Vermont Statutes Title 11 Sec. 819b
Terms Used In Vermont Statutes Title 11 Sec. 819b
- Articles of organization: means the articles of organization of a mutual benefit enterprise required by section 302 of this title. See
- Board of directors: means the board of directors of a mutual benefit enterprise. See
- Bylaws: means the bylaws of a mutual benefit enterprise. See
- Director: means a director of a mutual benefit enterprise. See
- Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.
- Person: means an individual; corporation; business trust; cooperative; estate; trust; partnership; limited partnership; limited liability company; mutual benefit enterprise; joint venture; association; public corporation; government or governmental subdivision, agency, or instrumentality; or any other legal or commercial entity. See
- Quorum: The number of legislators that must be present to do business.
§ 819b. Directors’ action
(a) Directors’ action respecting a director‘s conflicting interest transaction is effective for purposes of subdivision 819a(b)(1) of this title if the transaction has been authorized by the affirmative vote of a majority but no fewer than two of the qualified directors who voted on the transaction after required disclosure by the conflicted director of information not already known by such qualified directors or after modified disclosure in compliance with subsection (b) of this section, provided that:
(1) the qualified directors have deliberated and voted outside the presence of and without the participation of any other director; and
(2) where the action has been taken by a committee, all members of the committee were qualified directors and either:
(A) the committee was composed of all the qualified directors on the board of directors; or
(B) the members of the committee were appointed by the affirmative vote of a majority of the qualified directors on the board.
(b) Notwithstanding subsection (a) of this section, when a transaction is a director’s conflicting interest transaction only because a related person described in subdivisions 819(5)(E) and (F) of this title is a party to or has a material financial interest in the transaction, the conflicted director is not obligated to make required disclosure to the extent that the director reasonably believes that doing so would violate a duty imposed under law, a legally enforceable obligation of confidentiality, or a professional ethics rule, provided that the conflicted director discloses to the qualified directors voting on the transaction:
(1) all information required to be disclosed that is not so violative;
(2) the existence and nature of the director’s conflicting interest; and
(3) the nature of the conflicted director’s duty not to disclose the confidential information.
(c) A majority but no fewer than two of all the qualified directors on the board of directors or on the committee constitutes a quorum for purposes of action that complies with this section.
(d) Where directors’ action under this section does not satisfy a quorum or voting requirement applicable to the authorization of the transaction by reason of the articles of organization, the bylaws, or a provision of law, independent action to satisfy those authorization requirements shall be taken by the board of directors or a committee, in which action directors who are not qualified directors may participate. (Added 2011, No. 84 (Adj. Sess.), § 1, eff. April 20, 2012.)