Officers

Question 1

officer

Answer 1

• An executive agent of the corporation (can act with actual or apparent authority)
• Generally has the same duties and obligations as directors

Question 2

Is a corporation liable for unauthorized actions by an officer?

Answer 2

Only if the corp engages in one of the following:
1. Ratification
2. Adoption
3. Estoppel

Always liable for actions within scope of authority

Question 3

Can one individual hold more than one exectuive officer position?

Answer 3

Yes

Question 4

How are officers selected and/or removed?

Answer 4

• Selected and removed by the board
• Board sets officer compensation
• Can be removed at any time with or without cause, but may be liable for contractural damages

Question 5

Catagories of indemnification

Answer 5

No indemnification
* Held liable to the corporation
* Held to have recieved an improper benefit

Mandatory indemnification
* Successful in defending a proceeding on merits or otherwise
* Only for reasonable expenses
* States differ on whether they must win entire case

Permissive indemnification
* Reasonable litigation expenses incurred in unsuccessfully defending a suit brought against director if (1) acted in good faith, (2) believed conduct was in best interest of corp.

Question 6

Who determines whether a director/officer is entitled to indemnification?

Answer 6

• Disinterested majority of the board
• Disinterested committee or indpt legal counsel
• Shareholders

Question 7

When may a court order indemnification?

Answer 7

• Look at all circumstances
• Limited to costs and attorney fees

Question 8

May a d/o request an advance on indemnification?

Answer 8

Yes, so long as the director/officer believes that he has met the appropriate standard of coduct, will repay advance if later found to not met the app. standard