Oregon Statutes 65.364 – Loans to or guarantees for directors and officers
(1) A public benefit corporation or religious corporation may not make a loan, guarantee an obligation or modify a preexisting loan or guarantee to or for the benefit of a director or officer of the corporation, except as stated in this section. Unless prohibited by the corporation’s articles of incorporation or bylaws, a public benefit corporation or religious corporation may make a loan, guarantee an obligation or modify a preexisting loan or guarantee to or for the benefit of a director or officer as part of a recruitment package, for a total period not to exceed three years, provided that:
Terms Used In Oregon Statutes 65.364
- Articles of incorporation: means the articles of incorporation described in ORS § 65. See Oregon Statutes 65.001
- Board of directors: means the individual or individuals who are vested with overall management of the affairs of a domestic corporation or foreign corporation, irrespective of the name that designates the individual or individuals. See Oregon Statutes 65.001
- Bylaws: means a set of provisions for managing and regulating a corporation's affairs that the corporation must adopt under ORS § 65. See Oregon Statutes 65.001
- Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
- Corporation: means a domestic corporation or a foreign corporation. See Oregon Statutes 65.001
- Director: means an individual who acts as a member of the board of directors, who has a right to vote on questions concerning the management and regulation of a corporation's affairs and who is:
(a) An appointed director;
(b) A designated director; or
(c) A director elected by the incorporators, directors or members. See Oregon Statutes 65.001
- Indemnification: In general, a collateral contract or assurance under which one person agrees to secure another person against either anticipated financial losses or potential adverse legal consequences. Source: FDIC
- Mutual benefit corporation: means a domestic corporation that is organized to serve and operates primarily to serve the mutual interests of a group of persons, but is not a public benefit corporation or religious corporation. See Oregon Statutes 65.001
- Notice: means a notice described in ORS § 65. See Oregon Statutes 65.001
- Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.
- Public benefit corporation: means a domestic corporation that:
(a) Is formed as a public benefit corporation under ORS § 65. See Oregon Statutes 65.001
- Religious corporation: means a domestic corporation that is formed as a religious corporation under ORS § 65. See Oregon Statutes 65.001
- Vote: means an authorization by written ballot or written consent, where permitted, or by another method that a corporation specifies as an authorization. See Oregon Statutes 65.001
- Written: means embodied as a document. See Oregon Statutes 65.001
(a) Approval of the loan, guarantee or modification is obtained in the manner provided in ORS § 65.361 (2) and (5) for approval of issues involving director conflicts of interest;
(b) Notice of the loan, guarantee or modification is given to the members of the public benefit corporation or religious corporation in the manner provided in ORS § 65.784 for notice of certain acts of indemnification; and
(c) Twenty or more days before the loan, guarantee or modification is to become binding on the public benefit corporation or religious corporation, written notice has been given to the Attorney General of the proposed recruitment package for the director or officer, including identification of the amount and character of all items of compensation and a separate statement of the amount and terms of any such loan, guarantee or modification.
(2) A mutual benefit corporation may not lend money to or guarantee the obligation of a director of the mutual benefit corporation unless:
(a) The particular loan or guarantee is approved by a majority of the votes of members entitled to vote, excluding the votes of members under the control of the benefited director; or
(b) The mutual benefit corporation’s board of directors determines that the loan or guarantee benefits the mutual benefit corporation and either approves the specific loan or guarantee or a general plan authorizing the loans and guarantees.
(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. [1989 c.1010 § 90; 1991 c.231 § 6; 2019 c.174 § 68]