45-2-401 - Directors and officers Qualifications of directors Election Terms.
45-2-401. Directors and officers Qualifications of directors Election Terms.
(a) The affairs of a state bank shall be managed by a board of directors, which shall exercise its powers and be responsible for the discharge of its duties. The charter or bylaws may establish a variable range for the size of the board of directors by fixing a minimum of not less than five (5) members and a maximum of not more than twenty-five (25) members. If a variable range is established, the number of directors may be fixed or changed from time to time, within the minimum and maximum, by the shareholders or the board of directors; however, unless the charter or bylaws provide otherwise, only the shareholders may change the range for the size of the board or change from a fixed to a variable-range size board or vice versa. Each bank director must, during each director's whole term of service, be a citizen of the United States. A majority of the directors must reside in a state in which the bank has a branch location or within one hundred (100) miles of the location of any branch, both for at least one (1) year immediately preceding their election and during their term of service as a director. The bylaws of the bank may specify other qualifications for directors. Any director who becomes disqualified shall forthwith resign the office, but, upon removal of the disqualification, shall be eligible for election. A director who is disqualified may be removed by the board of directors or by the commissioner. No action taken by a director prior to resignation or removal shall be subject to attack on the ground of the director's disqualification.
(b) Except in cases of disqualification, directors shall serve until their successors are elected and qualified.
(c) Directors shall be elected by the stockholders at the first meeting and thereafter at the annual meeting or at a special meeting called for the purpose. If the charter provides for cumulative voting, the votes of each share may be cast for one (1) person or divided among two (2) or more, as the stockholders may choose. The person or persons (to the number of directors to be elected) having the largest number of votes shall be elected.
(d) The term of office of directors shall be one (1) year or, if the bylaws so provide, three (3) years, in which case one third (1/3) of the directors, or as nearly one third (1/3) as possible, shall be elected for each year following the first election of directors. Vacancies at any one time to the number of one third (1/3) of the board may be filled by vote of the board of directors until the next meeting of the stockholders.
(e) The officers designated by the bylaws shall be elected by the board of directors. The bank shall have only one (1) officer designated as president and the president shall be a member of the board of directors. No officer shall be elected or a contract executed for employment for a period longer than three (3) years. An officer may be removed by the board of directors at any time but removal shall not prejudice any rights that the officer may have to damages for breach of contract of employment.
[Acts 1969, ch. 36, § 1 (3.315); 1971, ch. 77, § 1; 1973, ch. 294, § 6; T.C.A., § 45-226; Acts 1989, ch. 57, § 1; 1994, ch. 551, § 10; 1996, ch. 768, §§ 15, 16; 2001, ch. 54, § 11.]