§ 10A-2A-8.58 — Variation by Corporate Action; Application of Division

Alabama § 10A-2A-8.58

• Jurisdiction: Alabama
• Title 10A: Alabama Business and Nonprofit Entities Code
• Ch. 2A: Alabama Business Corporation Law
• Art. 8: Directors and Officers
• Div. E: Indemnification and Advance for Expenses

Text

(a) A corporation may, by a provision in its certificate of incorporation, bylaws, or in a resolution adopted or a contract approved by the board of directors or stockholders, obligate itself in advance of the act or omission giving rise to a proceeding to provide indemnification in accordance with Section 10A-2A-8.51 or advance funds to pay for or reimburse expenses in accordance with Section 10A-2A-8.53. Any obligatory provision shall be deemed to satisfy the requirements for authorization referred to in Section 10A-2A-8.53(c) and in Section 10A-2A-8.55(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 Section 10A-2A-8.53 to the fullest extent permitted by law, unless the provision expressly provides otherwise.
(b) A right of indemnification or to advances for expenses created by this Division E of this Article 8 or under subsection (a) and in effect at the time of an act or omission shall not be eliminated or impaired with respect to the act or omission by an amendment of the certificate of incorporation, bylaws, or a resolution of the board of directors or stockholders, adopted after the occurrence of the act or omission, unless, in the case of a right created under subsection (a), the provision creating the right and in effect at the time of the act or omission explicitly authorizes elimination or impairment after the act or omission has occurred.
(c) Any provision pursuant to subsection (a) 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 expressly provided. Any provision for indemnification or advance for expenses in the certificate of incorporation, bylaws, or a resolution of the board of directors or stockholders 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 Section 10A-2A-11.07(a)(4).
(d) Subject to subsection (b), a corporation may, by a provision in its certificate of incorporation, limit any of the rights to indemnification or advance for expenses created by or pursuant to this Division E of this Article 8.
(e) This Division E of this Article 8 does not limit a corporation’s power to pay or reimburse expenses incurred by a director or an officer in connection with appearing as a witness in a proceeding at a time when he or she is not a party.
(f) This Division E of this Article 8 does not limit a corporation’s power to indemnify, advance expenses to or provide or maintain insurance on behalf of an employee or agent.

Legislative History

(Act 2019-94, §1.)