2023 New York Laws › BSC - Business Corporation › Article 7 - Directors and Officers › 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).