North Carolina § 55A-8-57 - Additional indemnification and insurance.

§ 55A-8-57. Additional indemnification and insurance.

In addition to and separate and apart from the indemnification provided for in G.S. 55A-8-51, 55A-8-52, 55A-8-54, 55A-8-55, and 55A-8-56, a corporation may in its articles of incorporation or bylaws or by contract or resolution indemnify or agree to indemnify any one or more of its directors, officers, employees, or agents against liability and expenses in any proceeding (including without limitation a proceeding brought by or on behalf of the corporation itself) arising out of their status as such or their activities in any of the foregoing capacities; provided, however, that a corporation shall not indemnify or agree to indemnify a person against liability or expenses the person may incur on account of his activities which were at the time taken, known, or believed by the person to be clearly in conflict with the best interests of the corporation or if the person received an improper personal benefit. A corporation may likewise and to the same extent indemnify or agree to indemnify any person who, at the request of the corporation, is or was serving as a director, officer, partner, trustee, employee, or agent of another foreign or domestic corporation, partnership, joint venture, trust, or other enterprise or as a trustee or administrator under an employee benefit plan. Any provision in any articles of incorporation, bylaw, contract, or resolution permitted under this section may include provisions for recovery from the corporation of reasonable costs, expenses, and attorneys' fees in connection with the enforcement of rights to indemnification granted therein and may further include provisions establishing reasonable procedures for determining and enforcing the rights granted therein. A corporation may purchase and maintain insurance on behalf of an individual who is or was a director, officer, employee, or agent of the corporation, or who, while a director, officer, employee, or agent of the corporation, is or was serving at the request of the corporation as a director, officer, partner, trustee, employee, or agent of another foreign or domestic corporation, partnership, joint venture, trust, employee benefit plan, or other enterprise, against liability asserted against or incurred by him in that capacity or arising from his status as a director, officer, employee, or agent, whether or not the corporation would have power to indemnify him against the same liability under any provision of this Chapter. History (1977, c. 236, s. 2; 1985 (Reg. Sess., 1986), c. 801, ss. 15, 16; 1993, c. 398, s. 1.) NORTH CAROLINA COMMENTARY Subject to one exception, subsections (a) and (b) of this section are the same as subsections (a) and (c) of G.S. 55-8-57 , based on the theory that the nonstatutory indemnification available to nonprofit corporations under this section should generally be no more restrictive than that available to business corporations. The single exception is that subsection (a) of this section, unlike its counterpart in Chapter 55 , prohibits a nonprofit corporation from indemnifying a person "if the person received an improper personal benefit"; the theory being that the nature of a nonprofit corporation makes this additional limitation appropriate. This section also does not contain a counterpart to subsection (b) of G.S. 55-8-57 , on the theory that the conflict of interest provisions in G.S. 55A-8-31 should apply to all forms of nonstatutory indemnification under G.S. 55A-8-57, regardless of the nature or constituency of the nonprofit corporation and regardless of whether the indemnification is retroactive or prospective. Legal Periodicals. - For survey of 1977 law on business associations, see 56 N.C.L. Rev. 939 (1977). For note, "The Nonprofit Corporation in North Carolina: Recognizing a Right to Member Derivative Suits," see 63 N.C.L. Rev. 999 (1985). For article, "Corporate Director and Officer Indemnification: Alternative Methods for Funding," see 24 Wake Forest L. Rev. 53 (1989).