TITLE 14
CORPORATIONS, PARTNERSHIPS, AND ASSOCIATIONS
Section 3. Nonprofit Corporations, 14-3-101 through 14-3-1703.
ARTICLE 8
DIRECTORS AND OFFICERS
14-3-858. Applicability of indemnification provisions.
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A corporation may, by a provision in its articles of incorporation or bylaws or in a resolution adopted or a contract approved by its board of directors or members, obligate itself in advance of the act or omission giving rise to a proceeding to provide indemnification or advance funds to pay for or reimburse expenses consistent with this part. Any such 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 Code Section 14-3-853 to the fullest extent permitted by law, unless the provision specifically provides otherwise. Any such provision existing on July 1, 1991, shall be valid to the extent it does not provide for broader indemnification than is allowed under this part.
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Any provision pursuant to subsection (a) of this Code section 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 specifically provided. Any provision for indemnification or advance for expenses in the articles of incorporation, bylaws, or a resolution of the board of directors, members, shareholders, partners, or, in the case of limited liability companies, members or managers of a predecessor of the corporation or other entity 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 paragraph (3) of Code Section 14-3-1105.
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A corporation may, by a provision in its articles of incorporation, limit any of the rights to indemnification or advance for expenses created by or pursuant to this part.
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This part does not limit a corporation's power to pay or reimburse expenses incurred by a director or an officer in connection with his or her appearance as a witness in a proceeding at a time when he or she is not a party.
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Except as expressly provided in Code Section 14-3-856, this part does not limit a corporation's power to indemnify, advance expenses to, or provide or maintain insurance on behalf of an employee or agent.
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The provisions of this part may be incorporated by reference into a corporation's articles of incorporation, bylaws, or a resolution of its members or board of directors. In such case, any such provision shall subsequently be deemed amended to conform with any amendments to this part, unless such provision otherwise expressly provides.
(Code 1981, §14-3-858, enacted by Ga. L. 1991, p. 465, § 1; Ga. L. 1992, p. 6, § 14; Ga. L. 1997, p. 1165, § 14; Ga. L. 2004, p. 508, § 45.)
This section varies from its Business Code counterpart, section 14-2-859, in two respects.
First, subsection (a) expressly validates indemnification provisions existing on the effective date of this Code to the extent they do not provide for broader indemnification than is permitted under this part.
This addition is intended to clarify that corporations that have already amended their articles or bylaws to provide for broad indemnification need not enact another amendment to conform with this Code.
Subsection (c) has no counterpart in the Business Code.
It is intended to prevent unnecessary expense that may be involved in attempting to update and conform indemnification provisions to changes in the Code.
This subsection permits incorporation of this part by reference in a corporation's articles or bylaws.
Note to 1997 Amendment
Amendments were made to conform the definitions to changes made in the Business Corporation Code in 1996.
Comments to the 1996 amendments to the comparable provisions of the Business Corporation Code are applicable to these provisions.
OPINIONS OF THE ATTORNEY GENERAL
Conflict of interest disclosure requirements do not affect Board of Regents' employees.
- Provisions of the Nonprofit Corporation Code, O.C.G.A.
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14-3-101 et seq., placing certain disclosure requirements upon directors and officers of nonprofit corporations do not affect, limit or modify the proviso in O.C.G.A.
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45-10-23(a) negating a "conflict of interest" situation for Board of Regents' employees who serve on the governing boards of foundations and associations supporting higher education institutions. 1995 Op. Att'y Gen. No. 95-36.
