1260.1
. (a) Except as provided in subdivision (b), any member of
the board of directors of a nonprofit corporation that is subject to
Section 5920 of the Corporations Code, who negotiates the terms and
conditions of a sale or transfer of assets, as described in Section
5920 of the Corporations Code, is prohibited from receiving, directly
or indirectly, any salary, compensation, payment, or other form of
remuneration from the purchasing public benefit corporation or entity
following the close of the sale or other transfer of assets. This
prohibition shall not apply to any reimbursement or payment made to a
member of the board of directors, who is a physician or other health
care provider, for direct patient care services provided to patients
covered by a health insurer, health care service plan, employer, or
other entity that provides health care coverage, and that is owned,
operated, or affiliated with the purchasing public benefit
corporation or entity, provided that the amounts payable for the
services rendered are no greater than the amounts payable to other
physicians or health care providers providing the same or similar
services.
For the purpose of this section, "direct patient care services"
means health care services provided directly to a patient, and does
not include services provided through an intermediary. Further, in
order to qualify for the exemption in this subdivision, the direct
patient care services must be health care services that are regularly
provided by other physicians or other health care providers in the
community who are also receiving reimbursements or payments from the
same health insurer, health care service plan, employer, or other
entity that is owned or operated by, or affiliated with, the
purchasing public benefit corporation or entity.
(b) After a period of two years following the close of the sale or
other transfer of assets, a person who was a member of the board of
directors of the selling nonprofit corporation who is prohibited from
receiving any remuneration from the purchasing public benefit
corporation or entity under subdivision (a) may enter into usual and
customary business transactions with the purchasing public benefit
corporation or entity so long as the following facts are established:
(1) Prior to authorizing or approving the transaction, the
representative of the purchasing public benefit corporation or entity
considered and in good faith determined after reasonable
investigation under the circumstances that the purchasing public
benefit corporation could not have obtained a more advantageous
arrangement with reasonable effort under the circumstances.
(2) The purchasing public benefit corporation or entity, in fact,
could not have obtained a more advantageous arrangement with
reasonable effort under the circumstances.
(c) Any person who is a member of management of the selling
nonprofit corporation and who presents information or opinions to the
board regarding the sale or other transfer of assets as described in
subdivision (a) that are relied upon, or considered by, any of the
board members in making decisions regarding the sale or transfer, may
make a written affirmative declaration that he or she will not work
for, or receive any form of remuneration from, the purchasing public
benefit corporation or entity in the future.
(d) In making any decision regarding the sale or other transfer of
the nonprofit corporation's assets, as described in Section 5920 of
the Corporations Code, the board of the selling nonprofit corporation
is prohibited from substantially relying on any information
presented by any person to whom subdivision (c) applies who has not
made a written affirmative declaration pursuant to subdivision (c).
This subdivision shall not apply to any person whose only role in the
sale or transfer is to provide to the selling nonprofit corporation
exclusively factual information about the selling nonprofit
corporation, community, financial status, or other similar data.
(e) In performing those duties of a director set forth in
subdivision (d), the board of directors may contract with independent
counsel, accountants, financial analysts, or other professionals
whom the board believes to be reliable and competent in the matters
presented, to review and evaluate information and advice presented by
an employee who has not signed an affirmative declaration pursuant
to subdivision (c). Any director who substantially relies on
information and advice presented by the independent professional
shall be deemed to have not violated subdivision (d).