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.
Terms Used In N.Y. Banking Law 9009
- Amendment: A proposal to alter the text of a pending bill or other measure by striking out some of it, by inserting new language, or both. Before an amendment becomes part of the measure, thelegislature must agree to it.
- Corporation: means and includes all mutual savings banks, mutual savings and loan associations, mutual holding companies and credit unions. See N.Y. Banking Law 9001
- Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
- Indemnification: In general, a collateral contract or assurance under which one person agrees to secure another person against either anticipated financial losses or potential adverse legal consequences. Source: FDIC
- Litigation: A case, controversy, or lawsuit. Participants (plaintiffs and defendants) in lawsuits are called litigants.
- Organization certificate: includes (a) the original organization certificate or any other instrument filed or issued under any statute to form a corporation or foreign corporation, as amended, supplemented or restated by certificates of amendment, merger or consolidation or other certificates or instruments filed or issued under any statute; or (b) a special act or charter creating a corporation or foreign corporation, as amended, supplemented or restated by special acts or by certificates of amendment, merger or consolidation or other certificates or instruments filed or issued under any statute. See N.Y. Banking Law 9001
- Settlement: Parties to a lawsuit resolve their difference without having a trial. Settlements often involve the payment of compensation by one party in satisfaction of the other party's claims.
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.