Nev. Rev. Stat. » NRS: CHAPTER 78 - PRIVATE CORPORATIONS

Nev. Rev. Stat. § 78.140

Restrictions on transactions involving interested directors or officers; compensation of directors

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NRS 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:

      (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,

Ê 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.

      [31(b):177:1925; added 1951, 328]—(NRS A 1959, 683; 1969, 113; 1989, 872; 1991, 1218; 1993, 952; 1997, 698; 2003, 3085; 2007, 2415; 2015, 3221)

ANNUAL LIST AND OTHER REQUIREMENTS; DEFAULTING CORPORATIONS

     

Notes of Decisions
Cited in 9 cases, 1963–2020 · leading case: Usacm Liquidating Trust v. Deloitte & Touche, LLP
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Usacm Liquidating Trust v. Deloitte & Touche, LLP (2011) nvd · cites it 4× “See Nev.Rev.Stat. § 78.140. Section 78.140 does not require that prior to entering into such a transaction, officers or directors must present the transaction to either the shareholders or disinterested directors for approval.”
Leavitt v. Leisure Sports Incorporation (1987) nev · cites it 2× “See NRS 78.140; Pederson v. Owen, <a href="/opinion/8084379/pederson-v-owen/#650" aria-description="Citation for case: Pederson v.”
Shoen v. SAC Holding Corp. (2006) nev “; NRS 78.140 (governing interested director transactions).”
Buchanan v. Henderson (1990) nvd · cites it 2× “Nev.Rev.Stat. § 78.140(1) provides in pertinent part that: “[directors and officers shall exercise their powers in good faith and with a view to the interests of the corporation.”
Miniace v. Pacific Maritime Ass'n (2006) cand · cites it 3× “” Nev. Rev.Stat. § 78.140(4). In addition, Mari-tech’s bylaws provide that its directors “may be paid a fixed sum for attendance at each meeting of the Board of Directors.”
Pederson v. Owen (1976) nev · cites it 2× “In support of their challenge to the construction contract, respondents contended the contract was unfair to T-Car, hence it was forbidden by NRS 78.140, because the Pedersons own Ready Mix, and the rental income was insufficient to meet the mortgage payments.”
Barenbaum v. FTE Networks, Inc (2020) nysd “See Nev. Rev. Stat. § 78.140 (5) (“[I]f 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.”
Schoff v. Clough (1963) nev “His entire argument is based on the premise that under NRS 78.140 (1) (c), unless the transaction between the corporation and respondent, a director thereof, was “fair” it would be void or voidable.”
Islet Scis., Inc. v. Brighthaven Ventures, LLC (2017) ncbizct “…directors” is not sufficient to invalidate the releases. (Id. at 7, citing Nev. Rev. Stat. § 78.140 .) 32. In this case, however, the pleadings establish that there is a dispute of fact regarding whether Snapper and O’Ferral were disinterested directors. In the Amended…”
— Nev. Rev. Stat. § 78.140(1) — 1 case
Buchanan v. Henderson (1990) nvd “Nev.Rev.Stat. § 78.140(1) provides in pertinent part that: “[directors and officers shall exercise their powers in good faith and with a view to the interests of the corporation.”
— Nev. Rev. Stat. § 78.140(4) — 1 case
Miniace v. Pacific Maritime Ass'n (2006) cand “” Nev. Rev.Stat. § 78.140(4). In addition, Mari-tech’s bylaws provide that its directors “may be paid a fixed sum for attendance at each meeting of the Board of Directors.”
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