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273A.120 Reimbursement -- Indemnification -- Advancement -- Insurance.
(1)
(2)
(3)
(4)
(5)
Except as otherwise provided in the governing principles, an unincorporated
nonprofit association shall reimburse a member or manager for authorized expenses
reasonably incurred in the course of the member's or manager's activities on behalf
of the association.
An unincorporated nonprofit association may indemnify a member or manager for
any debt, obligation, or other liability incurred in the course of the member's or
manager's activities on behalf of the association if the person seeking
indemnification has complied with KRS 273A.075 and 273A.100, as applicable.
Governing principles in a record may broaden or limit indemnification.
If a person is made or threatened to be made a party in an action based on that
person's activities on behalf of an unincorporated nonprofit association and the
person makes a request in a record to the association, a majority of the disinterested
managers may approve in a record advance payment, or reimbursement, by the
association, of all or a part of the reasonable expenses, including attorney's fees and
costs, incurred by the person before the final disposition of the proceeding. To be
entitled to an advance payment or reimbursement, the person shall state in a record
that the person has a good faith belief that the criteria for indemnification in
subsection (2) of this section have been satisfied and that the person will repay the
amounts advanced or reimbursed if the criteria for payment have not been satisfied.
The governing principles in a record may broaden or limit the advance payments or
reimbursements.
An unincorporated nonprofit association may purchase insurance on behalf of a
member or manager for liability asserted against or incurred by the member or
manager in the capacity of a member or manager, whether or not the association has
authority under this chapter to reimburse, indemnify, or advance expenses to the
member or manager against the liability.
The rights of reimbursement, indemnification, and advancement of expenses under
this section apply to a former member or manager for an activity undertaken on
behalf of the unincorporated nonprofit association while a member or manager.
Effective: June 24, 2015
History: Created 2015 Ky. Acts ch. 34, sec. 35, effective June 24, 2015.
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