1. A conflictof interest transaction isa transaction with the corporation in which a director of the corporation has a direct or indirect interest. A conflict of interest transaction is not voidable by the corporation on the basis of the director’s interest in the transaction if the transaction was fair atthe time itwas entered into or is approved as provided in subsection 2. 2. A transaction in which a director of a corporation has a conflict of interest may be approved ifeither of the following occurs: a. The material factsof the transaction and thedirector’s interest were disclosedorknown tothe board of directors or a committee of the board and the board or committee of the board authorized, approved, or ratified the transaction. b. The material factsof the transaction and thedirector’s interest were disclosedorknown to the members and they authorized, approved, or ratified the transaction. 3. For the purposes of this section, a director of the corporation has an indirect interest in a transaction under either of the following circumstances: a. Ifanother entity in which the director has a material interest or in which the director isa general partner is a party to the transaction. b. Ifanother entity of which the director is a director, officer, or trustee isa party to the transaction. 4. For purposes of subsection 2, a conflict of interest transaction isauthorized, approved, or ratified ifit receives the affirmative vote of a majority of the directors on the board or on a committee of the board who have no direct or indirect interest in the transaction, but a transaction shall not be authorized, approved, or ratified under this section by a single director. If a majority of the directors on the board who have no direct or indirect interest in the transaction vote to authorize, approve, or ratify the transaction, a quorum ispresent for the purpose of taking action under this section. The presence of,or a vote cast by, a director with a direct or indirect interest in the transaction does not affect the validity of any action taken under subsection 2, paragraph “a”, ifthe transaction is otherwise approved as provided in subsection 2. 5. For purposes of subsection 2, paragraph “b”, a conflict of interest transaction is authorized, approved, or ratifiedby the members ifitreceives a majority of the votes entitled to be counted under this subsection. Votes cast by or voted under the control of a director who has a direct or indirect interest in the transaction, and votes cast by or voted under the control of an entity described in subsection 3, paragraph “a”, shall not be counted in a vote of members to determine whether to authorize, approve, or ratify a conflict of interest transaction under subsection 2, paragraph “b”. The vote of these members, however, is counted in determining whether the transaction is approved under other sections of this chapter. A majority of the voting power, whether or not present, that is entitled to be counted in a vote on the transaction under this subsection constitutes a quorum for the purpose of taking action under this section. 6. The articles, bylaws, or a resolution of the board may impose additional requirements on conflict of interest transactions.
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