(a)A director shall, based on facts then known
to the director, discharge the duties as a director, including the
director's duties as a member of a committee:
(2)with the care an ordinarily prudent person in a like position
would exercise under similar circumstances; and
(3)in a manner the director reasonably believes to be in the best
interests of the corporation.
(b)In discharging the director's duties a director is entitled to rely
on information, opinions, reports, or statements, including financial
statements and other financial data, if prepared or presented by:
(1)one (1) or more officers or employees of the corporation
whom the director reasonably believes to be reliable and
competent in the matters presented;
(2)legal counsel, public accountants, or other
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(a) A director shall, based on facts then known
to the director, discharge the duties as a director, including the
director's duties as a member of a committee:
(1) in good faith;
(2) with the care an ordinarily prudent person in a like position
would exercise under similar circumstances; and
(3) in a manner the director reasonably believes to be in the best
interests of the corporation.
(b) In discharging the director's duties a director is entitled to rely
on information, opinions, reports, or statements, including financial
statements and other financial data, if prepared or presented by:
(1) one (1) or more officers or employees of the corporation
whom the director reasonably believes to be reliable and
competent in the matters presented;
(2) legal counsel, public accountants, or other persons as to
matters the director reasonably believes are within the person's
professional or expert competence; or
(3) a committee of the board of directors of which the director is
not a member if the director reasonably believes the committee
merits confidence.
(c) A director is not acting in good faith if the director has
knowledge concerning the matter in question that makes reliance
otherwise permitted by subsection (b) unwarranted.
(d) A director may, in considering the best interests of a corporation,
consider the effects of any action on shareholders, employees,
suppliers, and customers of the corporation, and communities in which
offices or other facilities of the corporation are located, and any other
factors the director considers pertinent.
(e) A director is not liable for any action taken as a director, or any
failure to take any action, regardless of the nature of the alleged breach
of duty, including alleged breaches of the duty of care, the duty of
loyalty, and the duty of good faith, unless:
(1) the director has breached or failed to perform the duties of the
director's office in compliance with this section; and
(2) the breach or failure to perform constitutes willful misconduct
or recklessness.
(f) In enacting this article, the general assembly established
corporate governance rules for Indiana corporations, including in this
chapter, the standards of conduct applicable to directors of Indiana
corporations, and the corporate constituent groups and interests that a
director may take into account in exercising the director's business
judgment. The general assembly intends to reaffirm certain of these
corporate governance rules to ensure that the directors of Indiana
corporations, in exercising their business judgment, are not required to
approve a proposed corporate action if the directors in good faith
determine, after considering and weighing as they deem appropriate the
effects of such action on the corporation's constituents, that such action
is not in the best interests of the corporation. In making such
determination, directors are not required to consider the effects of a
proposed corporate action on any particular corporate constituent group
or interest as a dominant or controlling factor. Without limiting the
generality of the foregoing, directors are not required to render
inapplicable any of the provisions of IC 23-1-43, to redeem any rights
under or to render inapplicable a shareholder rights plan adopted
pursuant to IC 23-1-26-5, or to take or decline to take any other action
under this article, solely because of the effect such action might have
on a proposed acquisition of control of the corporation or the amounts
that might be paid to shareholders under such an acquisition. Certain
judicial decisions in Delaware and other jurisdictions, which might
otherwise be looked to for guidance in interpreting Indiana corporate
law, including decisions relating to potential change of control
transactions that impose a different or higher degree of scrutiny on
actions taken by directors in response to a proposed acquisition of
control of the corporation, are inconsistent with the proper application
of the business judgment rule under this article. Therefore, the general
assembly intends:
(1) to reaffirm that this section allows directors the full discretion
to weigh the factors enumerated in subsection (d) as they deem
appropriate; and
(2) to protect both directors and the validity of corporate action
taken by them in the good faith exercise of their business
judgment after reasonable investigation.
(g) In taking or declining to take any action, or in making or
declining to make any recommendation to the shareholders of the
corporation with respect to any matter, a board of directors may, in its
discretion, consider both the short term and long term best interests of
the corporation, taking into account, and weighing as the directors
deem appropriate, the effects thereof on the corporation's shareholders
and the other corporate constituent groups and interests listed or
described in subsection (d), as well as any other factors deemed
pertinent by the directors under subsection (d). If a determination is
made with respect to the foregoing with the approval of a majority of
the disinterested directors of the board of directors, that determination
shall conclusively be presumed to be valid unless it can be
demonstrated that the determination was not made in good faith after
reasonable investigation.
(h) For the purposes of subsection (g), a director is disinterested if:
(1) the director does not have a conflict of interest, within the
meaning of section 2 of this chapter, in connection with the action
or recommendation in question;
(2) in connection with matters described in IC 23-1-32 the
director is disinterested (as defined in IC 23-1-32-4(d));
(3) in connection with any matter involving or otherwise
affecting:
(A) a control share acquisition (as defined in IC 23-1-42-2) or
any matter related to a control share acquisition under IC 23-1-42 or other provisions of this article;
(B) a business combination (as defined in IC 23-1-43-5) or any
matter related to a business combination under IC 23-1-43
(including a person becoming an interested shareholder) or
other provisions of this article; or
(C) any transaction that may result in a change of control (as
defined in IC 23-1-22-4) of the corporation;
the director is not an employee of the corporation; and
(4) in connection with any matter involving or otherwise
affecting:
(A) a control share acquisition (as defined in IC 23-1-42-2) or
any matter related to a control share acquisition under IC 23-1-42 or other provisions of this article;
(B) a business combination (as defined in IC 23-1-43-5) or any
matter related to a business combination under IC 23-1-43
(including a person becoming an interested shareholder) or
other provisions of this article; or
(C) any transaction that may result in a change of control (as
defined in IC 23-1-22-4) of the corporation;
the director is not an affiliate or associate of, or was not
nominated or designated as a director by, a person proposing any
of the transactions described in clause (A), (B), or (C).
(i) A person may be disinterested under this section even though the
person is a director or shareholder of the corporation.