N.Y. Rural Electric Cooperative Law § 26: Payment of indemnification other than by court award

§ 26. Payment of indemnification other than by court award. (a) A

person who has been successful, on the merits or otherwise, in the

defense of a civil or criminal action or proceeding of the character

described in section twenty-five shall be entitled to indemnification as

authorized in such section.

(b) Except as provided in subdivision (a) of this section, any

indemnification under section twenty-five of this article or otherwise

permitted by section twenty-four of this article, unless ordered by a

court under section twenty-seven of this article, shall be made by the

cooperative only if authorized in the specific case:

(1) by the board acting by a quorum consisting of directors who are

not parties to such action or proceeding upon a finding that the

director or officer has met the standard of conduct set forth in section

twenty-five of this article or established pursuant to section

twenty-four of this article, as the case may be, or,

(2) if a quorum under paragraph one of this subdivision is not

obtainable or, even if obtainable, a quorum of disinterested directors

so directs:

(i) By the board upon the opinion in writing of independent legal

counsel that indemnification is proper in the circumstances because the

applicable standard of conduct set forth in such sections has been met

by such director or officer, or

(ii) By the members upon a finding that the director or officer has

met the applicable standard of conduct set forth in such sections.

(c) Expenses incurred in defending a civil or criminal action or

proceeding may be paid by the cooperative in advance of the final

disposition of such action or proceeding upon receipt of an undertaking

by or on behalf of such director or officer to repay such amount as, and

to the extent, required by subdivision (a) of section twenty-eight of

this article.