§415-48.5 Limitation of liability of directors; shareholder approval required.
(a) A corporation shall have the power to eliminate or limit the personal liability of its directors in any action brought by the shareholders or the corporation for monetary damages against any director of the corporation for a breach of fiduciary duty as a director, provided that:(1) The elimination or limitation shall be authorized, directed, or provided for in:
(A) The articles of incorporation of the corporation; or
(B) Any duly adopted amendment of the articles of incorporation; and
(2) If the provision eliminating or limiting the personal liability of a corporation's directors is authorized, directed, or provided for by amendments to the articles of incorporation, it shall be adopted upon the affirmative vote of the holders of two-thirds of the shares represented at the shareholders' meeting and having voting power; provided that the vote also constitutes a majority of the shares having voting power.
(b) A corporation shall not have the power to eliminate or limit the personal liability of a director:
(1) For any breach of the director's duty of loyalty to the corporation or its shareholders;
(2) For any act or omission of the director not performed in good faith, or which involves intentional misconduct or knowing violation of law, or which constitutes a wilful or reckless disregard of the director's fiduciary duty;
(3) For the director's wilful or negligent violation of any provision of this chapter regarding payment of dividends or stock purchase or redemption; or
(4) For any transaction from which the director received an improper benefit.
(c) The shareholders of the corporation shall receive written notice of any proposal by the corporation to eliminate or limit the personal liability of the directors under subsection (a)(2), and the corporation shall in such cases submit the duly adopted amendment to the articles of incorporation to the director of commerce and consumer affairs.
(d) No provision pursuant to subsection (a)(1) shall be authorized by the corporation to eliminate or limit the liability of directors for acts, omissions, or causes of action occurring, accruing, or arising prior to June 7, 1989.
(e) Nothing in this section shall impair or affect the validity of any provisions of the bylaws of a corporation eliminating or limiting the personal liability of the directors which were authorized, directed, or provided for and approved by the shareholders of the corporation in compliance with this section prior to July 1, 1996. [L 1989, c 190, §1; am L 1996, c 182, §§2, 3; am L 1997, c 71, §1]