17-16-801. Requirement for and functions of board of directors.
(a) Except as provided in W.S. 17-16-732, each corporation shall have a board of directors.
(b) All corporate powers shall be exercised by or under the authority of the board of directors of the corporation, and the business and affairs of the corporation shall be managed by or under the direction, and subject to the oversight, of its board of directors, subject to any limitation set forth in the articles of incorporation or in an agreement authorized under W.S. 17-16-732.
(c) In the case of a public corporation, the board's oversight responsibilities include attention to:
(i) Business performance and plans;
(ii) Major risks to which the corporation is or may be exposed;
(iii) The performance and compensation of the chief executive officer;
(iv) Policies and practices to foster the corporation's compliance with law and ethical conduct;
(v) Preparation of the corporation's financial statements;
(vi) The effectiveness of the corporation's internal controls;
(vii) Arrangements for providing adequate and timely information to directors; and
(viii) The composition of the board and its committees, taking into account the important role of independent directors.
The articles of incorporation or bylaws may prescribe qualifications for directors. A director need not be a resident of this state or a shareholder of the corporation unless the articles of incorporation or bylaws so prescribe.
(a) A board of directors shall consist of one (1) or more individuals, with the number specified in or fixed in accordance with the articles of incorporation or bylaws.
(b) The number of directors may be increased or decreased from time to time by amendment to, or in the manner provided in, the articles of incorporation or the bylaws.
(c) Directors are elected at the first annual shareholders' meeting and at each annual meeting thereafter unless their terms are staggered under W.S. 17-16-806.
(d) The articles of incorporation or bylaws may establish a variable range for the size of the board of directors by fixing a minimum and maximum number of directors. If a variable range is established, the number of directors may be fixed or changed from time to time within the minimum and maximum, by the shareholders or the board of directors. After shares are issued, only the shareholders may change the range for the size of the board or change from a fixed to a variable-range size board or vice versa.
17-16-804. Election of directors by certain classes of shareholders.
If the articles of incorporation authorize dividing the shares into classes, the articles may also authorize the election of all or a specified number of directors by the holders of one (1) or more authorized classes of shares. A class or classes of shares entitled to elect one (1) or more directors is a separate voting group for purposes of the election of directors.
(a) The terms of the initial directors of a corporation expire at the first shareholders' meeting at which directors are elected.
(b) The terms of all other directors expire at the next, or if their terms are staggered in accordance with W.S. 17-16-806, at the applicable second or third, annual shareholders' meeting following their election except to the extent:
(i) Provided in W.S. 17-16-1022 if a bylaw electing to be governed by that section is in effect; or
(ii) A shorter term is specified in the articles of incorporation in the event of a director nominee failing to receive a specified vote for election.
(c) A decrease in the number of directors does not shorten an incumbent director's term.
(d) The term of a director elected to fill a vacancy expires at the next shareholders' meeting at which directors are elected.
(e) Despite the expiration of a director's term, he continues to serve until his successor is elected and qualifies or until there is a decrease in the number of directors.
The articles of incorporation may provide for staggering the terms of directors by dividing the total number of directors into two (2) or three (3) groups, with each group containing one-half (1/2) or one-third (1/3) of the total, as near as may be practicable. In that event, the terms of directors in the first group expire at the first annual shareholders' meeting after their election, the terms of the second group expire at the second annual shareholders' meeting after their election, and the terms of the third group, if any, expire at the third annual shareholders' meeting after their election. At each annual shareholders' meeting held thereafter, directors shall be chosen for a term of two (2) years or three (3) years, as the case may be, to succeed those whose terms expire.
(a) A director may resign at any time by written notice or by electronic transmission delivered to the board of directors, its chairman, or to the corporation.
(b) A resignation is effective when the resignation is delivered unless the resignation specifies a later effective date or an effective date determined upon the happening of an event or events. A resignation that is conditioned upon failing to receive a specified vote for election as a director may provide that it is irrevocable.
(a) The shareholders may remove one (1) or more directors with or without cause unless the articles of incorporation provide that directors may be removed only for cause.
(b) If a director is elected by a voting group of shareholders, only the shareholders of that voting group may participate in the vote to remove that director.
(c) If cumulative voting is authorized, a director may not be removed if the number of votes sufficient to elect the director under cumulative voting is voted against his removal. If cumulative voting is not authorized, a director may be removed only if the number of votes cast to remove the director exceeds the number of votes cast not to remove the director.
(d) A director may be removed by the shareholders only at a meeting called for the purpose of removing the director and the meeting notice shall state that the purpose, or one (1) of the purposes, of the meeting is removal of the director.
17-16-809. Removal of directors by judicial proceeding.
(a) The district court of the county where a corporation's principal office, or if none in this state, its registered office, is located may remove a director of the corporation from office in a proceeding commenced by or in the right of the corporation if the court finds that:
(i) The director engaged in fraudulent conduct with respect to the corporation or its shareholders, grossly abused the position of director, or intentionally inflicted harm on the corporation; and
(ii) Considering the director's course of conduct and the inadequacy of other available remedies, removal would be in the best interest of the corporation.
