§ 725 — Other provisions affecting indemnification of directors and officers

New York § 725

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

Text

§ 725. Other provisions affecting indemnification of directors and\n officers.\n (a) All expenses incurred in defending a civil or criminal action or\nproceeding which are advanced by the corporation under paragraph (c) of\nsection 723 (Payment of indemnification other than by court award) or\nallowed by a court under paragraph (c) of section 724 (Indemnification\nof directors and officers by a court) shall be repaid in case the person\nreceiving such advancement or allowance is ultimately found, under the\nprocedure set forth in this article, not to be entitled to\nindemnification or, where indemnification is granted, to the extent the\nexpenses so advanced by the corporation or allowed by the court exceed\nthe indemnification to which he is entitled.\n (b) No indemnification, advancement or allowance shall be made under\nthis article in any circumstance where it appears:\n (1) That the indemnification would be inconsistent with the law of the\njurisdiction of incorporation of a foreign corporation which prohibits\nor otherwise limits such indemnification;\n (2) That the indemnification would be inconsistent with a provision of\nthe certificate of incorporation, a by-law, a resolution of the board or\nof the shareholders, an agreement or other proper corporate action, in\neffect at the time of the accrual of the alleged cause of action\nasserted in the threatened or pending action or proceeding in which the\nexpenses were incurred or other amounts were paid, which prohibits or\notherwise limits indemnification; or\n (3) If there has been a settlement approved by the court, that the\nindemnification would be inconsistent with any condition with respect to\nindemnification expressly imposed by the court in approving the\nsettlement.\n (c) If any expenses or other amounts are paid by way of\nindemnification, otherwise than by court order or action by the\nshareholders, the corporation shall, not later than the next annual\nmeeting of shareholders unless such meeting is held within three months\nfrom the date of such payment, and, in any event, within fifteen months\nfrom the date of such payment, mail to its shareholders of record at the\ntime entitled to vote for the election of directors a statement\nspecifying the persons paid, the amounts paid, and the nature and status\nat the time of such payment of the litigation or threatened litigation.\n (d) If any action with respect to indemnification of directors and\nofficers is taken by way of amendment of the by-laws, resolution of\ndirectors, or by agreement, then the corporation shall, not later than\nthe next annual meeting of shareholders, unless such meeting is held\nwithin three months from the date of such action, and, in any event,\nwithin fifteen months from the date of such action, mail to its\nshareholders of record at the time entitled to vote for the election of\ndirectors a statement specifying the action taken.\n (e) Any notification required to be made pursuant to the foregoing\nparagraph (c) or (d) of this section by any domestic mutual insurer\nshall be satisfied by compliance with the corresponding provisions of\nsection one thousand two hundred sixteen of the insurance law.\n (f) The provisions of this article relating to indemnification of\ndirectors and officers and insurance therefor shall apply to domestic\ncorporations and foreign corporations doing business in this state,\nexcept as provided in section 1320 (Exemption from certain provisions).\n