N.Y. Banking Law § 9009: Other provisions affecting indemnification of directors and officers

§ 9009. Other provisions affecting indemnification of directors and

officers. 1. All expenses incurred in defending a civil or criminal

action or proceeding which are advanced by the corporation under

subdivision three of section nine thousand seven or allowed by a court

under subdivision three of section nine thousand eight shall be repaid

in case the person receiving such advancement or allowance is ultimately

found, under the procedure set forth in this article, not to be entitled

to indemnification or, where indemnification is granted, to the extent

the expenses so advanced by the corporation or allowed by the court

exceed the indemnification to which he is entitled.

2. No indemnification, advancement or allowance shall be made under

this article in any circumstance where it appears:

(a) That the indemnification would be inconsistent with a provision of

the organization certificate, a by-law, a resolution of the board or of

the shareholders, an agreement or other proper corporate action, in

effect at the time of the accrual of the alleged cause of action

asserted in the threatened or pending action or proceeding in which the

expenses were incurred or other amounts were paid, which prohibits or

otherwise limits indemnification; or

(b) If there has been a settlement approved by the court, that the

indemnification would be inconsistent with any condition with respect to

indemnification expressly imposed by the court in approving the

settlement.

3. If any expenses or other amounts are paid by way of

indemnification, otherwise than by court order or action by the

shareholders, the corporation shall, not later than the next annual

meeting of shareholders unless such meeting is held within three months

from the date of such payment, and, in any event, within fifteen months

from the date of such payment, mail to its shareholders of record at the

time entitled to vote for the election of directors a statement

specifying the persons paid, the amounts paid, and the nature and status

at the time of such payment of the litigation or threatened litigation.

4. If any action with respect to indemnification of directors and

officers is taken by way of amendment of the by-laws, resolution of

directors, or by agreement, then the corporation shall, not later than

the next annual meeting of shareholders, unless such meeting is held

within three months from the date of such action and, in any event

within fifteen months from the date of such action, mail to its

shareholders of record at the time entitled to vote for the election of

directors a statement specifying the action taken.

5. No payment of indemnification, advancement or allowance under this

article shall be made unless a notice has been filed with the

superintendent, not less than thirty days prior to such payment,

specifying the persons to be paid, the amounts to be paid, the manner in

which such payment was authorized, and the nature and status at the time

of the notice of the litigation or threatened litigation.