2015 Code of Alabama
Title 10A - ALABAMA BUSINESS AND NONPROFIT ENTITIES CODE.
Chapter 2 - BUSINESS CORPORATIONS.
Article 8 - Directors and Officers.
Division E - Indemnification.
Section 10A-2-8.55 - Determination and authorization of indemnification.
(a) A corporation may not indemnify a director under Section 10A-2-8.51 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 10A-2-8.51.
(b) The determination 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), 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 special legal counsel;
(i) Selected by the board of directors or its committee in the manner prescribed in subdivision (1) or (2); or
(ii) If a quorum of the board of directors cannot be obtained under subdivision (1) and a committee cannot be designated under subdivision (2), selected by majority vote of the full board of directors, in which selection directors who are parties may participate; or
(4) By the shareholders, but shares owned by or voted under the control of directors who are at the time parties to the proceeding may not be voted on the determination. A majority of the shares that are entitled to vote on the transaction by virtue of not being owned by or under the control of the directors constitutes a quorum for the purpose of taking action under this section.
(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 subsection (b)(3) to select counsel.
(Acts 1994, No. 94-245, p. 343, §1; §10-2B-8.55; amended and renumbered by Act 2009-513, p. 967, §124.)Disclaimer: These codes may not be the most recent version. Alabama may have more current or accurate information. We make no warranties or guarantees about the accuracy, completeness, or adequacy of the information contained on this site or the information linked to on the state site. Please check official sources.