(b) A shareholder proceeding on behalf of the corporation under subsection (a) of this section shall comply with all of the requirements of W.S. 17-16-740 through 17-16-747 excluding W.S. 17-16-741(a)(i).
(c) The court in addition to removing a director may bar the director from reelection for a period prescribed by the court.
(d) Nothing in this section limits the equitable powers of the court to order other relief including, but not limited to, an award of expenses.
(a) Unless the articles of incorporation provide otherwise, if a vacancy occurs on a board of directors, including a vacancy resulting from an increase in the number of directors:
(i) The shareholders may fill the vacancy;
(ii) The board of directors may fill the vacancy; or
(iii) If the directors remaining in office constitute fewer than a quorum of the board, they may fill the vacancy by the affirmative vote of a majority of all the directors remaining in office.
(b) If the vacant office was held by a director elected by a voting group of shareholders, only the holders of shares of that voting group are entitled to vote to fill the vacancy if it is filled by the shareholders, and only the directors elected by that voting group are entitled to fill the vacancy if it is filled by the directors.
(c) A vacancy that will occur at a later date, by reason of a resignation effective at a later date under W.S. 17-16-807(b) or otherwise, may be filled before the vacancy occurs but the new director may not take office until the vacancy occurs.
Unless the articles of incorporation or bylaws provide otherwise, the board of directors may fix the compensation of directors. B. Meetings and Action of the Board
(a) The board of directors may hold regular or special meetings within or outside of this state.
(b) Unless the articles of incorporation or bylaws provide otherwise, the board of directors may permit any or all directors to participate in a regular or special meeting by, or conduct the meeting through the use of, any means of communication, including electronic transmission by which all directors participating may communicate with each other during the meeting. A director participating in a meeting by this means is deemed to be present in person at the meeting.
(a) Unless the articles of incorporation or bylaws provide otherwise, action required or permitted by this act to be taken at a board of directors' meeting may be taken without a meeting if the action is taken by the requisite number of members of the board. The action shall be evidenced by one (1) or more written consents describing the action taken, signed by the requisite number of directors, or shall be sent by electronic transmission by the requisite number of directors, and shall be included in the minutes or filed with the corporate records reflecting the action taken.
(b) Action taken under this section is the act of the board of directors when one (1) or more consents signed by the requisite number of directors are delivered to the corporation. The consent may specify the time at which the action taken thereunder is to be effective. A director's consent may be withdrawn by a revocation signed by the director and delivered to the corporation prior to delivery to the corporation of unrevoked written consents signed by the requisite number of directors. If action is taken by less than unanimous written consent of the directors, the corporation shall give the nonconsenting or nonvoting directors written notice of the action not more than ten (10) days after written consents sufficient to take the action have been delivered to the corporation. The notice shall reasonably describe the action taken. The requirement to give the notice shall not delay the effectiveness of actions taken by the written consent, and a failure to comply with the notice requirements shall not invalidate actions taken by written consent, provided that this subsection shall not be deemed to limit judicial power to fashion any appropriate remedy in favor of a director adversely affected by a failure to give the notice within the required time period.
(c) A consent signed under this section has the effect of action taken at a meeting of the board of directors and may be described as such in any document.
(a) Unless the articles of incorporation or bylaws provide otherwise, regular meetings of the board of directors may be held without notice of the date, time, place or purpose of the meeting.
(b) Unless the articles of incorporation or bylaws provide for a longer or shorter period, special meetings of the board of directors shall be preceded by at least two (2) days notice of the date, time and place of the meeting. The notice need not describe the purpose of the special meeting unless required by the articles of incorporation or bylaws.
(a) A director may waive any notice required by this act, the articles of incorporation, or bylaws before or after the date and time stated in the notice. Except as provided by subsection (b) of this section, the waiver shall be in writing, signed by the director entitled to the notice, and filed with the minutes or corporate records.
(b) A director's attendance at or participation in a meeting waives any required notice to the director of the meeting unless the director at the beginning of the meeting or promptly upon his arrival objects to holding the meeting or transacting business at the meeting and does not thereafter vote for or assent to action taken at the meeting.
(a) Unless the articles of incorporation or bylaws require a greater number or unless otherwise specifically provided in this act, a quorum of a board of directors consists of:
(i) A majority of the fixed number of directors if the corporation has a fixed board size; or
(ii) A majority of the number of directors prescribed, or if no number is prescribed the number in office immediately before the meeting begins, if the corporation has a variable-range size board.
(b) The articles of incorporation or bylaws may authorize a quorum of a board of directors to consist of no fewer than one-third (1/3) of the fixed or prescribed number of directors determined under subsection (a) of this section.
(c) If a quorum is present when a vote is taken, the affirmative vote of a majority of directors present is the act of the board of directors unless the articles of incorporation or bylaws require the vote of a greater number of directors.
