CHAPTER 33. BOARD OF DIRECTORS GENERALLY
IC 23-1-33
Chapter 33. Board of Directors Generally
IC 23-1-33-1
Necessity of board of directors; powers
Sec. 1. (a) Except as provided in subsection (c), each corporationmust have a board of directors.
(b) All corporate powers shall be exercised by or under theauthority of, and the business and affairs of the corporation managedunder the direction of, its board of directors, subject to any limitationset forth in the articles of incorporation.
(c) A corporation having fifty (50) or fewer shareholders maydispense with the board of directors or limit the authority of theboard by describing in its articles of incorporation who will performsome or all of the duties of the board of directors. If a corporationelects to dispense with or limit the authority of the board of directors,any reference to the board of directors by this article also includesthose persons described in the articles of incorporation who willperform the duties of the board of directors.
As added by P.L.149-1986, SEC.17.
IC 23-1-33-2
Qualifications
Sec. 2. The articles of incorporation or bylaws may prescribequalifications for directors. A director need not be a resident of thisstate or a shareholder of the corporation unless the articles ofincorporation or bylaws so prescribe.
As added by P.L.149-1986, SEC.17.
IC 23-1-33-3
Number of directors; time for electing
Sec. 3. (a) A board of directors must consist of one (1) or moreindividuals, with the number specified in or fixed in accordance withthe articles of incorporation or bylaws.
(b) The articles of incorporation or bylaws may establish avariable range for the size of the board of directors by fixing aminimum and maximum number of directors. If a variable range isestablished, the number of directors may be fixed or changed fromtime to time, within the minimum and maximum, by the board ofdirectors.
(c) Directors are elected at the first annual shareholders' meetingand at each annual meeting thereafter unless their terms are staggeredunder section 6 of this chapter.
As added by P.L.149-1986, SEC.17.
IC 23-1-33-4
Election of directors by classes of shares
Sec. 4. If the articles of incorporation authorize dividing theshares into classes, the articles may also authorize the election of allor a specified number of directors by the holders of one (1) or more
authorized classes of shares. Each class (or classes) of shares entitledto elect one (1) or more directors is a separate voting group forpurposes of the election of directors.
As added by P.L.149-1986, SEC.17.
IC 23-1-33-5
Terms of office
Sec. 5. (a) The terms of the initial directors of a corporationexpire at the first shareholders' meeting at which directors areelected.
(b) Unless the bylaws of a corporation specify otherwise asprovided under IC 23-1-39-4 or a shorter term is specified in thebylaws for a director nominee failing to receive a specified vote forelection, the terms of all other directors expire at:
(1) the next; or
(2) if the director's terms are staggered in accordance withsection 6 of this chapter, the applicable second or third;
annual shareholders' meeting following their election.
(c) A decrease in the number of directors does not shorten anincumbent director's term.
(d) The term of a director elected to fill a vacancy expires at theend of the term for which the director's predecessor was elected.
(e) Unless the bylaws of a corporation specify otherwise asprovided under IC 23-1-39-4, despite the expiration of a director'sterm, the director continues to serve until a successor is elected andqualifies or until there is a decrease in the number of directors.
As added by P.L.149-1986, SEC.17. Amended by P.L.133-2009,SEC.23.
IC 23-1-33-6
Staggered terms
Sec. 6. (a) The articles of incorporation or the bylaws may providefor staggering their terms by dividing the total number of directorsinto either:
(1) two (2) groups, with each group containing one-half (1/2) ofthe total, as near as may be; or
(2) if there are more than two (2) directors, three (3) groups,with each group containing one-third (1/3) of the total, as nearas may be.
(b) In the event that terms are staggered under subsection (a), theterms of directors in the first group expire at the first annualshareholders' meeting after their election, the terms of the secondgroup expire at the second annual shareholders' meeting after theirelection, and the terms of the third group, if any, expire at the thirdannual shareholders' meeting after their election. At each annualshareholders' meeting held thereafter, directors shall be chosen for aterm of two (2) years or three (3) years, as the case may be, tosucceed those whose terms expire.
