Ala. Code § 10A-30-2.10 (1975) Appointment of a Provisional Director In Certain Cases; Applicable to Corporations Formed As Close Corporations Or Electing Close Corporation Status Prior to January, 1 1995

• Library: Alabama Statutes
• Edition: 2023
• Currency: Current with legislation from the 2023 Regular and Special Sessions.
• Year: 2023
• Citation: Ala. Code § 10A-30-2.10 (1975)

(a) Notwithstanding any contrary provision of the governing documents or agreement of the shareholders, the circuit court of the county in which the registered office of the corporation is located may appoint a provisional director for a close corporation if the directors are so divided respecting the management of the corporation's business and affairs that the votes required for action by the board of directors cannot be obtained with the consequence that the business and affairs of the corporation can no longer be conducted to the advantage of the shareholders generally.

(b) An application for relief under this section must be filed (1) by at least one-half of the number of directors then in office, or (2) by the holders of at least one-third of all shares then entitled to elect directors, or, (3) if there be more than one class of shares then entitled to elect one or more directors, by the holders of two-thirds of the shares of any such class; but the certificate of formation of a close corporation may provide that a lesser proportion of the directors or of the shareholders or of a class of shareholders may apply for relief under this section.

(c) A provisional director shall be an impartial person who is neither a shareholder nor a creditor of the corporation or of any subsidiary or affiliate of the corporation, and whose further qualifications, if any, may be determined by the circuit court of the county. A provisional director is not a receiver of the corporation and does not have the title and powers of a custodian or receiver. A provisional director shall have all the rights and powers of a duly elected director of the corporation, including the right to notice of and to vote at meetings of directors until such time as he or she shall be removed by order of the circuit court of the county or by the holders of a majority of all shares then entitled to vote to elect directors or by the holders of two-thirds of the shares of that class of voting shares which filed the application for appointment of a provisional director. His or her compensation shall be determined by agreement between him or her and the corporation subject to approval of the circuit court of the county, which may fix his or her compensation in the absence of agreement or in the event of disagreement between the provisional director and the corporation.