§ 397. Number, qualifications and disqualifications of directors;
oath; quorum; meeting of directors. 1. The affairs of every savings and
loan association shall be managed and its corporate powers exercised by
a board of directors, in number not less than seven nor more than
fifteen, except that in the case of the merger of two or more savings
and loan associations or one or more savings banks into a savings and
loan association and if the merger agreement so provides, the authorized
number of directors of the resulting association may be increased to not
more than twenty-four, provided that thereafter the number of directors
shall be reduced to fifteen by the elimination of one authorized office
for every two vacancies that occur.

2. (a) All directors of a savings and loan association must be over
the age of eighteen years and citizens of the United States.

(b) No person shall be eligible to election as a director of any
savings and loan association

(1) Unless he is the owner in good faith and in his own right on the
books of the association of shares having a book value of not less than
two hundred dollars and every person elected a director, who, after such
election shall hypothecate, pledge or cease to be the owner in his own
right of such qualifying shares, shall thereby vacate his office, and
shall not be eligible for re-election as a director for a period of one
year from the date of the next succeeding annual meeting. Except as
provided in paragraphs (c) and (d) of this subdivision, every person
legally qualified and duly serving as a director at the time this act
takes effect, may continue as such director until the expiration of the
term for which he was elected or appointed, but shall not be eligible
for re-election unless he shall meet the requirement of this
subdivision.

(2) If he would, upon his election, become the third salaried
full-time employee of the savings and loan association on its board of
directors and if such board, with his election, would have twelve or
less directors, or if he would, upon his election, become the fourth
salaried full-time employee of the savings and loan association on its
board of directors and if such board, with his election, would have more
than twelve directors; provided, however, that with the written approval
of the superintendent, four salaried full-time employees may serve as
directors of a savings and loan association resulting from the merger of
two or more savings and loan associations or from the merger of one or
more savings banks into a savings and loan association if, immediately
prior to such merger, each such person was a salaried full-time employee
and a director or a trustee of a merging institution.

No director in office on April first, nineteen hundred sixty-eight,
shall be ineligible for the office of director by reason of the
provisions of subparagraph (2) of paragraph (b) of this subdivision.

(3) If: (a) Such person's spouse is a director or one of the five
highest paid salaried officers of the association; (b) Such person or
such person's spouse is the grandparent, parent, child, grandchild,
brother, sister, aunt, uncle, nephew or neice of a director or one of
the five highest paid salaried officers of the association; or (c) A
director or one of the five highest paid salaried officers of the
association is the spouse of such person's child, grandchild, brother or
sister.

No director in office on September first, nineteen hundred seventy-one
shall be ineligible for the office of director by reason of the
provisions of subparagraph three of paragraph (b) of this subdivision.

(c) The bylaws of a savings and loan association may prescribe a
maximum age beyond which no person shall be eligible for election to the
board of directors, and may prescribe a mandatory retirement age of
seventy-five years or less for directors, subject to the following
limitations:

(i) No person shall be eligible for initial election as a director
after December thirty-first, nineteen hundred sixty-eight who is seventy
years of age or more; and

(ii) No person shall continue to serve as a director after December
thirty-first, nineteen hundred seventy-three who is seventy-five years
of age or more, and the office of any such director shall become vacant
on the last day of the month in which such director reaches his
seventy-fifth birthday or on December thirty-first, nineteen hundred
seventy-three, whichever is the later.

(d) In the case of a savings and loan association which does not adopt
a bylaw prescribing a mandatory retirement age for directors prior to
January first, nineteen hundred sixty-nine, or which does not maintain
thereafter a bylaw prescribing such a mandatory retirement age, the
office of a director of such savings and loan association shall become
vacant on the last day of the month in which such director reaches his
seventieth birthday, or on December thirty-first, nineteen hundred
sixty-eight, whichever is the later.

3. Any director of a savings and loan association who shall default in
any contractual payment on any obligation to such association for more
than ninety days shall by reason of such default vacate his office as
director and shall not be eligible for re-election for a period of one
year from the date of the next succeeding annual meeting and until such
default is cured.

4. Every director of any savings and loan association, before entering
upon his duties as a director, shall take an oath that he will, so far
as the duty devolves upon him, diligently and honestly administer the
affairs of such association, and will not knowingly violate, or
willingly permit to be violated, any of the provisions of law applicable
to such association, and that he is the owner in good faith and in his
own right, of shares having a book value of not less than two hundred
dollars standing in his name on the books of the association and that
the same are not hypothecated, or in any way pledged as security for any
loan or debt, and, in case of re-election or re-appointment, that such
shares were not hypothecated, or in any way pledged as security for any
loan or debt during his previous term. Such oath shall be subscribed by
the director making it, certified by an officer authorized by law to
administer oaths, and immediately transmitted to the superintendent.

5. In the absence of a provision in the by-laws providing for the
number of directors necessary to constitute a quorum, a majority of the
total number of directors which a savings and loan association would
have if there were no vacancies shall constitute a quorum for the
transaction of business or of any specified item of business. Any
reference in this chapter to corporate action to be taken by the board
shall mean such action at a meeting of the board. Except as otherwise
provided in this chapter, the vote of a majority of the directors
present at the time of the vote, if a quorum is present at such time,
shall be the act of the board.

6. (a) Unless otherwise provided in the by-laws, regular meetings of
the board may be held without notice if the time and place of such
meetings are fixed by the by-laws or the board. Special meetings of the
board shall be held upon notice to the directors.

(b) The by-laws may prescribe what shall constitute notice of meetings
of the board. A notice, or waiver of notice, need not specify the
purpose of any regular or special meeting of the board, unless required
by the by-laws.

(c) Notice of a meeting need not be given to any director who submits
a signed waiver of notice whether before or after the meeting or who
attends the meeting without protesting, prior thereto or at its
commencement, the lack of notice to him.

(d) A majority of the directors present, whether or not a quorum is
present, may adjourn any meeting to another time and place. If the
by-laws so provide, notice of any adjournment of a meeting of the board
to another time or place shall be given to the directors who were not
present at the time of the adjournment and, unless such time and place
are announced at the meeting, to the other directors.

7. Any officer elected or appointed by the board may be removed by the
board, or his authority suspended by it, with or without cause. Such
removal or suspension without cause, however, shall be without prejudice
to his contract rights. The election or appointment of an officer shall
not be deemed of itself to create contract rights. This subdivision does
not affect the powers of the superintendent under section forty-one of
this chapter.

8. Upon the petition of any shareholder aggrieved by an election, and
upon notice to the persons declared elected thereat, the savings and
loan association and such other persons as the court may direct, the
supreme court at a special term held within the judicial district where
the office of the savings and loan association is located shall
forthwith hear the proofs and allegations of the parties, and confirm
the election, order a new election, or take such other action as justice
may require.