Minnesota Session Laws - 1987, Regular Session

  

                         Laws of Minnesota 1987 

                         CHAPTER 33-H.F.No. 202 
           An act relating to corporations; providing for 
          modification of the personal liability of directors of 
          certain corporations and fraternal benefit societies; 
          authorizing certain advances by fraternal benefit 
          societies; amending Minnesota Statutes 1986, sections 
          64B.08, by adding subdivisions; 300.45; and 300.64, by 
          adding a subdivision. 
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
    Section 1.  Minnesota Statutes 1986, section 64B.08, is 
amended by adding a subdivision to read:  
    Subd. 4.  [ADVANCES.] If a person is made or threatened to 
be made a party to a proceeding, the person is entitled, upon 
written request to the society, to payment or reimbursement by 
the society of reasonable expenses, including attorneys' fees 
and disbursements, incurred by the person in advance of the 
final disposition of the proceeding, (1) upon receipt by the 
society of a written affirmation by the person of a good faith 
belief that the criteria for indemnification set forth in 
subdivision 2 and the bylaws of the society have been satisfied 
and a written undertaking by the person to repay all amounts so 
paid or reimbursed by the society, if it is ultimately 
determined that the criteria for indemnification have not been 
satisfied; and (2) after a determination that the facts then 
known to those making the determination would not preclude 
indemnification under this section.  The written undertaking 
required by clause (1) is an unlimited general obligation of the 
person making it, but need not be secured and shall be accepted 
without reference to financial ability to make the repayment.  
    Sec. 2.  Minnesota Statutes 1986, section 64B.08, is 
amended by adding a subdivision to read:  
    Subd. 5.  [ELIMINATION OR LIMITATION OF LIABILITY.] A 
director's personal liability to the society, supreme governing 
body, or members for monetary damages for breach of fiduciary 
duty as a director may be eliminated or limited in the 
articles.  The articles shall not eliminate or limit the 
liability of a director:  
    (1) for any breach of the director's duty of loyalty to the 
society, the supreme governing body, or its members; 
    (2) for acts or omissions not in good faith or that involve 
intentional misconduct or a knowing violation of law; 
    (3) for any transaction from which the director derived an 
improper personal benefit; or 
    (4) for any act or omission occuring prior to the date when 
the provision in the articles eliminating or limiting liability 
becomes effective. 
    Sec. 3.  Minnesota Statutes 1986, section 300.45, is 
amended to read: 
    300.45 [CERTIFICATES OF INCORPORATION, AMENDMENT; 
EXCEPTIONS.] 
    Except for a nonprofit corporation subject to the Minnesota 
Nonprofit Corporation Act, the certificate of incorporation of a 
corporation organized and existing under the laws of this state 
may be amended to change its name, to increase or decrease its 
capital stock, to change the number and par value of the shares 
of its capital stock, to eliminate or limit a director's 
personal liability, or in respect to another matter which an 
original certificate of a corporation of the same kind might 
lawfully have contained.  The change must be accomplished by the 
adoption of a resolution specifying the proposed amendment at a 
regular meeting or at a special meeting called for that 
expressly stated purpose, in either of the following ways: 
    (1) by a majority vote of all its shares, if a stock 
corporation; or 
    (2) by a majority vote of its members; or, in either case, 
    (3) by a majority vote of its entire board of directors, 
trustees, or other managers within one year after authorization 
by specific resolution duly adopted at a meeting of stockholders 
or members.  The resolution must be included in a certificate 
duly executed by its president and secretary, or other presiding 
and recording officers, under its corporate seal, and approved 
and filed in the manner prescribed for the execution, approval, 
and filing of a like original certificate.  
    As to a local building and loan association and 
corporations organized for the establishing, maintaining, and 
operating of hospitals not for profit, the resolution to amend 
may be adopted as provided in this section or by a two-thirds 
vote of the stockholders or members of the association attending 
the meeting in person or by proxy.  
    Sec. 4.  Minnesota Statutes 1986, section 300.64, is 
amended by adding a subdivision to read:  
    Subd. 4.  [ELIMINATION OR LIMITATION OF LIABILITY.] A 
director's personal liability to the corporation or its 
stockholders or members for monetary damages for breach of 
fiduciary duty as a director may be eliminated or limited in the 
certificate.  The certificate shall not eliminate or limit the 
liability of a director:  
    (1) for a breach of the director's duty of loyalty to the 
corporation or its stockholders or members; 
    (2) for acts or omissions not in good faith or that involve 
intentional misconduct or a knowing violation of law; 
    (3) for acts prohibited under section 300.60; 
    (4) under subdivisions 1, 2, or 3; 
    (5) for a transaction from which the director derived an 
improper personal benefit; or 
    (6) for an act or omission occurring prior to the date when 
the provision in the certificate eliminating or limiting 
liability becomes effective. 
    Sec. 5.  [EFFECTIVE DATE.] 
    Sections 1 to 4 are effective the day following final 
enactment. 
    Approved April 16, 1987