Utah § 6a-906 - Determination and authorization of indemnification of directors.
Full text of Utah Utah Code § 6a-906 — Determination and authorization of indemnification of directors., with citation guidance and answers to common questions.
§ 6a-906. Determination and authorization of indemnification of directors.
16-6a-906.
Determination and authorization of indemnification of directors.
(1)
(a)
A nonprofit corporation may not indemnify a director under Section 16-6a-902 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 16-6a-902.
(b)
A nonprofit corporation may not advance expenses to a director under Section 16-6a-904 unless:
(i)
authorized in the specific case after the written affirmation and undertaking required by Subsections 16-6a-904(1)(a) and (1)(b) are received; and
(ii)
the determination required by Subsection 16-6a-904(1)(c) has been made.
(2)
(a)
The determinations required by Subsection (1) shall be made:
(i)
by the board of directors by a majority vote of those present at a meeting at which a quorum is present if only those directors not parties to the proceeding are counted in satisfying the quorum;
(ii)
if a quorum cannot be obtained under Subsection (2)(a)(i), by a majority vote of a committee of the board of directors:
(A)
designated by the board of directors; and
(B)
consisting of two or more directors not parties to the proceeding; or
The directors who are parties to the proceeding may participate in the designation of directors for the committee described in Subsection (2)(a)(ii).
(3)
(a)
The determination required to be made by Subsection (1) shall be made by a person described in Subsection (3)(b) if:
(i)
(A)
a quorum cannot be obtained in accordance with Subsection (2)(a)(i); and
(B)
a committee cannot be established under Subsection (2)(a)(ii); or
(ii)
even if a quorum is obtained or a committee is designated, a majority of the directors constituting the quorum or committee directs.
(b)
If a condition described in Subsection (3)(a) is met, the determination required to be made by Subsection (1) shall be made:
(i)
by independent legal counsel selected by:
(A)
a vote of the board of directors or the committee in the manner specified in Subsection (2)(a)(i) or (ii); or
(B)
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
(ii)
by the voting members, but a voting member may not vote on the determination if the voting member is:
(A)
a director; and
(B)
at the time seeking indemnification.
(4)
(a)
Except as provided in Subsection (4)(b), an 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.
(b)
Notwithstanding Subsection (4)(a), 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 the independent legal counsel.
Section 6a-906 ("Determination and authorization of indemnification of directors.") is part of the Utah Code, the codified statutory law of Utah. It sets out the legal rule or procedure described in the text above. Statutes are amended regularly, so always verify against the official source.
How do I cite Utah § 6a-906?
A common citation format is "Utah Code § 6a-906" (Utah). Legal writing may require the code abbreviation, section number, and year or edition. Match the style required by your court, professor, or publisher.
Is this the official text of Utah law?
No. This page is for research and education and may not include the most recent amendments. For official current law, check the Utah official source linked on this page or consult a licensed Utah attorney.
How does Utah § 6a-906 apply to my situation?
Statutes are interpreted in context, and application depends on your specific facts. Only a licensed attorney in Utah can advise on how this section applies to you. Contact your state or local bar association for a referral.
