reglab/statecodes huggingface dataset:
2023 Vermont Statutes › Title 11C - Mutual Benefit Enterprises › Chapter 8 - Directors and Officers › § 808. Suspension of director by board

§ 808. Suspension of director by board
(a) A board of directors may suspend a director if, considering the director’s course of conduct and the inadequacy of other available remedies, immediate suspension is necessary for the best interests of the enterprise and if the director is engaging or has engaged in:
(1) fraudulent conduct with respect to the enterprise or its members;
(2) gross abuse of the position of director;
(3) intentional or reckless infliction of harm on the enterprise; or
(4) any other behavior, act, or omission as provided by the organic rules.
(b)(1) A suspension under subsection (a) of this section is effective for 30 days unless the board of directors calls a special meeting of members for removal of the director before the end of the 30-day period, in which case the suspension is effective until adjournment of the meeting or the director is removed.
(2) Upon call of a special meeting of members for removal of the director, an officer of the enterprise or the board of directors shall mail or otherwise transmit or deliver in a record to the members entitled to vote on the removal and to the director to be removed notice of the meeting that complies with section 508 of this title.
(3) A director is removed if the votes in favor of removal are equal to or greater than the votes required to elect the director at the time of the vote. (Added 2011, No. 84 (Adj. Sess.), § 1, eff. April 20, 2012.)
2023 Vermont Statutes › Title 11C - Mutual Benefit Enterprises › Chapter 8 - Directors and Officers › § 809. Vacancy on board

§ 809. Vacancy on board
(a) Unless the organic rules otherwise provide, a vacancy on the board of directors shall be filled:
(1) notwithstanding subdivision 804(a)(2) and subsection 804(b) of this title, within a reasonable time by majority vote of the remaining directors until the next annual members’ meeting or a special meeting of members called to fill the vacancy; and
(2) for the unexpired term by members at the next annual members’ meeting or a special meeting of members called to fill the vacancy.
(b) Unless the organic rules otherwise provide, if a vacating director was elected or appointed by a class of members or a district:
(1) the new director shall be of that class or district; and
(2) the selection of the director for the unexpired term shall be conducted in the same manner as would the selection for that position without a vacancy.
(c) If a member appointed a vacating director, the organic rules may provide for that member to appoint a director to fill the vacancy. (Added 2011, No. 84 (Adj. Sess.), § 1, eff. April 20, 2012.)
2023 Vermont Statutes › Title 11C - Mutual Benefit Enterprises › Chapter 8 - Directors and Officers › § 810. Remuneration of directors

§ 810. Remuneration of directors
Unless the organic rules otherwise provide, the board of directors may set the remuneration of directors and of nondirector committee members appointed under subsection 817(a) of this title. (Added 2011, No. 84 (Adj. Sess.), § 1, eff. April 20, 2012.)
2023 Vermont Statutes › Title 11C - Mutual Benefit Enterprises › Chapter 8 - Directors and Officers › § 811. Meetings

§ 811. Meetings
(a) A board of directors shall meet at least annually and may hold meetings inside or outside this State.
(b) Unless the organic rules otherwise provide, a board of directors may permit directors to attend or conduct board meetings through the use of any means of communication if all directors attending the meeting can communicate with each other during the meeting. (Added 2011, No. 84 (Adj. Sess.), § 1, eff. April 20, 2012.)
2023 Vermont Statutes › Title 11C - Mutual Benefit Enterprises › Chapter 8 - Directors and Officers › § 812. Action without meeting

§ 812. Action without meeting
(a) Unless prohibited by the organic rules, any action that may be taken by a board of directors may be taken without a meeting if each director consents in a record to the action.
(b) Consent under subsection (a) of this section may be withdrawn by a director in a record at any time before the mutual benefit enterprise receives consent from all directors.
(c) A record of consent for any action under subsection (a) of this section may specify the effective date or time of the action. (Added 2011, No. 84 (Adj. Sess.), § 1, eff. April 20, 2012.)
2023 Vermont Statutes › Title 11C - Mutual Benefit Enterprises › Chapter 8 - Directors and Officers › § 813. Meetings and notice

§ 813. Meetings and notice
(a) Unless the organic rules otherwise provide, a board of directors may establish a time, date, and place for regular board meetings, and notice of the time, date, place, or purpose of those meetings is not required.
(b) Unless the organic rules otherwise provide, notice of the time, date, and place of a special meeting of a board of directors shall be given to all directors at least three days before the meeting, the notice shall contain a statement of the purpose of the meeting, and the meeting is limited to the matters contained in the statement. (Added 2011, No. 84 (Adj. Sess.), § 1, eff. April 20, 2012.)
2023 Vermont Statutes › Title 11C - Mutual Benefit Enterprises › Chapter 8 - Directors and Officers › § 814. Waiver of notice of meeting

