(1)    Definition. In this section, “conflict of interest transaction” means a transaction with the bank in which a director of the bank has a direct or indirect interest.

   (2)   When transaction not voidable. A conflict of interest transaction is not voidable by the bank solely because of the director’s interest in the transaction if any of the following is true:

      (a)    The material facts of the transaction and the director’s interest were disclosed or known to the board of directors or a committee of the board of directors and the board of directors or committee authorized, approved or specifically ratified the transaction under sub. (4).

      (b)    The material facts of the transaction and the director’s interest were disclosed or known to the shareholders entitled to vote and they authorized, approved or specifically ratified the transaction under sub. (5).

      (c)    The transaction was fair to the bank.

   (3)   Indirect interests. For purposes of this section, the circumstances in which a director of the bank has an indirect interest in a transaction include but are not limited to a transaction under any of the following circumstances:

      (a)    Another entity in which the director has a material financial interest or in which the director is a general partner is a party to the transaction.

      (b)    Another entity of which the director is a director, officer or trustee is a party to the transaction and the transaction is or, because of its significance to the bank, should be considered by the board of directors of the bank.

   (4)   Authorization, approval or ratification by board. For purposes of sub. (2) (a), a conflict of interest transaction is authorized, approved or specifically ratified if it receives the affirmative vote of a majority of the directors on the board of directors or on the committee acting on the transaction, who have no direct or indirect interest in the transaction. If a majority of the directors who have no direct or indirect interest in the transaction vote to authorize, approve or ratify the transaction, a quorum is present for the purpose of taking action under this section. The presence of, or a vote cast by, a director with a direct or indirect interest in the transaction does not affect the validity of any action taken under sub. (2) (a) if the transaction is otherwise authorized, approved or ratified as provided in this section.

   (5)   Authorization, approval or ratification by shareholders. For purposes of sub. (2) (b), a conflict of interest transaction is authorized, approved or specifically ratified if it receives the vote of a majority of the shares entitled to be counted under this subsection. Shares owned by or voted under the control of a director who has a direct or indirect interest in the transaction, and shares owned by or voted under the control of an entity described in sub. (3) (a), may not be counted in a vote of shareholders to determine whether to authorize, approve or ratify a conflict of interest transaction under sub. (2) (b). The vote of those shares shall be counted in determining whether the transaction is approved under other sections of this chapter. A majority of the shares, whether or not present, that are entitled to be counted in a vote on the transaction under this subsection constitutes a quorum for the purpose of taking action under this section.