CODE OF VIRGINIA

CERTIFICATE OF INCORPORATION OR CHARTER; ADDITION AND WITHDRAWAL OF MEMBERS;
BOARD OF DIRECTORS; INDEMNIFICATION OF DIRECTORS, OFFICERS OR EMPLOYEES (§
15.2-5405)

A. After adoption or approval of the ordinances or agreement providing for the
creation of an authority, the articles of incorporation of the authority shall
be filed with the State Corporation Commission. If the State Corporation
Commission finds that the articles of incorporation conform to law, and the
creation of such an authority is in the public interest, a certificate of
incorporation or charter shall forthwith be issued, and thereupon the authority
shall constitute a political subdivision of the Commonwealth and a body politic
and corporate and shall be deemed to have been lawfully and properly created,
established and authorized to exercise the powers granted under this chapter.In
any suit, action or proceeding involving the validity or enforcement of, or
relating to, any contract or action of the authority, the authority, in the
absence of establishing fraud in the premises, shall be conclusively deemed to
have been established in accordance with the provisions of this chapter upon
proof of the issuance of the aforesaid certificate by the State Corporation
Commission. A copy of such certificate, duly certified by the State Corporation
Commission, shall be admissible in evidence in any such suit, action or
proceeding, and shall be conclusive evidence of the filing and contents
thereof.Notice of the issuance of such certificate by the State Corporation
Commission shall be given to each of the member governmental units of the
authority by the State Corporation Commission.

B. After the creation of an authority, any other governmental unit may become a
member thereof upon application to such authority after the adoption of an
ordinance by the governing body of the governmental unit authorizing such
governmental unit to become a member of the authority, and with the unanimous
consent of the members of the authority evidenced by ordinances of their
respective governing bodies. Except for an authority created by a governmental
unit exempt from the referendum requirement of § 15.2-5403, any governmental
unit may withdraw from an authority; however, all contractual rights acquired
and obligations incurred while a governmental unit was a member shall remain in
full force and effect.In the case of the joining of a new member governmental
unit to an authority, or in the case of the withdrawal of an existing member
governmental unit from an authority, the articles of incorporation of the
authority shall be amended to evidence such joinder or withdrawal, as the case
may be, and such amendment shall be filed with the State Corporation Commission.
Thereupon, the State Corporation Commission shall issue a certificate of joinder
or withdrawal, as the case may be, to which shall be attached a copy of the
amendment to the articles of incorporation. The joining or withdrawal shall
become effective upon the issuance of such certificate.

C. The powers of each authority created by the governing body of a single
governmental unit shall be exercised by a board of five directors, or, at the
option of the governing body of the particular governmental unit, a number of
directors equal to the number of persons on the governing body of the
governmental unit. The powers of each authority created by the governing bodies
of two or more governmental units shall be exercised by a board of such number
of directors specified in its articles of incorporation, which shall be not less
than one member for each governmental unit and not less than a total of five
directors. The directors of an authority shall be selected in the manner and for
the terms provided by the ordinance of a single governmental unit, or the
concurrent ordinances or agreement of two or more of the governmental units
creating the authority. No director shall be appointed for a term of more than
four years but a director may be reappointed and succeed himself or herself.
Directors shall hold office until their successors have been appointed. When one
or more additional governmental units join an existing authority, each of such
joining governmental units shall appoint not less than one director of the
authority.The directors of the authority shall elect one of their number
chairman of the authority, and shall elect a secretary and treasurer and such
other officers as are deemed necessary who need not be directors of the
authority. The offices of secretary and treasurer may be combined. A majority of
the directors of the authority shall constitute a quorum, and the vote of a
majority of the directors shall be necessary for any action taken by the
authority. No vacancy in the board of directors of the authority shall impair
the right of a quorum to exercise all the rights and perform all the duties of
the authority. If a vacancy occurs by reason of the death, disqualification or
resignation of a director, the governing body of the governmental unit which
appointed such director shall appoint a successor to fill his unexpired term. In
the event of a vacancy in the board of directors for any reason, a successor
shall be appointed within six months of the date on which such vacancy
occurred.Whenever a governmental unit withdraws from an authority, the term of
any director appointed to the board of directors from such governmental unit
shall immediately terminate, and, if such termination results in less than five
directors of the authority, additional directors shall be selected in the manner
and for the terms provided by the ordinances or agreement creating the authority
so as to comply with the requirements of this section. No elected official of a
member governmental unit shall be a director of an authority. No person shall
serve as a director unless he resides within the governmental unit which has
appointed him. Directors shall receive such compensation as shall be fixed from
time to time by resolution or resolutions of the governing body or bodies of the
member governmental unit or units of the authority, and shall be reimbursed for
any actual expenses necessarily incurred in the performance of their duties.

D. An authority may defend, indemnify against loss or liability and save
harmless any of its directors, officers or employees whenever a claim or demand
is made or threatened, or whenever proceeded against in any investigation or
before any court, board, commission or other public body to defend or maintain
his official position or a position taken in the course of the execution of his
duties or because of any act or omission arising out of the performance of his
official duties if the director, officer or employee acted in good faith and in
a manner he reasonably believed to be in, or not opposed to, the best interests
of the authority. If it is ultimately determined that a director, officer or
employee of an authority is entitled to be indemnified by the authority as
authorized in this section, he shall be indemnified against expenses, including
attorneys’ fees, actually and reasonably incurred by him in connection
therewith. Expenses, including attorneys’ fees, incurred in defending a
civil action, suit or proceeding may be paid by an authority in advance of the
final disposition of such action, suit or proceeding as authorized in the manner
provided in this section upon receipt of an undertaking by or on behalf of the
director, officer or employee, to repay such amount unless it shall ultimately
be determined that he is entitled to be indemnified by the authority as
authorized in this section.The indemnification provided by this section shall
not be deemed exclusive of any other rights to which those indemnified may be
entitled under any bylaw, agreement, or otherwise, both as to action in his
official capacity and as to action in another capacity while holding such
office, and shall continue as to a person who has ceased to be a director,
officer or employee, and shall inure to the benefit of the heirs, executors and
administrators of such person. An authority shall have power to purchase and
maintain insurance on behalf of any person who is or was a director, officer or
employee of the authority against any liability asserted against him and
incurred by him in any such capacity or arising out of his status as such,
whether or not the authority would have the power to indemnify him against such
liability under the provisions of this section.

HISTORY: 1979, c. 416, § 15.1-1608; 1997, c. 587; 2006, cc. 929, 941.