ARTICLE VI DUES AND OTHER FINANCIAL AFFAIRS; INDEMNIFICATION
6.1 Dues; Assessment.
6.1.1 On an annual basis, the Board shall determine the calendar year dues of each class of membership set forth in Section 2.1. For purposes of determining dues, the Board may further divide each class of membership by period of admission to practice law, age, residence, location of office or any other reasonable standards. For purposes of this Section 6.1, the period of a Member’s admission shall be calculated from the date on which the Member was first admitted to practice before any court of record.
6.1.2 The Chancellor, in consultation with the Executive Director, may provide for the waiver of part or all of the dues of a Member or applicant for membership or any provision of Section 2.1 or 2.2, if it is determined that there are special circumstances.
6.2 Dues; When Payable.
6.2.1 Dues shall be payable annually in advance on or before January 1 of each year. The Association shall send a written notice to each Member prior to January 1 of each year stating that dues for that year are then payable, and setting forth the arrearages of dues, if any.
6.3 Annual Operating Budget.
6.3.1 Prior to the commencement of each Fiscal Year, the Board shall adopt an operating budget setting forth anticipated income and expenditures for the year. A summary of the operating budget shall be Published prior to January 31 of the applicable fiscal year. During the fiscal year, the Board may authorize additional expenditures in excess of the adopted operating budget, provided that no single expenditure may exceed five percent of the total of the adopted operating budget unless such expenditure is first approved at a meeting of the Members or in a secret ballot referendum vote in accordance with the requirements of Section 12.1.2.
6.4.1 The accounts of the Association, covering all moneys, investments and other property of the Association, shall be audited annually and at such other times and in such manner as may be deemed appropriate by the Board, and a report thereof and of the financial condition of the Association shall be presented to the Board and shall be available for inspection by any Member at the office of the Association and on the Association’s website.
6.5 Indemnification And Limitation of Liability.
6.5.1 Limitation of Liability: To the fullest extent permitted by Pennsylvania law, as then in effect, a Board Member shall not be personally liable for any action taken or for any failure to take action as an Officer or as a Board Member. The foregoing limitation of liability shall be retroactive to the fullest extent permitted by law. The limitation of liability shall not apply if (i) the Board Member has breached or failed to perform the duties of his or her office under 15 Pa.C.S. § 5712 (which, as amended from time to time, is hereafter called Section 5712); and (ii) the breach or failure to perform constitutes self-dealing, willful misconduct or recklessness. This Section 6.5.1 shall not limit a Board Member’s liability for monetary damages to the extent any such limitation is prohibited by the provisions of the Pennsylvania Nonprofit Corporation Law of 1988, as amended.
6.5.2 Mandatory Indemnification. To the fullest extent permitted by Pennsylvania law, as then in effect, the Association shall indemnify any present or former Board Member, Officer, member of the Commission, or individual serving as a board member or officer of another entity by appointment of the Chancellor and/or the Board or by virtue of that individual’s position in the Association, which individual was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit, proceeding, issue or matter, whether civil, criminal, legislative, administrative, or investigative (whether or not such action, suit or proceeding arises or arose by or in the right of the Association or other entity) (i) by reason of the fact that such individual is or was serving as a Board Member or Officer; or (ii) by reason of the fact that such individual is or was serving at the request or appointment of the Chancellor and/or the Board, or by virtue of that individual’s position in the Association, as a director, officer, employee, partner, trustee, agent or fiduciary of another corporation, partnership, limited liability company, joint venture, trust or other enterprise (including service with respect to employee benefit plans), against expenses (including, but not limited to, attorneys’ fees and costs), judgments, fines (including excise taxes assessed on a person with respect to any employee benefit plan) and amounts paid in settlement actually and reasonably incurred by such individual in connection with such action, suit, proceeding, issue or matter. Indemnification under this Section 6.5.2 shall not be provided in any situation excepted from indemnification as provided in Section 6.3.4. An individual entitled to indemnification under this Section 6.5.2 is hereafter in this Article VI called a “person covered by Section 6.5.2.” In addition
6.5.3 Advance of Expenses. Expenses (including attorney’s fees and costs) incurred by a person covered by Section 6.5.2 in defending a threatened, pending or completed civil or criminal action, suit, proceeding, issue or matter 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 such person is not entitled to be indemnified by the Association, except as otherwise provided in Section 6.5.4. The right to advancement of expenses by the Board Member, Officer or Commission member shall not be subject to any condition other than submission of such an undertaking. The undertaking need not be secured and shall be accepted without reference to the financial ability of the Board Member, Officer or Commission member to make repayment.
