Vermont Statutes Title 11 Sec. 819
Terms Used In Vermont Statutes Title 11 Sec. 819
- Board of directors: means the board of directors of a mutual benefit enterprise. See
- Contract: A legal written agreement that becomes binding when signed.
- Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
- Director: means a director of a mutual benefit enterprise. See
- Domestic: when applied to a corporation, company, association, or copartnership shall mean organized under the laws of this State; "foreign" when so applied, shall mean organized under the laws of another state, government, or country. See
- Entity: means a person other than an individual. See
- Fiduciary: A trustee, executor, or administrator.
- Guardian: A person legally empowered and charged with the duty of taking care of and managing the property of another person who because of age, intellect, or health, is incapable of managing his (her) own affairs.
- Member: means a person that is admitted as a patron member or investor member or both in a mutual benefit enterprise. See
- Mutual benefit enterprise: means an enterprise organized under this title. See
- Person: means an individual; corporation; business trust; cooperative; estate; trust; partnership; limited partnership; limited liability company; mutual benefit enterprise; joint venture; association; public corporation; government or governmental subdivision, agency, or instrumentality; or any other legal or commercial entity. See
- Trustee: A person or institution holding and administering property in trust.
§ 819. Definitions
For purposes of this section and sections 819a through 819c of this title:
(1) “Control,” including the term “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 enterprise or by an entity controlled by the enterprise that at the relevant time the director:
(A) was a party to; or
(B) had knowledge of and a material financial interest known to the director; or
(C) knew that a related person was a party or had a material financial interest.
(3) “Fair to the enterprise” means, for purposes of subdivision 819a(b)(3) of this title, that the transaction as a whole was beneficial to the enterprise, taking into appropriate account whether it was:
(A) fair in terms of the director’s dealings with the enterprise; and
(B) comparable to what might have been obtainable in an arm’s length transaction, given the consideration paid or received by the enterprise.
(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) the director’s spouse;
(B) a child, stepchild, grandchild, parent, stepparent, grandparent, sibling, step-sibling, half-sibling, aunt, uncle, niece, or nephew (or spouse of any thereof) of the director or of the director’s spouse;
(C) an individual living in the same home as the director;
(D) an entity, other than the enterprise or an entity controlled by the enterprise, controlled by the director or any person specified in this subdivision (5);
(E) a domestic or foreign:
(i) business corporation, nonprofit corporation, or mutual benefit enterprise (other than the enterprise or an entity controlled by the enterprise) of which the director is a director;
(ii) unincorporated entity of which the director is a general partner or a member of the governing body; or
(iii) individual, trust, or estate for whom or of which the director is a trustee, guardian, personal representative, or like fiduciary; or
(F) a person who is or an entity that is controlled by an employer of the director.
(6) “Relevant time” means:
(A) the time at which the directors’ action respecting the transaction is taken in compliance with section 819b of this title; or
(B) if the transaction is not brought before the board of directors of the enterprise or its committee for action under section 819b of this title, at the time the enterprise or an entity controlled by the enterprise 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 such conflicting interest would reasonably believe to be material in deciding whether to proceed with the transaction. (Added 2011, No. 84 (Adj. Sess.), § 1, eff. April 20, 2012.)