CHAPTER 570

An Act to amend the Code of Virginia by amending and reenacting
§ 18.1-8, as amended, relating to general powers of stock corpora-
tions, and by adding a section numbered 13.1-3.1, to provide for tn-
demnification of officers, directors, employees and agents and for
insurance on their behalf.

[H 96]

Approved April 4, 1968

Be it enacted by the General Assembly of Virginia:

1, That the Code of Virginia be amended by amending and reenacting
3 ot as amended, and by adding a section numbered 13.1-3.1, as
ollows:

§ 13.1-8. General powers.—Each corporation shall have power:

(a) To have perpetual succession by its corporate name.

(b) To sue and be sued, complain and defend, in its corporate name.

(c) To have a corporate seal which may be altered at pleasure, and
to use the same by causing it, or a facsimile thereof, to be impressed or
affixed or in any other manner reproduced.

(d) To purchase, take by gift, devise or bequest, receive, lease or
otherwise acquire, own, hold, improve. use and otherwise deal in and with,
real or personal property, or any interest therein, wherever situated.

(e) To sell, convey, mortgage, pledge, lease, exchange, transfer and
otherwise dispose of all or any part of its property and assets.

(f) To lend money to its employees, officers and directors, and other-
wise assist them.

(¢g) To purchase, take, receive, subscribe for, or otherwise acquire,
own, hold, vote, use, employ, sell, mortgage, lend. pledge, or otherwise
dispose of, and otherwise use and deal in and with, stock, securities or
other interests in, or obligations of, other domestic or foreign corpora-
tions organized for any purpose, associations, partnerships or individuals,
or direct or indirect obligations of the United States or of any other gov-
ernment, state, territory, governmental district or municipality or of any
instrumentality thereof; and to guarantee the payment of any bonds or
other obligations of any association, partnership, or individual or of any
other domestic or foreign corporation organized for any purpose.

(h) To make contracts and incur liabilities, borrow money at such
rates of interest as the corporation may determine, issue its notes, bonds,
and other obligations, and secure any of its obligations by mortgage or
pledge of all or any of its property, franchises and income.

(i) To lend money for its corporate purposes, invest and reinvest its
funds, and take and hold real and personal property as security for the
payment of funds so loaned or invested.

(j) To conduct its business, carry on its operations, hold property,
have offices and exercise the powers granted by this Act in any part of
the world.

(k) To elect or appoint officers and agents of the corporation, and
define their duties and fix their compensation.

(1) To make and alter bylaws, not inconsistent with its articles of
incorporation or with the laws of this State, for the administration and
regulation of the affairs of the corporation.

(m) Unless otherwise provided in the articles of incorporation or by
resolution of the stockholders and within any limits so prescribed, to make
by action of its board of directors donations for the public welfare or
for religious, charitable, scientific, literary or educational purposes; except
that corporations subject to regulation as to rates by the Commission
shall not have power to make donations in excess of five per centum of
net income computed before federal and state taxes on income and with-
out taking into account any deduction for gifts.

*** (n) To pay pensions and establish pension plans, pension trusts,
profit-sharing plans, stock option plans, stock purchase plans, and other
incentive plans for directors, officers and employees of the corporation or
of its subsidiaries.

(o) To insure the life of any director, officer, agent or employee and
to continue such insurance after the relationship terminates, and no such
director, officer, agent or employee shall be deemed disqualified by interest
from acting in respect thereof.

(p) To cease its corporate activities and surrender its corporate
franchise.

(q) To have and exercise all powers necessary or convenient to effect
any or all of the purposes for which the corporation is organized.

Each corporation other than a railroad or other public service com-
pany, a banking corporation, an insurance corporation, a building and
loan association, a credit union or an industrial loan association shall
have power * to enter into partnership agreements, joint ventures, or
other association of any kind with other corporations, whether organized
wee the laws of this State or otherwise, or with any individual or in-

ividuals.

Privileges and powers conferred and restrictions and requirements
imposed by other titles of the Code on railroads or other public service
companies, banking corporations, insurance corporations, building and
loan associations, credit unions, industrial loan associations or other
special types of corporations shall not be deemed repealed or amended by
any provision of this Act except where specifically so provided.

