2013 Indiana Code TITLE 28. FINANCIAL INSTITUTIONS ARTICLE 13. CORPORATE GOVERNANCE CHAPTER 9. BOARD OF DIRECTORS GENERALLY
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IC 28-13-9
Chapter 9. Board of Directors Generally
IC 28-13-9-1
Necessity of board; powers
Sec. 1. (a) Each corporation must have a board of directors.
(b) All corporate powers shall be exercised by or under the
authority of, and the business and affairs of the corporation managed
under the direction of, the corporation's board of directors, subject to
any limitation set forth in the articles of incorporation.
As added by P.L.14-1992, SEC.163.
IC 28-13-9-2
Qualifications of directors; articles and bylaws prescribing; waiver
of citizenship requirement
Sec. 2. (a) Except as provided in subsection (c), every director
must, during the director's whole term of service, be a citizen of the
United States. A director must be at least eighteen (18) years of age.
At least one-half (1/2) of the directors must reside in Indiana or
within a distance of not to exceed fifty (50) miles of any office of the
corporation of which the director is a director.
(b) The articles of incorporation or bylaws may prescribe other
qualifications for directors. A director need not be a shareholder of
the corporation unless the articles of incorporation or bylaws so
prescribe.
(c) The director of the department may waive the United States
citizenship requirement set forth in subsection (a) for a particular
corporation if the waiver would affect only a minority of the total
number of directors of the corporation.
As added by P.L.14-1992, SEC.163. Amended by P.L.192-2003,
SEC.7; P.L.213-2007, SEC.104; P.L.217-2007, SEC.102.
IC 28-13-9-3
Size of board; articles and bylaws; annual election of directors
Sec. 3. (a) A board of directors must consist of at least three (3)
individuals, with the number specified in or fixed in accordance with
the articles of incorporation or bylaws. The articles of incorporation
or bylaws may provide that the number of directors may be
determined by resolution of the board of directors.
(b) The articles of incorporation or bylaws may establish a
variable range for the size of the board of directors by fixing a
minimum and maximum number of directors. However, the
minimum must be at least three (3) directors. If a variable range is
established, the number of directors may be fixed or changed from
time to time, within the minimum and maximum, in the bylaws or by
resolution of the board of directors.
(c) Directors are elected at the first annual shareholders' meeting
and at each subsequent annual meeting unless the directors' terms are
staggered under section 6 of this chapter.
As added by P.L.14-1992, SEC.163.
IC 28-13-9-4
Election of directors; voting groups; classes of shares
Sec. 4. (a) If the articles of incorporation authorize dividing the
shares into classes, the articles may also authorize the election of all
or a specified number of directors by the holders of at least one (1)
authorized class of shares.
(b) Each class of shares entitled to elect at least one (1) director
is a separate voting group for purposes of the election of directors.
As added by P.L.14-1992, SEC.163.
IC 28-13-9-5
Terms of office; vacancies; continuation until qualification of
successor
Sec. 5. (a) The terms of the initial directors of a corporation
expire at the first shareholders' meeting at which directors are
elected.
(b) The terms of all other directors expire at the next annual
shareholders' meeting following their election unless the directors'
terms are staggered under section 6 of this chapter.
(c) A decrease in the number of directors does not shorten an
incumbent director's term.
(d) The term of a director elected to fill a vacancy expires at the
end of the term for which the director's predecessor was elected.
(e) Despite the expiration of a director's term, the director
continues to serve until a successor is elected and qualifies or until
there is a decrease in the number of directors.
As added by P.L.14-1992, SEC.163.
IC 28-13-9-6
Staggering terms; groups of directors; expiration of terms
Sec. 6. (a) The articles of incorporation or, if the articles of
incorporation so authorize, the bylaws may provide for staggering the
board of directors' terms by dividing the total number of directors
into either:
(1) two (2) groups, with each group containing one-half (1/2) of
the total, as near as may be; or
(2) three (3) groups, with each group containing one-third (1/3)
of the total, as near as may be.
