2006 Code of Virginia § 13.1-880 - Determination and authorization of indemnification

13.1-880. Determination and authorization of indemnification.

A. A corporation may not indemnify a director under 13.1-876 unlessauthorized in the specific case after a determination has been made thatindemnification of the director is permissible in the circumstances becausehe has met the standard of conduct set forth in 13.1-876.

B. The determination shall be made:

1. By the board of directors by majority vote of a quorum consisting ofdirectors not at the time parties to the proceeding;

2. If a quorum cannot be obtained under subdivision 1 of this subsection, bymajority vote of a committee duly designated by the board of directors (inwhich designation directors who are parties may participate), consistingsolely of two or more directors not at the time parties to the proceeding;

3. By special legal counsel:

a. Selected by the board of directors or its committee in the mannerprescribed in subdivision 1 or 2 of this subsection; or

b. If a quorum of the board of directors cannot be obtained under subdivision1 of this subsection and a committee cannot be designated under subdivision 2of this subsection, selected by majority vote of the full board of directors,in which selection directors who are parties may participate; or

4. By the members, but directors who are at the time parties to theproceeding may not vote on the determination.

C. Authorization of indemnification and evaluation as to reasonableness ofexpenses shall be made in the same manner as the determination thatindemnification is permissible, except that if the determination is made byspecial legal counsel, authorization of indemnification and evaluation as toreasonableness of expenses shall be made by those entitled under subdivision3 of subsection B of this section to select counsel.

(Code 1950, 13.1-205.1; 1968, c. 689; 1975, c. 500; 1981, c. 57; 1985, c.522.)