KRS 271B.8-420: Standards of conduct for officers.

(1) An officer with discretionary authority shall discharge his duties under that

authority:

(a) In good faith;

(b) On an informed basis; and

(c) In a manner he honestly believes to be in the best interests of the corporation.

(2) An officer shall be considere d to discharge his duties on an informed basis if he

makes, with the care an ordinarily prudent person in a like position would exercise

under similar circumstances, inquiry into the business and affairs of the corporation,

or into a particular action to be taken or decision to be made.

(3) In discharging his duties an officer shall be entitled to rely on information, opinions,

reports, or statements, including financial statements and other financial data, if

prepared or presented by:

(a) One (1) or more o fficers or employees of the corporation whom the officer

honestly believes to be reliable and competent in the matters presented; or

(b) Legal counsel, public accountants, or other persons as to matters the officer

honestly believes are within the person's professional or expert competence.

(4) An officer shall not be considered to be acting in good faith if he has knowledge

concerning the matter in question that makes reliance otherwise permitted by

subsection (3) of this section unwarranted.

(5) Any action taken as an officer, or any failure to take any action as an officer, shall

not be the basis for monetary damages or injunctive relief unless:

(a) The officer has breached or failed to perform his duties in compliance with

this section; and

(b) In the case of an action for monetary damages, the breach or failure to perform

constitutes willful misconduct or wanton or reckless disregard for the best

interests of the corporation or its shareholders.

(6) A person bringing an action or monetary damages under t his section shall have the

burden of proving by clear and convincing evidence the provisions of subsection

(5)(a) and (b) of this section, and the burden of proving that the breach or failure to

perform was the legal cause of damages suffered by the corporation.

(7) Nothing in this section shall eliminate or limit the liability of any officer for any act

or omission occurring prior to July 15, 1988.