(a) 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:

non profit

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Terms Used In Tennessee Code 48-58-504

  • 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.
  • Document: means :
    (A) Any tangible medium on which information is inscribed, and includes any writing or written instrument. See Tennessee Code 48-11-201
  • 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 Tennessee Code 48-202-101
(1) The director furnishes the corporation a document of the director’s good faith belief that the director has met the standard of conduct described in § 48-58-502 or is immune from suit under § 48-58-601;
(2) The director furnishes the corporation a document, executed personally or on the director’s behalf, to repay the advance if it is ultimately determined that the director is not entitled to indemnification; and
(3) A determination is made that the facts then known to those making the determination would not preclude indemnification under this part.
(b) The undertaking required by subdivision (a)(2) 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.
(c) Determinations and authorizations of payments under this section shall be made in the manner specified in § 48-58-506.
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