2005 North Carolina Code - General Statutes § 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 and permissive indemnification of managers, directors, executives, and members; insurance.

(a)       Subject to subsection (b) of this section, the articles of organization or a written operating agreement may:

(1)       Eliminate or limit the personal liability of a manager, director, or executive for monetary damages for breach of any duty provided for in G.S. 57C‑3‑22 (other than liability under G.S. 57C‑4‑07); and

(2)       Provide for indemnification of 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 a manager, member, director, or executive. For purposes of this subdivision, the words "expenses", "proceeding", and "party" shall have the meanings set forth in G.S. 55‑8‑50(b).

(b)       No provision permitted under subsection (a) of this section shall limit, eliminate, or indemnify against the liability of a manager, director, or executive for (i) acts or omissions that the manager, director, or executive knew at the time of the acts or omissions were clearly in conflict with the interests of the limited liability company, (ii) any transaction from which the manager, director, or executive derived an improper personal benefit, or (iii) acts or omissions occurring prior to the date the provision became effective, except that indemnification pursuant to subdivision (2) of subsection (a) of this section may be provided if approved by all the members. As used in this subsection, "improper personal benefit" does not include reasonable compensation or other reasonable incidental benefit for or on account of service as a manager, director, executive, officer, employee, independent contractor, attorney, or consultant of the limited liability company.

(c)       A limited liability company may purchase and maintain insurance on behalf of an individual who is or was a manager, director, executive, officer, employee, or agent of the limited liability company, or who, while a manager, director, executive, officer, employee, or agent of the limited liability company is or was serving at 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 capacity or arising from the person's status as a manager, director, executive, officer, employee, or agent, whether or not the limited liability company would have the power to indemnify the person against the same liability under any provision of this 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.)