Guam § 28860 - Subarticle Definitions.

§ 28860. Subarticle Definitions.

For this Subarticle the following definitions apply:

(a) Conflicting interest with respect to a corporation, means the

interest a director of the corporation has respecting a transaction

effected or proposed to be effected by the corporation (or by a

subsidiary of the corporation or any other entity in which the

corporation has a controlling interest) if

(1) whether or not the transaction is brought before the board

of directors of the corporation for action, the director knows at the

time of commitment that he or a related person is a party to the

transaction or has a beneficial financial interest in or so closely

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linked to the transaction and of such financial significance to the

director or a related person that the interest would reasonably be

expected to exert an influence on the director’s judgment if he

were called upon to vote on the transaction; or

(2) the transaction is brought (or is of such character and

significance to the corporation that it would in the normal course

be brought) before the board of directors of the corporation for

action, and the director knows at the time of commitment that any

of the following persons is either a party to the transaction or has a

beneficial financial interest in or so closely linked to transaction

and of such financial significance to the person that the interest

would reasonably be expected to exert an influence on the

director’s judgment if he were called upon to vote on the

transaction:

(A) an entity (other than the corporation) of which the

director is a director, general partner, agent, or employee;

(B) a person that controls one or more of the entities

specified in sub-clause (A) or an entity that is controlled by,

or is under common control with, one or more of the entities

specified in sub-clause (A); or

(C) an individual who is a general partner, principal, or

employer of the Director.

(b) Directors conflicting interest transaction, with respect to a

corporation, means a transaction effected or proposed to be effected by

the corporation (or by a subsidiary of the corporation or any other entity

in which the corporation has a controlling interest) respecting which a

director of the corporation has a conflicting interest.

(c) Related person of a director means:

(1) the spouse (or a parent or sibling thereof) of the director,

or a child, grandchild, sibling, parent (or spouse of any thereof) of

the director, or an individual having the same home as the

director, or a trust or estate of which an individual specified in this

clause (1) is a substantial beneficiary; or

(2) a trust, estate, incompetent, conservatee, or minor of

which the director is a fiduciary.

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(d) Required disclosure means disclosure by the director who has a

conflicting interest of

(1) the existence and nature of his conflicting interest; and

(2) all facts known to him respecting the subject matter of

the transaction that an ordinarily prudent person would reasonably

believe to be material to a judgment about whether or not to

proceed with the transaction.

(e) Time of commitment respecting a transaction means the time

when the transaction is consummated or, if made pursuant to contract,

the time when the corporation (or its subsidiary or the entity in which it

has controlling interest) becomes contractually obligated so that its

unilateral withdrawal from the transaction would entail significant loss,

liability, or other damage.

2013 NOTE: Pursuant to the authority granted by 1 GCA § 1606, numbers and/or

letters were altered in subsection (a)(2) to adhere to the Compiler’s alpha-numeric

scheme.