MEMBER OF MANAGER - ELIMINATION OR LIMITATION OF
LIABILITY - INDEMNIFICATION

1. A. Subject to subsection B of this section, the articles of organization or operating agreement may:

   1. 1. Eliminate or limit the personal liability of a member or manager for monetary damages for breach of any duty provided for in Section 2016 of this title; and
   2. 2. Provide for indemnification of a member or manager for judgments, settlements, penalties, fines or expenses incurred in any proceeding because the person is or was a member or manager.

2. B. No provision permitted under subsection A of this section shall limit or eliminate the liability of a manager for:

   1. 1. Any breach of the manager's duty of loyalty to the limited liability company or its members;
   2. 2. Acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law; or
   3. 3. Any transaction from which the manager derived an improper personal benefit.
3. C. The articles of organization or operating agreement may define the scope of any duties owned by the members or managers to the limited liability company, if not manifestly unreasonable. A definition shall not eliminate the duty of loyalty or the obligation of good faith and fair dealing.

Added by Laws 1992, c. 148, § 18, eff. September 1, 1992; Amended by Laws 1993, c. 366, § 9, eff. September 1, 1993; Amended by Laws 2001, SB 610, c. 405, § 33, eff. November 1, 2001 (superseded document available).