N.Y. Rural Electric Cooperative Law § 25: Authorization for indemnification of directors and officers

§ 25. Authorization for indemnification of directors and officers. (a)

A cooperative may indemnify any person, made, or threatened to be made,

a party to an action or proceeding other than one by or in the right of

the cooperative to procure a judgment in its favor, whether civil or

criminal, including an action by or in the right of any other

corporation of any type or kind, domestic or foreign, or any

partnership, joint venture, trust, employee benefit plan or other

enterprise, which any director or officer of the cooperative served in

any capacity at the request of the cooperative, by reason of the fact

that he or she, his or her testator or intestate, was a director or

officer of the corporation, or served such other corporation,

partnership, joint venture, trust, employee benefit plan or other

enterprise in any capacity, against judgments, fines, amounts paid in

settlement and reasonable expenses, including attorneys' fees actually

and necessarily incurred as a result of such action or proceeding, or

any appeal therein, if such director or officer acted, in good faith,

for a purpose which he or she reasonably believed to be in, or, in the

case of service for any other corporation or any partnership, joint

venture, trust, employee benefit plan or other enterprise, not opposed

to, the best interests of the cooperative and, in criminal actions or

proceedings, in addition, had no reasonable cause to believe that his or

her conduct was unlawful.

(b) The termination of any such civil or criminal action or proceeding

by judgment, settlement, conviction or upon a plea of nolo contendere,

or its equivalent, shall not in itself create a presumption that any

such director or officer did not act, in good faith, for a purpose which

he or she reasonably believed to be in, or, in the case of service for

any other corporation or any partnership, joint venture, trust, employee

benefit plan or other enterprise, not opposed to, the best interests of

the cooperative or that he or she had reasonable cause to believe that

his or her conduct was unlawful.

(c) A cooperative may indemnify any person made, or threatened to be

made, a party to an action by or in the right of the cooperative to

procure a judgment in its favor by reason of the fact that he or she,

his or her testator or intestate, is or was a director or officer of the

cooperative or is or was serving at the request of the cooperative as a

director or officer of any other corporation of any type or kind,

domestic or foreign, of any partnership, joint venture, trust, employee

benefit plan or other enterprise, against amounts paid in settlement and

reasonable expenses, including attorneys' fees, actually and necessarily

incurred by him or her in connection with the defense or settlement of

such action, or in connection with an appeal therein, if such director

or officer acted, in good faith, for a purpose which he or she

reasonably believed to be in, or, in the case of service for any other

corporation or any partnership, joint venture, trust, employee benefit

plan or other enterprise, not opposed to, the best interests of the

cooperative, except that no indemnification under this subdivision shall

be made in respect of (1) a threatened action, or a pending action which

is settled or otherwise disposed of, or (2) any claim, issue or matter

as to which such person shall have been adjudged to be liable to the

cooperative unless and only to the extent that the court in which the

action was brought, or, if no action was brought, any court of competent

jurisdiction, determines upon application that, in view of all the

circumstances of the case, the person is fairly and reasonably entitled

to indemnity for such portion of the settlement amount and expenses as

the court deems proper.

(d) For the purpose of this action, a cooperative shall be deemed to

have requested a person to serve an employee benefit plan where the

performance by such person of his or her duties to the cooperative also

imposes duties on, or otherwise involves services by, such person to the

plan or participants or beneficiaries of the plan; excise taxes assessed

on a person with respect to an employee benefit plan pursuant to

applicable law shall be considered fines; and action taken or omitted by

a person with respect to an employee benefit plan in the performance of

such person's duties for a purpose reasonably believed by such person to

be in the interest of the participants and beneficiaries of the plan

shall be deemed to be for a purpose which is not opposed to the best

interests of the cooperative.