2006 Code of Virginia § 13.1-870.1 - Limitation on liability of officers and directors; exception

13.1-870.1. Limitation on liability of officers and directors; exception.

A. Except as otherwise provided in this section, in any proceeding brought byor in the right of a corporation or brought by or on behalf of members of thecorporation, the damages assessed against an officer or director arising outof a single transaction, occurrence, or course of conduct shall not exceedthe lesser of:

1. The monetary amount including the elimination of liability, specified inthe articles of incorporation or, if approved by the members, in the bylawsas a limitation on or elimination of the liability of the officer ordirector; or

2. The greater of (i) $100,000, or (ii) the amount of the cash compensationreceived by the officer or director from the corporation during the twelvemonths immediately preceding the act or omission for which liability wasimposed.

B. In any proceeding against an officer or director who receives compensationfrom a corporation exempt from income taxation under 501 (c) of theInternal Revenue Code for his services as such, the damages assessed arisingout of a single transaction, occurrence or course of conduct shall not exceedthe amount of compensation received by the officer or director from thecorporation during the twelve months immediately preceding the act oromission for which liability was imposed. An officer or director who servessuch an exempt corporation without compensation for his services shall not beliable for damages in any such proceeding.

C. The liability of an officer or director shall not be limited as providedin this section if the officer or director engaged in willful misconduct or aknowing violation of the criminal law.

D. No limitation on or elimination of liability adopted pursuant to thissection may be affected by any amendment of the articles of incorporation orbylaws with respect to any act or omission occurring before such amendment.

E. 1. Notwithstanding the provisions of this section, in any proceedingagainst an officer or director who receives compensation from a communityassociation for his services, the damages assessed arising out of a singletransaction, occurrence or course of conduct shall not exceed the amount ofcompensation received by the officer or director from the association duringthe twelve months immediately preceding the act or omission for whichliability was imposed. An officer or director who serves such an associationwithout compensation for his services shall not be liable for damages in anysuch proceeding.

2. The liability of an officer or director shall not be limited as providedin this subsection if the officer or director engaged in willful misconductor a knowing violation of the criminal law.

3. As used in this subsection, "community association" shall mean acorporation incorporated under this chapter which owns or has under its care,custody or control real estate subject to a recorded declaration of covenantswhich obligates a person, by virtue of ownership of specific real estate, tobe a member of the incorporated association.

(1987, cc. 59, 257; 1988, c. 561; 1989, c. 422.)