Sec. 33-753. Committees.
Sec. 33-753. Committees. (a) Unless sections 33-600 to 33-998, inclusive, the
certificate of incorporation or the bylaws provide otherwise, a board of directors may
create one or more committees and appoint one or more members of the board of directors to serve on any such committee.
(b) Unless sections 33-600 to 33-998, inclusive, provide otherwise, the creation of
a committee and appointment of members to it shall be approved by the greater of (1)
a majority of all the directors in office when the action is taken, or (2) the number of
directors required by the certificate of incorporation or bylaws to take action under
section 33-752.
(c) (1) In the case of a corporation with at least one hundred shareholders which
is not otherwise required to have an audit committee under federal law or regulation or
the regulation of a national securities exchange registered under the Securities Exchange
Act of 1934, as amended, the board of directors shall, in the manner provided in subsection (b) of this section, whether or not the bylaws provide for such a committee, designate
two or more directors to constitute an audit committee, at least one of whom shall be
independent, if the board of directors includes an independent director. A director shall
be deemed to be "independent" unless (A) such director, or any spouse, parent or child
of such director, or any other corporation, firm or organization in which such director
or any such spouse, parent or child has a substantial interest, or any combination thereof,
has or at any time during the last two fiscal years of the corporation has had one or more
of the following relationships: (i) That of officer or employee of the corporation or of
any other corporation, firm or organization which owns a ten per cent or more debt or
equity interest in the corporation or in which the corporation owns a ten per cent or more
debt or equity interest; (ii) that of ownership of ten per cent or more of the debt or
equity of the corporation; or (iii) that of a business or professional relationship with the
corporation, other than by reason of the directorship itself, where the amount involved
in all transactions which result from such relationship during any fiscal year of the
corporation exceeds forty thousand dollars, or where the amount derived from transactions directly between the corporation and such director or such spouse, parent or child
exceeds five per cent of such director's annual income, or (B) such director serves as
an independent director on the boards of directors of more than five corporations. (2)
The audit committee shall perform such functions as the bylaws or a resolution of the
board of directors of the corporation may provide, except that if any such corporation
engages or proposes to engage an independent public accountant to review the preparation of and render reports on the financial statements of the corporation, notwithstanding
any provisions of the bylaws or such resolution, the audit committee shall review, evaluate and advise the board of directors with respect to (A) the proposed engagement and
any succeeding engagement of the accountant or any successor, and (B) the functions
performed by the accountant pursuant to the terms of the accountant's engagement.
(d) The provisions of sections 33-748 to 33-752, inclusive, apply both to committees
of the board and their members.
(e) To the extent specified by the board of directors or in the certificate of incorporation or bylaws, each committee may exercise the powers of the board of directors under
section 33-735.
(f) A committee may not, however: (1) Authorize or approve distributions, except
according to a formula or method, or within limits, prescribed by the board of directors;
(2) approve or propose to shareholders action that sections 33-600 to 33-998, inclusive,
require be approved by shareholders; (3) fill vacancies on the board of directors or,
subject to subsection (h) of this section, on any of its committees; or (4) adopt, amend
or repeal bylaws.
(g) The creation of, delegation of authority to, or action by a committee does not
alone constitute compliance by a director with the standards of conduct described in
section 33-756.
(h) The board of directors may appoint one or more directors as alternate members
of any committee to replace any absent or disqualified member during the member's
absence or disqualification. If authorized by the certificate of incorporation, the bylaws
or the resolution creating the committee, in the event of the absence or disqualification
of a member of a committee, the member or members present at any meeting and not
disqualified from voting, unanimously, may appoint another director to act in place of
the absent or disqualified member.
(P.A. 94-186, S. 99, 215; P.A. 96-271, S. 74, 254; P.A. 01-199, S. 10.)
History: P.A. 94-186 effective January 1, 1997; P.A. 96-271 replaced "articles" of incorporation with "certificate" of
incorporation where appearing, amended Subsec. (a) to replace "bylaws" with "a bylaw", amended Subsec. (c) to replace
"member of such director's immediate family" with "spouse, parent or child" and amended Subsec. (d) to delete provisions
that described the subject matter of the referenced statutory sections and rephrase the remaining provisions, effective
January 1, 1997; P.A. 01-199 amended Subsec. (a) to specify that Secs. 33-600 to 33-998, inclusive, may provide other
rules for the creation of committees and appointment of members thereto, authorize the board to appoint "one or more"
members to serve on any committee and delete requirement that each committee have "two or more members, who serve
at the pleasure of the board of directors", amended Subsec. (b) to make a technical change and specify that Secs. 33-600
to 33-998, inclusive, may provide other rules for the approval of the creation of a committee and appointment of members
thereto, amended Subsec. (d) to rephrase provisions, amended Subsec. (e) to replace "authority" with "powers", amended
Subsec. (f) to replace in Subdiv. (1) "Authorize distributions" with "Authorize or approve distributions, except according
to a formula or method, or within limits, prescribed by the board of directors", add in Subdiv. (3) that filling vacancies on
committees is "subject to subsection (h) of this section", delete former Subdiv. (4) re amendment of the certificate of
incorporation, renumbering former Subdiv. (5) as Subdiv. (4), delete former Subdiv. (6) re approval of a plan or merger
not requiring shareholder approval, delete former Subdiv. (7) re authorization or approval of a reacquisition of shares and
delete former Subdiv. (8) re authorization or approval of the issuance or sale of shares or the determination of rights,
preferences and limitations of a class or series of shares, and added new Subsec. (h) re appointment of alternate members.