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Arizona Revised Statutes Title 10. Corporations and Associations § 10-853. Advance for expenses

Current as of January 01, 2025 | Updated by Findlaw Staff

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 § 10-851 or that the proceeding involves conduct for which liability has been eliminated under a provision of the articles of incorporation pursuant to § 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 § 10-852 and it is ultimately determined under § 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 § 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 § 10-852.

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Cite this article: FindLaw.com - Arizona Revised Statutes Title 10. Corporations and Associations § 10-853. Advance for expenses - last updated January 01, 2025 | https://codes.findlaw.com/az/title-10-corporations-and-associations/az-rev-st-sect-10-853/

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