§ 57C-3-32. Limitation of liability of managers, directors, executives, and members and permissive indemnification of managers, directors, executives, and members; insurance.
§ 57C‑3‑32. Limitation of liability of managers, directors, executives, and members andpermissive indemnification of managers, directors, executives, and members;insurance.
(a) Subject tosubsection (b) of this section, the articles of organization or a writtenoperating agreement may:
(1) Eliminate or limitthe personal liability of a manager, director, or executive for monetarydamages for breach of any duty provided for in G.S. 57C‑3‑22 (otherthan liability under G.S. 57C‑4‑07); and
(2) Provide for indemnificationof a manager, member, director, or executive for judgments, settlements,penalties, fines, or expenses incurred in a proceeding to which the member,manager, director, or executive is a party because the person is or was amanager, member, director, or executive. For purposes of this subdivision, thewords "expenses", "proceeding", and "party" shallhave the meanings set forth in G.S. 55‑8‑50(b).
(b) No provisionpermitted under subsection (a) of this section shall limit, eliminate, orindemnify against the liability of a manager, director, or executive for (i)acts or omissions that the manager, director, or executive knew at the time ofthe acts or omissions were clearly in conflict with the interests of thelimited liability company, (ii) any transaction from which the manager,director, or executive derived an improper personal benefit, or (iii) acts oromissions occurring prior to the date the provision became effective, exceptthat indemnification pursuant to subdivision (2) of subsection (a) of thissection may be provided if approved by all the members. As used in thissubsection, "improper personal benefit" does not include reasonablecompensation or other reasonable incidental benefit for or on account ofservice as a manager, director, executive, officer, employee, independentcontractor, attorney, or consultant of the limited liability company.
(c) A limited liabilitycompany may purchase and maintain insurance on behalf of an individual who isor was a manager, director, executive, officer, employee, or agent of thelimited liability company, or who, while a manager, director, executive,officer, employee, or agent of the limited liability company is or was servingat the request of the limited liability company as a director, executive,officer, partner, member, manager, trustee, employee, or agent of a person,against liability asserted against or incurred by the person in that capacityor arising from the person's status as a manager, director, executive, officer,employee, or agent, whether or not the limited liability company would have thepower to indemnify the person against the same liability under any provision ofthis Chapter. (1993,c. 354, s. 1; 1995, c. 351, ss. 8, 9; 1999‑189, s. 4.4; 2000‑140,s. 101(t); 2001‑387, s. 71.)