(c) A corporation that has a class of voting shares registered withthe Securities and Exchange Commission under Section 12 of the
Securities Exchange Act of 1934 shall provide for staggering theterms of directors in accordance with this section unless, not laterthan thirty (30) days after the later of:
(1) July 1, 2009; or
(2) the time when the corporation's voting shares are registeredwith the Securities and Exchange Commission under Section 12of the Securities Exchange Act of 1934;
the board of directors of the corporation adopts a bylaw expresslyelecting not to be governed by this subsection. However, an electionnot to be governed by this subsection may be rescinded by asubsequent action of the board of directors unless the original articlesof incorporation contain a provision expressly electing not to begoverned by this subsection.
(d) If the board fails to provide for the staggering of the terms ofdirectors as required by subsection (c), the board must be staggeredas follows:
(1) The first group comprises one-third (1/3) of the directors orone-third (1/3) of the directors rounded to the nearest higherwhole number if the number of directors is not divisible bythree (3) without any remaining.
(2) The second group comprises one-third (1/3) of the directorsor one-third (1/3) of the directors rounded to the nearest higherwhole number if the number of directors is not divisible bythree (3) without two (2) remaining.
(3) The third group comprises one-third (1/3) of the directors orone-third (1/3) of the directors rounded to the nearest lowerwhole number if the number of directors is not divisible bythree (3) without any remaining.
The directors shall be placed into the groups established by thissubsection alphabetically by last name.
As added by P.L.149-1986, SEC.17. Amended by P.L.107-1987,SEC.9; P.L.277-2001, SEC.5; P.L.133-2009, SEC.24.
IC 23-1-33-7
Resignation
Sec. 7. (a) A director may resign at any time by delivering writtennotice:
(1) to the board of directors, its chairman, or the secretary of thecorporation; or
(2) if the articles of incorporation or bylaws so provide, toanother designated officer.
(b) A resignation is effective when the notice is delivered unlessthe notice specifies:
(1) a later effective date; or
(2) an effective date determined upon the happening of anevent.
(c) A resignation that is conditioned upon failing to receive aspecified vote for election as a director may provide that theresignation is irrevocable.
As added by P.L.149-1986, SEC.17. Amended by P.L.107-1987,
SEC.10; P.L.133-2009, SEC.25.
IC 23-1-33-8
Removal
Sec. 8. (a) Directors may be removed in any manner provided inthe articles of incorporation. In addition, the shareholders or directorsmay remove one (1) or more directors with or without cause unlessthe articles of incorporation provide otherwise.
(b) If a director is elected by a voting group of shareholders, onlythe shareholders of that voting group may participate in the vote toremove that director.
(c) If cumulative voting is authorized, a director may not beremoved if the number of votes sufficient to elect the director undercumulative voting is voted against the director's removal. Ifcumulative voting is not authorized, a director may be removed onlyif the number of votes cast to remove the director exceeds thenumber of votes cast not to remove the director.
(d) A director may be removed by the shareholders, if they areotherwise authorized to do so, only at a meeting called for thepurpose of removing the director and the meeting notice must statethat the purpose, or one (1) of the purposes, of the meeting isremoval of the director.
As added by P.L.149-1986, SEC.17.
IC 23-1-33-9
Vacancies
Sec. 9. (a) Unless the articles of incorporation provide otherwise,if a vacancy occurs on a board of directors, including a vacancyresulting 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 aquorum of the board, they may fill the vacancy by theaffirmative vote of a majority of all the directors remaining inoffice.
(b) If the vacant office was held by a director elected by a votinggroup of shareholders, only the holders of shares of that voting groupare entitled to vote to fill the vacancy if it is filled by theshareholders.
(c) A vacancy that will occur at a specific later date (by reason ofa resignation effective at a later date under section 7(b) of thischapter or otherwise) may be filled before the vacancy occurs but thenew director may not take office until the vacancy occurs.
As added by P.L.149-1986, SEC.17.
IC 23-1-33-10
Compensation
Sec. 10. Unless the articles of incorporation or bylaws provideotherwise, the board of directors may fix the compensation ofdirectors.
As added by P.L.149-1986, SEC.17.