§ 28 — Other provisions affecting indemnification of directors and officers

New York § 28

• Jurisdiction: New York
• Law REL: Rural Electric Cooperative
• Art. 2: Purpose; Organization and Management; Powers

Text

§ 28. Other provisions affecting indemnification of directors and\nofficers. (a) All expenses incurred in defending a civil or criminal\naction or proceeding which are advanced by the corporation under\nsubdivision (c) of section twenty-six of this article or allowed by a\ncourt under subdivision (c) of section twenty-seven of this article\nshall be repaid in case the person receiving such advancement or\nallowance is ultimately found, under the procedure set forth in this\narticle, not to be entitled to indemnification or, where indemnification\nis granted, to the extent the expenses so advanced by the cooperative or\nallowed by the court exceed the 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 a provision of\nthe certificate of incorporation, a by-law, a resolution of the board or\nof the members, an agreement or other proper corporate action, in effect\nat the time of the accrual of the alleged cause of action asserted in\nthe threatened or pending action or proceeding in which the expenses\nwere incurred or other amounts were paid, which prohibits or otherwise\nlimits indemnification; or\n (2) 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 set-\ntlement.\n (c) If any express or other amounts are paid by way of\nindemnification, otherwise than by court order or action by the members,\nthe cooperative shall prepare a statement specifying the persons paid,\nthe amounts paid, and the nature and status at the time of such payment\nof the litigation or threatened litigation, and not later than the next\nannual meeting of members, unless such meeting is held within three\nmonths from the date of such payment, and, in any event, within fifteen\nmonths of the date of such payment, shall mail the statement to its\nmembers of record entitled at the time to vote for the election of\ndirectors.\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 cooperative shall, not later than\nthe next annual meeting of members, unless such meeting is held within\nthree months from the date of such action, and, in any event, within\nfifteen months from the date of such action, mail to its members of\nrecord at the time entitled to vote for the election of directors a\nstatement specifying the action taken.\n