Section: Effect of Revised Statutes and acts hereafter passed upon actions or proceedings commenced prior to the effective date of such legislation
Liability of directors; reliance on records and reports.
(1) Directors and members of any committee designated by the board shall discharge their duties in good faith and with that degree of diligence, care and skill which ordinarily prudent people would exercise under similar circumstances in like positions.
(2) In discharging their duties, directors and members of any committee designated by the board shall not be liable if, acting in good faith, they rely
(a) Upon the opinion of counsel for the corporation;
(b) Upon written reports setting forth financial data concerning the corporation and prepared by an independent public accountant or certified public accountant or firm of such accountants;
(c) Upon financial statements, books of account or reports of the corporation represented to them to be correct by the president, the officer of the corporation having charge of its books of account, or the person presiding at a meeting of the board; or
(d) Upon written reports of committees of the board.
(3) A director shall not be personally liable to the corporation or its shareholders for damages for breach of duty as a director if and to the extent that such liability has been eliminated or limited by a provision in the certificate of incorporation authorized by subsection (3) of N.J.S. 14A:2-7.
(4) In taking action, including, without limitation, action which may involve or relate to a change or potential change in the control of the corporation, a director shall be entitled to consider, without limitation, both the long-term and the short-term interests of the corporation and its shareholders. For the purpose of this subsection, "control" means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of the corporation, whether through the ownership of voting shares, by contract or otherwise.
L.1968, c.350; amended 1987,c.35,s.3; 1988,c.94,s.33; 1989,c.17,s.3.
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