Nevada Revised Statutes 78.140 – Restrictions on transactions involving interested directors or officers; compensation of directors
1. A contract or other transaction is not void or voidable solely because:
Terms Used In Nevada Revised Statutes 78.140
- Contract: A legal written agreement that becomes binding when signed.
- Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
- Evidence: Information presented in testimony or in documents that is used to persuade the fact finder (judge or jury) to decide the case for one side or the other.
- Quorum: The number of legislators that must be present to do business.
(a) The contract or transaction is between a corporation and:
(1) One or more of its directors or officers; or
(2) Another corporation, firm or association in which one or more of its directors or officers are directors or officers or are financially interested;
(b) A common or interested director or officer:
(1) Is present at the meeting of the board of directors or a committee thereof which authorizes or approves the contract or transaction; or
(2) Joins in the signing of a written consent which authorizes or approves the contract or transaction pursuant to subsection 2 of NRS 78.315; or
(c) The vote or votes of a common or interested director are counted for the purpose of authorizing or approving the contract or transaction, if one of the circumstances specified in subsection 2 exists.
2. The circumstances in which a contract or other transaction is not void or voidable pursuant to subsection 1 are:
(a) The fact of the common directorship, office or financial interest is known to the board of directors or committee, and the directors or members of the committee, other than any common or interested directors or members of the committee, approve or ratify the contract or transaction in good faith.
(b) The fact of the common directorship, office or financial interest is known to the stockholders, and stockholders holding a majority of the voting power approve or ratify the contract or transaction in good faith. The votes of the common or interested directors or officers must be counted in any such vote of stockholders.
(c) The fact of the common directorship, office or financial interest is not known to the director or officer at the time the transaction is brought before the board of directors of the corporation for action.
(d) The contract or transaction is fair as to the corporation at the time it is authorized or approved.
3. Common or interested directors or common or interested members of the committee may be counted in determining the presence of a quorum at a meeting of the board of directors or a committee thereof which authorizes, approves or ratifies a contract or transaction, and if the votes of the common or interested directors or common or interested members of the committee are not counted at the meeting, then a majority of the disinterested directors or disinterested members of the committee may authorize, approve or ratify a contract or transaction.
4. The fact that the vote or votes of the common or interested director or directors, or common or interested member or members of the committee, are not counted for purposes of subsection 2 does not prohibit any authorization, approval or ratification of a contract or transaction to be given by written consent pursuant to subsection 2 of NRS 78.315, regardless of whether the common or interested director signs such written consent or abstains in writing from providing consent.
5. Unless otherwise provided in the articles of incorporation or the bylaws, the board of directors, without regard to personal interest, may establish the compensation of directors for services in any capacity. If the board of directors establishes the compensation of directors pursuant to this subsection, such compensation is presumed to be fair to the corporation unless proven unfair by a preponderance of the evidence.