271B.8-550 Determination and authorization of indemnification.
(1)
(2)
(3)
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.
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.
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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