N.Y. Business Corporation Law § 717: Duty of directors

§ 717. Duty of directors.

(a) A director shall perform his duties as a director, including his

duties as a member of any committee of the board upon which he may

serve, in good faith and with that degree of care which an ordinarily

prudent person in a like position would use under similar circumstances.

In performing his duties, a director shall be entitled to rely on

information, opinions, reports or statements including financial

statements and other financial data, in each case prepared or presented

by:

(1) one or more officers or employees of the corporation or of any

other corporation of which at least fifty percentum of the outstanding

shares of stock entitling the holders thereof to vote for the election

of directors is owned directly or indirectly by the corporation, whom

the director believes to be reliable and competent in the matters

presented,

(2) counsel, public accountants or other persons as to matters which

the director believes to be within such person's professional or expert

competence, or

(3) a committee of the board upon which he does not serve, duly

designated in accordance with a provision of the certificate of

incorporation or the by-laws, as to matters within its designated

authority, which committee the director believes to merit confidence,

so long as in so relying he shall be acting in good faith and with such

degree of care, but he shall not be considered to be acting in good

faith if he has knowledge concerning the matter in question that would

cause such reliance to be unwarranted. A person who so performs his

duties shall have no liability by reason of being or having been a

director of the corporation.

(b) 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, (1) both the long-term and the short-term interests of the

corporation and its shareholders and (2) the effects that the

corporation's actions may have in the short-term or in the long-term

upon any of the following:

(i) the prospects for potential growth, development, productivity and

profitability of the corporation;

(ii) the corporation's current employees;

(iii) the corporation's retired employees and other beneficiaries

receiving or entitled to receive retirement, welfare or similar benefits

from or pursuant to any plan sponsored, or agreement entered into, by

the corporation;

(iv) the corporation's customers and creditors; and

(v) the ability of the corporation to provide, as a going concern,

goods, services, employment opportunities and employment benefits and

otherwise to contribute to the communities in which it does business.

Nothing in this paragraph shall create any duties owed by any director

to any person or entity to consider or afford any particular weight to

any of the foregoing or abrogate any duty of the directors, either

statutory or recognized by common law or court decisions.

For purposes of this paragraph, "control" shall mean 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 stock, by contract, or otherwise.