(1)    Conflict voiding certain contracts and transactions. A contract or transaction between a cooperative and a director, as determined under sub. (2) (b) 1., or between a cooperative and a business entity of which at least one of the cooperative’s directors is a governor, director, manager, officer, or legal representative, as determined under sub. (2) (b) 2., or in which at least one of the cooperative’s directors has a material financial interest, as determined under sub. (2) (a), is void unless any of the following apply:

      (a)    The contract or transaction was fair and reasonable as to the cooperative at the time it was authorized or ratified by the cooperative; the material facts as to the contract or transaction and as to the director’s interest are disclosed or known to the members before the contract or transaction is authorized or ratified by the cooperative; and the material facts as to the contract or transaction and as to the director’s interest are fully disclosed or known to the board or a committee established under s. 193.445 or 193.451 (1), and the board or committee in good faith authorizes or ratifies the contract or transaction. The interested director may not be counted in determining the presence of a quorum at a meeting where the contract or transaction may be authorized or ratified and may not vote on the authorization or ratification. The person asserting the validity of the contract or transaction has the burden of establishing that the contract or transaction was fair and reasonable as to the cooperative at the time it was authorized or ratified by the cooperative.

      (b)    The contract or transaction is a distribution, or is a contract or transaction that is made available to all members or patron members as part of the cooperative’s business.

      (c)    The contract or transaction results from a resolution fixing the compensation of a director or of another officer, employee, or agent of the cooperative.

   (2)   Material financial interest; transactions involving third parties.

      (a)    For purposes of sub. (1), a director has a material financial interest in each organization in which that director, that director’s spouse, parent, child, or sibling, the spouse of that director’s child or sibling, or the sibling of that director’s spouse has a material financial interest.

      (b)   

         1.    For purposes of sub. (1), a contract or transaction between a cooperative and a director or that director’s spouse, parent, child, or sibling, the spouse of that director’s child or sibling, or the sibling of that director’s spouse, is considered to be a transaction between the cooperative and the director.

         2.    For purposes of sub. (1), a contract or transaction between a cooperative and a business entity of which a director or that director’s spouse, parent, child, or sibling, the spouse of that director’s child or sibling, or the sibling of that director’s spouse, is a governor, director, manager, officer, or legal representative is considered to be a transaction between the cooperative and a business entity of which the director is a governor, director, manager, officer, or legal representative.