State Codes and Statutes

State Codes and Statutes

Statutes > Nebraska > Chapter21 > 21-20_112

21-20,112. Director; conflict of interest; terms, defined.For purposes of sections 21-20,112 to 21-20,115:(1) Conflicting interest with respect to a corporation shall mean the interest a director of the corporation has respecting a transaction effected or proposed to be effected by the corporation or by a subsidiary of the corporation or any other entity in which the corporation has a controlling interest if:(a) Whether or not the transaction is brought before the board of directors of the corporation for action, the director knows at the time of commitment that he or she or a related person is a party to the transaction or has a beneficial financial interest in or is so closely linked to the transaction and of such financial significance to the director or a related person that the interest would reasonably be expected to exert an influence on the director's judgment if he or she were called upon to vote on the transaction; or(b) The transaction is brought, or is of such character and significance to the corporation that it would in the normal course be brought, before the board of directors of the corporation for action and the director knows at the time of commitment that any of the following persons is either a party to the transaction or has a beneficial financial interest in or is so closely linked to the transaction and the transaction is of such financial significance to the person that the interest would reasonably be expected to exert an influence on the director's judgment if he or she were called upon to vote on the transaction:(i) An entity, other than the corporation, of which the director is a director, general partner, member of a limited liability company, agent, or employee;(ii) A person that controls one or more of the entities specified in subdivision (i) of this subdivision or an entity that is controlled by, or is under common control with, one or more of the entities specified in subdivision (i) of this subdivision; or(iii) An individual who is a general partner, principal, or employer of the director;(2) Director's conflicting interest transaction with respect to a corporation shall mean a transaction effected or proposed to be effected by the corporation or by a subsidiary of the corporation or any other entity in which the corporation has a controlling interest respecting which a director of the corporation has a conflicting interest;(3) Related person of a director shall mean (a) the spouse, or a parent or sibling thereof, of the director, or a child, grandchild, sibling, parent, or spouse of any thereof, of the director, or an individual having the same home as the director, or a trust or estate of which an individual specified in this subdivision is a substantial beneficiary or (b) a trust, estate, incompetent, conservatee, or minor of which the director is a fiduciary;(4) Required disclosure shall mean disclosure by the director who has a conflicting interest of (a) the existence and nature of his or her conflicting interest and (b) all facts known to him or her respecting the subject matter of the transaction that an ordinarily prudent person would reasonably believe to be material to a judgment about whether or not to proceed with the transaction; and(5) Time of commitment respecting a transaction shall mean the time when the transaction is consummated or, if made pursuant to contract, the time when the corporation, or its subsidiary or the entity in which it has a controlling interest, becomes contractually obligated so that its unilateral withdrawal from the transaction would entail significant loss, liability, or other damage. SourceLaws 1995, LB 109, § 112.