17-6304.   Financial interest of officer or director in corporatetransaction; effect; quorum.(a) No contract or transaction between a corporation and one or more ofits directors or officers, or between a corporation and any othercorporation, partnership, association or other organization in which one ormore of its directors or officers are directors or officers, or have afinancial interest, shall be void or voidable solely for this reason, orsolely because the director or officer is present at or participates in themeeting of the board or committee thereof which authorizes the contract ortransaction, or solely because his or their votes are counted for suchpurpose, if:

      (1)   The material facts as to his relationship or interest and as to thecontract or transaction are disclosed or are known to the board ofdirectors or the committee, and the board or committee in good faithauthorized the contract or transaction by the affirmative votes of amajority of the disinterested directors, even though the disinteresteddirectors be less than a quorum; or

      (2)   The material facts as to his relationship or interest and as to thecontract or transaction are disclosed or are known to the shareholdersentitled to vote thereon, and the contract or transaction is specificallyapproved in good faith by vote of the shareholders; or

      (3)   The contract or transaction is fair as to the corporation as of thetime it is authorized, approved or ratified by the board of directors, acommittee thereof or the shareholders.

      (b)   Common or interested directors may be counted in determining thepresence of a quorum at a meeting of the board of directors or of acommittee which authorized the contract or transaction.

      History:   L. 1972, ch. 52, § 26; July 1.