(d) The right to dissent or abstention is not available to a director who votes in favor of the action taken. A director who is present at a meeting of the board of directors or a committee of the board of directors when corporate action is taken is deemed to have assented to the action taken unless:
(i) The director objects at the beginning of the meeting or promptly upon his arrival to holding the meeting or transacting business at the meeting;
(ii) The director's dissent or abstention from the action taken is entered in the minutes of the meeting; or
(iii) The director delivers written notice of his dissent or abstention to the presiding officer of the meeting before its adjournment or to the corporation immediately after adjournment of the meeting.
(a) Unless this act, the articles of incorporation or bylaws provide otherwise, a board of directors may create one (1) or more committees and appoint one (1) or more members of the board of directors to serve on any committee.
(b) The creation of a committee and appointment of members to it shall be approved by the greater of:
(i) A majority of all the directors in office when the action is taken; or
(ii) The number of directors required by the articles of incorporation or bylaws to take action under W.S. 17-16-824.
(c) W.S. 17-16-820 through 17-16-824 apply to committees and their members as well.
(d) To the extent specified by the board of directors or in the articles of incorporation or bylaws, each committee may exercise the authority of the board of directors under W.S. 17-16-801.
(e) A committee may not, unless specifically authorized by the board of directors:
(i) Authorize or approve distributions except according to a formula or method, or within limits, prescribed by the board of directors;
(ii) Approve or propose to shareholders action that this act requires to be approved by shareholders;
(iii) Fill vacancies on the board of directors or, subject to subsection (g) of this section, on any of its committees;
(iv) Adopt, amend or repeal bylaws.
(f) The creation of, delegation of authority to, or action by a committee does not alone constitute compliance by a director with the standards of conduct described in W.S. 17-16-830.
(g) The board of directors may appoint one (1) or more directors as alternate members of any committee to replace any absent or disqualified member during the member's absence or disqualification. Unless the articles of incorporation or the bylaws or the resolution creating the committee provide otherwise, in the event of the absence or disqualification of a member of a committee, the member or members present at any meeting and not disqualified from voting, unanimously, may appoint another director to act in place of the absent or disqualified member. C. Standards of Conduct
(a) Each member of the board of directors, when discharging the duties of a director, shall act:
(i) In good faith; and
(ii) In a manner he reasonably believes to be in or at least not opposed to the best interests of the corporation.
(b) The members of the board of directors or a committee of the board, when becoming informed in connection with their decision making function or devoting attention to their oversight function, shall discharge their duties with the care that a person in a like position would reasonably believe appropriate under similar circumstances.
(c) In discharging board or committee duties a director shall disclose, or cause to be disclosed, to the other board or committee members information not already known by them but known by the director to be material to the discharge of their decision making or oversight functions, except that disclosure is not required to the extent that the director reasonably believes that doing so would violate a duty imposed under law, a legally enforceable obligation of confidentiality or a professional ethics rule.
(d) In discharging board or committee duties a director who does not have knowledge that makes reliance unwarranted is entitled to rely on the performance by any of the persons specified in paragraph (f)(i) or (iii) of this section to whom the board may have delegated, formally or informally by course of conduct, the authority or duty to perform one (1) or more of the board's functions that are delegable under applicable law.
(e) In discharging board or committee duties a director who does not have knowledge that makes reliance unwarranted is entitled to rely on information, opinions, reports or statements, including financial statements and other financial data, prepared or presented by any of the persons specified in subsection (f) of this section.
(f) A director is entitled to rely in accordance with subsections (d) and (e) of this section on:
(i) One (1) or more officers or employees of the corporation whom the director reasonably believes to be reliable and competent in the functions performed or the information, opinions, reports or statements provided;
(ii) Legal counsel, public accountants or other persons retained by the corporation as to matters involving skills or expertise the director reasonably believes are matters:
(A) Within the person's professional or expert competence; or
(B) As to which the particular person merits confidence; or
(iii) A committee of the board of directors of which he is not a member if the director reasonably believes the committee merits confidence.
(g) For purposes of subsection (a) of this section, a director, in determining what he reasonably believes to be in or not opposed to the best interests of the corporation, shall consider the interests of the corporation's shareholders and, in his discretion, may consider any of the following:
(i) The interests of the corporation's employees, suppliers, creditors and customers;
(ii) The economy of the state and nation;
(iii) The impact of any action upon the communities in or near which the corporation's facilities or operations are located;
(iv) The long-term interests of the corporation and its shareholders, including the possibility that those interests may be best served by the continued independence of the corporation; and
(v) Any other factors relevant to promoting or preserving public or community interests.
