Officer Duties

Question 1

Officers - Powers + Status

Answer 1

• agents of the corp -> agency law determines powers + status
  -> actual authority, apparent authority, + ratification apply
• corp= liable for actions by officers w/in the scope of their authority even if the particular act wasn’t specifically authorized

Question 2

Officers - Roles

Answer 2

• corp need not have particular officers
• may have those specified or permitted in bylaws
• one officer may appoint assistant officers if permitted in or by the bylaws

Question 3

Officer Duties

Answer 3

• generally determined by the bylaws or (if consistent w/ bylaws) by board or an officer so authorized by board
• owe same duties of loyalty + care as directors too

Question 4

Selection + Removal of Officers

Answer 4

• selected + removed by board -> can do so at any time, w/ or w/o cause
  -> also sets their compensation
• officer can resign at any time
• keep in mind NOT hired by SHs (they hire directors)

Question 5

Categories of Indemnification

Answer 5

• no indemnification
• mandatory indemnification
  permissive indemnification

Question 6

No Indemnification

Answer 6

• corp can’t indemnify dir who is:
  1) held liable to the corp OR
  2) held to have received an improper benefit

Question 7

Mandatory Indemnification

Answer 7

• must indemnify officer or dir who was successful in defending a proceeding on the merits or otherwise against the officer or dir for reasonable expenses, including attorneys’ fees, incurred in connection with the proceeding

Question 8

Permissive Indemnification

Answer 8

Corp may indemnify dir for reasonable litigation expenses incurred in unsuccessfully defending suit brought against the dir on account of dir’s position if dir:
1) acted in good faith AND
2) believed her conduct was in the best interests of the corp

• officers can also generally be indemnified to same extent as dir

Question 9

Permissive Indemnification - Who Makes Determination

Answer 9

• generally disinterested majority of the board
  -> or, if no disinterested quorum, by majority of a disinterested committee or by independent legal counsel
  -> SHs can also decide

Question 10

Court-Ordered Indemnification

Answer 10

• allowed when court concludes justified
• if dir was held liable to corp, reimbursement limited to costs + attorneys’ fees (can’t include the judgment)

Question 11

Limitations of Liability

Answer 11

• articles can limit dir liability for damages, but not for intentional misconduct, usurping corporate opportunities, unlawful distributions, or improper personal benefit
  -> can only eliminate for duty of care cases

Question 12

Liability Insurance

Answer 12

• corp can purchase to indemnify d’s + o’s even if wouldn’t be indemnified by corp under above standards