1. Assume that the company that is making the TF-300 is a publicly traded corporation. Mark is the president of the company. Knowing that they may cause a fire, he decides not to recall the TF-300s. The fans cause many fires and deaths and the company goes bankrupt. Angry shareholders sue Mark personally. A jury decides that mark did not act in good faith, did not exercise the care that an ordinarily prudent person would exercise in similar circumstance when making the recall decision and was not acting in the best interest of the company. Decide:
Mark will probably be liable since he violated the duty of care.
Mark will probably not be liable since a violation of the duty of care cannot lead to personal liability.
Mark will probably not be liable since the duty of loyalty only applies to directors of corporations, not officers.
Mark will probably not be liable since he did not violate the duty of loyalty.
2. Assume that the company that is making the TF-300 is a publicly traded corporation. Further assume the company decides to make the recall and this gives them goodwill in the industry and they have a record year for profits. Which of the following is correct?
The shareholders can vote to have the company distribute dividends, but they must do so at the annual meeting of shareholders.
The shareholders can vote to have the company distribute dividends, and they can do it at any time.
The shareholders cannot vote for dividends, this is a function of the board of directors.
The shareholders cannot vote for dividends, this is a function of the corporate officers.
3. Assume that the company that is making the TF-300 is a publicly traded corporation. Mark is on the board of directors of the company. Knowing that they may cause a fire, the board decides not to recall the TF-300s. At the end of his term, the shareholders would like someone other than Mark on the board. Which of the following is true?
Election of directors is a function of the shareholders, so they can replace Mark.
Election of directors is a function of the directors themselves, so the shareholders cannot replace Mark.
Election of directors is a function of the corporate officers, so the shareholders cannot replace Mark.
Election of the directors is a function of the officers and the board acting in concert, so the shareholders cannot replace Mark.