§ 13401. Directors: number, election, qualifications, and term

(a) The number of directors on the governing body of a mutual or cooperative financial institution may not be less than five, all of whom shall be residents of the financial institution’s geographic area or an area proximate to that geographic area.

(b) The initial governing body shall be elected at the first meeting of the corporators or the organizers as provided for in section 13103 of this title, and the governing body shall be elected by a vote of the corporators or members at each annual meeting thereafter, provided that the organizational documents or internal governance documents may provide for classification of directors in accordance with Title 11 or 11A, depending on the form of organization.

(c) Vacancies on the governing body occurring during the year may be filled by the governing body until the next annual meeting of the corporators or members. A director so elected shall fill such position for the remainder of the term. Any vacancy that causes the number of directors to fall below the minimum required in subsection (a) of this section or in the institution’s internal governance documents shall be filled promptly.

(d) The compensation of directors, which may include provision for payment of medical, surgical, and hospital expenses due to accident or illness in the same manner as provided for officers and employees, may be fixed by the corporators or members at any legal meeting thereof or, subject to the written approval of the Commissioner, such may be fixed by the governing body. (Added 1999, No. 153 (Adj. Sess.), § 2, eff. Jan. 1, 2001.)