§ 13.1-3.1. Indemnification of officers, directors, employees and
agents; insurance.—(a) A corporation shall have power to indemnify any
person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative (other than an action by or in
the right of the corporation) by the reason of the fact that he is or was
a director, officer, employee or agent of the corporation, or is or was
serving at the request of the corporation as a director, officer, employee
or agent of another corporation, partnership, joint venture, trust or other
enterprise, against expenses (including attorneys’ fees), judgments, fines
and amounts paid in settlement actually and reasonably incurred by him
ain connection with such action, suit or proceeding if he acted in good
faith and in the manner he reasonably believed to be in or not opposed
to the best interests of the corporation. The termination of any action,
suit or proceeding by judgment, order or settlement shall not of itself
create a presumption that the person did not act in good faith and in a
manner he reasonably believed to be in or not opposed to the best interests
of the corporation.

(b) A corporation shall have power to indemnify any person who
was or is a party or is threatened to be made a party to any threatened,
pendung or completed action or suit by or in the right of the corporation
to procure a judgment in its favor by reason of the fact that he is or
was a director, officer, employee or agent of the corporation, or 1s or was
serving at the request of the corporation as a director, officer, employee
or agent of another corporation, partnership, joint venture, trust or other
enterprise against expenses (including attorneys’ fees) actually and rea-
sonably incurred by him in connection with the defense or settlement of
such action or suit if he acted in good faith and in a manner he reason-
ably believed to be in or not opposed to the best interests of the corpora-
tion and except that no indemnification shall be made in respect of any
claim, issue or matter as to which such person shall have becn adjudged
to be liable for negligence or misconduct in the performance of his duty
to the corporation unless and only to the extent that the court in which
such action or suit was brought shall determine upon application that,
despite the adjudication of liability but in view of all circumstances of
the case, such person is fairly and reasonably entitled to indemnity for
such expenses which such court shall deem proper.

(c) To the extent that a director, officer, employee or agent of a
corporation has been successful on the merits or otherwise in defense
of any action, suit or proceeding referred to in subsections (a) and (b),
or in defense of any claim, issue or matter therein, he shall be indemnified
against expenses ( including attorneys’ fees) actually and reasonably 1n-
curred by him in connection therewith.

(d) Any indemnification under subsections (a) and (b) (unless
ordered by a court) shall be made by the corporation only as authorized
in the specific case upon a determination that indemnification of the
director, officer, employee or agent is proper in the circumstances because
he has met the applicable standard of conduct set forth in subsections (a)
and (b). Such determination shall be made (1) by the board of directors
by a majority vote of a quorum consisting of directors who were not
parties to such action, suit or proceeding, or (2) if such a quorum is not
obtainable, or, even if obtainable a quorum of disinterested directors 80
directs, by independent legal counsel in a written opinion, or (8) by the
shareholders.

(e) Expenses incurred in defending an action, suit or proceeding,
whether civil, administrative or investigative, may be paid by the cor-
poration in advance of the final disposition of such action, suit or pro-
ceeding as authorized in the manner provided in subsection (d) upon
receipt of an undertaking by or on behalf of the director, officer, employee
or agent to repay such amount unless it shall ultimately be determined that
he is entitled to be indemnified by the corporation as authorized in this
section.

(f) Any corporation shall have power to make any other or further
indemnity, including criminal proceedings, to any person referred to tn
this section that may be authorized by the articles of incorporation or
any bylaw made by the stockholders or any resolution adopted, before or
after the event, by the stockholders, except an indemnity against his gross
negligence or willful misconduct. Each such indemnity may continue as
to a person who has ceased to have the capacity referred to above and may
inure to the benefit of the heirs, executors and administrators of such
a person.

(g) Any corporation shall have power to purchase and maintain in-
surance on behalf of any person who 1s or was a. dtrector, officer, employee
or agent of the corporation, or is or was serving at the request of the
corporation as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise against any liability
asserted against him and incurred by him in any such capacity or arising
out of his status as such, whether or not the corporation would have the
power to indemnify him against such liability under the provisions of this
section.