AZ LAW BOOK

10-3809. Removal of designated or appointed directors A. A designated director may be removed by an amendment to the articles of incorporation or bylaws deleting or changing the designation. B. Except as otherwise provided in the articles of incorporation or bylaws, an appointed director may be removed with or without cause by the person appointing the director. The person removing the director shall give written notice of the removal to the director and either the board of directors, its presiding officer or the corporation. A removal is effective when the notice is delivered unless the notice specifies a later effective date or event. 10-3810. Removal of directors by judicial proceeding A. The court in the county where a corporation's known place of business or, if none in this state, its statutory agent is located may remove a director of the corporation from office in a proceeding commenced either by the corporation or by its members holding at least twenty-five per cent of the voting power of any class, if the court finds that both: 1. The director engaged in fraudulent conduct or intentional criminal conduct with respect to the corporation. 2. Removal is in the best interests of the corporation. B. The court that removes a director may bar the director from serving on the board for a period prescribed by the court, but in no event may the period exceed five years. C. If members commence a proceeding under subsection A, they shall make the corporation a party defendant, unless the corporation elects to become a party plaintiff. D. The articles of incorporation or bylaws of a corporation organized for religious purposes may limit or prohibit the application of this section. 10-3811. Vacancy on board A. Unless the articles of incorporation or bylaws provide otherwise, and except as provided in subsections B and C of this section, if a vacancy occurs on a board of directors, including a vacancy resulting from an increase in the number of directors, either: 3. If the directors remaining in office constitute fewer than a quorum of the board of directors, they may fill the vacancy by the affirmative vote of a majority of all the directors remaining in office. B. Unless the articles of incorporation or bylaws provide otherwise, if the vacant office was held by a director elected by a class, chapter, region or other organizational or geographic unit or grouping, only members of the class, chapter, region, unit or grouping are entitled to vote to fill the vacancy if it is filled by the members. C. Unless the articles of incorporation or bylaws provide otherwise, if a vacant office was held by an appointed director, only the person who appointed the director may fill the vacancy. D. If a vacant office was held by a designated director, the vacancy shall be filled as provided in the articles of incorporation or bylaws. In the absence of an applicable article or bylaw provision, the vacancy may not be filled by the board. E. A vacancy that will occur at a specific later date by reason of a resignation effective at a later date under section 10-3807, subsection B or otherwise may be filled before the vacancy occurs, but the new director may not take office until the vacancy occurs. F. If at any time by reason of death or resignation or other cause a corporation has no directors in office, any officer or any member may call a special meeting of members. 10-3812. Compensation of directors Unless the articles of incorporation or bylaws provide otherwise, the board of directors may fix the compensation of directors. Article 2 Meetings and Action of the Board 1. The members, if any, may fill the vacancy. 2. The board of directors may fill the vacancy.

Page 311

Law Book Revised 11.02.2017