Tennessee § 48-58-703 When director's or officer's action respecting conflicting interest transaction is effective - Required disclosures - Quorum

Tennessee Statutes

§ 48-58-703 — When director's or officer's action respecting conflicting interest transaction is effective - Required disclosures - Quorum

Tennessee § 48-58-703

Title48

This text of Tennessee § 48-58-703 (When director's or officer's action respecting conflicting interest transaction is effective - Required disclosures - Quorum) is published on Counsel Stack Legal Research, covering Tennessee primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook

Tenn. Code Ann. § 48-58-703 (2026).

Text

(a)Directors' action respecting a director's or officer's conflicting interest transaction is effective for purposes of § 48-58-702 if the transaction has been authorized by the affirmative vote of a majority (but no fewer than two (2)) of the qualified directors who voted on the transaction, after required disclosure by the conflicted director or officer of information not already known by such qualified directors, or after modified disclosure in compliance with subsection (b); provided, that:

(1)The qualified directors have deliberated and voted without the participation by any other director; and (2) Where the action has been taken by a committee, all members of the committee were qualified directors, and either:

(A)The committee was composed of all the qualified directors on the boa

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(a) Directors' action respecting a director's or officer's conflicting interest transaction is effective for purposes of § 48-58-702 if the transaction has been authorized by the affirmative vote of a majority (but no fewer than two (2)) of the qualified directors who voted on the transaction, after required disclosure by the conflicted director or officer of information not already known by such qualified directors, or after modified disclosure in compliance with subsection (b); provided, that: (1) The qualified directors have deliberated and voted without the participation by any other director; and (2) Where the action has been taken by a committee, all members of the committee were qualified directors, and either: (A) The committee was composed of all the qualified directors on the board of directors; or (B) The members of the committee were appointed by the affirmative vote of a majority of the qualified directors on the board. (b) Notwithstanding subsection (a), when a transaction is a director's or officer's conflicting interest transaction only because a related person described in § 48-58-701(7)(E) or (7)(F) is a part to or has a material financial interest in the transaction, the conflicted director or officer is not obligated to make required disclosure to the extent that the director or officer reasonably believes that doing so would violate a duty imposed under law, a legally enforceable obligation of confidentiality, or a professional ethics rule; provided, that the conflicted director or officer discloses to the qualified directors voting on the transaction: (1) All the information required to be disclosed that is not so violative; (2) The existence and nature of the director's or officer's conflicting interest; and (3) The nature of the conflicted director's or officer's duty not to disclose the confidential information. (c) (1) A majority (but no fewer than two (2)) of all the qualified directors on the board of directors, or on the committee, constitutes a quorum for purposes of action that complies with this section. (2) Where directors' action under this section does not satisfy a quorum or voting requirement applicable to the authorization of the transaction by reason of the charter, the bylaws or a provision of law, independent action to satisfy those authorization requirements must be taken by the board of directors or a committee, in which action directors who are not qualified directors may participate.