CHAPTER 689

An Act to amend and reenact § 18.1-205 of the Code of Virginia, relating
to general powers of non-stock corporations; and to amend the
Code of Virginia by adding a section numbered 18.1-205.1, to permit
indemnification of officers, employees, etc., and purchase of liability
msurance for same by such corporations. rH 899]

Approved April 5, 1968

Be it enacted by the General Assembly of Virginia:

1. That § 13.1-205 of the Code of Virginia be amended and reenacted,
and that the Code of Virginia be amended by adding a section numbered
18.1-205.1, as follows:

§ 18.1-205. 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, receive, lease, take by gift, devise or bequest,
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
otherwise 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 or other
interests in, or obligations of, other domestic or foreign corporations
organized for any purpose whether or not authorized to issue shares of
stock, associations, partnerships or individuals, or direct or indirect
obligations of the United States, or of any other government, state,
territory, governmental district or municipality or of any instrumentality
thereof; and to guarantee the payment of any bonds or other obligations
of any other 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 affairs, 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 members and within any limits so prescribed, to make
donations for the public welfare or for religious, charitable, scientific,
literary or educational purposes.

* % %

(n1) To pay pensions and establish pension plans, pension trusts,
profit-sharing plans, and other incentive plans for directors, officers and
employees of the corporation or of its subsidiaries. |

(n2) To imsure 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
mterest from acting in respect thereof.

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

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

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.

§ 13.1-205.1. 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,
administrative or mvestigative (other than an action by or in the right
of the corporation) by reason of the fact that he is or was a director, offi-
cer, employee or agent of the corporation, or is or was serving at the re-
quest 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 and amounts paid in
settlement actually and reasonably incurred by him in connection with
such action, suit or proceeding if he acted in good faith and in a 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 judg-
ment, 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.

A corporation shall have power to indemnify any person who
was or 1s a party or is threatened to be made a party to any threatened,
pending or completed action or suit by or in the right of the corporation
fo 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 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) 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 reasonably
believed to be in or not opposed to the best interest of the corporation and
except that no indemnification shall be made in respect of any claim, issue
or matter as to which such person shall have been 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
meurred 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 mdemnification 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 1s not
obtainable, or, even if obtainable a quorum of disinterested directors so
directs, by independent legal counsel in a written opinion, or (8) by the
members.

(e) Expenses incurred in defending an action, suit or proceeding,
whether civil, administrative or investigative, may be paid by the corpora-
tion in advance of the final disposition of such action, suit or proceeding 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 in
this section that may be authorized by the articles of incorporation or any
bylaw made by the members, if there be any, or if there be none, by the
directors except an indemnity against his gross negligence or willful mis-
conduct. 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 i-
surance on behalf of any person who 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 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.