(a) A corporation may indemnify and advance expenses under this Division E of this Article 8 to an officer who is a party to a proceeding because he or she is an officer

Attorney's Note

Under the Alabama Code, punishments for crimes depend on the classification. In the case of this section:
ClassPrisonFine
Violationup to 30 daysup to $200
For details, see Ala. Code § 13A-5-7
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Terms Used In Alabama Code 10A-2A-8.56

  • certificate of incorporation: as used in this chapter is synonymous to the term "certificate of formation" used in Chapter 1. See Alabama Code 10A-2A-1.40
  • Contract: A legal written agreement that becomes binding when signed.
  • Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
  • Indemnification: In general, a collateral contract or assurance under which one person agrees to secure another person against either anticipated financial losses or potential adverse legal consequences. Source: FDIC
(1) to the same extent as a director; and
(2) if he or she is an officer but not a director, to such further extent as may be provided by the certificate of incorporation or the bylaws, or by a resolution adopted or a contract approved by the board of directors or stockholders, except for

(i) liability in connection with a proceeding by or in the right of the corporation other than for expenses incurred in connection with the proceeding, or
(ii) liability arising out of conduct that constitutes

(A) receipt by the officer of a financial benefit to which he or she is not entitled,
(B) an intentional infliction of harm on the corporation or the stockholders, or
(C) an intentional violation of criminal law.
(b) Subsection (a)(2) shall apply to an officer who is also a director if he or she is made a party to the proceeding based on an act or omission solely as an officer.
(c) An officer who is not a director is entitled to mandatory indemnification under Section 10A-2A-8.52, and may apply to a court under Section 10A-2A-8.54 for indemnification or an advance for expenses, in each case to the same extent to which a director may be entitled to indemnification or advance for expenses under those sections.
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