(a) A director shall not be liable to the corporation or its shareholders for any decision to take or not to take action, or any failure to take any action including abstaining from voting after full disclosure, as a director, unless the party asserting liability in a proceeding establishes that:
(i) No defense interposed by the director based on the following precludes liability:
(A) Any provision in the articles of incorporation authorized by W.S. 17-16-202(b)(iv); or
(B) The protection afforded by W.S. 17-16-861 for action taken in compliance with W.S. 17-16-862 or 17-16-863; or
(C) The protection afforded by W.S. 17-16-870; and
(ii) The challenged conduct consisted or was the result of:
(A) Action not in good faith; or
(B) A decision:
(I) Which the director did not reasonably believe to be in or at least not opposed to the best interests of the corporation; or
(II) As to which the director was not informed to an extent the director reasonably believed appropriate in the circumstances; or
(C) Lack of objectivity due to the director's familial, financial or business relationship with, or a lack of independence due to the director's domination or control by, another person having a material interest in the challenged conduct:
(I) Which relationship or which domination or control could reasonably be expected to have affected the director's judgment respecting the challenged conduct in a manner adverse to the corporation; and
(II) After a reasonable expectation to such effect has been established, the director shall not have established that the challenged conduct was reasonably believed by the director to be in or at least not opposed to the best interests of the corporation; or
(D) A sustained failure of the director to devote attention to ongoing oversight of the business and affairs of the corporation, or a failure to devote timely attention, by making or causing to be made appropriate inquiry, when particular facts and circumstances of significant concern materialize that would alert a reasonably attentive director to the need therefore; or
(E) Receipt of a financial benefit to which the director was not entitled or any other breach of the director's duties to deal fairly with the corporation and its shareholders that is actionable under applicable law.
(b) The party seeking to hold the director liable:
(i) For money damages, shall also have the burden of establishing that:
(A) Harm to the corporation or its shareholders has been suffered; and
(B) The harm suffered was proximately caused by the director's challenged conduct.
(ii) For other money payment under a legal remedy, such as compensation for the unauthorized use of corporate assets, shall also have whatever burden of proof may be called for to establish that the payment sought is appropriate in the circumstances; or
(iii) For other money payment under an equitable remedy, such as profit recovery by or disgorgement to the corporation, shall also have whatever burden of proof may be called for to establish that the equitable remedy sought is appropriate in the circumstances.
(c) Nothing contained in this section shall:
(i) In any instance where fairness is at issue, such as consideration of the fairness of a transaction to the corporation under W.S. 17-16-861(b)(iii), alter the burden of proving the fact or lack of fairness otherwise applicable;
(ii) Alter the fact or lack of liability of a director under another section of this act, such as the provisions governing the consequences of an unlawful distribution under W.S. 17-16-833 or a transactional interest under W.S. 17-16-861; or
(iii) Affect any rights to which the corporation or a shareholder may be entitled under another statute of this state or the United States.
17-16-833. Director's liability for unlawful distributions.
(a) A director who votes for or assents to a distribution in excess of what may be authorized and made pursuant to W.S. 17-16-640 or 17-16-1409(a) is personally liable to the corporation for the amount of the distribution that exceeds what could have been distributed without violating W.S. 17-16-640 or 17-16-1409(a) if the party asserting liability establishes that when taking the action the director did not comply with W.S. 17-16-830.
(b) A director held liable under subsection (a) of this section for an unlawful distribution is entitled to:
(i) Contribution from every other director who could be held liable under subsection (a) of this section for the unlawful distribution; and
(ii) Recoupment from each shareholder of the pro-rata portion of the amount of the unlawful distribution the shareholder accepted knowing the distribution was made in violation of W.S. 17-16-640 or 17-16-1409(a).
(c) A proceeding to enforce:
(i) The liability of a director under subsection (a) of this section is barred unless it is commenced within two (2) years after the date:
(A) On which the effect of the distribution was measured under W.S. 17-16-640(e) or (g);
(B) As of which the violation of W.S. 17-16-640(a) occurred as the consequence of disregard of a restriction in the articles of incorporation; or
(C) On which the distribution of assets to shareholders under W.S. 17-16-1409(a) was made.
(ii) Contribution or recoupment under subsection (b) of this section is barred unless it is commenced within one (1) year after the liability of the claimant has been finally adjudicated under subsection (a) of this section. D. Officers
(a) A corporation has the officers described in its bylaws or appointed by the board of directors in accordance with the bylaws.
(b) The board of directors may elect individuals to fill one (1) or more offices of the corporation. An officer may appoint one (1) or more officers if authorized by the bylaws or the board of directors.
(c) The bylaws or the board of directors shall assign to one (1) of the officers responsibility for preparing minutes of the directors' and shareholders' meetings and for maintaining and authenticating records of the corporation required to be kept under W.S. 17-16-1601(a) and (e).
(d) The same individual may simultaneously hold more than one (1) office in a corporation.
Each officer has the authority and shall perform the functions set forth in the bylaws or, to the extent consistent with the bylaws, the functions prescribed by the board of directors or by direction of an officer authorized by the board of directors to prescribe the functions of other officers.
(a) An officer when performing in such capacity, has the duty to act:
(i) In good faith;
(ii) With the care that a person in a like position would reasonably exercise under similar circumstances; and
(iii) In a manner the officer reasonably believes to be in or at least not opposed to the best interests of the corporation.
(b) The duty of an officer includes the obligation:
(i) To inform the superior officer to whom, or the board of directors or the committee thereof to which, the officer reports of information about the affairs of the corporation known to the officer, within the scope of the officer's functions, and known to the officer to be material to the superior officer, board or committee; and
(ii) To inform the officer's superior officer, or another appropriate person within the corporation, or the board of directors, or a committee thereof, of any actual or probable material violation of law involving the corporation or material breach of duty to the corporation by an officer, employee or agent of the corporation, that the officer believes has occurred or is likely to occur.
