New York Laws
Article 7 - Directors and Officers
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.