§ 814. Waiver of notice of meeting
(a) Unless the organic rules otherwise provide, a director may waive any required notice of a meeting of the board of directors in a record before, during, or after the meeting.
(b) Unless the organic rules otherwise provide, a director’s participation in a meeting is a waiver of notice of that meeting unless:
(1) the director objects to the meeting at the beginning of the meeting or promptly upon the director’s arrival at the meeting and does not thereafter vote in favor of or otherwise assent to the action taken at the meeting; or
(2) the director promptly objects upon the introduction of any matter for which notice under section 813 of this title has not been given and does not thereafter vote in favor of or otherwise assent to the action taken on the matter. (Added 2011, No. 84 (Adj. Sess.), § 1, eff. April 20, 2012.)
2023 Vermont Statutes › Title 11C - Mutual Benefit Enterprises › Chapter 8 - Directors and Officers › § 815. Quorum

§ 815. Quorum
(a) Unless the articles of organization provide for a greater number, a majority of the total number of directors specified by the organic rules constitutes a quorum for a meeting of the directors.
(b) If a quorum of the board of directors is present at the beginning of a meeting, any action taken by the directors present is valid even if withdrawal of directors originally present results in the number of directors being fewer than the number required for a quorum.
(c) A director present at a meeting but objecting to notice under subdivision 814(b)(1) or (2) of this title does not count toward a quorum. (Added 2011, No. 84 (Adj. Sess.), § 1, eff. April 20, 2012.)
2023 Vermont Statutes › Title 11C - Mutual Benefit Enterprises › Chapter 8 - Directors and Officers › § 816. Voting

§ 816. Voting
(a) Each director shall have one vote for purposes of decisions made by the board of directors.
(b) Unless the organic rules otherwise provide, the affirmative vote of a majority of directors present at a meeting is required for action by the board of directors. (Added 2011, No. 84 (Adj. Sess.), § 1, eff. April 20, 2012.)
2023 Vermont Statutes › Title 11C - Mutual Benefit Enterprises › Chapter 8 - Directors and Officers › § 817. Committees

§ 817. Committees
(a) Unless the organic rules otherwise provide, a board of directors may create one or more committees and appoint one or more individuals to serve on a committee.
(b) Unless the organic rules otherwise provide, an individual appointed to serve on a committee of a mutual benefit enterprise need not be a director or member.
(c) An individual who is not a director and is serving on a committee has the same rights, duties, and obligations as a director serving on the committee.
(d) Unless the organic rules otherwise provide, each committee of a mutual benefit enterprise may exercise the powers delegated to it by the board of directors, but a committee may not:
(1) approve allocations or distributions except according to a formula or method prescribed by the board of directors;
(2) approve or propose to members action requiring approval of members; or
(3) fill vacancies on the board of directors or any of its committees. (Added 2011, No. 84 (Adj. Sess.), § 1, eff. April 20, 2012.)
2023 Vermont Statutes › Title 11C - Mutual Benefit Enterprises › Chapter 8 - Directors and Officers › § 818. Standards of conduct and liability

§ 818. Standards of conduct and liability
(a) A director shall discharge his or her duties as a director, including the director’s duties as a member of a committee:
(1) in good faith;
(2) with the care that an ordinarily prudent person in a like position would exercise under similar circumstances; and
(3) in a manner the director reasonably believes to be in the best interests of the enterprise.
(b) In discharging his or her duties, a director is entitled to rely on information, opinions, reports, or statements, including financial statements and other financial data, if prepared or presented by:
(1) one or more officers or employees of the enterprise whom the director reasonably believes to be reliable and competent in the matters presented;
(2) legal counsel, public accountants, or other persons as to matters the director reasonably believes are within the person’s professional or expert competence; or
(3) a committee of the board of directors of which the director is not a member if the director reasonably believes the committee merits confidence.
(c) A director is not acting in good faith if he or she has knowledge concerning the matter in question that makes reliance permitted by subsection (b) of this section unwarranted.
(d) A director is not liable for any action taken as a director or any failure to take any action if the director performed the duties of his or her office in compliance with this section. (Added 2011, No. 84 (Adj. Sess.), § 1, eff. April 20, 2012.)
2023 Vermont Statutes › Title 11C - Mutual Benefit Enterprises › Chapter 8 - Directors and Officers › § 819a. Judicial action

