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Title XXIII CORPORATIONS, ASSOCIATIONS AND PARTNERSHIPS

Chapter 351

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  351.327.  Financial interest of corporate officers, effect on contracts with corporations — directors setting their own compensation not a conflict of interest, exception. — 1.  No contract or transaction between a corporation and one or more of its directors or officers, or between a corporation and any other corporation, partnership, association, or other organization in which one or more of its directors or officers are directors or officers, or have a financial interest, shall be void or voidable solely for this reason, or solely because the director or officer is present at or participates in the meeting of the board or committee thereof which authorizes the contract or transaction, or solely because his or their votes are counted for such purpose, if:

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

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

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

  2.  Common or interested directors may be counted in determining the presence of a quorum at a meeting of the board of directors or a committee which authorizes the contract or transaction.

  3.  Unless otherwise provided in the articles of incorporation or the bylaws, the setting of the compensation of directors for services in any capacity by the board of directors pursuant to section 351.310 shall not be deemed to involve a conflict of interest.

  4.  The intent of this section is not only to provide against the voiding or voidability of a contract or transaction, but rather to set forth as well the substantive law on the methods by which a conflict transaction may be regularized to become an arms length transaction.

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(L. 1983 S.B. 367, A.L. 1998 S.B. 680)


---- end of effective   28 Aug 1998 ----

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