US Laws, Codes, Statutes & Cases

 
  § 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; or
    (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 members, 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 members,
  the corporation shall prepare 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, and
    (1) Not later than the next annual meeting  of  members,  unless  such
  meeting  is held within three months from the date of such payment, and,
  in any event, within fifteen months of the date of such  payment,  shall
  mail the statement to its members of record entitled at the time to vote
  for the election of directors; or
    (2)  If the corporation has no members, shall include the statement in
  the records of the corporation open to public inspection, or
    (3) If the corporation  is  a  cemetery  corporation,  as  defined  in
  paragraph  (a)  of  section  1502  (Definitions),  which  term,  for the
  purposes of this section, shall include a religious  corporation  having
  members,  (i)  by  including the statement required by this paragraph or
  paragraph (d) of section 726 (Insurance for indemnification of directors
  and officers), as the case may be in the records of the corporation open
  to public inspection; (ii) by including the information required by  the
  statement  in any notice published pursuant to the provisions of section
  605 (Notice of meeting of members), except as otherwise provided by law;
  (iii) by enclosing the statement with the notice of  annual  meeting  if
  such  notice  is  in fact mailed to the members; and (iv) by raising the
  issue for approval at the next annual meeting of the members.
    (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 members, 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 members of
  record at the time entitled to vote for  the  election  of  directors  a
  statement  specifying  the  action  taken.  If  the  corporation  has no
  members,  the  statement  shall  be  included  in  the  records  of  the
  corporation open to public inspection.
    (e)  The  provisions  of  this  article relating to indemnification of
  directors and officers and insurance therefor shall  apply  to  domestic
  corporations  and  foreign  corporations  conducting  activities in this
  state, except as  provided  in  section  1321  (Exemption  from  certain
  provisions).