(1) The business of a capital stock association shall be managed and its powers exercised by a board of directors. The board shall consist of not less than five (5) adult natural persons who shall be elected at the annual meeting of stockholders in the following manner:

At each election for directors every shareholder entitled to vote at such election shall have the right to vote, in person or by proxy, the number of shares owned by him for as many persons as there are directors to be elected and for whose election he has a right to vote.

(2) The term of office of the directors shall be for one (1) year; provided that when the board of directors shall consist of nine (9) or more members, in lieu of electing the whole number of directors annually, the articles of incorporation may provide that the directors be divided into either two (2) or three (3) classes, each class to be as nearly equal in number as possible, the term of office of directors of the first class to expire at the first annual meeting of the shareholders after their election; that of the second class to expire at the second annual meeting after their election; and that of the third class, if any, to expire at the third annual meeting after their election. At each annual meeting after such classification, the number of directors equal to the number of the class whose term expires at the time of such meeting shall be elected to hold office until the second succeeding annual meeting, if there be two (2) classes, or until the third succeeding annual meeting, if there be three (3) classes. No classification of directors shall be effective prior to the first annual meeting of shareholders.

(3) Every director must, during his whole term of service, be a citizen of the United States, and at least three-fifths (⅗) of the directors must have resided in this state for at least one (1) year preceding their election and must be residents therein during their continuance in office. No person shall be eligible for election or shall serve as a director or officer of a capital stock association who has been convicted of a criminal offense. A director or officer shall automatically cease to be a director when he is adjudicated a bankrupt or convicted of a criminal offense. However, no action of the board of directors shall be invalidated through the participation of such director in such action unless challenge is made to such director’s vote prior to such action. Each director shall, in his own name, own capital stock in, or have a deposit relationship with, the association on an unencumbered basis as follows:

(a) For stock associations under Fifty Million Dollars ($50,000,000.00) in assets, stock ownership in the institution or its holding company of Two Thousand Five Hundred Dollars ($2,500.00) in market value at time of purchase; or

(b) For mutual associations under Fifty Million Dollars ($50,000,000.00) in assets, a Two Thousand Five Hundred Dollar ($2,500.00) deposit relationship; or

(c) For stock associations over Fifty Million Dollars ($50,000,000.00) in assets, stock ownership in the institution or its holding company of Five Thousand Dollars ($5,000.00) in market value at the time of purchase; or

(d) For mutual associations over Fifty Million Dollars ($50,000,000.00) in assets a Five Thousand Dollar ($5,000.00) deposit relationship.

For associations that cross the Fifty Million Dollar ($50,000,000.00) threshold, the commissioner shall allow a reasonable period for the directors to comply with the ownership interest requirement.

(4) Each director, upon assuming office, shall take an oath that he will, so far as the duty devolves on him, diligently and honestly administer the affairs of such capital stock association and will not knowingly violate or permit to be violated, any of the provisions of this chapter, and a written copy of such oath shall be filed with the commissioner.

(5) The board of directors of each capital stock association shall hold meetings as set forth in the bylaws of the association.

(6) Vacancies on the board of directors may be filled at a meeting by the stockholders called for that purpose.