(b) If terms are staggered under subsection (a):
(1) the terms of directors in the first group expire at the first
annual shareholders' meeting after the directors' election;
(2) the terms of the second group expire at the second annual
shareholders' meeting after the directors' election; and
(3) the terms of the third group, if any, expire at the third annual
shareholders' meeting after the directors' election.
At each annual shareholders' meeting held after the meetings
specified in this subsection, directors shall be chosen for a term of
two (2) years or three (3) years, as the case may be, to succeed those
whose terms expire.
As added by P.L.14-1992, SEC.163.
IC 28-13-9-7
Resignation; notice; effective date
Sec. 7. (a) A director may resign at any time by delivering written
notice:
(1) to the board of directors, its chairman, or the secretary of the
corporation; or
(2) if the articles of incorporation or bylaws so provide, to
another designated officer.
(b) A resignation is effective when the notice is delivered unless
the notice specifies a later effective date.
As added by P.L.14-1992, SEC.163.
IC 28-13-9-8
Removal from office; meeting; notice
Sec. 8. (a) Directors may be removed in any manner provided in
the articles of incorporation. In addition, the shareholders or directors
may remove one (1) or more directors for cause or, unless the articles
of incorporation provide otherwise, without cause.
(b) If a director is elected by a voting group of shareholders, only
the shareholders of that voting group may participate in the vote to
remove that director.
(c) A director may be removed only if the number of votes cast to
remove the director exceeds the number of votes cast not to remove
the director.
(d) A director may be removed by the shareholders, if the
shareholders are otherwise authorized to do so, only at a meeting
called for the purpose of removing the director. The meeting notice
must state that the purpose, or one (1) of the purposes, of the
meeting, is removal of the director.
As added by P.L.14-1992, SEC.163.
IC 28-13-9-9
Vacancies; filling known future vacancies; temporary appointment
by director of department
Sec. 9. (a) Unless the articles of incorporation provide otherwise,
if a vacancy occurs on a board of directors, including a vacancy
resulting from an increase in the number of directors:
(1) the board of directors may fill the vacancy; or
(2) if the directors remaining in office constitute fewer than a
quorum of the board, the directors may fill the vacancy by the
affirmative vote of a majority of all the directors remaining in
office.
(b) If the vacant office was held by a director elected by a voting
group of shareholders, only the holders of shares of that voting group
are entitled to vote to fill the vacancy if it is filled by the
shareholders.
(c) A vacancy that will occur at a specific later date by reason of
a resignation effective at a later date under section 7(b) of this
chapter or otherwise may be filled before the vacancy occurs.
However, the new director may not take office until the vacancy
occurs.
(d) If a vacancy is not filled through a corporation's normal
process for filing vacancies within a time considered reasonable by
the department, the director of the department may make a temporary
appointment to the board of directors to fill the vacancy. The director
of the department shall appoint a person whom the director considers
capable of providing competent leadership and decision making
ability. A person appointed to a board of directors under this
subsection shall serve on the board until the corporation fills the
position through the corporation's normal process for filing vacancies
on the board. However, a person appointed to a board of directors by
the director of the department under this subsection may not serve on
the board for more than two (2) years, unless the person is selected
to fill the vacancy through the corporation's normal process for
filling vacancies. For purposes of this subsection, in determining
whether a corporation has had a reasonable period in which to fill a
vacancy, the department shall consider the following:
(1) The financial condition of the corporation.
(2) The number of remaining board members.
(3) The likelihood the board of directors will be able to
establish a quorum for the transaction of business.
(4) The potential harm to the corporation that could result
without an appointment under this subsection.
As added by P.L.14-1992, SEC.163. Amended by P.L.141-2005,
SEC.25.
IC 28-13-9-10
Compensation; fixing
Sec. 10. Unless the articles of incorporation or bylaws provide
otherwise, the board of directors may fix the compensation of
directors.
As added by P.L.14-1992, SEC.163.
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