(1) (a) The applicable court may remove a director in a
proceeding commenced either by the nonprofit corporation or by voting members
holding at least 10% of the votes entitled to be cast in the election of the
director's successor if the court finds that:
(i) the director engaged in:
(A) fraudulent or dishonest conduct; or
(B) gross abuse of authority or discretion with respect to the nonprofit corporation; or
(ii) (A) a final judgment has been entered finding that the director has violated a duty set forth in Section 16-6a-822; and
(B) removal is in the best interests of the nonprofit corporation.
(b) For purposes of this Subsection (1), the applicable court is the:
(i) district court of the county in this state where a nonprofit corporation's principal office is located; or
(ii) if the nonprofit corporation has no principal office in this state:
(A) the district court of the county in which its registered office is located; or
(B) if the nonprofit corporation has no registered office, the district court for Salt Lake County.
(2) The court that removes a director may bar the director
for a period prescribed by the court from:
(b) reappointment; or
(3) If voting members commence a proceeding under Subsection (1), the voting members shall make the nonprofit corporation a party defendant.
(4) A director who is removed pursuant to this section may deliver to the division for filing a statement to that effect pursuant to Section 16-6a-1608.
Amended by Chapter 9, 2001 General Session
Amended by Chapter 127, 2001 General Session