Indiana § 28-13-8-5 - Corporate committee; establishment; powers and duties; determination made independently of board; conclusive presumption on merits; disinterested director or other person

§ 28-13-8-5. Corporate committee; establishment; powers and duties; determination made independently of board; conclusive presumption on merits; disinterested director or other person

Sec. 5. (a) Unless prohibited by the articles of incorporation, the board of directors may establish a committee consisting of at least three (3) disinterested directors or other disinterested persons to determine:

(1) whether the corporation has a legal or equitable right or remedy; and

(2) whether it is in the best interests of the corporation to pursue that right or remedy, if any, or to dismiss a proceeding that seeks to assert that right or remedy on behalf of the corporation.

(b) In making a determination under subsection (a), the committee is not subject to the direction or control of or termination by the board. A vacancy on the committee may be filled by the majority of the remaining members by selection of another disinterested director or other disinterested person.

(c) If the committee determines that pursuit of a right or remedy through a derivative proceeding or otherwise is not in the best interests of the corporation, the merits of that determination are presumed to be conclusive against any shareholder making a demand or bringing a derivative proceeding with respect to the right or remedy, unless the shareholder can demonstrate that:

(1) the committee was not disinterested, as described in subsection (d); or

(2) the committee's determination was not made after an investigation conducted in good faith.

(d) For purposes of this chapter, a director or other person is disinterested if the director or other person:

(1) has not been made a party to a derivative proceeding seeking to assert the right or remedy in question, or has been made a party but only on the basis of a frivolous or insubstantial claim or for the sole purpose of seeking to disqualify the director or other person from serving on the committee;

(2) is able under the circumstances to render a determination in the best interests of the corporation; and

(3) is not an officer, employee, or agent of the corporation or of a related corporation.

However, an officer, employee, or agent of the corporation or a related corporation who meets the standards of subdivisions (1) and (2) shall be considered disinterested in any case in which the right or remedy under scrutiny is not assertable against a director or officer of the corporation or the related corporation.

As added by P.L.14-1992, SEC.163.

IC 28-13-9Chapter 9. Board of Directors Generally

28-13-9-1Necessity of board; powers 28-13-9-2Qualifications of directors; articles and bylaws prescribing; waiver of citizenship requirement 28-13-9-3Size of board; articles and bylaws; annual election of directors 28-13-9-4Election of directors; voting groups; classes of shares 28-13-9-5Terms of office; vacancies; continuation until qualification of successor 28-13-9-6Staggering terms; groups of directors; expiration of terms 28-13-9-7Resignation; notice; effective date 28-13-9-8Removal from office; meeting; notice 28-13-9-9Vacancies; filling known future vacancies; temporary appointment by director of department 28-13-9-10Compensation; fixing