§414-222  Limitation of liability ofdirectors; shareholder approval required.  (a)  A corporation may eliminateor limit the personal liability of its directors in any action brought by theshareholders or the corporation for monetary damages against any director ofthe corporation for any action taken, or any failure to take any action, as adirector; provided that:

(1)  The elimination or limitation shall beauthorized, directed, or provided for in:

(A)  The articles of incorporation of thecorporation; or

(B)  Any duly adopted amendment of the articlesof incorporation; and

(2)  If the provision eliminating or limiting thepersonal liability of a corporation's directors is authorized, directed, orprovided for by amendments to the articles of incorporation, it shall beadopted upon the affirmative vote of the holders of two-thirds of the sharesrepresented at the shareholders' meeting and entitled to vote; provided thatthe vote also constitutes a majority of the shares entitled to vote.

(b)  A corporation shall not eliminate or limitthe personal liability of a director for:

(1)  The amount of a financial benefit received by adirector to which the director is not entitled;

(2)  An intentional infliction of harm on thecorporation or the shareholders;

(3)  A violation of section 414-223; or

(4)  An intentional violation of criminal law.

(c)  The shareholders of the corporation shallreceive written notice of any proposal by the corporation to eliminate or limitthe personal liability of the directors under subsection (a)(2), and thecorporation shall in such cases submit the duly adopted amendment to thearticles of incorporation to the department director.

(d)  Nothing in this section shall impair oraffect the validity of any provisions of the bylaws of a corporationeliminating or limiting the personal liability of the directors, which wereauthorized, directed, or provided for and approved by the shareholders of thecorporation in compliance with then existing law prior to July 1, 1996. [L2000, c 244, pt of §1; am L 2001, c 129, §24]