Oregon Statutes 65.397 – Advance for expenses
(1) A corporation may pay for or reimburse the reasonable expenses incurred by a director who is a party to a proceeding in advance of final disposition of the proceeding if:
Terms Used In Oregon Statutes 65.397
- Articles of incorporation: means the articles of incorporation described in ORS § 65. See Oregon Statutes 65.001
- Board of directors: means the individual or individuals who are vested with overall management of the affairs of a domestic corporation or foreign corporation, irrespective of the name that designates the individual or individuals. See Oregon Statutes 65.001
- Bylaws: means a set of provisions for managing and regulating a corporation's affairs that the corporation must adopt under ORS § 65. See Oregon Statutes 65.001
- Contract: A legal written agreement that becomes binding when signed.
- 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.
- Corporation: means a domestic corporation or a foreign corporation. See Oregon Statutes 65.001
- Director: means an individual who acts as a member of the board of directors, who has a right to vote on questions concerning the management and regulation of a corporation's affairs and who is:
(a) An appointed director;
(b) A designated director; or
(c) A director elected by the incorporators, directors or members. See Oregon Statutes 65.001
- 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: means a civil, criminal, administrative or investigatory action. See Oregon Statutes 65.001
- Written: means embodied as a document. See Oregon Statutes 65.001
(a) The director furnishes the corporation a written affirmation of the director’s good faith belief that the director has met the standard of conduct described in ORS § 65.391; and
(b) The director furnishes the corporation a written undertaking, executed personally or on the director’s behalf, to repay the advance if the director is ultimately determined not to have met the standard of conduct.
(2) The undertaking required by subsection (1)(b) of this section must be an unlimited general obligation of the director but need not be secured and may be accepted without reference to financial ability to make repayment.
(3) An authorization of payments under this section may be made by provision in the articles of incorporation or bylaws, by a resolution of the members or board of directors or by contract.
(4)(a) A corporation that authorizes payments in accordance with subsection (3) of this section may not amend or rescind the articles of incorporation, bylaws or resolution that authorizes the payments so as to eliminate or impair a director’s right to payments after an act or omission occurs that subjects the director to a proceeding for which the director seeks payment.
(b) Notwithstanding the prohibition set forth in paragraph (a) of this subsection, a corporation may eliminate or impair a director’s right to payments if at the time the act or omission occurred the corporation’s articles of incorporation, bylaws or resolution explicitly authorized the corporation to eliminate or impair the right after an act or omission occurs. [1989 c.1010 § 101; 2011 c.227 § 6]