Alabama § 10A-2A-8.51 Permissible Indemnification

Alabama Statutes

§ 10A-2A-8.51 — Permissible Indemnification

Alabama § 10A-2A-8.51

JurisdictionAlabama

Title 10AAlabama Business and Nonprofit Entities Code

Ch. 2AAlabama Business Corporation Law

Art. 8Directors and Officers

Div. EIndemnification and Advance for Expenses

This text of Alabama § 10A-2A-8.51 (Permissible 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-2A-8.51 (2026).

Text

(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:

(1)(i) the director conducted himself or herself in good faith; and

(ii)the director reasonably believed:

(A)in the case of conduct in an official capacity, that his or her conduct was in the best interests of the corporation; and

(B)in all other cases, that his or her conduct was at least not opposed to the best interests of the corporation; and

(iii)in the case of any criminal proceeding, the director had no reasonable cause to believe his or her conduct was unlawful; or

(2)the director engaged in conduct for which broader indemnification has been made permissible or obligator

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(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:
(1) (i) the director conducted himself or herself in good faith; and
(ii) the director reasonably believed:
(A) in the case of conduct in an official capacity, that his or her conduct was in the best interests of the corporation; and
(B) in all other cases, that his or her conduct was at least not opposed to the best interests of the corporation; and
(iii) in the case of any criminal proceeding, the director had no reasonable cause to believe his or her conduct was unlawful; or
(2) the director engaged in conduct for which broader indemnification has been made permissible or obligatory under a provision of the certificate of incorporation (as authorized by Section 10A-2A-2.02(b)(5)).
(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 the beneficiaries of, the plan is conduct that satisfies the requirement of subsection (a)(1)(ii)(B).
(c) The termination of a proceeding by judgment, order, settlement, or conviction, or upon a plea of nolo contendere or its equivalent, is not, of itself, determinative that the director did not meet the relevant standard of conduct described in this section.
(d) Unless ordered by a court under Section 10A-2A-8.54(a)(3), a corporation may not indemnify a director:
(1) in connection with a proceeding by or in the right of the corporation, except for expenses incurred in connection with the proceeding if it is determined that the director has met the relevant standard of conduct under subsection (a); or
(2) in connection with any proceeding with respect to conduct for which the director was adjudged liable on the basis of receiving a financial benefit to which he or she was not entitled, regardless of whether it involved action in the director’s official capacity.