Sec. 10.06.485. Loans to directors, officers, and employees.

261 words·~1 min read·/ak/title-10/chapter-6/10-06-485

A research copy — for the controlling text, always check the official state or federal source. Not legal advice.

(a)A loan may not be extended to an officer or employee without authorization by the board. A loan may not be extended to a director without the approval of two-thirds of the voting shares. An employee or officer who is also a director is considered a director for purposes of this section. A shareholder is not disqualified from voting on a loan to a shareholder as a director because of personal interest.

(b)A loan to a director, officer, or employee and a loan secured by the shares of the corporation may not be made unless the loan would be permissible as a distribution under AS 10.06.358 — 10.06.365. A loan under this subsection impairs the retained earnings or paid-in capital accounts to the extent of the loan.

(c)For purposes of this section, a loan may consist of cash, securities, or personal or real property.

(d)If a corporation acts as a guarantor on a loan to a director, officer, or employee, the guarantee is treated as a loan under this section.

(e)A director, officer, or employee of an affiliate corporation is a director, officer, or employee of the lending corporation for purposes of this section.

(f)A loan is to be judged by the duties of directors and officers to act in good faith in a manner reasonably believed to be in the best interests of the corporation and with the care, including reasonable inquiry, that an ordinarily prudent person in a like position would use under similar circumstances.