§ 819a. Judicial action
(a) A transaction effected or proposed to be effected by the enterprise, or by an entity controlled by the enterprise, may not be the subject of equitable relief or give rise to an award of damages or other sanctions against a director of the enterprise in a proceeding by a member or by or in the right of the enterprise 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 sanctions against a director of the enterprise in a proceeding by a member or by or in the right of the enterprise on the ground that the director has an interest respecting the transaction if:
(1) the directors’ action respecting the transaction was taken in compliance with section 819b of this title at any time; or
(2) the members’ action respecting the transaction was taken in compliance with section 819c of this title at any time; or
(3) the transaction, judged according to the circumstances at the relevant time, is established to have been fair to the enterprise. (Added 2011, No. 84 (Adj. Sess.), § 1, eff. April 20, 2012.)
2023 Vermont Statutes › Title 11C - Mutual Benefit Enterprises › Chapter 8 - Directors and Officers › § 819b. Directors’ action

§ 819b. Directors’ action
(a) Directors’ action respecting a director’s conflicting interest transaction is effective for purposes of subdivision 819a(b)(1) of this title if the transaction has been authorized by the affirmative vote of a majority but no fewer than two 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:
(1) the qualified directors have deliberated and voted outside the presence of and without the participation of any other director; and
(2) 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 subdivisions 819(5)(E) and (F) of this title 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:
(1) all information required to be disclosed that is not so violative;
(2) the existence and nature of the director’s conflicting interest; and
(3) the nature of the conflicted director’s duty not to disclose the confidential information.
(c) A majority but no fewer than two 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 organization, 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. (Added 2011, No. 84 (Adj. Sess.), § 1, eff. April 20, 2012.)
2023 Vermont Statutes › Title 11C - Mutual Benefit Enterprises › Chapter 8 - Directors and Officers › § 819c. Members’ action

§ 819c. Members’ action
(a) Members’ action respecting a director’s conflicting interest transaction is effective for purposes of subdivision 819a(b)(2) of this title if a majority of the votes cast by the holders of all of the voting power of the members is in favor of the transaction after:
(1) notice to members describing the action to be taken respecting the transaction;
(2) provision to the enterprise of the information referred to in subsection (b) of this section; and
(3) communication of the information that is the subject of required disclosure to the members entitled to vote on the transaction, to the extent the information is not known by them.
(b) A director who has a conflicting interest respecting the transaction shall, before the members’ vote, inform the secretary or other officer or agent of the enterprise authorized to tabulate votes, in writing, of the voting power that the director knows is not qualified voting power under subsection (c) of this section and the identity of the holders of that power.
(c) For purposes of this section, “qualified voting power” means the power entitled to be voted with respect to the transaction except for the voting power that the secretary or other officer or agent of the enterprise authorized to tabulate votes either knows, or under subsection (b) of this section is notified, is held by:
(1) a director who has a conflicting interest respecting the transaction; or
(2) a person related to the director, excluding a person described in subdivision 819(5)(F) of this title.
(d) A majority of the votes entitled to be cast by the holders of all qualified voting power constitutes a quorum for purposes of compliance with this section. Subject to the provisions of subsection (e) of this section, members’ action that otherwise complies with this section is not affected by the presence of holders of voting power that is not qualified voting power.
(e) If a member’s 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 take such action respecting the transaction and the director and may give such effect, if any, to the member’s vote as the court considers appropriate in the circumstances.
(f) Where members’ 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 organization, the bylaws, or a provision of law, independent action to satisfy those authorization requirements shall be taken by the members, in which action voting power that is not qualified voting power may participate. (Added 2011, No. 84 (Adj. Sess.), § 1, eff. April 20, 2012.)
2023 Vermont Statutes › Title 11C - Mutual Benefit Enterprises › Chapter 8 - Directors and Officers › § 820. Other considerations of directors

§ 820. Other considerations of directors
In determining what the director reasonably believes to be in the best interests of the enterprise, a director may consider:
(1) the interests of the enterprise’s employees, suppliers, creditors, and customers;
(2) the economy of the State, region, nation, and community, and societal considerations, including those of any community in which any offices or facilities of the enterprise are located; and
(3) any other factors the director in his or her discretion reasonably considers appropriate in determining what he or she reasonably believes to be in the best interests of the enterprise and the long-term and short-term interests of the enterprise and its members, including the possibility that these interests may be best served by the continued independence of the enterprise. (Added 2011, No. 84 (Adj. Sess.), § 1, eff. April 20, 2012.)
2023 Vermont Statutes › Title 11C - Mutual Benefit Enterprises › Chapter 8 - Directors and Officers › § 821. Right of director or committee member to information

