BILL ANALYSIS �
AB 2668
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Date of Hearing: April 16, 2012
ASSEMBLY COMMITTEE ON BANKING AND FINANCE
Mike Eng, Chair
AB 2668 (Banking & Finance) - As Introduced: March 5, 2012
SUBJECT : Corporate agents: indemnification.
SUMMARY : Provides indemnification standards to a fiduciary of
a pension, deferred compensation, saving, thrift, or other
retirement, incentive, or benefit plan, trust or provision for
any or all of the corporation's directors, officers, employees,
and persons providing services to the corporation or any of its
subsidiary or related or affiliated corporations.
EXISTING LAW
1)Provides a nonprofit public benefit corporation the authority
to indemnify their agents does not apply to any proceedings
against any trustee, investment manager, or other fiduciary of
an employee benefit plan. �Corporations Code, Section 5238]
2)Provides a nonprofit mutual benefit corporation the authority
to indemnify their agents does not apply to any proceedings
against any trustee, investment manager, or other fiduciary of
an employee benefit plan. �Corporations Code, Section 7237]
3)Provides a nonprofit religious corporation the authority to
indemnify their agents does not apply to any proceedings
against any trustee, investment manager, or other fiduciary of
an employee benefit plan. �Corporations Code, Section 9246]
4)Provides a consumer cooperative corporation the authority to
indemnify their agents does not apply to any proceedings
against any trustee, investment manager, or other fiduciary of
an employee benefit plan. �Corporations Code, Section 12377]
FISCAL EFFECT : None.
COMMENTS :
This measure would eliminate the ambiguity in the Corporations
Code regarding the indemnification standards applicable to
fiduciaries of an employee benefit plan when acting on behalf of
a nonprofit public benefit, mutual benefit, religious or a
AB 2668
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consumer cooperative corporation.
AB 2668, sponsored by the Nonprofit and Unincorporated
Organization Committee of the California State Bar, would
provide certainty for nonprofit and cooperative corporations
with respect to the sorts of plans the fiduciaries of which may
be indemnified and to the scope of activities that can be
indemnified.
The measure would amend subdivision (j) of Corporations Code
Sections 5238, 7237, 9246, and 12377. Each of these sections
makes the indemnification standards provided by Corporations
Code section 207(f) applicable to any trustee, investment
manager or other fiduciary of an employee benefit plan when
acting in that capacity on behalf of a nonprofit public benefit,
mutual benefit, religious and consumer cooperative corporation,
respectively. Such indemnification is authorized even if the
person would also be considered that corporation's agent under
Corporations Code sections 5238, 7237, 9246, and 12377, which
describes the scope of indemnification generally applicable to a
corporation's agents. This change in law would eliminate
ambiguity arising from the internal cross-reference to a section
of the General Corporation Law where an analogous statute is
already contained in the Nonprofit Corporation Law and the
Consumer Cooperative Corporation Law. AB 2668 would also
eliminate further ambiguity between the different descriptions
of employee benefit plan fiduciaries contained in the
Corporations Code.
REGISTERED SUPPORT / OPPOSITION :
Support
The State Bar of California (Sponsor)
Opposition
None on file.
Analysis Prepared by : Kathleen O'Malley / B. & F. / (916)
319-3081
AB 2668
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