Article Nineteen
Indemnification Of Officers,Directors,Alternates,Employees And Agents
Article 19 Section 19.1 The Association shall indemnify any director or officer, and may indemnify any alternate or other employee or agent, who was or is a party to, or is threatened to be made a party to, or who is called as a witness in connection with, any threatened, pending, or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, other than an action by or in the right of the Association, by reason of the fact that he is or was a director, officer, alternate, employee or agent of the Association, or is or was serving at the request of the Association as a director, officer, alternate, employee or agent of another domestic or foreign corporation for profit or not-for-profit, partnership, joint venture, trust or other enterprise, against expenses, including attorneys' fees, judgments, fines and amounts paid in settlement, actually and reasonably incurred by him in connection with such action, suit or proceeding, if such person acted in good faith and in a manner he 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 his conduct was unlawful. Section 19.2 The Association shall indemnify any director or officer, and may indemnify any alternate or other employee or agent, who was or is a party to, or is threatened to be made a party to, any threatened, pending or completed action or suit by or in the right of the Association to procure a judgment in its favor by reason of the fact that he is or was a director, officer, alternate, employee or agent of the Association or is or was serving at the request of the Association as a director, officer, alternate, employee or agent of another domestic or foreign corporation for profit or not-for-profit, partnership, joint venture, trust or other enterprise against expenses, including attorneys' fees, actually and reasonably incurred by him in connection with the defense or settlement of such action or suit if such person acted in good faith and in a manner he reasonably believed to be in, or not opposed to, the best interests of the Association and except that no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable for negligence or misconduct in the performance of his duty to the Association unless and only to the extent that the court of common pleas of the county in which the registered office of the Association is located or the court in which such action or suit was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which the court of common pleas or such other court shall deem proper. Section 19.3 The indemnification and advancement of expenses provided by, or granted pursuant to, this Article 19 shall not be deemed exclusive of any other rights to which those seeking indemnification or advancement of expenses may be entitled under any Bylaw, agreement, vote of members or disinterested directors or otherwise, both as to action in his official capacity and as to action in another capacity while holding such office. It is the policy of the Association that indemnification of, and advancement of expenses to, directors and officers of the Association shall be made to the fullest extent permitted by law. To this end, the provisions of this Article 19 shall be deemed to have been amended for the benefit of directors and officers of the Association effective immediately upon any modification of the Nonprofit Corporation Law of 1988 ("NPCL") or any modification, or adoption of any other law that expands or enlarges the power or obligation of corporations organized under the NPCL to indemnify, or advance expenses to, directors and officers of corporations. Section 19.4 The Association shall pay expenses incurred by an officer or director, and may pay expenses incurred by any alternate or other employee or agent, in defending an action, or proceeding referred to in this Article 19 in advance of the final disposition of such action 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 he is not entitled to be indemnified by the Association. Section 19.5 The indemnification and advancement of expenses provided by, or granted pursuant to, this Article 19 shall, unless otherwise provided when authorized or ratified, continue as to a person who has ceased to be a director, officer, alternate, employee or agent of the Association and shall inure to the benefit of the heirs, executors and administrators of such person. Section 19.6 The Association shall have the authority to create a fund of any nature, which may, but need not be, under the control of a trustee, or otherwise secure or insure in any manner, its indemnification obligations, whether arising under these By-Laws or otherwise. This authority shall include, without limitation, the authority to: (i) deposit funds in trust or in escrow; (ii) establish any form of self-insurance; (iii) secure its indemnity obligation by grant of a security interest, mortgage or other lien on the assets of the Association; or (iv) establish a letter of credit, guaranty or surety arrangement for the benefit of such persons in connection with the anticipated indemnification or advancement of expenses contemplated by this Article 19. The provisions of this Article 19 shall not be deemed to preclude the indemnification of, or advancement of expenses to, any person who is not specified in Section 19.1 or Section 19.2 of this Article 19 but whom the Association has the power or obligation to indemnify, or to advance expenses for, under the provisions of the NPCL or otherwise. The authority granted by this Section 19.6 shall be exercised by the Board of Directors of the Association. Section 19.7 The Association shall have the authority to enter into aseparate indemnification agreement with any officer, director, alternate, employee or agent of the Association or any subsidiary providing for such indemnification of such person as the Board of Directors shall determine up to the fullest extent permitted