Is a Corporate Officer Also an Employee?
The answer will depend on all the facts and documents involved. For example, if the termination was by judicial proceeding, there may be a legal basis to file an appeal. Procedures for removal according to the bylaws of the corporation will be governed by contract law principles. I suggest you consult a local attoreny who can review all the circumstances and documents in the matter.
The following is the SC corporate statutes definition of employee:
"Employee" includes an officer but not a director, unless a
director accepts duties that make him also an employee.
Please see the following SC statutes to determine applicability:
§ 33-8-440. Contract rights of officers.
(a) The appointment of an officer does not itself create contract
(b) An officer's removal does not affect the officer's contract
rights, if any, with the corporation. An officer's resignation does not
affect the corporation's contract rights, if any, with the officer.
§ 33-8-430. Resignation and removal of officers.
(a) An officer may resign at any time by delivering notice to the
corporation. A resignation is effective when the notice is delivered
unless the notice specifies a later effective date. If a resignation
is made effective at a later date and the corporation accepts the
future effective date, its board of directors may fill the pending
vacancy before the effective date if the board of directors provides
that the successor does not take office until the effective date.
(b) A board of directors may remove any officer, except an officer
elected by the shareholders pursuant to the articles of incorporation,
the bylaws, or a shareholder agreement, at any time with or without
cause. An officer elected by the shareholders pursuant to the articles of
incorporation, the bylaws, or a shareholder agreement may be removed only
by the shareholders entitled to elect that officer.
§ 33-8-300. General standards for directors.
(a) A director shall discharge his duties as a director, including
his duties as a member of a committee:
(1) in good faith;
(2) with the care an ordinarily prudent person in a like position
would exercise under similar circumstances; and
(3) in a manner he reasonably believes to be in the best interests of
the corporation and its shareholders.
(b) In discharging his duties a director is entitled to rely on
information, opinions, reports, or statements, including financial
statements and other financial data, if prepared or presented by:
(1) one or more officers or employees of the corporation whom the
director reasonably believes to be reliable and competent in the
(2) legal counsel, public accountants, or other persons as to matters
the director reasonably believes are within the person's professional
or expert competence; or
(3) a committee of the board of directors of which he is not a member
if the director reasonably believes the committee merits confidence.
(c) A director is not acting in good faith if he has knowledge
concerning the matter in question that makes reliance otherwise permitted
by subsection (b) unwarranted.
(d) A director is not liable for any action taken as a director, or
any failure to take any action, if he performed the duties of his
office in compliance with this section.
(e) An action against a director for failure to perform the duties
imposed by this section must be commenced within three years after the
cause of action has accrued, or within two years after the time when
the cause of action is discovered, or should reasonably have been
discovered, whichever sooner occurs. This limitations period does not
apply to breaches of duty which have been concealed fraudulently.
§ 33-8-108. Removal of directors by shareholders.
(a) The shareholders may remove one or more directors with or without
cause unless the articles of incorporation provide that directors may be
removed only for cause.
(b) If a director is elected by a voting group of shareholders, only
the shareholders of that voting group may participate in the vote to
(c) If cumulative voting is authorized, a director may not be removed
if the number of votes sufficient to elect him under cumulative voting
is voted against his removal. If cumulative voting is not authorized,
a director may be removed only if the number of votes cast to remove
him exceeds the number of votes cast not to remove him.
(d) A director may be removed by the shareholders only at a meeting
called for the purpose of removing him and the meeting notice must
state that the purpose, or one of the purposes, of the meeting is
removal of the director.
(e) "Cause" for removal of a director under this section means
fraudulent or dishonest acts, or gross abuse of authority in the
discharge of duties to the corporation, and must be established after
written notice of specific charges and opportunity to meet and refute
§ 33-8-109. Removal of directors by judicial proceeding.
(a) The circuit court of the county where a corporation's principal
office (or, if none in this State, its registered office) is located may
remove a director of the corporation from office in a proceeding
commenced either by the corporation or by its shareholders holding at
least five percent of the outstanding shares of any class if the court
finds that (1) the director engaged in fraudulent or dishonest acts, or
gross abuse of authority in discharge of duties to the corporation, and
(2) removal is in the best interest of the corporation.
(b) The court that removes a director may bar the director from
reelection for a period prescribed by the court.
(c) If shareholders commence a proceeding under subsection (a), they
shall make the corporation a party defendant.