§ 7-129-106 — Determination and authorization of indemnification of directors

Colorado § 7-129-106

• Jurisdiction: Colorado
• Title 07: Corporations
• Art.: Indemnification

Text

(1) A nonprofit corporation may not indemnify a director under section 7-129-102
unless authorized in the specific case after a determination has been made that
indemnification of the director is permissible in the circumstances because the
director has met the standard of conduct set forth in section 7-129-102. A nonprofit
corporation shall not advance expenses to a director under section 7-129-104
unless authorized in the specific case after the written affirmation and undertaking
required by section 7-129-104 (1)(a) and (1)(b) are received and the determination
required by section 7-129-104 (1)(c) has been made.

(2) The determinations required by subsection (1) of this section shall be
made:

(a) By the board of directors by a majority vote of those present at a meeting
at which a quorum is present, and only those directors not parties to the proceeding
shall be counted in satisfying the quorum; or

(b) If a quorum cannot be obtained, by a majority vote of a committee of the
board of directors designated by the board of directors, which committee shall
consist of two or more directors not parties to the proceeding; except that directors
who are parties to the proceeding may participate in the designation of directors for
the committee.

(3) If a quorum cannot be obtained as contemplated in paragraph (a) of
subsection (2) of this section, and a committee cannot be established under
paragraph (b) of subsection (2) of this section, or, even if a quorum is obtained or a
committee is designated, if a majority of the directors constituting such quorum or
such committee so directs, the determination required to be made by subsection (1)
of this section shall be made:

(a) By independent legal counsel selected by a vote of the board of directors
or the committee in the manner specified in paragraph (a) or (b) of subsection (2) of
this section or, if a quorum of the full board cannot be obtained and a committee
cannot be established, by independent legal counsel selected by a majority vote of
the full board of directors; or

(b) By the voting members, but voting members who are also directors and
who are at the time seeking indemnification may not vote on the determination.

(4) Authorization of indemnification and advance of expenses shall be made
in the same manner as the determination that indemnification or advance of
expenses is permissible; except that, if the determination that indemnification or
advance of expenses is permissible is made by independent legal counsel,
authorization of indemnification and advance of expenses shall be made by the
body that selected such counsel.

Legislative History

Source: L. 97: Entire article added, p. 704, � 3, effective July 1, 1998.