(c) In discharging his duties an officer who does not have knowledge that makes reliance unwarranted is entitled to rely on:
(i) The performance of properly delegated responsibilities by one (1) or more employees of the corporation whom the officer reasonably believes to be reliable and competent in performing the responsibilities delegated; or
(ii) Information, opinions, reports or statements, including financial statements and other financial data, prepared or presented by one (1) or more employees of the corporation whom the officer reasonably believes to be reliable and competent in the matters presented or by legal counsel, public accountants or other persons retained by the corporation as to matters involving skills or expertise the officer reasonably believes are matters:
(A) Within the particular person's professional or expert competence; or
(B) As to which the particular person merits confidence.
(d) An officer shall not be liable to the corporation or its shareholders for any decisions to take or not to take action as an officer, or any failure to take any action, if he performed the duties of his office in compliance with this section. Whether an officer who does not comply with this section shall have liability shall depend in such instance on applicable law, including those principles of W.S. 17-16-831 that have relevance.
(e) For purposes of subsection (a) of this section, an officer, in determining what he reasonably believes to be in or not opposed to the best interests of the corporation, shall consider the interests of the corporation's shareholders and, in his discretion, may consider any of the following:
(i) The interests of the corporation's employees, suppliers, creditors and customers;
(ii) The economy of the state and nation;
(iii) The impact of any action upon the communities in or near which the corporation's facilities or operations are located;
(iv) The long-term interests of the corporation and its shareholders, including the possibility that those interests may be best served by the continued independence of the corporation; and
(v) Any other factors relevant to promoting or preserving public or community interests.
(a) An officer may resign at any time by delivering notice to the corporation. A resignation is effective when the notice is delivered unless the notice specifies a later effective time. If a resignation is made effective at a later time and the board or appointing officer accepts the future effective time, the board or appointing officer may fill the pending vacancy before the effective time if the board or appointing officer provides that the successor does not take office until the effective time.
(b) An officer may be removed at any time with or without cause by:
(i) The board of directors;
(ii) The officer who appointed such officer, unless the bylaws or the board of directors provide otherwise; or
(iii) Any other officer if authorized by the bylaws or the board of directors.
(c) In this section, "appointing officer" means the officer, including any successor to that officer, who appointed the officer resigning or being removed.
(a) The appointment of an officer does not itself create contract rights.
(b) An officer's removal does not affect the officer's contract rights, if any, with the corporation. An officer's resignation does not affect the corporation's contract rights, if any, with the officer. E. Indemnification
(a) In this subarticle:
(i) "Corporation" includes any domestic or foreign predecessor entity of a corporation in a merger;
(ii) "Director" or "officer" means an individual who is or was a director or officer, respectively, of a corporation or who, while a director or officer of the corporation, is or was serving at the corporation's request as a director, officer, manager, partner, trustee, employee or agent of another entity or employee benefit plan. A director or officer is considered to be serving an employee benefit plan at the corporation's request if the individual's duties to the corporation also impose duties on, or otherwise involve services by, the individual to the plan or to participants in or beneficiaries of the plan. "Director" or "officer" includes, unless the context requires otherwise, the estate or personal representative of a director or officer;
(iii) "Liability" means the obligation to pay a judgment, settlement, penalty, fine (including an excise tax assessed with respect to an employee benefit plan), or reasonable expenses incurred with respect to a proceeding.
(a) Except as otherwise provided in this section, a corporation may indemnify an individual who is a party to a proceeding because the individual is a director against liability incurred in the proceeding if: (i)(A) The director conducted himself in good faith; and
(B) He reasonably believed that his conduct was in or at least not opposed to the corporation's best interests; and
(C) In the case of any criminal proceeding, the director had no reasonable cause to believe his conduct was unlawful; or
(ii) The director engaged in conduct for which broader indemnification has been made permissible or obligatory under a provision of the articles of incorporation, as authorized by W.S. 17-16-202(b)(v).
(b) A director's conduct with respect to an employee benefit plan for a purpose the director reasonably believed to be in the interests of the participants in and beneficiaries of the plan is conduct that satisfies the requirement of subparagraph (a)(i)(B) of this section.
(c) The termination of a proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent is not, of itself, determinative that the director did not meet the standard of conduct described in this section.
(d) Unless ordered by a court under W.S. 17-16-854(a)(iii) a corporation may not indemnify a director under this section:
(i) In connection with a proceeding by or in the right of the corporation, except for reasonable expenses incurred in connection with the proceeding if it is determined that the director has met the standard of conduct under subsection (a) of this section; or
(ii) In connection with any proceeding with respect to conduct for which he was adjudged liable on the basis that he received a financial benefit to which he was not entitled, whether or not involving action in the director's capacity.
(e) Repealed By Laws 1997, ch. 190, § 3.
A corporation shall indemnify a director who was wholly successful, on the merits or otherwise, in the defense of any proceeding to which the director was a party because he was a director of the corporation against reasonable expenses incurred by the director in connection with the proceeding.