by law. Section 19.8 As soon as practicable after receipt by any person specified in Section 19.1 or Section 19.2 of this Article 19 of notice of the commencement of any action, suit or proceeding specified in Section 19.1 or Section 19.2 of this Article 19, such person shall, if a claim with respect thereto may be made against the Association under Article 19 of these By-Laws, notify the Association in writing of the commencement or threat thereof; however, the omission so to notify the Association shall not relieve the Association from any liability under Article 19 of these By-Laws unless the Association shall have been prejudiced thereby or from any other liability which it may have to such person other than under Article 19 of these By-Laws. With respect to any such action as to which such person notifies the Association of the commencement or threat thereof, the Association may participate therein at its own expense and, except as otherwise provided herein, to the extent that it desires, the Association, jointly with any other indemnifying party similarly notified, shall be entitled to assume the defense thereof, with counsel selected by the Association to the reasonable satisfaction of such person. After notice from the Association to such person of its election to assume the defense thereof, the Association shall not be liable to such person under Article 19 of these By-Laws for any legal or other expenses subsequently incurred by such person in connection with the defense thereof other than as otherwise provided herein. Such person shall have the right to employ his own counsel in such action, but the fees and expenses of such counsel incurred after notice from the Association of its assumption of the defense thereof shall be at the expense of such person unless: (i) the employment of counsel by such person shall have been authorized by the Association; (ii) such person shall have reasonably concluded that there may be a conflict of interest between the Association and such person in the conduct of the defense of such proceeding; or (iii) the Association shall not in fact have employed counsel to assume the defense of such action. The Association shall not be entitled to assume the defense of any proceeding brought by or on behalf of the Association or as to which such person shall have reasonably concluded that there may be a conflict of interest. If indemnification under Article 19 of these By-Laws or advancement of expenses are not paid or made by the Association, or on its behalf, within 90 days after a written claim for indemnification or a request for an advancement of expenses has been received by the Association, such person may, at any time thereafter, bring suit against the Association to recover the unpaid amount of the claim or the advancement of expenses. The right to indemnification and advancements of expenses provided hereunder shall be enforceable by such person in any court of competent jurisdiction. The burden of proving that indemnification is not appropriate shall be on the Association. Expenses reasonably incurred by such person in connection with successfully establishing the right to indemnification or advancement of expenses, in whole or in part, shall also be indemnified by the Association. Section 19.9 The Association shall have the power to purchase and maintain insurance on behalf of any person who is or was a director, officer, alternate, employee or agent of the Association, or is or was serving at the request of the Association as a director, officer, alternate, employee or agent of another domestic or foreign corporation for profit or not-for-profit, partnership, joint venture, trust or other enterprise against any liability asserted against him and incurred by him in any such capacity, or arising out of his status as such, whether or not the Association would have the power to indemnify him against such liability under the provisions of this Article 19. Section 19.10 Notwithstanding any other provisions of these By-Laws, the approval of members shall be required to amend, repeal or adopt any provision as part of these By-Laws which is inconsistent with the purpose or intent of this Article 19, and, if any such action shall be taken, it shall become effective only on a prospective basis from and after the date of such member approval. The provisions of this Article 19 were adopted by the members of the Association on October 30, 1993. Table of Contents Article 1 Association Office Article 2 Definitions Article 3 Purpose Article 4 Membership Article 5 Voting Article 6 Meetings of Members 6.1 Annual Meetings BY-LAWS 6.2 Special Meetings 6.3 Notice of Meetings 6.5 Quorum 6.6 Proxies Article 7 Board of Directors 7.1 Number 7.2 Term of Office 7.3 Removal 7.4 Vacancies 7.5 Compensation 7.6 Action Taken Without a Meeting 7.7 Nomination 7.8 Election 7.9 Interested Directors 7.10 Multiple Owners Article 8 Meetings of Directors 8.1 Regular Meetings 8.2 Special Meetings 8.3 Open Meetings 8.4 Quorum 8.5 Meeting by Conference Telephone Article 9 Powers and Duties of Board of Directors 9.1 Powers 9.2 Duties Article 10 Liability of Directors Article 11 Officers and Their Duties 11.1 Enumeration of Officers 11.2 Election of Officers 11.3 Term 11.4 Resignation/Removal 11.5 Vacancies 11.6 Multiple Offices 11.7 Duties Article 12 Committees and Special Officers Article 13 Books and Records 13.1 Required Records 13.2 Right of Inspection 13.3 Proceedings for the Enforcement of Inspection Article 14 Membership, Dues, Assessments and Other Charges 14.1 Power to Levy Dues, Assessments, and Other Charges 14.2 Enforcement of Payment 14.3 Voluntary and Involuntary Conveyances Article 15 Corporate Seal Article 16 Amendments Article 17 Conflicts Article 18 Financial Management 18.1 Accounting Period 18.2 Preliminary Budget 18.3 Adoption of Budgets 18.4 Auditing Article 19 Indemnification of Officers, Directors Alternates, Employees and Agents
