Section 10-19.1-51 - Director conflicts of interest1. A contract or other transaction between a corporation and: a. One or more of its directors or a member of the family of a director;b. A director or governor of a related organization, or a member of the family of a director or governor of a related organization; orc. An organization in or of which the corporation's director, or a member of the family of its director, is a director, officer, governor, manager, or representative or has a material financial interest, is not void or voidable because the director or the other individual or organization is a party or because the director is present at the meeting of the shareholders or the board or a committee at which the contract or transaction is authorized, approved, or ratified, if at least one of the requirements of subsection 2 is satisfied.2. The contract or transaction described in subsection 1 is not void or voidable if:a. The contract or transaction was, and the person asserting the validity of the contract or transaction was, fair and reasonable as to the corporation at the time it was authorized, approved, or ratified;b. The material facts as to the contract or transaction and as to the director's or directors' interest are fully disclosed or known to the holders of all outstanding shares, whether or not entitled to vote, and the contract or transaction is approved in good faith by: (1) The holders of two-thirds of the voting power of the shares entitled to vote which are owned by persons other than the interested director or directors; or(2) The unanimous affirmative vote of the holder of all outstanding shares, whether or not entitled to vote;c. The material facts as to the contract or transaction and as to the director's or directors' interest are fully disclosed or known to the board or a committee, and the board or committee authorizes, approves, or ratifies the contract or transaction in good faith by a majority of the directors or committee members currently holding office: (1) However, the interested director or directors may not vote and are not considered for purposes of a quorum.(2) If as a result, the number of remaining directors is not sufficient to reach a quorum, then a quorum for the purpose of considering the contract or transaction is the number of remaining directors or committee members, not counting any vote that the interested director might otherwise have in, and not counting the director in determining the presence of a quorum; ord. The contract or transaction is a distribution described in subsection 1 of section 10-19.1-92 or a merger or exchange described in subsection 1 or 2 of section 10-19.1-96.3. For purposes of this section: a. A director does not have a material financial interest in a resolution fixing the compensation of a director or fixing the compensation of another director as a director, officer, employee, or agent of the corporation, is not void or voidable or considered to be a contract or other transaction between a corporation even though the director receiving the compensation fixed by the resolution is present and voting at the meeting of the board or a committee at which the resolution is authorized, approved, or ratified, or even though other directors voting upon the resolution are also receiving compensation from the corporation;b. A director has a material financial interest in each organization in which the director, or a member of the family of the director, has a material financial interest; andc. A "member of the family" of a director is a spouse, parent, child, child of a spouse, brother, sister, or the spouse of any of these.4. The procedures described under subdivisions a, b, and c of subsection 2 are not required if the contract or other transaction is between related organizations.Amended by S.L. 2011, ch. 87 (SB 2174),§ 13, eff. 7/1/2011.