Sec. 8.35. Removal of directors.

355 words·~2 min read·/il/chapter-805/act-5/8-35

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(a)One or more of the directors may be removed, with or without cause, at a meeting of shareholders by the affirmative vote of the holders of a majority of the outstanding shares then entitled to vote at an election of directors, except as follows:

(1)No director shall be removed at a meeting of shareholders unless the notice of such meeting shall state that a purpose of the meeting is to vote upon the removal of one or more directors named in the notice. Only the named director or directors may be removed at such meeting.

(2)In the case of a corporation having cumulative voting, if less than the entire board is to be removed, no director may be removed, with or without cause, if the votes cast against his or her removal would be sufficient to elect him or her if then cumulatively voted at an election of the entire board of directors.

(3)If a director is elected by a class or series of shares, he or she may be removed only by the shareholders of that class or series.

(4)In the case of a corporation whose board is classified as provided in subsection

(e)of Section 8.10, the articles of incorporation may provide that directors may be removed only for cause.

(b)The provisions of subsection

(a)shall not preclude the circuit court of the county in which the corporation's registered office is located from removing a director of the corporation from office in a proceeding commenced either by corporation or by shareholders of the corporation holding at least 10 percent of the outstanding shares of any class if the court finds

(1)the director is engaged in fraudulent or dishonest conduct or has grossly abused his or her position to the detriment of the corporation, and

(2)removal is in the best interest of the corporation. If the court removes a director, it may bar the director from reelection for a period prescribed by the court. If such a proceeding is commenced by the shareholders, they shall make the corporation a party defendant.