Alabama § 10A-1-6.23 Manner for Determining Permissive Indemnification

Alabama Statutes

§ 10A-1-6.23 — Manner for Determining Permissive Indemnification

Alabama § 10A-1-6.23

JurisdictionAlabama

Title 10AAlabama Business and Nonprofit Entities Code

Ch. 1General Provisions

Art. 6Indemnification and Insurance

Div. CPermissive Indemnification and Advancement of Expenses

This text of Alabama § 10A-1-6.23 (Manner for Determining Permissive Indemnification) is published on Counsel Stack Legal Research, covering Alabama primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook

Ala. Code § 10A-1-6.23 (2026).

Text

(a)Except as otherwise provided by subsections (b) and (c), the determinations required under Section 10A-1-6.21(a) must be made by:

(1)a majority vote of a quorum composed of the governing persons who at the time of the vote are disinterested and independent;

(2)if a quorum described by subsection (a)(1) cannot be obtained, a majority vote of a committee of the board of directors of the enterprise designated to act in the matter by a majority vote of the governing persons and composed of at least one governing person who at the time of the vote is disinterested and independent;

(3)special legal counsel selected by the board of directors of the enterprise, or selected by a committee of the board of directors, by vote in accordance with subdivision (1) or subdivision (2) or, if a quorum

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(a) Except as otherwise provided by subsections (b) and (c), the determinations required under Section 10A-1-6.21(a) must be made by:
(1) a majority vote of a quorum composed of the governing persons who at the time of the vote are disinterested and independent;
(2) if a quorum described by subsection (a)(1) cannot be obtained, a majority vote of a committee of the board of directors of the enterprise designated to act in the matter by a majority vote of the governing persons and composed of at least one governing person who at the time of the vote is disinterested and independent;
(3) special legal counsel selected by the board of directors of the enterprise, or selected by a committee of the board of directors, by vote in accordance with subdivision (1) or subdivision (2) or, if a quorum described by subdivision (1) cannot be obtained and a committee described by subdivision (2) cannot be established, by a majority vote of the governing persons of the enterprise;
(4) a majority of the membership interests that are entitled to vote on the transactions by virtue of not being owned by or under control of the governing persons constitutes a quorum for purposes of taking action under this section; or
(5) a unanimous vote of the owners or members of the enterprise.
(b) If special legal counsel determines under subsection (a)(3) that a person meets the standard under Section 10A-1-6.21(a)(1), the special legal counsel shall determine whether the amount of expenses is reasonable under Section 10A-1-6.21(a)(2) but may not determine whether indemnification should be paid under Section 10A-1-6.21(a)(3). The determination whether indemnification should be paid must be made in a manner specified by subsection (a)(1), (2), (4), or (5).
(c) A provision contained in the governing documents of the enterprise, a resolution of the owners, members, or governing authority, or an agreement that requires the indemnification of a person who meets the standard under Section 10A-1-6.21(a)(1) constitutes a determination under Section 10A-1-6.21(a)(3) that indemnification should be paid even though the provision may not have been adopted or authorized in the same manner as the determinations required under Section 10A-1-6.21(a). The determinations required under Section 10A-1-6.21(a)(1) and (2) must be made in a manner provided by subsection (a).