14A:6-6. Removal of directors
393 words·~2 min read·
/nj/title-14a/chapter-6/14a-6-6·A research copy — for the controlling text, always check the official state or federal source. Not legal advice.
(1)One or more or all the directors of a corporation may be removed for cause or, unless otherwise provided in the certificate of incorporation, without cause by the shareholders by the affirmative vote of the majority of the votes cast by the holders of shares entitled to vote for the election of directors.
(2)Unless otherwise provided in the certificate of incorporation, the removal of directors, with or without cause, by vote of the shareholders as provided in subsection 14A:6-6(1), is subject to the following qualifications
(a)In any case where cumulative voting is authorized, if less than the total number of directors then serving on the board is to be removed by the shareholders, no one of the directors may be so removed if the votes cast against his removal would be sufficient to elect him if then voted cumulatively at an election of the entire board; or, if there are classes of directors, at an election of the class of directors of which he is a part;
(b)A director elected by a class vote, as authorized by subsection 14A:6-4(2), may be removed only by a class vote of the holders of shares entitled to vote for his election;
(c)If the certificate of incorporation requires a greater vote than a plurality of the votes cast for the election of directors, no director may be removed except by the greater vote required to elect him; and
(d)Shareholders of a corporation whose board of directors is classified as provided in subsection 14A:6-4(1) shall not be entitled to remove directors without cause.
(3)The certificate of incorporation or a by-law adopted by the shareholders may provide that the board shall have the power to remove directors for cause and to suspend directors pending a final determination that cause exists for removal.
(4)The Superior Court, in an action in which the court may proceed in a summary manner or otherwise, may review the removal or suspension of a director for cause.
(5)No act of the board done during the period when a director has been suspended or removed for cause shall be impugned or invalidated solely on account of the suspension or removal if the suspension or removal is thereafter rescinded by the shareholders or by the board or by the final judgment of the court.
L.1968, c.350; amended 1988,c.94,s.28.