§ 821. Right of director or committee member to information
A director or a member of a committee appointed under section 817 of this title may obtain, inspect, and copy all information regarding the state of activities and financial condition of the mutual benefit enterprise and other information regarding the activities of the enterprise if the information is reasonably related to the performance of the director’s duties as director or the committee member’s duties as a member of the committee. Information obtained in accordance with this section may not be used in any manner that would violate any duty of or to the enterprise. (Added 2011, No. 84 (Adj. Sess.), § 1, eff. April 20, 2012.)
2023 Vermont Statutes › Title 11C - Mutual Benefit Enterprises › Chapter 8 - Directors and Officers › § 822. Appointment and authority of officers

§ 822. Appointment and authority of officers
(a) A mutual benefit enterprise has the officers:
(1) provided in the organic rules; or
(2) established by the board of directors in a manner not inconsistent with the organic rules.
(b) The organic rules may designate or, if the rules do not designate, the board of directors shall designate one of the enterprise’s officers for preparing all records required by section 114 of this title and for the authentication of records.
(c) Unless the organic rules otherwise provide, the board of directors shall appoint the officers of the mutual benefit enterprise.
(d) Officers of a mutual benefit enterprise shall perform the duties the organic rules prescribe or as authorized by the board of directors not in a manner inconsistent with the organic rules.
(e) The election or appointment of an officer of a mutual benefit enterprise does not of itself create a contract between the enterprise and the officer.
(f) Unless the organic rules otherwise provide, an individual may simultaneously hold more than one office in a mutual benefit enterprise. (Added 2011, No. 84 (Adj. Sess.), § 1, eff. April 20, 2012.)
2023 Vermont Statutes › Title 11C - Mutual Benefit Enterprises › Chapter 8 - Directors and Officers › § 823. Resignation and removal of officers

§ 823. Resignation and removal of officers
(a) The board of directors may remove an officer at any time with or without cause.
(b) An officer of a mutual benefit enterprise may resign at any time by giving notice in a record to the enterprise. Unless the notice specifies a later time, the resignation is effective when the notice is given. (Added 2011, No. 84 (Adj. Sess.), § 1, eff. April 20, 2012.)
2023 Vermont Statutes › Title 11C - Mutual Benefit Enterprises › Chapter 9 - Indemnification › § 901. Article definitions

§ 901. Article definitions
In this article:
(1) “Enterprise” includes any enterprise or foreign predecessor entity of an enterprise in a merger or other transaction in which the predecessor’s existence ceased upon the consummation of the transaction.
(2) “Director” means an individual who is or was a director of an enterprise or an individual who, while a director of an enterprise, is or was serving at the enterprise’s request as a director, officer, partner, trustee, employee, or agent of another foreign or domestic enterprise, partnership, joint venture, trust, employee benefit plan, or other enterprise. A director is considered to be serving an employee benefit plan at the enterprise’s request if the director’s duties to the enterprise also impose duties on or otherwise involve services by the director to the plan or to participants in or beneficiaries of the plan. “Director” includes, unless the context requires otherwise, the estate or personal representative of a director.
(3) “Expenses” means the reasonable costs incurred in connection with a proceeding, including reasonable attorney’s fees.
(4) “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.
(5) “Official capacity” means:
(A) When used with respect to a director, the office of director in an enterprise.
(B) When used with respect to an individual other than a director, as contemplated in section 907 of this title, the office in an enterprise held by the officer or the employment or agency relationship undertaken by the employee or agent on behalf of the enterprise. “Official capacity” does not include service for any other foreign or domestic corporation or any enterprise or any partnership, joint venture, trust, employee benefit plan, or other enterprise.
(6) “Party” includes an individual who was, is, or is threatened to be made a named defendant or respondent in a proceeding.
(7) “Proceeding” means any threatened, pending, or completed action, suit, or proceeding, whether civil, criminal, administrative, or investigative and whether formal or informal.
(8) “Special legal counsel” means counsel that has never been an employee of the enterprise and who has not and whose firm has not performed legal services for the enterprise pertaining to the matter for which indemnification is sought for a period of at least two years before retention as special counsel. (Added 2011, No. 84 (Adj. Sess.), § 1, eff. April 20, 2012.)
2023 Vermont Statutes › Title 11C - Mutual Benefit Enterprises › Chapter 9 - Indemnification › § 902. Authority to indemnify

