Officers

Question 1

Powers and Status

Answer 1

Officers are agents of the corporation. Agency law determines the authority and powers of officers. The corporation is the principal and the officer is the agent.

Question 2

Selection and Removal of Officers

Answer 2

Officers are selected and removed by the board, which also sets officer compensation. Despite any contractual term to the contrary, an officer has the power to resign at any time by delivering notice to the corporation, and the corporation has the power to remove an officer at any time, with or without cause.

Question 3

Category 1: No Indemnification

Answer 3

A corporation cannot indemnify a director who is (1) held liable to the corporation or (2) held to have received an improper benefit.

Question 4

Category 2: Mandatory Indemnification

Answer 4

Unless limited by the articles, a corporation must indemnify a director or officer who was successful in defending a proceeding on the merits or otherwise against the officer or director for reasonable expenses, including attorneys’ fees, incurred in connection with the proceeding.

Question 5

Category 3: Permissive Indemnification

Answer 5

A corporation may indemnify a director for reasonable litigation expenses incurred in unsuccessfully defending a suit brought against the director on account of the director’s position if the director: (1) acted in good faith; and (2) believed that her conduct was in the best interests of the corporation