A. At a meeting of shareholders called expressly for that purpose, directors may be removed in the manner provided in this section. Except as provided in Subsection D of this section, a director or the entire board of directors may be removed, with or without cause, by a vote of the holders of a majority of the shares then entitled to vote at an election of directors.
B. In the case of a corporation having cumulative voting, if less than the entire board is to be removed, no one of the directors may be removed if the votes cast against his removal would be sufficient to elect him if then cumulatively voted at an election of the entire board of directors, or, if there are classes of directors, at an election of the class of directors of which he is a part.
C. Whenever the holders of the shares of any class are entitled to elect one or more directors by the provisions of the articles of incorporation, the provisions of this section apply, in respect to the removal of a director or directors so elected, to the vote of the holders of the outstanding shares of that class and not to the vote of the outstanding shares as a whole.
D. Unless the articles of incorporation provide otherwise, in the case of a corporation whose board is classified as provided in Section 53-11-37 NMSA 1978, shareholders may remove directors only for cause.
History: 1953 Comp., § 51-24-38, enacted by Laws 1967, ch. 81, § 38; 1975, ch. 64, § 19; 2001, ch. 200, § 50.
Compiler's notes. — This section is derived from Section 39 of the ABA Model Business Corporation Act.
The 2001 amendment, effective July 1, 2001, inserted "Except as provided in Subsection D of this section," in the second sentence of Subsection A; and added Subsection D.
Law reviews. — For article, "1975 Amendments to the New Mexico Business Corporation Act," see 6 N.M.L. Rev. 57 (1975).
Am. Jur. 2d, A.L.R. and C.J.S. references. — 18B Am. Jur. 2d Corporations §§ 1427 to 1444.
Directors' power to remove officers or fellow directors, 63 A.L.R. 776.
Removal by court of director or officer of private corporation, 124 A.L.R. 364.
19 C.J.S. Corporations §§ 454 to 457.
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