351.327. Financial interest of corporate officers, effect on contracts with corporations--directors setting their own compensation not a conflict of interest, exception.
Financial interest of corporate officers, effect on contracts withcorporations--directors setting their own compensation not a conflictof interest, exception.
351.327. 1. No contract or transaction between a corporation and oneor more of its directors or officers, or between a corporation and anyother corporation, partnership, association, or other organization in whichone or more of its directors or officers are directors or officers, or havea financial 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 tothe contract or transaction are disclosed or are known to the board ofdirectors or committee, and the board of directors or committee in goodfaith authorizes 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 tothe contract 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 ofthe time it is authorized or approved by the board of directors, acommittee thereof, or the shareholders.
2. Common or interested directors may be counted in determining thepresence of a quorum at a meeting of the board of directors or a committeewhich authorizes the contract or transaction.
3. Unless otherwise provided in the articles of incorporation or thebylaws, the setting of the compensation of directors for services in anycapacity by the board of directors pursuant to section 351.310 shall not bedeemed to involve a conflict of interest.
4. The intent of this section is not only to provide against thevoiding or voidability of a contract or transaction, but rather to setforth as well the substantive law on the methods by which a conflicttransaction may be regularized to become an arms length transaction.
(L. 1983 S.B. 367, A.L. 1998 S.B. 680)