(2) A transaction in which a director of a public benefit corporation or religious corporation has a conflict of interest may be approved:
(a) By the vote of the board of directors or a committee of the board of directors if the material facts of the transaction and the director’s interest are disclosed or known to the board of directors or committee of the board of directors; or
(b) By obtaining approval of:
(A) The Attorney General; or
(B) The circuit court in an action in which the Attorney General is joined as a party.
(3) A transaction in which a director of a mutual benefit corporation has a conflict of interest may be approved:
(a) In advance by the vote of the board of directors or a committee of the board of directors if the material facts of the transaction and the director’s interest were disclosed or known to the board of directors or a committee of the board of directors; or
(b) If the material facts of the transaction and the director’s interest were disclosed or known to the members and the members authorized, approved or ratified the transaction.
(4) For the purposes of this section, a director of the corporation has an indirect interest in a transaction if:
(a) Another entity in which the director has a material interest or in which the director is a general partner is a party to the transaction;
(b) Another entity of which the director is a director, officer or trustee is a party to the transaction, and the transaction is or should be considered by the board of directors of the corporation; or
(c) A person who is related to the director or a business associate of the director is a party to the transaction.
(5) For purposes of subsections (2) and (3) of this section, a conflict of interest transaction is authorized, approved or ratified if the transaction receives the affirmative vote of a majority of the directors on the board of directors or on the committee who have no direct or indirect interest in the transaction. A transaction may not be authorized, approved or ratified under this section by a single director. If a majority of the directors who have no direct or indirect interest in the transaction votes to authorize, approve or ratify the transaction, a quorum is present 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)(a) or (3)(a) of this section if the transaction is otherwise approved as provided in subsection (2) or (3) of this section.
(6) For purposes of subsection (3)(b) of this section, a conflict of interest transaction is authorized, approved or ratified by the members if the transaction receives 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 (4) of this section may be counted in a vote of members to determine whether to authorize, approve or ratify a conflict of interest transaction under subsection (3)(b) of this section. A majority of the members, whether or not present, that are 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.
(7) The articles of incorporation, bylaws or a resolution of the board may impose additional requirements on conflict of interest transactions. [1989 c.1010 §89; 2019 c.174 §67]