6.5.4 Exceptions. No indemnification under Section 6.5.2 or advancement or reimbursement of expenses under Section 6.5.3 shall be provided to a person covered by Section 6.5.2 (a) if a final unappealable judgment or award establishes that such Board Member, Officer or Commission member engaged in self-dealing, willful misconduct or recklessness; (b) for expenses or liabilities of any type whatsoever (including, but not limited to, judgments, fines, and amounts paid in settlement) which have been paid directly to such person by an insurance carrier under a policy of officers’ and directors’ liability insurance maintained by the Association or other enterprise; (c) for amounts paid in settlement of any threatened, pending or completed action, suit, proceeding, issue or matter without the written consent of the Association, which written consent shall not be unreasonably withheld; and/or (d) if otherwise contrary to Pennsylvania law, as then in effect. The Board is hereby authorized, at any time by resolution, to add to the above list of exceptions from the right of indemnification under Section 6.5.2 or advancement or reimbursement of expenses under Section 6.5.3, but any such additional exception shall not apply with respect to any event, act or omission which has occurred prior to the date that the Board in fact adopts such resolution. Any such additional exception may, at any time after its adoption, be amended, supplemented, waived or terminated by further resolution of the Board.
6.5.5 Continuation of Rights. The indemnification and advancement or reimbursement of expenses provided by, or granted pursuant to, this Section 6.5 shall continue as to a person who has ceased to be a Board Member, Officer or Commission member, and shall inure to the benefit of the heirs, executors and administrators of such person.
6.5.6 Notice of Commencement of Action. As a condition of any right to indemnification hereunder, the Board Member, Officer or Commission Member shall give the Association written notice of the commencement of a claim, action, suit, proceeding, issue or matter against him or her as soon as practicable, but in any event, no later than sixty (60) days from when he or she becomes aware of such claim, action, suit, proceeding, issue or matter. Where a Board Member, Officer or Commission member fails to give such notice and that failure causes the Association material prejudice, the Association may, in its discretion, choose not to indemnify such Board Member, Officer or Commission member for any expenses incurred by him or her with respect to such claim, action, suit, proceeding, issue or matter. The Association shall have the right, at its election and expense, to assume or participate in the defense of any such civil action, suit or proceeding, if to do so will not subject it to a conflict of interest and is not unreasonable under the circumstances. If the Association assumes the defense, the Board Member, Officer or Commission member may participate in the defense at his or her own expense. The Association shall only be obligated to pay a settlement of a civil action, suit, proceeding, issue or matter to which it consents in writing, its consent not to be unreasonably withheld. If the Association is obligated to indemnify or advance expenses to a Board Member, Officer or Commission member as to a proceeding relating to his or her service at the Association’s request as a director, officer, employee, partner, trustee, agent or fiduciary of another corporation, partnership, limited liability company, joint venture, trust or other enterprise (including service with respect to employee benefit plans), the Association’s obligation shall be secondary to and in excess of any indemnification and advancement obligation owed by such other corporation, partnership, limited liability company, joint venture, trust or enterprise, or its insurer, and the Association shall be subrogated to the rights of the Board Member, Officer or Commission member with respect to such obligation of indemnification, advancement or insurance, if not duly paid.
6.5.7 General Provisions Relating To Indemnification and Limitation of Liability.
220.127.116.11 The term “to the fullest extent permitted by applicable law,” as used in this Section 6.5, shall mean the maximum extent permitted by public policy, common law or statute. A person covered by Section 6.5.2 may, to the fullest extent permitted by applicable law at the time of the election, elect to have the right to indemnification or to advancement or reimbursement of expenses, interpreted, at such person’s option (a) on the basis of the applicable law on the date this Section 6.5 was adopted, or (b) on the basis of the applicable law in effect at the time of the occurrence of the event or events giving rise to the action, suit or proceeding, or (c) on the basis of the applicable law in effect at the time indemnification is sought.
