§ 723 — Payment of indemnification other than by court award

New York § 723

• Jurisdiction: New York
• Law BSC: Business Corporation
• Art. 7: Directors and Officers

Text

§ 723. Payment of indemnification other than by court award.\n (a) A person who has been successful, on the merits or otherwise, in\nthe defense of a civil or criminal action or proceeding of the character\ndescribed in section 722 shall be entitled to indemnification as\nauthorized in such section.\n (b) Except as provided in paragraph (a), any indemnification under\nsection 722 or otherwise permitted by section 721, unless ordered by a\ncourt under section 724 (Indemnification of directors and officers by a\ncourt), shall be made by the corporation, only if authorized in the\nspecific case:\n (1) By the board acting by a quorum consisting of directors who are\nnot parties to such action or proceeding upon a finding that the\ndirector or officer has met the standard of conduct set forth in section\n722 or established pursuant to section 721, as the case may be, or,\n (2) If a quorum under subparagraph (1) is not obtainable or, even if\nobtainable, a quorum of disinterested directors so directs;\n (A) By the board upon the opinion in writing of independent legal\ncounsel that indemnification is proper in the circumstances because the\napplicable standard of conduct set forth in such sections has been met\nby such director or officer, or\n (B) By the shareholders upon a finding that the director or officer\nhas met the applicable standard of conduct set forth in such sections.\n (c) Expenses incurred in defending a civil or criminal action or\nproceeding may be paid by the corporation in advance of the final\ndisposition of such action or proceeding upon receipt of an undertaking\nby or on behalf of such director or officer to repay such amount as, and\nto the extent, required by paragraph (a) of section 725.\n