(a) A corporation may, before final disposition of a proceeding, advance funds to pay for or reimburse the expenses incurred in connection with the proceeding by an individual who is a party to a proceeding because that individual is a member of the board of directors if he delivers to the corporation:
(i) A written affirmation of his good faith belief that the standard of conduct described in W.S. 17-16-851 has been met by the director or that the proceeding involves conduct for which liability has been eliminated under a provision of the articles of incorporation as authorized by W.S. 17-16-202(b)(iv); and
(ii) His written undertaking to repay any funds advanced if the director is not entitled to mandatory indemnification under W.S. 17-16-852 and it is ultimately determined under W.S. 17-16-854 or 17-16-855 that he has not met the standard of conduct described in W.S. 17-16-851.
(iii) Repealed By Laws 1997, ch. 190, § 3.
(b) The undertaking required by paragraph (a)(ii) of this section shall 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:
(i) By the board of directors:
(A) If there are two (2) 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 of two (2) or more qualified directors appointed by such a vote; or
(B) If there are fewer than two (2) qualified directors, by the vote necessary for action by the board in accordance with W.S. 17-16-824(c), in which authorization directors who are not qualified directors may participate; or
(ii) 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.
17-16-854. Court-ordered indemnification and advance for expenses.
(a) A director who is a party to a proceeding because he is a director may apply for indemnification or an advance for expenses to the court conducting the proceeding or to another court of competent jurisdiction. After receipt of an application and after giving any notice it considers necessary, the court shall:
(i) Order indemnification if the court determines that the director is entitled to mandatory indemnification under W.S. 17-16-852;
(ii) Order indemnification or advance for expenses if the court determines that the director is entitled to indemnification or advance for expenses pursuant to a provision authorized by W.S. 17-16-858(a); or
(iii) Order indemnification or advance for expenses if the court determines, in view of all the relevant circumstances, that it is fair and reasonable:
(A) To indemnify the director; or
(B) To advance expenses to the director, even if he has not met the standard of conduct set forth in W.S. 17-16-851(a), failed to comply with W.S. 17-16-853 or was adjudged liable in a proceeding referred to in W.S. 17-16-851(d)(i) or (ii), but if the director was adjudged so liable his indemnification shall be limited to expenses incurred in connection with the proceeding.
(b) If the court determines that the director is entitled to indemnification under paragraph (a)(i) of this section or to indemnification or advance for expenses under paragraph (a)(ii) of this section, it shall also order the corporation to pay the director's expenses incurred in connection with obtaining court-ordered indemnification or advance for expenses. If the court determines that the director is entitled to indemnification or advance for expenses under paragraph (a)(iii) of this section, it may also order the corporation to pay the director's expenses to obtain court-ordered indemnification or advance for expenses.
17-16-855. Determination and authorization of indemnification.
(a) A corporation may not indemnify a director under W.S. 17-16-851 unless authorized for a specific proceeding after a determination has been made that indemnification of the director is permissible because the director has met the standard of conduct set forth in W.S. 17-16-851.
(b) The determination shall be made:
(i) If there are two (2) or more qualified directors, by the board of directors by 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 of two (2) or more qualified directors appointed by such a vote;
(ii) By special legal counsel:
(A) Selected in the manner prescribed in paragraph (i) of this subsection; or
(B) If there are fewer than two (2) qualified directors, selected by the board of directors (in which selection directors who are not qualified directors may participate); or
(iii) 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 determination.
(c) Authorization of indemnification shall be made in the same manner as the determination that indemnification is permissible, except that if there are fewer than two (2) qualified directors, authorization of indemnification shall be made by those entitled under paragraph (b)(ii) of this section to select special legal counsel.
(a) A corporation may indemnify and advance expenses under this subarticle to an officer of the corporation who is a party to a proceeding because he is an officer of the corporation:
(i) To the same extent as a director; and
(ii) If he is an officer but not a director, to such further extent as may be provided by the articles of incorporation, the bylaws, a resolution of the board of directors or contract, except for:
(A) Liability in connection with a proceeding by or in the right of the corporation other than for expenses incurred in connection with the proceeding; or
(B) Liability arising out of conduct that constitutes:
(I) Receipt by the officer of a financial benefit to which he is not entitled;
(II) An intentional infliction of harm on the corporation or the shareholders; or
(III) An intentional violation of criminal law.
(iii) A corporation may also indemnify and advance expenses to a current or former officer, employee or agent who is not a director to the extent, consistent with public policy, that may be provided by its articles of incorporation, bylaws, general or specific action of its board of directors or contract.
(b) The provisions of paragraph (a)(ii) of this section shall apply to an officer who is also a director if the basis on which he is made a party to the proceeding is an act or omission solely as an officer.
(c) An officer of a corporation who is not a director is entitled to mandatory indemnification under W.S. 17-16-852, and may apply to a court under W.S. 17-16-854 for indemnification or an advance for expenses, in each case to the same extent to which a director may be entitled to indemnification or advance for expenses under those provisions.
