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.