Connecticut § 33-773 - Advance for expenses.

§ 33-773. Advance for expenses.

Sec. 33-773. Advance for expenses. (a) A corporation may, before final disposition of a proceeding, advance funds to pay for or reimburse the reasonable expenses incurred in connection with the proceeding by an individual who is a party to the proceeding because that individual is a member of the board of directors if the director delivers to the corporation a signed written undertaking of the director to repay any funds advanced if (1) the director is not entitled to mandatory indemnification under section 33-772, and (2) it is ultimately determined under section 33-774 or 33-775 that the director is not entitled to indemnification.

(b) The undertaking required by subsection (a) of this section must be an unlimited general obligation of the director but need not be secured and may be accepted without reference to the financial ability of the director to make repayment.

(c) Authorizations under this section shall be made:

(1) By the board of directors: (A) If there are two or more qualified directors, by a majority vote of all the qualified directors, a majority of whom shall for such purpose constitute a quorum, or by a majority of the members of a committee consisting solely of two or more qualified directors appointed by such a vote; or (B) if there are fewer than two qualified directors, by the vote necessary for action by the board in accordance with subsection (c) of section 33-752, in which authorization directors who are not qualified directors may participate; or

(2) By the shareholders, but shares owned by or voted under the control of a director who at the time is not a qualified director may not be voted on the authorization.

(P.A. 94-186, S. 110, 215; P.A. 97-246, S. 15, 99; P.A. 98-137, S. 8, 62; 98-219, S. 33, 34; P.A. 06-68, S. 7; P.A. 11-147, S. 17; P.A. 15-48, S. 6.)

History: P.A. 94-186 effective January 1, 1997; P.A. 97-246 substantially revised section, including amending Subsec. (a) to revise the documentation required in order to permit the corporation to advance funds and delete the requirement of a prior determination that the facts then known would not preclude indemnification and amending Subsec. (c) to replace provision that required authorizations of payments to be made in the manner specified in Sec. 33-775 with provision specifying the procedure for authorizations to be made by the board of directors and by the shareholders, effective June 27, 1997; P.A. 98-137 amended Subsec. (a)(1) to replace “conduct for which liability has been eliminated” with “conduct for which liability has been limited”, effective July 1, 1998; P.A. 98-219 revised effective date of P.A. 98-137, but without affecting this section; P.A. 06-68 amended Subsec. (a) by replacing provisions re director with provisions re individual who is a member of the board of directors, adding provision re expenses incurred in connection with the proceeding and making technical changes, and amended Subsec. (c) by replacing references to “disinterested directors” with references to “qualified directors”, adding reference to Sec. 33-752(c) and making technical changes; P.A. 11-147 amended Subsec. (a) to require written affirmation in Subdiv. (1) and written undertaking in Subdiv. (2) to be “signed”; P.A. 15-48 amended Subsec. (a) by deleting former Subdiv. (1) re requirement of written affirmation and former Subdiv. (2) designator, adding new Subdiv. (1) and (2) designators, deleting provision re director meeting standard of conduct in Sec. 33-771 and adding “is not entitled to indemnification”, amended Subsec. (b) by deleting “subdivision (2) of” and amended Subsec. (c)(1)(A) by replacing “committee of” with “committee consisting solely of”.