10-863

10-863. Shareholders' action;
definition

A. Shareholders' action respecting a transaction is effective for purposes of
section 10-861, subsection B, paragraph 2 if a majority of the votes entitled to be cast
by the holders of all qualified shares was cast in favor of the transaction after all of
the following:

1. Notice to shareholders describing the director's conflicting interest
transaction.

2. Provision of the information referred to in subsection C of this section.

3. Required disclosure to the shareholders who voted on the transaction, to the
extent the information was not known by them.

B. A majority of the votes entitled to be cast by the holders of all qualified
shares is a quorum for the purposes of action that complies with this section. Subject
to subsections C and D of this section, shareholders' action that otherwise complies with
this section is not affected by the presence of holders or the voting of shares that are
not qualified shares.

C. For purposes of compliance with subsection A of this section, a director who has
a conflicting interest respecting the transaction shall inform, before the shareholders'
vote, the secretary, or other officer or agent of the corporation authorized to tabulate
votes, of the number and the identity of persons holding or controlling the vote of all
shares that the director knows are beneficially owned, or the voting of which is
controlled, by the director or by a related person of the director, or both.

D. If a shareholders' vote does not comply with subsection A of this section solely
because of a failure of a director to comply with subsection C of this section and if the
director establishes that his failure did not determine and was not intended by him to
influence the outcome of the vote, the court, with or without further proceedings
respecting section 10-861, subsection B, paragraph 3, may take such action respecting the
transaction and the director and give such effect, if any, to the shareholders' vote, as
it considers appropriate in the circumstances.

E. For purposes of this section, "qualified shares" means any shares entitled to
vote with respect to the director's conflicting interest transaction except shares that,
to the knowledge, before the vote, of the secretary, or other officer or agent of the
corporation authorized to tabulate votes, are beneficially owned, or the voting of which
is controlled, by a director who has a conflicting interest respecting the transaction or
by a related person of the director, or both.