N.Y. Business Corporation Law § 725: Other provisions affecting indemnification of directors and officers

§ 725. Other provisions affecting indemnification of directors and

officers.

(a) All expenses incurred in defending a civil or criminal action or

proceeding which are advanced by the corporation under paragraph (c) of

section 723 (Payment of indemnification other than by court award) or

allowed by a court under paragraph (c) of section 724 (Indemnification

of directors and officers by a court) 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.

(b) No indemnification, advancement or allowance shall be made under

this article in any circumstance where it appears:

(1) That the indemnification would be inconsistent with the law of the

jurisdiction of incorporation of a foreign corporation which prohibits

or otherwise limits such indemnification;

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

the certificate of incorporation, 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

(3) 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.

(c) 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.

(d) 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.

(e) Any notification required to be made pursuant to the foregoing

paragraph (c) or (d) of this section by any domestic mutual insurer

shall be satisfied by compliance with the corresponding provisions of

section one thousand two hundred sixteen of the insurance law.

(f) The provisions of this article relating to indemnification of

directors and officers and insurance therefor shall apply to domestic

corporations and foreign corporations doing business in this state,

except as provided in section 1320 (Exemption from certain provisions).