§ 902. Authority to indemnify
(a) Except as provided in subsection (d) of this section, an enterprise may indemnify an individual made a party to a proceeding because the individual is or was a director against liability incurred in the proceeding if:
(1) the director conducted himself or herself in good faith; and
(2) the director reasonably believed:
(A) in the case of conduct in the director’s official capacity with the enterprise, that the director’s conduct was in its best interests; and
(B) in all other cases, that the director’s conduct was at least not opposed to its best interests; and
(3) in the case of any proceeding brought by a governmental entity, the director had no reasonable cause to believe his or her conduct was unlawful, and the director is not finally found to have engaged in a reckless or intentional unlawful act.
(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 subdivision (a)(2)(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) An enterprise may not indemnify a director under this section:
(1) in connection with a proceeding by or in the right of the enterprise in which the director was adjudged liable to the enterprise; or
(2) in connection with any other proceeding charging improper personal benefit to the director, whether or not involving action in the director’s official capacity, in which the director was adjudged liable on the basis that personal benefit was improperly received by the director.
(e) Indemnification permitted under this section in connection with a proceeding by or in the right of the enterprise is limited to reasonable expenses incurred in connection with the proceeding. (Added 2011, No. 84 (Adj. Sess.), § 1, eff. April 20, 2012.)
2023 Vermont Statutes › Title 11C - Mutual Benefit Enterprises › Chapter 9 - Indemnification › § 903. Mandatory indemnification

§ 903. Mandatory indemnification
Unless limited by its articles of organization, an enterprise 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 the director is or was a director of the enterprise against reasonable expenses incurred by the director in connection with the proceeding. (Added 2011, No. 84 (Adj. Sess.), § 1, eff. April 20, 2012.)
2023 Vermont Statutes › Title 11C - Mutual Benefit Enterprises › Chapter 9 - Indemnification › § 904. Advance for expenses

§ 904. Advance for expenses
(a) An enterprise may pay for or reimburse the reasonable expenses incurred by a director who is a party to a proceeding in advance of final disposition of the proceeding if:
(1) the director furnishes the enterprise a written affirmation of his or her good faith belief that the director has met the standard of conduct described in section 902 of this title;
(2) the director furnishes the enterprise a written undertaking, executed personally or on the director’s behalf, to repay the advance if it is ultimately determined that the director did not meet the standard of conduct; and
(3) a determination is made that the facts then known to those making the determination would not preclude indemnification under this article.
(b) The undertaking required by subdivision (a)(2) of this section shall be an unlimited general obligation of the director but need not be secured and may be accepted without reference to financial ability to make repayment.
(c) Determinations and authorizations of payments under this section shall be made in the manner specified in section 906 of this title. (Added 2011, No. 84 (Adj. Sess.), § 1, eff. April 20, 2012.)
2023 Vermont Statutes › Title 11C - Mutual Benefit Enterprises › Chapter 9 - Indemnification › § 905. Court-ordered indemnification

§ 905. Court-ordered indemnification
A director of the enterprise who is a party to a proceeding may apply for indemnification to the court conducting the proceeding or to another court of competent jurisdiction. On receipt of an application, the court after giving any notice the court considers necessary may order indemnification if it determines:
(1) the director is entitled to mandatory indemnification under section 903 of this title, in which case the court shall also order the enterprise to pay the director’s reasonable expenses incurred to obtain court-ordered indemnification; or
(2) the director is fairly and reasonably entitled to indemnification in view of all the relevant circumstances, whether or not the director met the standard of conduct set forth in section 902 of this title or was adjudged liable as described in subsection 902(d), of this title but if the director was adjudged so liable the director’s indemnification is limited to reasonable expenses incurred. (Added 2011, No. 84 (Adj. Sess.), § 1; eff. April 20, 2012.)
2023 Vermont Statutes › Title 11C - Mutual Benefit Enterprises › Chapter 9 - Indemnification › § 906. Determination and authorization of indemnification

§ 906. Determination and authorization of indemnification
(a) Except as provided in section 904 of this title, an enterprise may not indemnify a director under section 902 of this title prior to the final resolution of a proceeding, whether by judgment, order, settlement, conviction, plea, or otherwise and 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 902 of this title.
(b) The determination required by subsection (a) of this section, in accordance with the terms of section 902 of this title, shall be made:
(1) by the board of directors by majority vote of a quorum consisting of directors not at the time parties to the proceeding;
(2) if a quorum cannot be obtained under subdivision (1) of this subsection, by majority vote of a committee duly designated by the board of directors (in which designation directors who are parties may participate), consisting solely of two or more directors not at the time parties to the proceeding;
(3) by written opinion of special legal counsel:
(A) selected by the board of directors or its committee in the manner prescribed in subdivision (1) or (2) of this subsection; or
(B) if a quorum of the board of directors cannot be obtained under subdivision (1) of this subsection and a committee cannot be designated under subdivision (2) of 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 voting power exercised by or under the control of directors who are at the time parties to the proceeding may not be voted on the determination.
(c) Authorization of indemnification and evaluation as to reasonableness of expenses shall be made in the same manner as the determination that indemnification is permissible, except that if the determination is made by special legal counsel, authorization of indemnification and evaluation as to reasonableness of expenses shall be made by those entitled under subdivision (b)(3) of this section to select counsel. (Added 2011, No. 84 (Adj. Sess.), § 1, eff. April 20, 2012.)
2023 Vermont Statutes › Title 11C - Mutual Benefit Enterprises › Chapter 9 - Indemnification › § 907. Indemnification of officers, employees, and agents

