§ 7-56-401 — Directors - elections - remuneration - vacancy

(1) The affairs of a
cooperative formed under or subject to this article shall be managed by a board of
not less than three directors as provided in the articles or bylaws elected by and
from the members of the cooperative or designated representatives of members
who are not individuals. If authorized by the articles or the bylaws, up to twenty
percent of the board may consist of directors who are neither members nor
representatives of members. Directors who are not members of the cooperative or
representatives of members may be elected by a vote of two-thirds of the
cooperative members present and voting. Nominations for the position of director
shall be conducted in a manner provided in the bylaws or in a resolution of the
board or of the members.

(2) The articles or bylaws may provide that the territory in which the
cooperative has members shall be divided into districts and that the directors shall
be elected according to such districts, either directly or by district delegates
elected by the members in that district. In that case the articles or bylaws shall
state the number of directors to be elected by each district and the manner and
method of reapportioning the directors and of redistricting the territory covered by
the cooperative. The bylaws may provide that primary elections shall be held in
each district to elect the directors apportioned to such districts and that the result
of all such primary elections shall be ratified at the next regular meeting of the
cooperative or be considered final as to the cooperative.

(3) A cooperative may provide a reasonable remuneration for the time
actually spent by its officers and directors in its service. No director, during the
term of the director's office, shall be a party to a contract for profit with the
cooperative differing in any way from the business relations accorded members of
the cooperative.

(4) The articles or bylaws may limit directors from occupying any position in
the cooperative on a regular salary or substantially full-time pay. The articles or
bylaws may provide for an executive committee and may allot to the committee all
the functions and powers of the board, subject to the general direction and control
of the board.

(5) When a vacancy on the board occurs other than by expiration of term, the
remaining members of the board, even though not a quorum, by a majority vote,
shall fill the unexpired term, unless the articles or bylaws provide for an election of
directors by district, in which event, unless the articles or bylaws provide for a
different procedure, the board shall immediately call a special meeting of the
members in the district to fill the vacancy.

Legislative History

Source: L. 96: Entire article R&RE, p. 501, � 1, effective July 1. L. 2003: (1) and (2) amended, p. 2226, � 83, effective July 1, 2004. L. 2004: (1) amended, p. 1413, � 46, effective July 1.