The Oklahoma Bar Journal October 2024

incorporation to include an excul patory provision that eliminates or limits the personal liability of its directors to the corporation or its shareholders for breach of their fiduciary duties. 20 The exculpatory provision may not, however, elimi nate or limit the directors’ liability for 1) any breach of their duty of loyalty, 2) acts or omissions not in good faith or that involve inten tional misconduct or a knowing violation of law, 3) unlawful div idends or share redemptions or 4) transactions from which the directors derived improper per sonal benefits. 21 The statute did not extend the liability limitation to officers, even though officers are subject to the same fiduciary duties as directors. 22 Following a 2022 DGCL amendment, SB 620 amends Section 1006.B.7 of the OGCA to permit a corporation to extend the exculpatory provisions in its certif icate of incorporation to protect its officers as well as directors. 23 The provision could eliminate or limit the personal liability of corporate officers for monetary damages for breach of their fiduciary duties. As with directors, the exculpatory

foreign professional entity qualify ing to practice in Oklahoma. 15 The qualifying document must include a certificate by the applicable reg ulatory board of the profession that the persons who will become the managers of the foreign pro fessional entity and who will be responsible for the practice of the profession in Oklahoma are duly licensed or otherwise permitted in accordance with the provisions of Oklahoma’s licensing laws to prac tice the profession. 16 Restrictions on ownership and management of domestic or foreign professional entities. SB 620 continues the requirement that every manager of a domestic professional entity responsible for the professional services rendered by the entity must be duly licensed or otherwise permitted to provide professional services in Oklahoma. 17 The owners of a domestic profes sional entity must also be duly licensed or otherwise permitted to practice law in Oklahoma. For a foreign professional entity, an unli censed person may be an owner or manager if the person is not prac ticing in Oklahoma. 18

Oklahoma General Corporation Act Oklahoma modeled its OGCA upon the Delaware General Corporation Law (DGCL) to fos ter reliance on the large body of Delaware case law, which offers persuasive guidance to Oklahoma courts and practitioners. 19 The amendments in SB 620 track earlier Delaware amendments to ensure continued guidance from the Delaware case law. SB 620 amends the OGCA to 1) permit a corpo ration by its charter to protect its corporate officers from certain monetary damages for breach of fiduciary duty, 2) expand certain rights of directors and offices regarding indemnification by the corporation, 3) authorize a corpo ration to purchase and maintain insurance through a captive insur ance company, 4) clarify a variety of items relating to notice of meetings, consents of shareholders in lieu of meetings, mergers, consolidations, conversions and dissolutions and 5) expand the procedures relating to shareholder appraisal rights. Exculpation of officers and indemnification. Since 1987, the OGCA, as in the DGCL, has per mitted a corporation’s certificate of

Statements or opinions expressed in the Oklahoma Bar Journal are those of the authors and do not necessarily reflect those of the Oklahoma Bar Association, its officers, Board of Governors, Board of Editors or staff.

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THE OKLAHOMA BAR JOURNAL