N.D. Cent. Code § 10-19.1-51

10-19.1-51. Director conflicts of interest

1. A contract or other transaction between a corporation and:

a. One or more of its directors or a member of the family of a director;

b. A director or governor of a related organization, or a member of the family of a

director or governor of a related organization; or

c. An organization in or of which the corporation's director, or a member of the

family of its director, is a director, officer, governor, manager, or representative or

has a material financial interest,

is not void or voidable because the director or the other individual or organization is a

party or because the director is present at the meeting of the shareholders or the

board or a committee at which the contract or transaction is authorized, approved, or

ratified, if at least one of the requirements of subsection 2 is satisfied.

2. The contract or transaction described in subsection 1 is not void or voidable if:

a. The contract or transaction was, and the person asserting the validity of the

contract or transaction was, fair and reasonable as to the corporation at the time

it was authorized, approved, or ratified;

b. The material facts as to the contract or transaction and as to the director's or

directors' interest are fully disclosed or known to the holders of all outstanding

shares, whether or not entitled to vote, and the contract or transaction is

approved in good faith by:

(1) The holders of two-thirds of the voting power of the shares entitled to vote

which are owned by persons other than the interested director or directors;

or

(2) The unanimous affirmative vote of the holder of all outstanding shares,

whether or not entitled to vote;

c. The material facts as to the contract or transaction and as to the director's or

directors' interest are fully disclosed or known to the board or a committee, and

the board or committee authorizes, approves, or ratifies the contract or

transaction in good faith by a majority of the directors or committee members

currently holding office:

(1) However, the interested director or directors may not vote and are not

considered for purposes of a quorum.

(2) If as a result, the number of remaining directors is not sufficient to reach a

quorum, then a quorum for the purpose of considering the contract or

transaction is the number of remaining directors or committee members, not

counting any vote that the interested director might otherwise have in, and

not counting the director in determining the presence of a quorum; or

d. The contract or transaction is a distribution described in subsection 1 of section

10-19.1-92 or a merger or exchange described in subsection 1 or 2 of section

10-19.1-96.

3. For purposes of this section:

a. A director does not have a material financial interest in a resolution fixing the

compensation of a director or fixing the compensation of another director as a

director, officer, employee, or agent of the corporation, is not void or voidable or

considered to be a contract or other transaction between a corporation even

though the director receiving the compensation fixed by the resolution is present

and voting at the meeting of the board or a committee at which the resolution is

authorized, approved, or ratified, or even though other directors voting upon the

resolution are also receiving compensation from the corporation;

b. A director has a material financial interest in each organization in which the

director, or a member of the family of the director, has a material financial interest;

and

c. A "member of the family" of a director is a spouse, parent, child, child of a

spouse, brother, sister, or the spouse of any of these.

4. The procedures described under subdivisions a, b, and c of subsection 2 are not

required if the contract or other transaction is between related organizations.