This text of New Mexico § 53-11-40.1 (Director conflict of interest) is published on Counsel Stack Legal Research, covering New Mexico primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.
A. A conflict of interest transaction is a transaction with the corporation in which a director of the corporation has a direct or indirect interest. A conflict of interest transaction is not voidable by the corporation solely because of the director's interest in the transaction if any one of the following is true:
(1)the material facts of the transaction and the director's interest were disclosed or known to the board of directors or a committee of the board of directors and the board of directors or committee authorized, approved or ratified the transaction;
(2)the material facts of the transaction and the director's interest were disclosed or known to the shareholders entitled to vote and they authorized, approved or ratified the transaction; or (3) the transaction was fair to the co
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A. A conflict of interest transaction is a transaction with the corporation in which a director of the corporation has a direct or indirect interest. A conflict of interest transaction is not voidable by the corporation solely because of the director's interest in the transaction if any one of the following is true: (1) the material facts of the transaction and the director's interest were disclosed or known to the board of directors or a committee of the board of directors and the board of directors or committee authorized, approved or ratified the transaction; (2) the material facts of the transaction and the director's interest were disclosed or known to the shareholders entitled to vote and they authorized, approved or ratified the transaction; or (3) the transaction was fair to the corporation. B. For purposes of this section, a director of the corporation has an indirect interest in a transaction if: (1) another entity in which he has a material financial interest or in which he is a general partner is a party to the transaction; or (2) another entity of which he is a director, officer or trustee is a party to the transaction and the transaction is or should be considered by the board of directors of the corporation. For purposes of this section, a director of the corporation does not have a direct or indirect interest in a transaction solely because the transaction may involve or effect a change in control of the corporation or his continuation in office as a director of that corporation. C. For purposes of Paragraph (1) of Subsection A of this section, a conflict of interest transaction is authorized, approved or ratified if it receives the affirmative vote of a majority of the directors on the board or [of] directors or on a committee of the board of directors who have no direct or indirect interest in the transaction but a transaction may not be authorized, approved or ratified under this section by a single director. If a majority of the directors who have no direct or indirect interest in the transaction vote to authorize, approve or ratify the transaction, a quorum is present for the purpose of taking action under this section. The presence of or a vote cast by a director with a direct or indirect interest in the transaction does not affect the validity of any action taken under Paragraph (1) of Subsection A of this section if the transaction is otherwise authorized, approved or ratified as provided in that subsection. D. For purposes of Paragraph (2) of Subsection A of this section, a conflict of interest transaction is authorized, approved or ratified if it receives the vote of a majority of the shares entitled to be counted under this subsection. Shares owned by or voted under the control of a director who has a direct or indirect interest in the transaction and shares owned by or voted under the control of an entity described in Paragraph (2) of Subsection B of this section may not be counted in a vote of shareholders to determine whether to authorize, approve or ratify a conflict of interest transaction under Paragraph (2) of Subsection A of this section. The vote of those shares, however, is counted in determining whether the transaction is approved under other sections of the Business Corporation Act. A majority of the shares, whether or not present, that are entitled to be counted in a vote on the transaction under this subsection constitutes a quorum for the purpose of taking action under this section.