§ 907. Indemnification of officers, employees, and agents
Unless an enterprise’s articles of organization limit indemnification of an officer, employee, or agent of the enterprise:
(1) an officer of the enterprise who is not a director is entitled to mandatory indemnification under section 903 of this title and is entitled to apply for court-ordered indemnification under section 905 of this title, in each case to the same extent as a director;
(2) the enterprise may indemnify and advance expenses under this article to an officer, employee, or agent of the enterprise who is not a director to the same extent as a director. (Added 2011, No. 84 (Adj. Sess.), § 1, eff. April 20, 2012.)
2023 Vermont Statutes › Title 11C - Mutual Benefit Enterprises › Chapter 9 - Indemnification › § 908. Insurance

§ 908. Insurance
An enterprise may purchase and maintain insurance on behalf of an individual who is or was a director, officer, employee, or agent of the enterprise or who, while a director, officer, employee, or agent of the enterprise, is or was serving at the request of the enterprise as a director, officer, partner, trustee, employee, or agent of another foreign or domestic enterprise, partnership, joint venture, trust, employee benefit plan, or other enterprise against liability asserted against or incurred by him or her in that capacity or arising from his or her status as a director, officer, employee, or agent, whether or not the enterprise would have power to indemnify him or her against the same liability under section 902 or 903 of this title. (Added 2011, No. 84 (Adj. Sess.), § 1, eff. April 20, 2012.)
2023 Vermont Statutes › Title 11C - Mutual Benefit Enterprises › Chapter 9 - Indemnification › § 909. Application of article

§ 909. Application of article
(a) A provision treating an enterprise’s indemnification of or advance for expenses to directors that is contained in its articles of organization, bylaws, a resolution of its members or board of directors, or in a contract or otherwise is valid only if and to the extent the provision is consistent with this article. If articles of organization limit indemnification or advance for expenses, indemnification and advance for expenses are valid only to the extent consistent with the articles.
(b) This article does not limit an enterprise’s power to pay or reimburse expenses incurred by a director in connection with the director’s appearance as a witness in a proceeding at a time when the director has not been made a named defendant or respondent to the proceeding. (Added 2011, No. 84 (Adj. Sess.), § 1, eff. April 20, 2012.)
2023 Vermont Statutes › Title 11C - Mutual Benefit Enterprises › Chapter 10 - Contributions, Allocations, and Distributions › § 1001. Members’ contributions

§ 1001. Members’ contributions
The organic rules shall establish the amount, manner, or method of determining any contribution requirements for members or shall authorize the board of directors to establish the amount, manner, or other method of determining any contribution requirements for members. (Added 2011, No. 84 (Adj. Sess.), § 1, eff. April 20, 2012.)
2023 Vermont Statutes › Title 11C - Mutual Benefit Enterprises › Chapter 10 - Contributions, Allocations, and Distributions › § 1002. Contribution and valuation

§ 1002. Contribution and valuation
(a) Unless the organic rules otherwise provide, the contributions of a member to a mutual benefit enterprise may consist of tangible or intangible property or other benefit to the enterprise, including money, labor, or other services performed or to be performed, promissory notes, other agreements to contribute money or property, and contracts to be performed.
(b) The receipt and acceptance of contributions and the valuation of contributions shall be reflected in a mutual benefit enterprise’s records.
(c) Unless the organic rules otherwise provide, the board of directors shall determine the value of a member’s contributions received or to be received, and the determination by the board of directors of valuation is conclusive for purposes of determining whether the member’s contribution obligation has been met. (Added 2011, No. 84 (Adj. Sess.), § 1, eff. April 20, 2012.)
2023 Vermont Statutes › Title 11C - Mutual Benefit Enterprises › Chapter 10 - Contributions, Allocations, and Distributions › § 1003. Contribution agreements

§ 1003. Contribution agreements
(a) Except as otherwise provided in the agreement, the following rules apply to an agreement made by a person before formation of a mutual benefit enterprise to make a contribution to the enterprise:
(1) The agreement is irrevocable for six months after the agreement is signed by the person unless all parties to the agreement consent to the revocation.
(2) If a person does not make a required contribution:
(A) the person is obligated, at the option of the enterprise, once formed, to contribute money equal to the value of that part of the contribution that has not been made, and the obligation may be enforced as a debt to the enterprise; or
(B) the enterprise, once formed, may rescind the agreement if the debt remains unpaid more than 20 days after the enterprise demands payment from the person and, upon rescission, the person has no further rights or obligations with respect to the enterprise.
(b) Unless the organic rules or an agreement to make a contribution to a mutual benefit enterprise otherwise provide, if a person does not make a required contribution to an enterprise, the person or the person’s estate is obligated, at the option of the enterprise, to contribute money equal to the value of the part of the contribution which has not been made. (Added 2011, No. 84 (Adj. Sess.), § 1, eff. April 20, 2012.)
2023 Vermont Statutes › Title 11C - Mutual Benefit Enterprises › Chapter 10 - Contributions, Allocations, and Distributions › § 1004. Allocations of profits and losses

