Colorado § 11-103-501 - Directors and officers.

§ 11-103-501. Directors and officers.

(1) 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 number of directors, not fewer than three nor more than twenty-five, shall be as fixed by the bylaws, and the number so fixed shall be the board, regardless of vacancies. At least three-fourths of the directors shall be citizens of the United States, and a majority shall be residents of this state. A director need not own shares. A director may not serve who has been convicted of fraud involving any financial institution or of a felony, but the banking board may waive this provision regarding a felony if it determines that the particular felony does not jeopardize the person's ability to act as a director. A director who is disqualified may be removed by the board of directors or by the banking board. An action taken by a director prior to the director's resignation or removal is not subject to attack on the ground of the director's disqualification.

(2) Directors shall receive such reasonable compensation as the bylaws may prescribe and shall serve until their successors are elected and qualify.

(3) 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 person or divided among two or more, as the stockholder may choose. The person (to the number of directors to be elected) having the largest number of votes shall be elected.

(4) The term of office of directors shall be one year. Vacancies may be filled by vote of the board of directors until the next meeting of the stockholders.

(5) A director may be removed by the stockholders at a meeting. Where cumulative voting for directors is provided in the charter, a director shall not be removed unless the votes cast against a motion for the director's removal are less than the total number of shares outstanding divided by the number of authorized directors, but all of the directors shall be removed if a majority of the outstanding shares approves a motion for the removal of all.

(6) The officers designated by the bylaws shall be elected by the board of directors. A member of the board of directors shall be elected president. No officer shall be elected for a period longer than one year. No person may be employed as an officer of a state bank who has been convicted of fraud involving any financial institution or of a felony, but the banking board may waive this provision regarding a felony if it determines that the particular felony does not jeopardize the person's ability to act as an officer. 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, unless the officer falsely answered any question or made any material misstatement of facts relating to any matter leading to or constituting any inducement to such employment.

Source: L. 2003: Entire article added with relocations, p. 1091, § 3, effective July 1. L. 2014: (1) and (6) amended, (HB 14-1274), ch. 110, p. 400, § 2, effective August 6. L. 2024: (1) and (5) amended, (HB 24-1351), ch. 461, p. 3203, § 23, effective August 7.

Editor's note: This section is similar to former § 11-3-114 as it existed prior to 2003.

Cross references: For the legislative declaration in HB 14-1274, see section 1 of chapter 110, Session Laws of Colorado 2014.

ANNOTATION

This section assures responsibility of directors. One of the purposes of this section is that only a person substantially interested should be entrusted with the control of the business of a bank. Another is that a director should be able to respond in something more than a nominal amount in case of failure of business, for which failure he was, in part, in law, responsible. Swenson v. McFerson, 91 Colo. 519, 17 P.2d 530 (1932) (decided under repealed laws antecedent to CSA, C. 18, § 12, which were similar to this section).