The directors elected at the first election held on the first Saturday in June, 1937, shall hold office; three for one (1) year, three for two (2) years, and three for three (3) years, so that annually thereafter there shall be elected three directors to serve for a term of three (3) years, and until their successors are elected and qualified. At the first meeting of the directors on the second Saturday of June, 1937, the directors shall determine by lot or agreement who shall serve for the one (1) year, the two (2) year and the three (3) year term.

Laws 1937, p. 275, § 10.