§ 1004. Allocations of profits and losses
(a) The organic rules may provide for allocating profits of a mutual benefit enterprise among members, among persons that are not members but conduct business with the enterprise, to an unallocated account, or to any combination thereof. Unless the organic rules otherwise provide, losses of the enterprise shall be allocated in the same proportion as profits.
(b) Unless the organic rules otherwise provide, all profits and losses of a mutual benefit enterprise shall be allocated to patron members.
(c) If a mutual benefit enterprise has investor members, the organic rules may not reduce the allocation to patron members to less than 50 percent of profits. For purposes of this subsection, the following rules apply:
(1) amounts paid or due on contracts for the delivery to the enterprise by patron members of products, goods, or services are not considered amounts allocated to patron members; and
(2) amounts paid, due, or allocated to investor members as a stated fixed return on equity are not considered amounts allocated to investor members.
(d) Unless prohibited by the organic rules, in determining the profits for allocation under subsections (a), (b), and (c) of this section, the board of directors may first deduct and set aside a part of the profits to create or accumulate:
(1) an unallocated capital reserve; and
(2) reasonable unallocated reserves for specific purposes, including expansion and replacement of capital assets; education, training, cooperative development; creation and distribution of information concerning principles of cooperation; and community responsibility.
(e) Subject to subsections (b) and (f) of this section and the organic rules, the board of directors shall allocate the amount remaining after any deduction or setting aside of profits for unallocated reserves under subsection (d) of this section:
(1) to patron members in the ratio of each member’s patronage to the total patronage of all patron members during the period for which allocations are to be made; and
(2) to investor members, if any, in the ratio of each investor member’s contributions to the total contributions of all investor members.
(f) For purposes of allocation of profits and losses or specific items of profits or losses of a mutual benefit enterprise to members, the organic rules may establish allocation units or methods based on separate classes of members or, for patron members, on class, function, division, district, department, allocation units, pooling arrangements, members’ contributions, or other equitable methods. (Added 2011, No. 84 (Adj. Sess.), § 1, eff. April 20, 2012.)
2023 Vermont Statutes › Title 11C - Mutual Benefit Enterprises › Chapter 10 - Contributions, Allocations, and Distributions › § 1005. Distributions

§ 1005. Distributions
(a) Unless the organic rules otherwise provide and subject to section 1007 of this title, the board of directors may authorize, and the mutual benefit enterprise may make, distributions to members.
(b) Unless the organic rules otherwise provide, distributions to members may be made in any form, including money, capital credits, allocated patronage equities, revolving fund certificates, and the mutual benefit enterprise’s own or other securities. (Added 2011, No. 84 (Adj. Sess.), § 1, eff. April 20, 2012.)
2023 Vermont Statutes › Title 11C - Mutual Benefit Enterprises › Chapter 10 - Contributions, Allocations, and Distributions › § 1006. Redemption or repurchase

§ 1006. Redemption or repurchase
Property distributed to a member by a mutual benefit enterprise, other than money, may be redeemed or repurchased as provided in the organic rules but a redemption or repurchase may not be made without authorization by the board of directors. The board may withhold authorization for any reason in its sole discretion. A redemption or repurchase is treated as a distribution for purposes of section 1007 of this title. (Added 2011, No. 84 (Adj. Sess.), § 1, eff. April 20, 2012.)
2023 Vermont Statutes › Title 11C - Mutual Benefit Enterprises › Chapter 10 - Contributions, Allocations, and Distributions › § 1007. Limitations on distributions

