Section 14-2-856. Shareholder approved indemnification

   (a) If authorized by the articles of incorporation or a bylaw, contract, or resolution approved or ratified by the shareholders by a majority of the votes entitled to be cast, a corporation may indemnify or obligate itself to indemnify a director made a party to a proceeding including a proceeding brought by or in the right of the corporation, without regard to the limitations in other Code sections of this part, but shares owned or voted under the control of a director who at the time does not qualify as a disinterested director with respect to any existing or threatened proceeding that would be covered by the authorization may not be voted on the authorization.

(b) The corporation shall not indemnify a director under this Code section for any liability incurred in a proceeding in which the director is adjudged liable to the corporation or is subjected to injunctive relief in favor of the corporation:

   (1) For any appropriation, in violation of the director's duties, of any business opportunity of the corporation;

   (2) For acts or omissions which involve intentional misconduct or a knowing violation of law;

   (3) For the types of liability set forth in Code Section 14-2-832; or

   (4) For any transaction from which he or she received an improper personal benefit.

(c) Where approved or authorized in the manner described in subsection (a) of this Code section, a corporation may advance or reimburse expenses incurred in advance of final disposition of the proceeding only if:

   (1) The director furnishes the corporation a written affirmation of his or her good faith belief that his or her conduct does not constitute behavior of the kind described in subsection (b) of this Code section; and

   (2) The director furnishes the corporation a written undertaking, executed personally or on his or her behalf, to repay any advances if it is ultimately determined that the director is not entitled to indemnification under this Code section.

Code 1981, § 14-2-856, enacted by Ga. L. 1988, p. 1070, § 1; Ga. L. 1989, p. 946, § 36; Ga. L. 1996, p. 1203, § 5; Ga. L. 1997, p. 143, § 14.