[§414-264]  Shareholders' action.  (a) Shareholders' action respecting a transaction is effective for purposes ofsection 414-262(b)(2) if a majority of the votes entitled to be cast by theholders of all qualified shares were cast in favor of the transaction after:

(1)  Notice to shareholders describing the director'sconflicting interest transaction;

(2)  Provision of the information referred to insubsection (d); and

(3)  Required disclosure to the shareholders who votedon the transaction (to the extent the information was not known by them).

(b)  For purposes of this section,"qualified shares" means any shares entitled to vote with respect tothe director's conflicting interest transaction except shares that, to theknowledge, before the vote, of the secretary (or other officer or agent of thecorporation authorized to tabulate votes), are beneficially owned (or thevoting of which is controlled) by a director who has a conflicting interestrespecting the transaction or by a related person of the director, or both.

(c)  A majority of the votes entitled to becast by the holders of all qualified shares constitutes a quorum for purposesof action that complies with this section.  Subject to subsections (d) and (e),shareholders' action that otherwise complies with this section is not affectedby the presence of holders, or the voting, of shares that are not qualifiedshares.

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

(e)  If a shareholders' vote does not complywith subsection (a) solely because of a failure of a director to comply withsubsection (d), and if the director establishes that the director's failure didnot determine and was not intended by the director to influence the outcome ofthe vote, the court, with or without further proceedings respecting section414-262(b)(3), may take such action respecting the transaction and thedirector, and give such effect, if any, to the shareholders' vote, as itconsiders appropriate in the circumstances. [L 2000, c 244, pt of §1]