(1) (a) As used in
this section, conflicting interest transaction means, with respect to a director of
the corporation, any of the following:
(I) A loan or other assistance by a corporation to a director of the corporation
or to an entity in which the director is a director or officer or has a financial interest
that is known to, and material to, the director;
(II) A guaranty by a corporation of an obligation of the director or of an
obligation of an entity in which the director is a director or officer or has a financial
interest that is known to, and material to, the director;
(III) A contract or transaction between the corporation and the director or
between the corporation and an entity in which the director is a director or officer or
has a financial interest that is known to, and material to, the director; or
(IV) The director's taking a corporate opportunity, except to the extent
permitted pursuant to a provision of the articles of incorporation adopted under
section 7-102-102 (2)(e).
(b) Conflicting interest transaction does not include any transaction
between:
(I) A corporation and another entity if the other entity owns, directly or
indirectly, all of the outstanding shares of the corporation; or
(II) The corporation and another entity if the corporation owns, directly or
indirectly, all of the outstanding shares or other equity interests of the other entity.
(2) A conflicting interest transaction is not void or voidable, shall not be
enjoined or set aside, and does not give rise to an award of damages or other
sanctions in a proceeding by a shareholder or by or in the right of the corporation,
solely because it is a conflicting interest transaction or because the director is
present at or participates in the meeting of the corporation's board of directors or
of the committee of the board of directors that authorizes, approves, or ratifies the
conflicting interest transaction or because the director's vote is counted for that
purpose if:
(a) The material facts as to the director's relationship or interest and as to
the conflicting interest transaction are disclosed or are known to the board of
directors or the committee, and the board of directors or committee in good faith
authorizes, approves, or ratifies the conflicting interest transaction by the
affirmative vote of a majority of the disinterested directors, even though the
disinterested directors are less than a quorum; or
(b) The material facts as to the director's relationship or interest and as to
the conflicting interest transaction are disclosed or are known to the shareholders
entitled to vote on the conflicting interest transaction, and:
(I) The conflicting interest transaction is specifically authorized, approved, or
ratified by a vote of the disinterested shareholders in which the votes cast in favor
of authorizing, approving, or ratifying the conflicting interest transaction exceed
the votes cast in opposition; or
(II) If the articles of incorporation provide for voting on the matter by the
disinterested shareholders in two or more voting groups, the conflicting interest
transaction is specifically authorized, approved, or ratified by a vote of each voting
group in which the votes cast within the voting group in favor of authorizing,
approving, or ratifying the conflicting interest transaction exceed the votes cast
within the voting group in opposition; or
(c) The conflicting interest transaction is fair as to the corporation.
(3) A director's taking advantage, directly or indirectly, of a corporate
opportunity shall not be enjoined or set aside and does not give rise to an award of
damages or other sanctions in a proceeding by a shareholder or by or in the right of
the corporation, because the director took such advantage, if:
(a) The material facts as to the director's relationship or interest and as to
the corporate opportunity are disclosed to or are known to the board of directors or
the committee, and the board of directors or committee authorizes, approves, or
ratifies the taking of the corporate opportunity by the affirmative vote of a majority
of the disinterested directors, even though the disinterested directors are less than
a quorum; or
(b) The material facts as to the director's relationship or interest and as to
the corporate opportunity are disclosed to or are known to the shareholders
entitled to vote on the corporate opportunity, and either:
(I) The taking of the corporate opportunity is specifically authorized,
approved, or ratified by a vote of the disinterested shareholders in which the votes
cast in favor of authorizing, approving, or ratifying the taking of the corporate
opportunity exceed the votes cast in opposition; or
(II) If the articles of incorporation provide for voting on the matter by the
disinterested shareholders in two or more voting groups, the taking of the
corporate opportunity is specifically authorized, approved, or ratified by a vote of
each such voting group in which the votes cast within the voting group in favor of
authorizing, approving, or ratifying the taking of the corporate opportunity exceed
the votes cast within the voting group in opposition.
(4) Common or interested directors may be counted in determining the
presence of a quorum at a meeting of the board of directors or of a committee that
authorizes, approves, or ratifies a conflicting interest transaction or the taking of a
corporate opportunity.
(5) Unless otherwise provided in the articles of incorporation, a majority of
the votes of disinterested shareholders entitled to be cast on the matter of
authorizing, approving, or ratifying a conflicting interest transaction pursuant to
subsection (2)(b) of this section or a taking of a corporate opportunity pursuant to
subsection (3)(b) of this section constitutes a quorum of that voting group for action
on that matter, but a quorum must not consist of fewer than one-third of the votes
of disinterested shareholders entitled to be cast on the matter by the voting group.