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304.29-081 Personal liability.
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The officers and members of the supreme governing body or any subordinate
body of a society shall not be personally liable for any benefits provided by a
society.
Any person may be indemnified and reimbursed by any society for expenses
reasonably incurred by, and liabilities imposed upon, the person in connection
with or arising out of any action, suit, or proceeding, whether civil, criminal,
administrative, or investigative, or threat thereof, in which the person may be
involved by reason of the fact that he or she is or was a director, officer,
employee or agent of the society or of any firm, corporation, or organization
which he or she served in any capacity at the request of the society. A person
shall not be indemnified or reimbursed in relation to any matter in such action,
suit, or proceeding as to which he or she shall finally be adjudged to be or have
been guilty of breach of a duty as a director, officer, employee, or agent of the
society nor in relation to any matter in such action, suit, or proceeding, or threat
thereof, which has been made the subject of a compromise settlement, unless
in either case the person acted in good faith for a purpose the person
reasonably believed to be in, or not opposed to, the best interests of the
society and, in a criminal action or proceeding, in addition, had no reasonable
cause to believe that his or her conduct was unlawful. The determination
whether the conduct of the person met the standard required in order to justify
indemnification and reimbursement in relation to any matter described in the
preceding sentence may only be made by the supreme governing body or
board of directors by a majority vote of a quorum consisting of persons who
were not parties to the action, suit, or proceeding or by a court of competent
jurisdiction. The termination of any action, suit, or proceeding by judgment,
order, settlement, conviction, or upon a plea of no contest, as to the person
shall not create a conclusive presumption that the person did not meet the
standard of conduct required in order to justify indemnification and
reimbursement. The foregoing right of indemnification and reimbursement shall
not be exclusive of other rights to which the person may be entitled as a matter
of law and shall inure to the benefit of his or her heirs, executors, and
administrators.
A society may purchase and maintain insurance on behalf of any person who
is or was a director, officer, employee, or agent of the society, or who is or was
serving at the request of the society as a director, officer, employee, or agent of
any other firm, corporation, or organization against any liability asserted
against the person and incurred by him or her in any such capacity or arising
out of his or her status as such, whether or not the society would have the
power to indemnify the person against such liability under this section.
History: Created 1988 Ky. Acts ch. 310, sec. 8, effective January 1, 1989.
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