35-14-860. Definitions -- director's conflicting interest transactions.
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/mt/title-35/chapter-14/part-8/35-14-860·A research copy — for the controlling text, always check the official state or federal source. Not legal advice.
35-14-860 . Definitions -- director's conflicting interest transactions. For the purposes of 35-14-860 through 35-14-863 , unless otherwise specified, the following definitions apply:
(1)"Control" or "controlled by" means:
(a)having the power, directly or indirectly, to elect or remove a majority of the members of the board of directors or other governing body of an entity, whether through the ownership of voting shares or interests, by contract, or otherwise; or
(b)being subject to a majority of the risk of loss from the entity's activities or entitled to receive a majority of the entity's residual returns.
(2)"Director's conflicting interest transaction" means a transaction effected or proposed to be effected by the corporation or by an entity controlled by the corporation:
(a)to which, at the relevant time, the director is a party;
(b)respecting which, at the relevant time, the director had knowledge and a material financial interest known to the director; or
(c)respecting which, at the relevant time, the director knew that a related person was a party or had a material financial interest.
(3)"Fair to the corporation" means, for purposes of 35-14-861 (2)(c), that the transaction as a whole was beneficial to the corporation, taking into appropriate account whether it was:
(a)fair in terms of the director's dealings with the corporation; and
(b)comparable to what might have been obtainable in an arm's-length transaction, given the consideration paid or received by the corporation.
(4)"Material financial interest" means a financial interest in a transaction that would reasonably be expected to impair the objectivity of the director's judgment when participating in action on the authorization of the transaction.
(5)"Related person" means:
(a)an individual's spouse;
(b)a child, stepchild, grandchild, parent, stepparent, grandparent, sibling, step sibling, half sibling, aunt, uncle, niece, or nephew, or spouse of any of them, of an individual or of an individual's spouse;
(c)a natural person living in the same home as an individual;
(d)an entity, other than the corporation or an entity controlled by the corporation, controlled by an individual or any person specified in subsections (5)(a) through (5)(c);
(e)a domestic or foreign:
(A)business or nonprofit corporation, other than the corporation or an entity controlled by the corporation, of which an individual is a director;
(B)unincorporated entity of which an individual is a general partner or a member of the governing body; or
(C)individual, trust, or estate for whom or of which an individual is a trustee, guardian, personal representative, or similar fiduciary; or
(f)a person that is or an entity that is controlled by an employer of an individual.
(6)"Relevant time" means:
(a)the time at which directors' action respecting the transaction is taken in compliance with 35-14-862 ; or
(b)if the transaction is not brought before the board of directors or a committee for action under 35-14-862 , the time at which the corporation or an entity controlled by the corporation becomes legally obligated to consummate the transaction.
(7)"Required disclosure" means disclosure of:
(a)the existence and nature of the director's conflicting interest; and
(b)all facts known to the director respecting the subject matter of the transaction that a director free of that conflicting interest would reasonably believe to be material in deciding whether to proceed with the transaction.