Shareholders’ action respecting a transaction is effective for purposes of Subsection 16-10a-851(2)(b) if a quorum existed pursuant to Subsection (2) and a majority of the votes entitled to be cast by holders of qualified shares present in person or by proxy at the meeting were cast in favor of the transaction after notice to shareholders describing the director’s conflicting interest transaction, provision of the information referred to in Subsection (3), and required disclosure to the shareholders who voted on the transaction, to the extent the information was not known by them.
Terms Used In Utah Code 16-10a-853
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.
Qualified shares: means , with respect to a director's conflicting interest transaction pursuant to Section 16-10a-853, one or more shares entitled to vote on the transaction, except a share:
(a)
that, to the knowledge, before the vote, of the secretary, other officer, or agent of the corporation authorized to tabulate votes, is beneficially owned; or
(b)
the voting of which is controlled, by:
(i)
a director who has a conflicting interest respecting the transaction;
(ii)
a related person of that director; or
(iii)
a person referred to in Subsections (27)(b)(i) and (ii). See Utah Code 16-10a-102
Quorum: The number of legislators that must be present to do business.
Secretary: means the corporate officer to whom the bylaws or the board of directors delegates responsibility under Subsection 16-10a-830(3) for:
(a)
the preparation and maintenance of:
(i)
minutes of the meetings of the board of directors and of the shareholders; and
(ii)
the other records and information required to be kept by the corporation by Section 16-10a-830; and
A majority of the votes entitled to be cast by the holders of all qualified shares constitutes a quorum for purposes of action that complies with this section. Subject to the provisions of Subsections (3) and (4), shareholders’ action that otherwise complies with this section is not affected by the presence of holders of, or the voting of, shares that are not qualified shares.
(3)
For purposes of compliance with Subsection (1), a director who has a conflicting interest respecting the transaction shall, before the shareholders vote, inform the secretary or other officer or agent of the corporation authorized to tabulate votes of the number and the identity of persons holding or controlling the vote, of all shares that the director knows are beneficially owned, or the voting of which is controlled, by the director or by a related person of the director, or both.
(4)
If a shareholders’ vote does not comply with Subsection (1) solely because of a failure of a director to comply with Subsection (3), and if the director establishes that the failure did not determine and was not intended by him to influence the outcome of the vote, the court may, with or without further proceedings under Subsection 16-10a-851(2)(c), take any action respecting the transaction and the director, and give any effect to the shareholders’ vote, as it considers appropriate in the circumstances.
