ARTICLE XII - PERSONAL LIABILITY OF DIRECTORS
A Director of this Association shall not be personally liable for monetary damages
as such for any action taken, or any failure to take any action, unless: (1) the
Director has breached or failed to perform the duties of office in good faith, in
a manner the Director reasonably believes to be in the best interests of the Association,
and with such care, including reasonable inquiry, skill and diligence, as a person
of ordinary prudence would use under similar circumstances; and (2) the breach or
failure to perform constitutes self-dealing, willful misconduct or recklessness.
T'he provisions of this Article XII shall not apply to the responsibility or liability
of a Director pursuant to any criminal statute or for the payment of taxes pursuant
to local, state or federal law and shall not apply to any actions filed or any breach
of performance of duty or any failure of performance of duty prior to January 27,
1987.
ARTICLE XIII
Section 1. Indemnification. (i) Subject to the limitations hereinafter set forth
the Association shall indemnify each director, officer, employee or agent of the
Association or of any organization that such person is serving as a director, officer,
employee or agent at the request of the Association, and the heirs, executors or
administrators of such person to the full extent permitted by law, against all judgments,
fines, liabilities, and reasonable expenses of such person (including, but not limited
to, court costs, attorneys' fees and any amount paid in any settlement), which judgments,
fines and liabilities and expenses were incurred or expended in connection with
any claim, suit, action or proceeding, whether civil, criminal, administrative or
investigative, and whether or not the indemnified liability arises or arose from
any action by or in the right of the association, in which such person was involved
because of anything such person may have done or omitted to do as a director, officer,
employee or agent of the Association or of any organization that such person may
have served as a director, officer, employee or agent at the request of the Association,
-- but such indemnification can be made only if a Determination is made as hereinafter
provided that such indemnification should be made. Such indemnification shall not
impair any other right any such person may have.
(ii) Said indemnification can be made only if a Determination has been made, with
the advice of Counsel for the Association, by members of the Board of Directors
not involved in the claim or proceeding, or by a disinterested person or persons
named by said members of the Board of Directors not involved in the claim or proceeding,
or by the members, or by independent legal counsel in a written opinion: (1) that
the director, officer, employee or agent acted or failed to act, and in either case,
in good faith, and in a manner such person reasonably believed to be in, or not
opposed to, the best interests of the Association, and with respect to any criminal
action or proceeding, had no reasonable cause to believe the conduct was unlawful,
and (2) that the amount of the proposed indemnification is reasonable, and (3) that
the proposed indemnification is just and proper and can be legally made by the Association
under then existing law, and (4) that the indemnification shall be made by the Association
in an amount stated in the Determination; provided, however, that the indemnification
provided for herein shall not be available if the act or failure to act giving rise
to the claim for indemnification has been determined by a court to have constituted
willful misconduct or recklessness.
Section 2. Advance Payment of Expenses. Expenses incurred by an officer, director,
employee or agent in defending a civil or criminal action, suit or proceeding shall
be paid by the Association in advance of the final disposition of such action, suit
or proceeding upon receipt of an undertaking by or on behalf of such person to repay
such amount if it shall ultimately be determined that the person is not entitled
to be indemnified by the Association.
Section 3. Insurance or Indemnification Fund. T'he Association shall have the power
to buy and maintain insurance and to establish and ftind a self-insurance indemnification
reserve fund on behalf of the directors, officers, employees and agents of the Association
and a person serving at the request of the Association as a director, officer, employee
or agent of another organization, against liability incurred in any such capacity,
or arising out of the status as such.
Section 4. Validity. The invalidity of any portion of this Article XIII shall not
affect the validity of the remainder hereof.
Section 5. Application. This Article shall not apply to any actions filed or any
breach of performance of duty or any failure of performance of duty prior to January
27, 1987.
Section 6. Contract Rights; Amendment or Repeal. All rights to indemnification under
this Article XIII shall be deemed a contract between the Association and the persons
to be indemnified under this Article Xill pursuant to which the Association and
each such person intend to be legally bound. Any repeal, amendment or modification
of this Article shall be prospective only and shall not affect any rights or obligations
then existing.
|