N.Y. Business Corporation Law § 713: Interested directors

§ 713. Interested directors.

(a) No contract or other transaction between a corporation and one or

more of its directors, or between a corporation and any other

corporation, firm, association or other entity in which one or more of

its directors are directors or officers, or have a substantial financial

interest, shall be either void or voidable for this reason alone or by

reason alone that such director or directors are present at the meeting

of the board, or of a committee thereof, which approves such contract or

transaction, or that his or their votes are counted for such purpose:

(1) If the material facts as to such director's interest in such

contract or transaction and as to any such common directorship,

officership or financial interest are disclosed in good faith or known

to the board or committee, and the board or committee approves such

contract or transaction by a vote sufficient for such purpose without

counting the vote of such interested director or, if the votes of the

disinterested directors are insufficient to constitute an act of the

board as defined in section 708 (Action by the board), by unanimous vote

of the disinterested directors; or

(2) If the material facts as to such director's interest in such

contract or transaction and as to any such common directorship,

officership or financial interest are disclosed in good faith or known

to the shareholders entitled to vote thereon, and such contract or

transaction is approved by vote of such shareholders.

(b) If a contract or other transaction between a corporation and one

or more of its directors, or between a corporation and any other

corporation, firm, association or other entity in which one or more of

its directors are directors or officers, or have a substantial financial

interest, is not approved in accordance with paragraph (a), the

corporation may avoid the contract or transaction unless the party or

parties thereto shall establish affirmatively that the contract or

transaction was fair and reasonable as to the corporation at the time it

was approved by the board, a committee or the shareholders.

(c) Common or interested directors may be counted in determining the

presence of a quorum at a meeting of the board or of a committee which

approves such contract or transaction.

(d) The certificate of incorporation may contain additional

restrictions on contracts or transactions between a corporation and its

directors and may provide that contracts or transactions in violation of

such restrictions shall be void or voidable by the corporation.

(e) Unless otherwise provided in the certificate of incorporation or

the by-laws, the board shall have authority to fix the compensation of

directors for services in any capacity.