a defendant or respondent in a proceeding. See Maine Revised Statutes Title 13-C Sec. 851
  • Proceeding: means any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative, arbitrative or investigative and whether formal or informal. See Maine Revised Statutes Title 13-C Sec. 851
  • Quorum: The number of legislators that must be present to do business.
2. Repayment obligation. The undertaking required by subsection 1, paragraph B 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.

[PL 2003, c. 344, Pt. B, §68 (AMD).]

3. Authorization process. Authorizations under this section may be made:
A. By the corporation’s board of directors:

(1) If there are 2 or more qualified directors, by a majority vote of all the qualified directors, a majority of whom for this purpose constitutes a quorum, or by a majority of the members of a committee of 2 or more qualified directors appointed by a majority vote of all the qualified directors; or
(2) If there are fewer than 2 qualified directors, by the vote necessary for action by the corporation’s board of directors in accordance with section 825, subsection 3, in which authorization directors who do not qualify as qualified directors may participate; or [PL 2007, c. 289, §24 (AMD).]
B. 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. [PL 2007, c. 289, §24 (AMD).]

[PL 2007, c. 289, §24 (AMD).]

SECTION HISTORY

PL 2001, c. 640, §A2 (NEW). PL 2001, c. 640, §B7 (AFF). PL 2003, c. 344, §B68 (AMD). PL 2007, c. 289, §§23, 24 (AMD). PL 2011, c. 274, §33 (AMD).
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