18.104.22.168 The right of a person covered by Section 6.5.2 to be indemnified or to receive an advancement or reimbursement of expenses pursuant to Section 6.5.3 (a) may be enforced as a contract right pursuant to which the person entitled thereto may bring suit as if the provisions hereof were set forth in a separate written contract between the Association and such person; and (b) shall continue to exist after the rescission or restrictive modification (as determined by such person) of this Section 6.5 with respect to events, acts or omissions occurring before such rescission or restrictive modification is adopted.
22.214.171.124 If a request for indemnification or for the advancement or reimbursement of expenses pursuant hereto is not paid in full by the Association within 30 days after a written claim has been received by the Association together with all supporting information reasonably requested by the Association, the claimant may at any time thereafter bring suit against the Association to recover the unpaid amount of the claim (plus interest at the prime rate announced from time to time by the Association’s primary banker) and, if successful in whole or in part, the claimant shall be entitled also to be paid the expenses (including, but not limited to, attorney’s fees and costs) of prosecuting such claim. Neither the failure of the Association (including the Board or independent legal counsel) to have made a determination prior to the commencement of such action that indemnification of or the advancement or reimbursement of expenses to the claimant is proper in the circumstances, nor an actual determination by the Association (including the Board or independent legal counsel) that the claimant is not entitled to indemnification or to the reimbursement or advancement of expenses, shall be a defense to the action or create a presumption that the claimant is not so entitled.
126.96.36.199 The indemnification and advancement or reimbursement of expenses provided by, or granted pursuant to this Section 6.5 shall not be deemed exclusive of any other rights to which those seeking indemnification or advancement or reimbursement of expenses may be entitled under any bylaw, agreement, vote of the Board Members or otherwise, both as to action in such Board Member’s or officer’s official capacity and as to action in another capacity while holding that office.
188.8.131.52 Nothing in this Section 6.5 shall be construed to limit the rights and powers the Association possesses under Subchapter D of 15 Pa.C.S. Chapter 57 of the Pennsylvania Nonprofit Corporation Law of 1988, as amended from time to time, or otherwise, including, but not limited to, the powers to purchase and maintain insurance, create funds to secure or insure its indemnification obligations, and any other rights or powers the Association may otherwise have under applicable law.
184.108.40.206 The provisions of this Section 6.5 may, at any time (and whether before or after there is any basis for a claim for indemnification or for the advancement of reimbursement of expenses pursuant hereto), be amended, supplemented, waived, or terminated, in whole or in part, with respect to any person covered by Section 6.5.2 by a written agreement signed by the Association and such person.
6.5.8 Indemnification of Employees and Others; Optional Indemnification. To the fullest extent permitted by Pennsylvania law, as then in effect, the Association may indemnify employees and others affiliated or involved with the Association on the same terms and conditions as Board Members, Officers and Commission members, if the Board decides that it is in the best interests of the Association to indemnify any such individuals. The Association may, to the fullest extent permitted by Pennsylvania law, as then in effect, indemnify and advance or reimburse expenses for persons in all situations other than that covered by this Section 6.5.
6.5.9 Insurance. To the fullest extent permitted by Pennsylvania law, as then in effect, the Association shall have the power to purchase liability insurance on behalf of any person who is or was serving as a Board Member, Officer, Commission member, employee or otherwise affiliated or involved with the Association, or is or was serving at the request of the Association as a director, officer, partner, trustee, employee or agent of another corporation, partnership, limited liability company, joint venture, trust, other enterprise or employee benefit plan, whether or not the Association would have the power to indemnify such persons against liability under applicable law.
6.5.10 Severability of Provisions. Every provision of this Section 6.5 is intended to be severable, and, if any term or provision is invalid for any reason whatsoever, such invalidity shall not affect the validity of the remainder of this Section 6.5.