A corporation may purchase and maintain insurance on behalf of an individual who is a director or officer of the corporation, or who, while a director or officer of the corporation, serves at the corporation's request as a director, officer, partner, trustee, employee or agent of another domestic or foreign corporation, partnership, joint venture, trust, employee benefit plan, or other entity, against liability asserted against or incurred by the individual in that capacity or arising from his status as a director or officer whether or not the corporation would have power to indemnify or advance expenses to the individual against the same liability under this subarticle.
17-16-858. Variation by corporate action; application of subarticle.
(a) A corporation may, by a provision in its articles of incorporation or bylaws or in a resolution adopted or a contract approved by its board of directors or shareholders, obligate itself in advance of the act or omission giving rise to a proceeding to provide indemnification in accordance with W.S. 17-16-851 or advance funds to pay for or reimburse expenses in accordance with W.S. 17-16-853. Any such obligatory provision shall be deemed to satisfy the requirements for authorization referred to in W.S. 17-16-853(c) and 17-16-855(c). Any provision that obligates the corporation to provide indemnification to the fullest extent permitted by law shall be deemed to obligate the corporation to advance funds to pay for or reimburse expenses in accordance with W.S. 17-16-853 to the fullest extent permitted by law, unless the provision specifically provides otherwise.
(b) Any provision pursuant to subsection (a) of this section shall not obligate the corporation to indemnify or advance expenses to a director of a predecessor of the corporation, pertaining to conduct with respect to the predecessor, unless otherwise specifically provided. Any provision for indemnification or advance for expenses in the articles of incorporation, bylaws, or a resolution of the board of directors or shareholders of a predecessor of the corporation in a merger or in a contract to which the predecessor is a party, existing at the time the merger takes effect, shall be governed by W.S. 17-16-1107(a)(iv).
(c) A corporation may, by provision in its articles of incorporation, limit any of the rights to indemnification or advance for expenses created by or pursuant to this subarticle.
(d) This subarticle does not limit a corporation's power to pay or reimburse expenses incurred by a director or officer in connection with his appearance as a witness in a proceeding at a time when he is not a party.
(e) This subarticle does not limit a corporation's power to indemnify, advance expenses to or provide or maintain insurance on behalf of an employee or agent.
A corporation may provide indemnification or advance expenses to a director or an officer only as permitted by this subarticle. F. Directors' Conflicting Interest Transactions
(a) In this subarticle:
(i) "Control", including the term "controlled by", means:
(A) Having the power, directly or indirectly, to elect or remove a majority of the members of the board of directors or other governing body of an entity, whether through the ownership of voting shares or interests, by contract or otherwise; or
(B) Being subject to a majority of the risk of loss from the entity's activities or entitled to receive a majority of the entity's residual returns.
(ii) "Director's conflicting interest transaction" means a transaction effected or proposed to be effected by the corporation, or by an entity controlled by the corporation:
(A) To which, at the relevant time, the director is a party; or
(B) Respecting which, at the relevant time, the director had knowledge and a material financial interest known to the director; or
(C) Respecting which, at the relevant time, the director knew that a related person was a party or had a material financial interest.
(iii) "Fair to the corporation" means, for purposes of W.S. 17-16-861(b)(iii), that the transaction as a whole was beneficial to or at least not harmful to the corporation, taking into appropriate account whether it was:
(A) Fair in terms of the director's dealings with the corporation; and
(B) Comparable to what might have been obtainable in an arm's length transaction, given the consideration paid or received by the corporation.
(iv) "Material financial interest" means a financial interest in a transaction that would reasonably be expected to impair the objectivity of the director's judgment when participating in action on the authorization of the transaction;
(v) "Related person" means:
(A) The director's spouse;
(B) A child, stepchild, grandchild, parent, stepparent, grandparent, sibling, stepsibling, half sibling, aunt, uncle, niece or nephew, or spouse of any thereof, of the director or of the director's spouse;
(C) An individual living in the same home as the director;
(D) An entity, other than the corporation or an entity controlled by the corporation, controlled by the director or any person specified above in this paragraph;
(E) A domestic or foreign:
(I) Business or nonprofit corporation, other than the corporation or an entity controlled by the corporation, of which the director is a director;
(II) Unincorporated entity of which the director is a general partner or a member of the governing body; or
(III) Individual, trust or estate for whom or of which the director is a trustee, guardian, personal representative or like fiduciary; or
(F) A person that is, or an entity that is controlled by, an employer of the director.
(vi) "Relevant time" means:
(A) The time at which directors' action respecting the transaction is taken in compliance with W.S. 17-16-862; or
(B) If the transaction is not brought before the board of directors of the corporation or its committee for action under W.S. 17-16-862, at the time the corporation or an entity controlled by the corporation becomes legally obligated to consummate the transaction.
(vii) "Required disclosure" means disclosure of:
(A) The existence and nature of the director's conflicting interest; and
(B) All facts known to the director respecting the subject matter of the transaction that a director free of such conflicting interest would reasonably believe to be material in deciding whether to proceed with the transaction.
