(a) As used in this chapter:
(1) "Benefit corporation" means a business corporation that is subject to this chapter;
(2) "Benefit director" means the director designated as the benefit director of a benefit corporation under § 4-36-302;
(3) "Benefit enforcement proceeding" means a claim or action for:
(A) Failure of a benefit corporation to pursue or create a general public benefit or a specific public benefit purpose as stated in its articles of incorporation; or
(B) Violation of an 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 § 4-36-304;
(5) "General public benefit" means a material positive impact on society and the environment, taken as a whole, assessed against a third-party standard, from the business and operations of a benefit corporation;
(6) (A) "Independent" means having no material relationship with a benefit corporation or a subsidiary of the benefit corporation.
(B) A person shall be independent even if serving as benefit director or benefit officer.
(C) A material relationship between a person and a benefit corporation or its subsidiaries is conclusively presumed to exist if:
(i) The person is, or has been in the last three (3) years, an employee other than a benefit officer of the benefit corporation or a subsidiary of the benefit corporation;
(ii) An immediate family member of the person is, or has been in the last three (3) years, an executive officer other than a benefit officer of the benefit corporation or its subsidiary; or
(iii) There is beneficial or record ownership of five percent (5%) or more of the outstanding shares of the benefit corporation by the person or an association:
(a) Of which the person is a director, an officer, or a manager; or
(b) In which the person owns beneficially or of record five percent (5%) or more of the outstanding equity interests;
(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 a class or series may vote as a class on the corporate action regardless of a limitation stated in the articles of incorporation or bylaws on the voting rights of the class or series; and
(ii) The corporate action shall 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 a class or series of equity interest in the entity that are entitled to receive a distribution from the entity may vote on or consent to the action regardless of an otherwise applicable limitation on the voting or consent rights of the class or series; and
(ii) The action shall be approved by vote or consent of the holders described in subdivision (7)(B)(i) of this section 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) "Specific public benefit" means:
(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) Preserving 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 public benefit purpose; and
(G) Conferring any other particular benefit on society or the environment;
(9) "Subsidiary" means in relation to a person, an association in which the person owns beneficially or of record fifty percent (50%) or more of the outstanding equity interests; and
(10) "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 § 4-36-301(a)(1)(B)-(E);
(B) Developed by an organization that is independent of the benefit corporation and satisfies the following:
(i) Not more than one-third (1/3) of the members of the governing body of the organization are representatives of:
(a) An association of businesses operating in a specific industry, the performance of whose members is measured by the standard;
(b) Businesses from a specific industry or an association of businesses in that industry; or
(c) A business whose performance is assessed against the standard; and
(ii) The organization is not materially financed by an association or business described in subdivision (10)(B)(i) of this section;
(C) Credible because the standard is developed by a person that both:
(i) Has access to necessary expertise to assess overall corporate social and environmental performance; and
(ii) Uses a balanced multistakeholder approach, including a public comment period of at least thirty (30) days to develop the standard; and
(D) Transparent because the following information is publicly available:
(i) The standard criteria considered if measuring the overall social and environmental performance of a business;
(ii) The relative weighting factor of those criteria;
(iii) The development and revision of the standard, including:
(a) The identity of the directors, officers, material owners, and the governing body of the organization that developed and controls revisions to the standard; and
(b) The process by which revisions to the standard and changes to the membership of the governing body are made; and
(iv) An accounting of the sources of financial support for the organization, with sufficient detail to disclose a relationship that could reasonably be considered to present a potential conflict of interest.
(b) For purposes of the definitions of "independent" and "subsidiary" in subsection (a) of this section, a percentage of ownership in an entity is computed as if all outstanding rights to acquire equity interests in the association had been exercised.
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