30-2002. DEFINITIONS. In this chapter:

(1) "Benefit corporation" means a business corporation that has elected to become subject to this chapter and the status of which as a benefit corporation has not been terminated.

(2) "Benefit director" means the director designated as the benefit director of a benefit corporation under section 30-2008, Idaho Code.

(3) "Benefit enforcement proceeding" means any claim, action or proceeding for failure of a benefit corporation to pursue or create general public benefit or a specific public benefit purpose as set forth in its articles, or violation of any obligation, duty or standard of conduct under this chapter.

(4) "Benefit officer" means the individual designated as the benefit officer of a benefit corporation under section 30-2010, Idaho Code.

(5) "General public benefit" means a material positive impact on society and the environment, taken as a whole, as assessed under a third-party standard, resulting from the business and operations of a benefit corporation.

(6) "Independent" means having no material relationship with a benefit corporation or a subsidiary of the benefit corporation; provided however, that serving as a benefit director or benefit officer does not by itself preclude a person from being independent. A material relationship between an individual and a benefit corporation or any of its subsidiaries will be conclusively presumed to exist if any of the following apply:

(a) The individual is or has been within the last three (3) years an employee other than a benefit officer of the benefit corporation or a subsidiary.

(b) An immediate family member of the individual is or has been within the last three (3) years an executive officer other than a benefit officer of the benefit corporation or a subsidiary.

(c) There is beneficial or record ownership of five percent (5%) or more of the outstanding shares of the benefit corporation, calculated as if all outstanding rights to acquire equity interests in the benefit corporation had been exercised, by:

(i) The individual; or

(ii) An entity:

1. Of which the individual is a director, an officer or a manager; or

2. In which the individual owns beneficially or of record five percent (5%) or more of the outstanding equity interests, calculated as if all outstanding rights to acquire equity interests in the entity had been exercised.

(7) "Minimum status vote" means:

(a) In the case of a business corporation, in addition to any other required approval or vote, the satisfaction of the following conditions:

(i) The shareholders of every class or series shall be entitled to vote as a separate voting group on the corporate action regardless of a limitation stated in the articles of incorporation or bylaws on the voting rights of any class or series.

(ii) The corporate action must be approved by vote of the shareholders of each class or series entitled to cast at least two-thirds (2/3) of the votes that all shareholders of the class or series are entitled to cast on the action.

(b) In the case of a domestic entity other than a business corporation, in addition to any other required approval, vote or consent, the satisfaction of the following conditions:

(i) The holders of every class or series of equity interest in the entity that are entitled to receive a distribution of any kind from the entity shall be entitled to vote on or consent to the action regardless of any otherwise applicable limitation on the voting or consent rights of any class or series.

(ii) The action must be approved by vote or consent of the holders entitled to cast at least two-thirds (2/3) of the votes or consents that all of those holders are entitled to cast on the action.

(8) "Publicly traded corporation" means a business corporation that has shares listed on a national securities exchange or traded in a market maintained by one (1) or more members of a national securities association.

(9) "Specific public benefit" includes:

(a) Providing low-income or underserved individuals or communities with beneficial products or services;

(b) Promoting economic opportunity for individuals or communities beyond the creation of jobs in the normal course of business;

(c) Protecting or restoring the environment;

(d) Improving human health;

(e) Promoting the arts, sciences or advancement of knowledge;

(f) Increasing the flow of capital to entities with a purpose to benefit society or the environment; or

(g) Conferring any other particular benefit on society or the environment.

(10) "Subsidiary" means, in relation to a person, an entity in which the person owns beneficially or of record fifty percent (50%) or more of the outstanding equity interests, calculated as if all outstanding rights to acquire equity interests in the entity had been exercised.

(11) "Third-party standard" means a recognized standard for defining, reporting and assessing corporate social and environmental performance that is:

(a) Comprehensive in that it assesses the effect of the business and its operations on the interests listed in section 30-2007(1), Idaho Code;

(b) Developed by an entity that is not controlled by the benefit corporation;

(c) Credible in that it is developed by an entity that both has access to necessary expertise to assess overall corporate social and environmental performance, and uses a balanced multi-stakeholder approach to develop the standard, including a reasonable public comment period; and

(d) Transparent in that information about the standard is publicly available, including information about:

(i) The criteria and weighting of such criteria used in the standard;

(ii) The identity of those who developed or revised the standard; and

(iii) An accounting of the revenue and sources of financial support for the entity that developed the standard, with sufficient detail to disclose any relationships that could reasonably be considered to present a potential conflict of interest.

History:

[30-2002, added 2015, ch. 217, sec. 1, p. 673.]