Section 48March 10, 1990, Sec./Art. 48

Dealings of Directors, Officers and Committee Members. - A contract of the cooperative with one (1) or more of its directors, officers, committee members is voidable, at the option of such cooperative, unless all the following conditions are present:

(1) That the presence of such director in the board meeting in which the contract was approved was not necessary to constitute a quorum for such meeting;

(2) That the vote of such director was not necessary for the approval of the contract;

(3) That the contract is fair and reasonable under the circumstances; and

(4) That in the case of an officer or committee member, the contract with the officer or committee member has been previously authorized by the general assembly or by the board of directors.

Where any of the first two conditions set forth in the preceding paragraph is absent in the case of a contract with a director, such contract may be ratified by a two-thirds (2/3) vote of all the members with voting rights in a meeting called for the purpose: Provided, That full disclosure of the adverse interest of the directors involved is made at such meeting, and all that the contract is fair and reasonable under the circumstances.