15-3-138. DIRECTOR CONFLICT OF INTEREST.

1. A conflict of interest transaction is a transaction with the corporation in which a director of the corporation has a director or indirect interest. A conflict of interest transaction is not voidable or the basis the basis for imposing liability on the director if the transaction was fair at the time it was entered into or is approved as provided in subsections (b) or (c).
2. A transaction in which a director of a public benefit corporation has a conflict of interest may be approved.
   1. In advance by the vote of the board of directors or a committee of the board if:
      1. The material facts of the transaction and the director’s interest are disclosed or known to the board or committee of the board; and
      2. The directors approving the transaction in good faith reasonably believe that the transaction is fair to the corporation; or
   2. Before or after it is consummated, by obtaining approval of the:
      1. Director of Corporations; or
      2. Tribal Court in an action of which the Director of Corporation is given notice.
3. A transaction in which a director of a mutual benefit corporation has a conflict of interest may be approved if:
   1. 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 and the board of committee of the board authorized, approved, or ratified the transaction; or
   2. The material facts of the transaction and the director’s interest were disclosed or known to the members and they authorized, approved, or ratified the transaction.
4. For purposes of this section, a director of the corporation has an indirect interest in a transaction (1) another entity in which he or she has a material financial interest or in which he or she is a general partner is a party to the transaction or (2) another entity of which he or she 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.
5. For purposes of subsections (b) and (c), a conflict of interest transaction is authorized, approved, or ratified if it 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, but 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 vote 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 subsections (b) and (c) if the transaction is otherwise authorized, approved, or ratified as provided in subsections (b) or (c).
6. For purposes of subsection (c) (2), a conflict of interest transaction is authorized, approved or ratified if it receives the vote of 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 (d) (1), may not be counted in a vote of interest transaction under subsection (c) (2). The vote of these members, however, is counted in determining whether the transaction is approved under other sections of this Chapter. A majority of the voting members, whether or not present, 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, bylaws, or a resolution of the board may impose additional requirements on conflict of interest transactions.