Any officer or agent may be removed by the board of directors whenever in its judgment the best interests of the corporation will be served thereby, but such removal shall be without prejudice to the contract rights, if any, of the person removed. Election or appointment of an officer or agent shall not of itself create contract rights.
History: 1953 Comp., § 51-24-47, enacted by Laws 1967, ch. 81, § 47.
ANNOTATIONSCompiler's notes. — This section is derived from Section 51 of the ABA Model Business Corporation Act.
Resolution held not to be removal. — A resolution suspending a newspaper executive during the period of litigation between him and the newspaper corporation was not a removal within the meaning of this section. McKinney v. Gannett Co., 660 F. Supp. 984 (D.N.M. 1981), appeal dismissed, 694 F.2d 1240 (10th Cir. 1982).
Subsequent ratification not curing breach. — Subsequent ratification by the board of directors of its removal of an officer in breach of an employment agreement could not cure the breach. McKinney v. Gannett Co., 660 F. Supp. 984 (D.N.M. 1981), appeal dismissed, 694 F.2d 1240 (10th Cir. 1982).
Contract rights of person not removed. — The underlying policy of this section giving precedence to contract rights implied that a former newspaper owner who sued a successor newspaper corporation for breach of his contract with the corporation could maintain his contract rights, even though it was another officer who was removed without the former owner's permission. McKinney v. Gannett Co., 660 F. Supp. 984 (D.N.M. 1981), appeal dismissed, 694 F.2d 1240 (10th Cir. 1982).
Am. Jur. 2d, A.L.R. and C.J.S. references. — 18B Am. Jur. 2d Corporations §§ 1427 to 1444.
Directors' power to remove officers or fellow directors, 63 A.L.R. 776.
Construction, application and effect of statute empowering removal of officer, agent or employee at pleasure, 111 A.L.R. 894.
Removal by court of director or officer of private corporation, 124 A.L.R. 364.
Bylaw authorizing removal of officer at any time as affecting contract of employment for specified period, 145 A.L.R. 312.
"Golden parachute" defense to hostile corporate takeover, 66 A.L.R.4th 138.
19 C.J.S. Corporations §§ 454 to 457.