§ 23-1-32-4 — Committee of disinterested directors or persons

Indiana § 23-1-32-4

• Jurisdiction: Indiana
• Title 23: BUSINESS AND OTHER ASSOCIATIONS
• Art. 1: INDIANA BUSINESS CORPORATION LAW
• Ch. 32: Derivative Proceedings

Text

(a) Unless prohibited by the articles of
incorporation, the board of directors may establish a committee
consisting of three (3) or more 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 shall be presumed
to be conclusive against any shareholder making a demand or bringing
a derivative proceeding with respect to such right or remedy, unless
such shareholder can demonstrate that:
(1) the committee was not "disinterested" within the meaning of
this section; or
(2) the committee's determination was not made after an
investigation conducted in good faith.
(d) For purposes of this section, 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.

Legislative History

As added by P.L.149-1986, SEC.16.