2006 Utah Code - 31A-5-412 — Committees of directors.

     31A-5-412.   Committees of directors.
     (1) If provided for in the articles or bylaws of a corporation, the board, by resolution adopted by a majority of the full board, may designate one or more committees. Each of these committees shall consist of three or more directors serving at the pleasure of the board. The board may designate one or more directors as alternate members of any committee to substitute for an absent member at any meeting of the committee. The designation of a committee and delegation of authority to it does not relieve the board or any director of responsibility imposed upon it or him by law.
     (2) (a) Except for corporations described under Subsection 31A-5-407 (4), every corporation shall have an audit committee.
     (b) No member of the audit committee may be an inside director as defined under Subsection 31A-5-407 (3).
     (c) The audit committee shall maintain an overview of the audit activities, systems, and staff of the company and of the activities of the outside auditors, in order to advise the board on the adequacy of fiscal control. The audit committee has direct and private access to company data and personnel as that committee considers necessary, and may meet privately with the outside directors as it sees fit.
     (3) When the board is not in session, a committee may exercise the powers of the board in the management of the business and affairs of the corporation to the extent authorized in the resolution or in the articles or bylaws, except action regarding:
     (a) compensation or indemnification of any person who is a director, principal officer, or one of the three most highly paid employees;
     (b) benefits or payments requiring shareholder or policyholder approval;
     (c) approval of a contract requiring board approval under Section 31A-5-414, or approval of any other transaction in which a director has a material interest adverse to the corporation;
     (d) amendment of the articles or bylaws;
     (e) merger or consolidation under Section 31A-5-501, 31A-5-502, or 31A-5-503, conversion under Section 31A-5-505, 31A-5-506, 31A-5-507, or 31A-5-509, voluntary dissolution under Section 31A-5-504, or transfer of business or assets under Section 31A-5-508;
     (f) any other decision requiring shareholder or policyholder approval;
     (g) amendment or repeal of an action taken by the full board, which by its terms is not subject to amendment or repeal by a committee;
     (h) dividends or other distributions to shareholders, policyholders, or voting members other than in the routine implementation of policy determinations of the full board;
     (i) selection of principal officers; and
     (j) filling vacancies on the board or on a committee created under Subsection (1), except that the articles or bylaws may provide for temporary appointments to fill vacancies on the board or a committee. These temporary appointments last only until the end of the next board meeting.
     (4) At the next meeting following action by any committee, the full board shall review any transaction in which an officer has a material financial interest adverse to the corporation.

Amended by Chapter 95, 1987 General Session
Amended by Chapter 91, 1987 General Session