Illinois General Assembly - Illinois Compiled Statutes

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205 ILCS 5/16

(205 ILCS 5/16) (from Ch. 17, par. 323)

Sec. 16.

Directors.

The business and affairs of a State bank shall be
managed by its board of directors that shall exercise its powers as follows:

(1) Directors shall be elected as provided in this Act. Any omission
to elect a director or directors shall not impair any of the rights and
privileges of the bank or of any person in any way interested. The existing
directors shall hold office until their successors are elected and qualify.

(2) (a) Notwithstanding the provisions of any charter

heretofore or hereafter issued, the number of directors, not fewer than 5 nor more than 25, may be fixed from time to time by the stockholders at any meeting of the stockholders called for the purpose of electing directors or changing the number thereof by the affirmative vote of at least two-thirds of the outstanding stock entitled to vote at the meeting, and the number so fixed shall be the board regardless of vacancies until the number of directors is thereafter changed by similar action.

(b) Notwithstanding the minimum number of directors

specified in paragraph (a) of this subsection, a State bank that has been in existence for 10 years or more and has less than $20,000,000 in assets, as of the December 31 immediately preceding the annual meeting of shareholders at which directors are elected, may, subject to the approval of the Commissioner, have a minimum of 3 directors; provided that if a State bank has fewer than 5 directors, at least one director shall not be an officer or employee of the bank. The Commissioner shall annually review the appropriateness of the grant of authority to have a reduced minimum number of directors pursuant to this paragraph (b).

(3) Except as otherwise provided in this paragraph (3), directors
shall hold office until the next annual meeting of the stockholders
succeeding their election or until their successors are elected and
qualify. If the board of directors consists of 6 or more members, in lieu
of electing the membership of the whole board of directors annually, the
charter or by-laws of a State bank may provide that the directors shall be
divided into either 2 or 3 classes, each class to be as nearly equal in
number as is possible. The term of office of directors of the first class
shall expire at the first annual meeting of the stockholders after their
election, that of the second class shall expire at the second annual
meeting after their election, and that of the third class, if any, shall
expire at the third annual meeting after their election. At each annual
meeting after classification, the number of directors equal to the number
of the class whose terms expire at the time of the meeting shall be elected
to hold office until the second succeeding annual meeting, if there be 2
classes, or until the third succeeding annual meeting, if there be 3
classes. Vacancies may be filled by stockholders at a special meeting
called for the purpose.

If authorized by the bank's by-laws or an amendment thereto, the directors
of a State bank may properly fill a vacancy or vacancies arising between
shareholders' meetings, but at no time may the number of directors selected to
fill a vacancy in this manner during any interim period between shareholders'
meetings exceed 33 1/3% of the total membership of the board of directors.

(4) The board of directors shall hold regular meetings at least
once
each month, provided that, upon prior written approval by the Commissioner,
the board of directors may hold regular meetings less frequently than once
each month but at least once each calendar
quarter.  A special meeting of the board of directors may be held as
provided by the by-laws.  A special meeting of the board of directors may
also be held upon call by the Commissioner or a bank examiner appointed
under the provisions of this Act upon not less than 12 hours notice of
the meeting by personal service of the notice or by mailing the notice to
each of the directors at his residence as shown by the books of the bank.
A majority of the board of directors shall constitute a quorum for the
transaction of business unless a greater number is required by the charter
or the by-laws.  The act of the majority of the directors present at a
meeting at which a quorum is present shall be the act of the board of
directors unless the act of a greater number is required by the charter
or by the by-laws.

(5) A member of the board of directors shall be elected
president.
The board of directors may appoint other officers, as the by-laws may
provide, and fix their salaries to carry on the business of the bank.  The
board of directors may make and amend by-laws (not inconsistent with this
Act) for the government of the bank and may, by the affirmative vote of a
majority of the board of directors, establish reasonable compensation of
all directors for services to the corporation as directors, officers, or
otherwise.  An officer, whether elected or appointed by the board of
directors or appointed pursuant to the by-laws, may be removed by the board
of directors at any time.

(6) The board of directors shall cause suitable books and
records of all
the bank's transactions to be kept.

(7) (a) In discharging the duties of their respective

positions, the board of directors, committees of the board, and individual directors may, in considering the best long term and short term interests of the bank, consider the effects of any action (including, without limitation, action that may involve or relate to a merger or potential merger or to a change or potential change in control of the bank) upon employees, depositors, suppliers, and customers of the corporation or its subsidiaries, communities in which the main banking premises, branches, offices, or other establishments of the bank or its subsidiaries are located, and all pertinent factors.

(b) In discharging the duties of their respective

positions, the board of directors, committees of the board, and individual directors shall be entitled to rely on advice, information, opinions, reports or statements, including financial statements and financial data, prepared or presented by: (i) one or more officers or employees of the bank whom the director believes to be reliable and competent in the matter presented; (ii) one or more counsels, accountants, or other consultants as to matters that the director believes to be within that person's professional or expert competence; or (iii) a committee of the board upon which the director does not serve, as to matters within that committee's designated authority; provided that the director's reliance under this paragraph (b) is placed in good faith, after reasonable inquiry if the need for such inquiry is apparent under the circumstances and without knowledge that would cause such reliance to be unreasonable.

(Source: P.A. 91-452, eff. 1-1-00; 92-476, eff. 8-23-01.)