355.416. Director's conflict of interest.
Director's conflict of interest.
355.416. 1. A conflict of interest transaction is atransaction with the corporation in which a director of thecorporation has a material interest. A conflict of interesttransaction is not voidable or the basis for imposing liabilityon a noncompensated director if the transaction was not unfair tothe corporation at the time it was entered into or is approved asprovided in subsection 2 or 3 of this section.
2. A transaction in which a noncompensated director of apublic benefit or religious corporation has a conflict ofinterest may be approved:
(1) In advance by the vote of the board of directors or acommittee of the board if:
(a) The material facts of the transaction and the director'sinterest are disclosed or known to the board or committee of theboard; and
(b) The directors approving the transaction in good faithreasonably believe that the transaction is not unfair to thecorporation; or
(2) Before or after it is consummated by obtaining approvalof the:
(a) Attorney general; or
(b) The circuit court in an action in which the attorneygeneral is joined as a party.
3. A transaction in which a director of a mutual benefitcorporation has a conflict of interest may be approved if:
(1) The material facts of the transaction and the director'sinterest were disclosed or known to the board of directors or acommittee of the board and the board or committee of the boardauthorized, approved, or ratified the transaction; or
(2) The material facts of the transaction and the director'sinterest were disclosed or known to the members and theyauthorized, approved, or ratified the transaction.
4. For purposes of subsections 2 and 3 of this section, aconflict of interest transaction is authorized, approved, orratified if it receives the affirmative vote of a majority of thedirectors on the board or on the committee, who have no direct orindirect interest in the transaction, but a transaction may notbe authorized, approved, or ratified under this section by asingle director. If a majority of the directors on the board whohave no direct or indirect interest in the transaction vote toauthorize, approve or ratify the transaction, a quorum is presentfor the purpose of taking action under this section. Thepresence of, or a vote cast by, a director with a materialinterest in the transaction does not affect the validity of anyaction taken under subdivision (1) of subsection 2 of thissection or subdivision (1) of subsection 3 of this section if thetransaction is otherwise approved as provided in subsection 2 ofthis section or subsection 3 of this section.
5. For purposes of subdivision (2) of subsection 3 of thissection, a conflict of interest transaction is authorized,approved or ratified by the members if it receives a majority ofthe votes entitled to be counted under this subsection. Votescast by a director who has a material interest in the transactionmay not be counted in a vote of members to determine whether toauthorize, approve or ratify a conflict of interest transactionunder subdivision (2) of subsection 3 of this section. The voteof these members, however, is counted in determining whether thetransaction is approved under other sections of this chapter. Amajority of the voting power, whether or not present, that isentitled to be counted in a vote on the transaction under thissubsection constitutes a quorum for the purpose of taking actionunder this section.
6. The articles, bylaws, or a resolution of the board mayimpose additional requirements on conflict of interesttransactions.
(L. 1994 H.B. 1095)Effective 7-1-95