Removal of Director Voting Rules

Hi,

The Not-for-Profit act indicates the following rule:

In the case of a corporation having cumulative voting, if less than the entire board is to be removed, no director may be removed, with or without cause, if the votes cast against his or her removal would be sufficient to elect him or her if then cumulatively voted at an election of the entire board of directors.

Can anyone give me an example of how this works? If 4 out of 5 board directors are being removed, does it mean that you are not removed if at least 20% (25%?) of votes are to retain you?

Any help would be wonderful!

Thanks,

Dave

Thanks for replying. The removal apparently has two parts.

The first part is a majority of the quorum votes to remove.

The second part is that not-for-profit part. The person, even though a majority has voted to remove the director, if enough people vote to retain the director, he/she stays. That is the part that confuses me. What is the threshold. If 60% vote to remove, does the 40% to retain over-ride because of this clause. Since we use cumulative voting, in the last election, the top 5 people were elected. I am not sure if I am stating the problem well. Hopefully this helps someone to answer me as I am very confused.

thanks again,

dave

Hi,

Thanks for the responses. We held the meeting on tuesday and our HOA lawyer ruled that the Not-for-profit portion was to done as follows:

Assuming per our declaration, at least 50% of the quorum voted for the removal of the board director, than they would only be removed if less than 16.67% of the votes were to retain. So essentially, regardless of the declaration or the condo act (we are in IL), at least 83.33% of the voters needed to vote for removal to remove any director (caveat - when less than a full board is being removed). The 16.67% number came from the following:

1. assume full board running plus one, i.e. 6
2. divide 100% of the votes by the number running, i.e. 6

this get you 100 / 6 = 16.67%, the minimum number someone would need to win a spot.

I don't know if i still follow it or if it makes sense, but this is what i was told. Since we have cumulative voting, I believe the 16.67% number can be backed into another way by using votes, but I think it is the same in the end.

Thanks everyone. So far due to the retain percentage problem, no one has been removed but one can hope the proxy protests will help (the board used a lot of proxies from last fall's election).

Dave