(a) A corporation may eliminate or limit the personal liability of its directors in any action brought by the shareholders or the corporation for monetary damages against any director of the corporation for any action taken, or any failure to take any action, as a director; provided that:
Terms Used In Hawaii Revised Statutes 414-222
Amendment: A proposal to alter the text of a pending bill or other measure by striking out some of it, by inserting new language, or both. Before an amendment becomes part of the measure, thelegislature must agree to it.
Articles of incorporation: include amended and restated articles of incorporation and articles of merger. See Hawaii Revised Statutes 414-3
Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
Damages: Money paid by defendants to successful plaintiffs in civil cases to compensate the plaintiffs for their injuries.
Department director: means the director of commerce and consumer affairs, unless the context otherwise requires. See Hawaii Revised Statutes 414-3
Shares: means the units into which the proprietary interests in a corporation are divided. See Hawaii Revised Statutes 414-3
(1) The elimination or limitation shall be authorized, directed, or provided for in:
(A) The articles of incorporation of the corporation; or(B) Any duly adopted amendment of the articles of incorporation; and(2) If the provision eliminating or limiting the personal liability of a corporation’s directors is authorized, directed, or provided for by amendments to the articles of incorporation, it shall be adopted upon the affirmative vote of the holders of two-thirds of the shares represented at the shareholders’ meeting and entitled to vote; provided that the vote also constitutes a majority of the shares entitled to vote.(b) A corporation shall not eliminate or limit the personal liability of a director for:
(1) The amount of a financial benefit received by a director to which the director is not entitled;(2) An intentional infliction of harm on the corporation or the shareholders;(3) A violation of § 414-223; or(4) An intentional violation of criminal law.(c) The shareholders of the corporation shall receive written notice of any proposal by the corporation to eliminate or limit the personal liability of the directors under subsection (a)(2), and the corporation shall in such cases submit the duly adopted amendment to the articles of incorporation to the department director.(d) Nothing in this section shall impair or affect the validity of any provisions of the bylaws of a corporation eliminating or limiting the personal liability of the directors, which were authorized, directed, or provided for and approved by the shareholders of the corporation in compliance with then existing law prior to July 1, 1996.
