It is unlawful for the beneficial owner, director, or officer, directly or indirectly, to sell any equity security of the company, if the person selling the security or the person’s principal:

(1) Does not own the security sold; or
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Terms Used In Tennessee Code 56-3-704

  • equity security: means any stock or similar security, or any security convertible, with or without consideration, into a stock or similar security, or carrying a warrant or right to subscribe or to purchase a stock or similar security. See Tennessee Code 56-3-701
  • Person: means any association, aggregate of individuals, business, company, corporation, individual, joint-stock company, Lloyds-type organization, organization, partnership, receiver, reciprocal or interinsurance exchange, trustee or society. See Tennessee Code 56-16-102
(2) If owning the security, does not deliver it against the sale within twenty (20) days thereafter, or does not within five (5) days after the sale deposit it in the mails or other usual channels of transportation; but no person shall be deemed to have violated this section if the person proves that, notwithstanding the exercise of good faith, the person was unable to make the delivery or deposit within that time, or that to do so would cause undue inconvenience or expense.
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