§ 10-33-46 — Director conflicts of interest

North Dakota § 10-33-46

• Jurisdiction: North Dakota
• Title 10: Corporations
• Ch. 10-33: Nonprofit Corporations

Text

1. A contract or other transaction between a corporation and its director or a member of
the family of its director; a director of a related organization, or a member of the family
of a director of a related organization; or an organization in or of which the
corporation's director, or a member of the family of its director, is a director, officer, or
legal representative or has a material financial interest, is not void or voidable because
the director or the other individual or organization are parties or because the director is
present at the meeting of the members 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. A 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 has the burden of establishing that the contract or
transaction was, fair and reasonable as to the corporation when it was
authorized, approved, or ratified;
b. The material facts as to the contract or transaction and as to the director's
interest are fully disclosed or known to the members and the contract or
transaction is approved in good faith by two-thirds of the members entitled to
vote, not counting any vote that the interested director might otherwise have, or
the unanimous affirmative vote of all members, whether or not entitled to vote;
c. The material facts as to the contract or transaction and as to the director's
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 directors or committee members currently holding office.
However, the interested director or directors may not vote and are not considered
for purposes of a quorum. 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,
and not counting the director in determining the presence of a quorum; or
d. The contract or transaction is a merger or consolidation described in section