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H.B. 350

             1     

REMOVAL OF DIRECTORS OF NONPROFIT

             2     
CORPORATIONS

             3     
2014 GENERAL SESSION

             4     
STATE OF UTAH

             5     
Chief Sponsor: Dixon M. Pitcher

             6     
Senate Sponsor: Jerry W. Stevenson

             7     
             8      LONG TITLE
             9      General Description:
             10          This bill modifies the Utah Revised Nonprofit Corporation Act.
             11      Highlighted Provisions:
             12          This bill:
             13          .    modifies provisions related to the removal of a director of a nonprofit corporation;
             14      and
             15          .    makes technical changes.
             16      Money Appropriated in this Bill:
             17          None
             18      Other Special Clauses:
             19          None
             20      Utah Code Sections Affected:
             21      AMENDS:
             22           16-6a-808 , as last amended by Laws of Utah 2010, Chapter 378
             23     
             24      Be it enacted by the Legislature of the state of Utah:
             25          Section 1. Section 16-6a-808 is amended to read:
             26           16-6a-808. Removal of directors.
             27          (1) Directors elected by voting members or directors may be removed as provided in


             28      Subsections (1)(a) through (g).
             29          (a) The voting members may remove one or more directors elected by them with or
             30      without cause unless the bylaws provide that directors may be removed only for cause.
             31          (b) If a director is elected by a voting group, only that voting group may participate in
             32      the vote to remove that director.
             33          (c) [A] Unless otherwise provided in the bylaws, a director may be removed [only if
             34      the number of votes cast to remove the director would be sufficient to elect the director at a
             35      meeting to elect directors.]:
             36          (i) when the director is elected by the voting members, only if a majority of the voting
             37      members votes to remove the director; or
             38          (ii) when the director is elected by a voting group, only if a majority of the voting
             39      group votes to remove the director.
             40          (d) A director elected by voting members may be removed by the voting members
             41      only:
             42          (i) at a meeting called for the purpose of removing that director; and
             43          (ii) if the meeting notice states that the purpose, or one of the purposes, of the meeting
             44      is removal of the director.
             45          (e) An entire board of directors may be removed under Subsections (1)(a) through (d).
             46          (f) (i) Except as provided in Subsection (1)(f)(ii), a director elected by the board of
             47      directors may be removed with or without cause by the vote of a majority of the directors then
             48      in office or such greater number as is set forth in the bylaws.
             49          (ii) A director elected by the board of directors to fill the vacancy of a director elected
             50      by the voting members may be removed without cause by the voting members but not the
             51      board of directors.
             52          (g) Notwithstanding Subsections (1)(a) through (f), if provided in the bylaws, any
             53      director no longer qualified to serve, under standards set forth in the bylaws, may be removed
             54      by a vote of a majority of the directors then in office or such greater number as set forth in the
             55      bylaws.
             56          (h) A director who is removed pursuant to this section may deliver to the division for
             57      filing a statement to that effect pursuant to Section 16-6a-1608 .
             58          (2) Unless otherwise provided in the bylaws:


             59          (a) an appointed director may be removed without cause by the person appointing the
             60      director;
             61          (b) the person described in Subsection (2)(a) shall remove the director by giving
             62      written notice of the removal to:
             63          (i) the director; and
             64          (ii) the nonprofit corporation; and
             65          (c) unless the written notice described in Subsection (2)(b) specifies a future effective
             66      date, a removal is effective when the notice is received by both:
             67          (i) the director to be removed; and
             68          (ii) the nonprofit corporation.
             69          (3) A designated director, as provided in Subsection 16-6a-804 (5), may be removed by
             70      an amendment to the bylaws deleting or changing the designation.
             71          (4) Removal of a director under this section is not affected by Subsection 16-6a-805 (5).




Legislative Review Note
    as of 2-13-14 12:29 PM


Office of Legislative Research and General Counsel


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