TN Code § 48-18-701 (2021)
2021 Tennessee Code|Title 48 - Securities, Corporations and Associations|Chapter 18 - Directors and Officers|Part 7 - Conflicting Interest Transactions|§ 48-18-701. Part Definitions

 In this part:   “Control” (including “controlled by”) means:  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   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;     “Director's or officer's conflicting interest transaction” means a transaction effected or proposed to be effected by the corporation (or by an entity controlled by the corporation):  To which, at the relevant time, the director or officer is a party; or   Respecting which, at the relevant time, the director or officer had knowledge and a material financial interest known to the director or officer; or   Respecting which, at the relevant time, the director or officer knew that a related person was a party or had a material financial interest;     “Fair to the corporation” means, for purposes of § 48-18-702(b)(3), that the transaction as a whole was beneficial to the corporation, taking into appropriate account whether it was:  Fair in terms of the director's or officer's dealings with the corporation; and   Comparable to what might have been obtainable in an arm's length transaction, given the consideration paid or received by the corporation;     “Material financial interest” means a financial interest in a transaction that would reasonably be expected to impair the objectivity of the director's or officer's judgment when participating in action on the authorization of the transaction;   “Material relationship” means a familial, financial, professional, employment or other relationship that would reasonably be expected to impair the objectivity of the director's judgment when participating in the action to be taken;    “Qualified director” means a director who, at the time action is to be taken under § 48-18-703, is not a director:   As to whom the transaction is a director's or officer's conflicting interest transaction; or   Who has a material relationship with another director as to whom the transaction is a director's or officer's conflicting interest transaction;     The presence of one (1) or more of the following circumstances shall not automatically prevent a director from being a qualified director:   Nomination or election of the director to the current board by any director who is not a qualified director with respect to the matter (or by any person that has a material relationship with that director), acting alone or participating with others; or   Service as a director of another corporation of which a director who is not a qualified director with respect to the matter (or any individual who has a material relationship with that director), is or was also a director;       “Related person” means:  The director's or officer's spouse;   A child, stepchild, grandchild, parent, step parent, grandparent, sibling, step sibling, half sibling, aunt, uncle, niece or nephew (or spouse of any thereof) of the director or officer or of the director's or officer's spouse;   An individual living in the same home as the director or officer;   An entity (other than the corporation or an entity controlled by the corporation) controlled by the director or officer or any person specified in subdivisions (7)(A)-(C);   A domestic or foreign:   Business or nonprofit corporation (other than the corporation or an entity controlled by the corporation) of which the director or officer is a director but only with respect to a transaction or proposed transaction to which the corporation and the other business or nonprofit corporation are parties or proposed parties and that is a transaction or proposed transaction that is or should be considered by the board of directors of the corporation;   Unincorporated entity of which the director or officer is a general partner or a member of the governing body; or   Individual, trust or estate for whom or of which the director or officer is a trustee, guardian, personal representative or like fiduciary; or     A person that is or an entity that is controlled by, an employer of the director or officer;     “Relevant time” means:  The time at which directors' action respecting the transaction is taken in compliance with § 48-18-703; or   If the transaction is not brought before the board of directors of the corporation (or its committee) for action under § 48-18-703, at the time the corporation (or an entity controlled by the corporation) becomes legally obligated to consummate the transaction; and     “Required disclosure” means disclosure of:  The existence and nature of the director's or officer's conflicting interest; and   All facts known to the director or officer respecting the subject matter of the transaction that a director or officer free of such conflicting interest would reasonably believe to be material in deciding whether to proceed with the transaction.