(a) A transaction effected or proposed to be effected by the corporation, or by an entity controlled by the corporation, may not be the subject of equitable relief, or give rise to an award of damages or other relief against a director of the corporation, in a proceeding by a shareholder or by or in the right of the corporation, on the ground that the director has an interest respecting the transaction, if it is not a director's conflicting interest transaction.
(b) A director's conflicting interest transaction may not be the subject of equitable relief, or give rise to an award of damages or other relief against a director of the corporation, in a proceeding by a shareholder or by or in the right of the corporation, on the ground that the director has an interest respecting the transaction, if:
(i) Directors' action respecting the transaction was taken in compliance with W.S. 17-16-862 at any time; or
(ii) Shareholders' action respecting the transaction was taken in compliance with W.S. 17-16-863 at any time; or
(iii) The transaction, judged according to the circumstances at the relevant time, is established to have been fair to the corporation.
(a) Directors' action respecting a director's conflicting interest transaction is effective for purposes of W.S. 17-16-861(b)(i) if the transaction has been authorized by the affirmative vote of a majority, but no fewer than two (2), of the qualified directors who voted on the transaction, after required disclosure by the conflicted director of information not already known by such qualified directors, or after modified disclosure in compliance with subsection (b) of this section, provided that:
(i) The qualified directors have deliberated and voted outside the presence of and without the participation by any other director; and
(ii) Where the action has been taken by a committee, all members of the committee were qualified directors, and either:
(A) The committee was composed of all the qualified directors on the board of directors; or
(B) The members of the committee were appointed by the affirmative vote of a majority of the qualified directors on the board.
(b) Notwithstanding subsection (a) of this section, when a transaction is a director's conflicting interest transaction only because a related person described in W.S. 17-16-860(a)(v)(E) or (F) is a party to or has a material financial interest in the transaction, the conflicted director is not obligated to make required disclosure to the extent that the director reasonably believes that doing so would violate a duty imposed under law, a legally enforceable obligation of confidentiality, or a professional ethics rule, provided that the conflicted director discloses to the qualified directors voting on the transaction:
(i) All information required to be disclosed that is not so violative;
(ii) The existence and nature of the director's conflicting interest; and
(iii) The nature of the conflicted director's duty not to disclose the confidential information.
(c) A majority, but no fewer than two (2), of all the qualified directors on the board of directors, or on the committee, constitutes a quorum for purposes of action that complies with this section.
(d) Where directors' action under this section does not satisfy a quorum or voting requirement applicable to the authorization of the transaction by reason of the articles of incorporation, the bylaws or a provision of law, independent action to satisfy those authorization requirements shall be taken by the board of directors or a committee, in which action directors who are not qualified directors may participate.
(a) Shareholders' action respecting a director's conflicting interest transaction is effective for purposes of W.S. 17-16-861(b)(ii) if a majority of the votes cast by the holders of all qualified shares are in favor of the transaction after:
(i) Notice to shareholders describing the action to be taken respecting the transaction;
(ii) Provision to the corporation of the information referred to in subsection (b) of this section; and
(iii) Communication to the shareholders entitled to vote on the transaction of the information that is the subject of required disclosure, or modified disclosure as described in W.S. 17-16-862(b) if the director's conflicting interest transaction is of the type described in that subsection, to the extent the information is not known by them.
(b) A director who has a conflicting interest respecting the transaction shall, before the shareholders' vote, inform the secretary or other officer or agent of the corporation authorized to tabulate votes, in writing, of the number of shares that the director knows are not qualified shares under subsection (c) of this section and the identity of the holders of those shares.
(c) For purposes of this section:
(i) "Holder" means and "held by" refers to shares held by both a record shareholder, as defined in W.S. 17-16-1301(a)(vi), and a beneficial shareholder as defined in W.S. 17-16-1301(a)(i);
(ii) "Qualified shares" means all shares entitled to be voted with respect to the transaction except for shares that the secretary or other officer or agent of the corporation authorized to tabulate votes either knows, or under subsection
(b) of this section is notified, are held by:
(A) A director who has a conflicting interest respecting the transaction; or
(B) A related person of the director, excluding a person described in W.S. 17-16-860(a)(v)(F).
(d) A majority of the votes entitled to be cast by the holders of all qualified shares constitutes a quorum for purposes of compliance with this section. Subject to the provisions of subsection (e) of this section, shareholders' action that otherwise complies with this section is not affected by the presence of holders, or by the voting, of shares that are not qualified shares.
(e) If a shareholders' vote does not comply with subsection (a) of this section solely because of a director's failure to comply with subsection (b) of this section, and if the director establishes that the failure was not intended to influence and did not in fact determine the outcome of the vote, the court may give the effect, if any, to the shareholders' vote, as the court considers appropriate in the circumstances.
(f) Where shareholders' action under this section does not satisfy a quorum or voting requirement applicable to the authorization of the transaction by reason of the articles of incorporation, the bylaws or a provision of law, independent action to satisfy those authorization requirements must be taken by the shareholders, in which action shares that are not qualified shares may participate. G. Business Opportunities