§414-263  Directors' action.  (a)  Theaction of directors respecting a transaction is effective for purposes ofsection 414-262(b)(1) if the transaction received the affirmative vote of amajority (but no fewer than two) of those qualified directors on the board ofdirectors or on a duly empowered committee of the board who voted on thetransaction after either required disclosure to them (to the extent theinformation was not known by them) or compliance with subsection (b); providedthat action by a committee is so effective only if:

(1)  All its members are qualified directors; and

(2)  Its members are either all the qualifieddirectors on the board or are appointed by the affirmative vote of a majorityof the qualified directors on the board.

(b)  If a director has a conflicting interestrespecting a transaction, but neither the director nor a related person of thedirector, as set forth in paragraph (2) of the definition of "relatedperson" in section 414-261, is a party to the transaction, and if thedirector has a duty under law or professional canon, or a duty ofconfidentiality to another person, respecting information relating to thetransaction such that the director may not make the required disclosuredescribed in paragraph (2) of the definition of "required disclosure"in section 414-261, then disclosure is sufficient for purposes of subsection(a) if the director:

(1)  Discloses to the directors voting on thetransaction the existence and nature of the director's conflicting interest andinforms them of the character and limitations imposed by that duty before theirvote on the transaction; and

(2)  Plays no part, directly or indirectly, in theirdeliberations or vote.

(c)  A majority (but no fewer than two) of allthe qualified directors on the board of directors, or on the committee,constitutes a quorum for purposes of action that complies with this section. The action of directors that otherwise complies with this section is notaffected by the presence or vote of a director who is not a qualified director.

(d)  For purposes of this section,"qualified director" means, with respect to a director's conflictinginterest transaction, any director who does not have either:

(1)  A conflicting interest respecting thetransaction; or

(2)  A familial, financial, professional, oremployment relationship with a second director who does have a conflictinginterest respecting the transaction, which relationship would, in thecircumstances, reasonably be expected to exert an influence on the first director'sjudgment when voting on the transaction. [L 2000, c 244, pt of §1; am L 2001, c129, §26]