10-853. Advance for expenses
233 words·~1 min read·
/az/title-10/10-853A research copy — for the controlling text, always check the official state or federal source. Not legal advice.
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 both of the following conditions exist:
1. The director furnishes the corporation with a written affirmation of the director's good faith belief that the director has met the standard of conduct described in section 10-851 or that the proceeding involves conduct for which liability has been eliminated under a provision of the articles of incorporation pursuant to section 10-202, subsection B, paragraph 1.
2. The director furnishes the corporation with a written undertaking, executed personally or on the director's behalf, to repay the advance if the director is not entitled to mandatory indemnification under section 10-852 and it is ultimately determined under section 10-854 or 10-855 that the director did not meet the standard of conduct.
B. The undertaking required by subsection A, paragraph 2 of this section is 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. Authorizations of payments under this section shall be made in a manner consistent with section 10-830 or 10-842.
D. This section does not apply to advancement of expenses to or for the benefit of an outside director. Advances to outside directors shall be made pursuant to section 10-852.