Section 504.834. Loans to or guarantees for directors and officers.

  1.  A corporation shall not lend money to or guarantee the obligation of a director or officer of the corporation.

  2.  This section does not apply to the situation where the director or officer is a full-time employee of the corporation and involves any of the following:

  a.  An advance to pay reimbursable expenses reasonably expected to be incurred by a director or officer.

  b.  An advance to pay premiums on a policy of life insurance if the advance is secured by the policy’s death benefit proceeds or cash surrender value, or both.

  c.  Advances pursuant to part 5.

  d.  Loans or advances pursuant to employee benefit plans.

  e.  A loan secured by the principal residence of an officer.

  f.  A loan to pay relocation expenses of an officer.

  3.  The fact that a loan or guarantee is made in violation of this section does not affect the borrower’s liability on the loan.

2004 Acts, ch 1049, §93, 192

; 2015 Acts, ch 45, §10

Section amended