35-14-862. Directors' action. (1) Directors' action respecting a director's conflicting interest transaction is effective for purposes of 35-14-861(2)(a) if the transaction has been authorized by the affirmative vote of a majority, but no fewer than two, of the qualified directors who voted on the transaction after required disclosure by the conflicted director of information not already known by the qualified directors or after modified disclosure in compliance with subsection (2), provided that:
(a) the qualified directors have deliberated and voted outside the presence of and without participation by any other director; and
(b) if the action has been taken by a board committee, all members of the committee were qualified directors and either:
(i) the committee was composed of all the qualified directors on the board of directors; or
(ii) the members of the committee were appointed by the affirmative vote of a majority of the qualified directors on the board of directors.
(2) Notwithstanding subsection (1), when a transaction is a director's conflicting interest transaction only because a related person of the director is a party to or has a material financial interest in the transaction, the conflicted director is not obligated to make required disclosure to the extent that the director reasonably believes that doing so would violate a duty imposed under law, a legally enforceable obligation of confidentiality, or a professional ethics rule if the conflicted director discloses to the qualified directors voting on the transaction:
(a) all information required to be disclosed that is not violative of the duty, obligation, or rule;
(b) the existence and nature of the director's conflicting interest; and
(c) the nature of the conflicted director's duty not to disclose the confidential information.
(3) A majority, but no fewer than two, of all the qualified directors on the board of directors or on the board committee constitutes a quorum for purposes of action that complies with this section.
(4) If directors' action under this section does not satisfy a quorum or voting requirement applicable to the authorization of the transaction by reason of the articles of incorporation or bylaws or a provision of law, independent action to satisfy those authorization requirements must be taken by the board of directors or a board committee, in which directors who are not qualified directors may participate.
History: En. Sec. 131, Ch. 271, L. 2019.
Structure Montana Code Annotated
Title 35. Corporations, Partnerships, and Associations
Chapter 14. Montana Business Corporation Act
Part 8. Directors and Officers
35-14-801. Board of directors -- requirements -- functions
35-14-802. Qualifications of directors
35-14-803. Directors -- number -- election
35-14-804. Election of directors -- certain classes or series of shares
35-14-805. Terms of directors generally
35-14-806. Staggered terms for directors
35-14-807. Resignation of directors
35-14-808. Removal of directors by shareholders
35-14-809. Removal of directors by judicial proceeding
35-14-810. Vacancy -- board of directors
35-14-811. Compensation of directors
35-14-812. through 35-14-819 reserved
35-14-821. Action without meeting
35-14-825. Committees of board
35-14-826. Submission of matters for shareholder vote
35-14-827. through 35-14-829 reserved
35-14-830. Standards of conduct for directors
35-14-831. Standards of liability for directors
35-14-832. Director's liability for unlawful distributions
35-14-833. through 35-14-839 reserved
35-14-841. Functions of officers
35-14-842. Standards of conduct for officers
35-14-843. Resignation and removal of officers
35-14-844. Contract rights of officers
35-14-845. through 35-14-849 reserved
35-14-850. Definitions -- indemnification and advance for expenses
35-14-851. Permissible indemnification
35-14-852. Mandatory indemnification
35-14-853. Advance for expenses
35-14-854. Court-ordered indemnification and advance for expenses
35-14-855. Determination and authorization of indemnification
35-14-856. Indemnification of officers
35-14-858. Variation by corporate action -- application
35-14-860. Definitions -- director's conflicting interest transactions
35-14-863. Shareholders' action