§ 1007. Limitations on distributions
(a) A mutual benefit enterprise may not make a distribution if, after the distribution:
(1) the enterprise would not be able to pay its debts as they become due in the ordinary course of the enterprise’s activities; or
(2) the enterprise’s assets would be less than the sum of its total liabilities.
(b) A mutual benefit enterprise may base a determination that a distribution is not prohibited under subsection (a) of this section on financial statements prepared on the basis of accounting practices and principles that are reasonable in the circumstances or on a fair valuation or other method that is reasonable in the circumstances.
(c) Except as otherwise provided in subsection (d) of this section, the effect of a distribution allowed under subsection (b) of this section is measured:
(1) in the case of distribution by purchase, redemption, or other acquisition of financial rights in the mutual benefit enterprise, as of the date money or other property is transferred or debt is incurred by the enterprise; and
(2) in all other cases, as of the date:
(A) the distribution is authorized, if the payment occurs not later than 120 days after that date; or
(B) the payment is made, if payment occurs more than 120 days after the distribution is authorized.
(d) If indebtedness is issued as a distribution, each payment of principal or interest on the indebtedness is treated as a distribution, the effect of which is measured on the date the payment is made.
(e) For purposes of this section, “distribution” does not include reasonable amounts paid to a member in the ordinary course of business as payment or compensation for commodities, goods, past or present services, or reasonable payments made in the ordinary course of business under a bona fide retirement or other benefits program. (Added 2011, No. 84 (Adj. Sess.), § 1, eff. April 20, 2012.)
2023 Vermont Statutes › Title 11C - Mutual Benefit Enterprises › Chapter 10 - Contributions, Allocations, and Distributions › § 1008. Liability for improper distributions; limitation of action

§ 1008. Liability for improper distributions; limitation of action
(a) A director who consents to a distribution that violates section 1007 of this title is personally liable to the mutual benefit enterprise for the amount of the distribution that exceeds the amount that could have been distributed without the violation if it is established that in consenting to the distribution the director failed to comply with sections 818-819c of this title.
(b) A member or transferee of financial rights that received a distribution knowing that the distribution was made in violation of section 1007 of this title is personally liable to the mutual benefit enterprise to the extent the distribution exceeded the amount that should have been properly paid.
(c) A director against whom an action is commenced under subsection (a) of this section may:
(1) implead in the action any other director who is liable under subsection (a) of this section and compel contribution from the person; and
(2) implead in the action any person that is liable under subsection (b) of this section and compel contribution from the person in the amount the person received as described in subsection (b) of this section.
(d) An action under this section is barred if it is commenced later than two years after the distribution. (Added 2011, No. 84 (Adj. Sess.), § 1, eff. April 20, 2012.)
2023 Vermont Statutes › Title 11C - Mutual Benefit Enterprises › Chapter 11 - Dissociation › § 1102. Effect of dissociation as member

§ 1102. Effect of dissociation as member
(a) Upon a member’s dissociation:
(1) subject to section 1103 of this title, the person has no further rights as a member; and
(2) subject to section 1103 of this title and article 16 of this title, any financial rights owned by the person in the person’s capacity as a member immediately before dissociation are owned by the person as a transferee.
(b) A person’s dissociation as a member does not of itself discharge the person from any debt, obligation, or liability to the mutual benefit enterprise that the person incurred under the organic rules, by contract, or by other means while a member. (Added 2011, No. 84 (Adj. Sess.), § 1, eff. April 20, 2012.)
2023 Vermont Statutes › Title 11C - Mutual Benefit Enterprises › Chapter 11 - Dissociation › § 1103. Power of estate of member

§ 1103. Power of estate of member
Unless the organic rules provide for greater rights, if a member is dissociated because of death or is expelled by reason of being adjudged incompetent, the member’s personal representative or other legal representative may exercise the rights of a transferee of the member’s financial rights and, for purposes of settling the estate of a deceased member, may exercise the informational rights of a current member to obtain information under section 505 of this title. (Added 2011, No. 84 (Adj. Sess.), § 1, eff. April 20, 2012.)
2023 Vermont Statutes › Title 11C - Mutual Benefit Enterprises › Chapter 12 - Dissolution › § 1201. Dissolution and winding up

§ 1201. Dissolution and winding up
A mutual benefit enterprise is dissolved only as provided in this article and upon dissolution winds up in accordance with this article. (Added 2011, No. 84 (Adj. Sess.), § 1, eff. April 20, 2012.)
2023 Vermont Statutes › Title 11C - Mutual Benefit Enterprises › Chapter 12 - Dissolution › § 1202. Nonjudicial dissolution

§ 1202. Nonjudicial dissolution
Except as otherwise provided in sections 1203 and 1211 of this title, a mutual benefit enterprise is dissolved and its activities shall be wound up:
(1) upon the occurrence of an event or at a time specified in the articles of organization;
(2) upon the action of the enterprise’s organizers, board of directors, or members under section 1204 or 1205 of this title; or
(3) 90 days after the dissociation of a member, which results in the enterprise having one patron member and no other members, unless the enterprise:
(A) has a sole member that is a cooperative; or
(B) not later than the end of the 90-day period, admits at least one member in accordance with the organic rules and has at least two members, at least one of which is a patron member. (Added 2011, No. 84 (Adj. Sess.), § 1, eff. April 20, 2012.)