(a) A corporation may not lend money to or guarantee the obligation of
a director of the corporation unless:
(1) the particular loan or guarantee is approved by the shareholders,
with the holders of a majority of the votes of the shares entitled to
vote thereon constituting a quorum, but shares held of record or
beneficially by directors who are benefitted by such loan or guarantee
shall not be entitled to vote or to be included in the determination of
a quorum; or
(2) with respect to any corporation in existence on the effective date
of this subparagraph (2) the certificate of incorporation of which
expressly provides such and with respect to any corporation incorporated
after the effective date of this subparagraph (2), the board determines
that the loan or guarantee benefits the corporation and either approves
the specific loan or guarantee or a general plan authorizing loans and
guarantees.
(b) The fact that a loan or guarantee is made in violation of this
section does not affect the borrower's liability on the loan.
Structure New York Laws
Article 7 - Directors and Officers
703 - Election and Term of Directors.
704 - Classification of Directors.
705 - Newly Created Directorships and Vacancies.
709 - Greater Requirement as to Quorum and Vote of Directors.
710 - Place and Time of Meetings of the Board.
711 - Notice of Meetings of the Board.
712 - Executive Committee and Other Committees.
718 - List of Directors and Officers.
719 - Liability of Directors in Certain Cases.
720 - Action Against Directors and Officers for Misconduct.
721 - Nonexclusivity of Statutory Provisions for Indemnification of Directors and Officers.
722 - Authorization for Indemnification of Directors and Officers.
723 - Payment of Indemnification Other Than by Court Award.
724 - Indemnification of Directors and Officers by a Court.
725 - Other Provisions Affecting Indemnification of Directors and Officers.
726 - Insurance for Indemnification of Directors and Officers.