Permissible indemnification payments.

CFR · 2024-01-01 · US · Title 12

(a) A System institution may make or agree to make reasonable indemnification payments to an IRP with respect to an administrative proceeding or civil action initiated by the FCA if: (1) The System institution's board of directors, in good faith, determines in writing after due investigation and consideration that the IRP acted in good faith and in a manner he/she believed to be in the best interests of the institution; (2) The System institution's board of directors, in good faith, determines in writing after due investigation and consideration that the payment of such expenses will not materially adversely affect the institution's safety and soundness; (3) The indemnification payments do not constitute prohibited indemnification payments as that term is defined in § 1412.2(l); and (4) The IRP agrees in writing to reimburse the System institution, to the extent not covered by payments from insurance or bonds purchased pursuant to § 1412.2(l)(2), for that portion of the advanced indemnification payments which subsequently become prohibited indemnification payments, as defined herein. (b) An IRP requesting indemnification payments shall not participate in any way in the board's discussion and approval of such payments; (c) In the event that a majority of the members of the board of directors are named as respondents in an administrative proceeding or civil action and request indemnification, the remaining members of the board may authorize independent legal counsel to review t

official document · source cfr-2024 · id 12:§ 1412.6