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2006 Kentucky Revised Statutes - .550 Determination and authorization of indemnification.
271B.8-550 Determination and authorization of
indemnification. (1) A corporation shall not indemnify a
director under KRS 271B.8-510 unless authorized in the specific
case after a determination has been made that indemnification of
the director is permissible in the circumstances because he has met
the standard of conduct set forth in KRS 271B.8-510. (2) The
determination shall be made: (a) By the board of directors by
majority vote of a quorum consisting of directors not at the time
parties to the proceeding; (b) If a quorum cannot be obtained
under subsection (2)(a) of this section, by majority vote of a
committee duly designated by the board of directors (in which
designation directors who are parties may participate), consisting
solely of two (2) or more directors not at the time parties to the
proceeding; (c) By special legal counsel: 1. Selected by the
board of directors or its committee in the manner prescribed in
subsection (2)(a) and (b) of this section; or 2. If a quorum of the
board of directors cannot be obtained under subsection (2)(a) of
this section and a committee cannot be designated under subsection
(2)(b) of this section, selected by majority vote of the full board
of directors (in which selection directors who are parties may
participate); or (d) By the shareholders, but shares owned by
or voted under the control of directors who are at the time parties
to the proceeding shall not be voted on the determination. (3)
Authorization of indemnification and evaluation as to
reasonableness of expenses shall be made in the same manner as the
determination that indemnification is permissible, except that if
the determination is made by special legal counsel, authorization
of indemnification and evaluation as to reasonableness of expenses
shall be made by those entitled under subsection (2)(c) of this
section to select counsel. Effective: January 1, 1989
History: Created 1988 Ky. Acts ch. 23, sec. 99, effective
January 1, 1989.
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