Full Text of SB0385 94th General Assembly
SB0385eng 94TH GENERAL ASSEMBLY
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| AN ACT concerning regulation.
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| Be it enacted by the People of the State of Illinois,
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| represented in the General Assembly:
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| Section 5. The Illinois Banking Act is amended by changing | 5 |
| Section 16 as follows:
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| (205 ILCS 5/16) (from Ch. 17, par. 323)
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| Sec. 16. Directors. The business and affairs of a State | 8 |
| bank shall be
managed by its board of directors that shall | 9 |
| exercise its powers as follows:
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| (1) Directors shall be elected as provided in this Act. Any | 11 |
| omission
to elect a director or directors shall not impair any | 12 |
| of the rights and
privileges of the bank or of any person in | 13 |
| any way interested. The existing
directors shall hold office | 14 |
| until their successors are elected and qualify.
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| (2) (a) Notwithstanding the provisions of any charter | 16 |
| heretofore or
hereafter issued, the number of directors, | 17 |
| not fewer than 5
nor more than 25, may be fixed from time | 18 |
| to time by the stockholders at any
meeting of the | 19 |
| stockholders called for the purpose of electing directors
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| or changing the number thereof by the affirmative vote of | 21 |
| at least
two-thirds of the outstanding stock entitled to | 22 |
| vote at the
meeting, and the number so fixed shall be the | 23 |
| board regardless of
vacancies until the number of directors | 24 |
| is thereafter changed by similar
action.
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| (b) Notwithstanding the minimum number of directors | 26 |
| specified in
paragraph (a) of this subsection, a State bank | 27 |
| that has been in existence
for 10 years or more and has | 28 |
| less than $20,000,000 in assets, as of the
December 31 | 29 |
| immediately preceding the annual meeting of shareholders | 30 |
| at
which directors are elected, may, subject to the | 31 |
| approval of the
Commissioner, have a minimum of 3 | 32 |
| directors; provided that if a State bank
has fewer than 5 |
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| directors, at least one director shall not be an officer
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| employee of the bank. The Commissioner shall annually | 3 |
| review the
appropriateness of the grant of authority to | 4 |
| have a reduced minimum number
of directors pursuant to this | 5 |
| paragraph (b).
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| (3) Except as otherwise provided in this paragraph (3), | 7 |
| directors
shall hold office until the next annual meeting of | 8 |
| the stockholders
succeeding their election or until their | 9 |
| successors are elected and
qualify. If the board of directors | 10 |
| consists of 6 or more members, in lieu
of electing the | 11 |
| membership of the whole board of directors annually, the
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| charter or by-laws of a State bank may provide that the | 13 |
| directors shall be
divided into either 2 or 3 classes, each | 14 |
| class to be as nearly equal in
number as is possible. The term | 15 |
| of office of directors of the first class
shall expire at the | 16 |
| first annual meeting of the stockholders after their
election, | 17 |
| that of the second class shall expire at the second annual
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| meeting after their election, and that of the third class, if | 19 |
| any, shall
expire at the third annual meeting after their | 20 |
| election. At each annual
meeting after classification, the | 21 |
| number of directors equal to the number
of the class whose | 22 |
| terms expire at the time of the meeting shall be elected
to | 23 |
| hold office until the second succeeding annual meeting, if | 24 |
| there be 2
classes, or until the third succeeding annual | 25 |
| meeting, if there be 3
classes. Vacancies may be filled by | 26 |
| stockholders at a special meeting
called for the purpose.
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| Unless prohibited
If authorized by the bank's by-laws or an | 28 |
| amendment thereto, the directors
of a State bank may properly | 29 |
| fill a vacancy or vacancies arising between
shareholders' | 30 |
| meetings by appointment , but at no time may the number of | 31 |
| directors appointed
selected to
fill a vacancy in this manner | 32 |
| during any interim period between shareholders'
meetings | 33 |
| exceed 33 1/3% of the total membership of the board of | 34 |
| directors. Any director appointed to fill a vacancy arising | 35 |
| between shareholders' meetings shall serve until the next | 36 |
| meeting of shareholders at which directors are elected.
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| (4) The board of directors shall hold regular meetings at | 2 |
| least
once
each month, provided that, upon prior written | 3 |
| approval by the Commissioner,
the board of directors may hold | 4 |
| regular meetings less frequently than once
each month but at | 5 |
| least once each calendar
quarter. A special meeting of the | 6 |
| board of directors may be held as
provided by the by-laws. A | 7 |
| special meeting of the board of directors may
also be held upon | 8 |
| call by the Commissioner or a bank examiner appointed
under the | 9 |
| provisions of this Act upon not less than 12 hours notice of
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| the meeting by personal service of the notice or by mailing the | 11 |
| notice to
each of the directors at his residence as shown by | 12 |
| the books of the bank.
A majority of the board of directors | 13 |
| shall constitute a quorum for the
transaction of business | 14 |
| unless a greater number is required by the charter
or the | 15 |
| by-laws. The act of the majority of the directors present at a
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| meeting at which a quorum is present shall be the act of the | 17 |
| board of
directors unless the act of a greater number is | 18 |
| required by the charter
or by the by-laws.
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| (5) A member of the board of directors shall be elected
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| president.
The board of directors may appoint other officers, | 21 |
| as the by-laws may
provide, and fix their salaries to carry on | 22 |
| the business of the bank. The
board of directors may make and | 23 |
| amend by-laws (not inconsistent with this
Act) for the | 24 |
| government of the bank and may, by the affirmative vote of a
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| majority of the board of directors, establish reasonable | 26 |
| compensation of
all directors for services to the corporation | 27 |
| as directors, officers, or
otherwise. An officer, whether | 28 |
| elected or appointed by the board of
directors or appointed | 29 |
| pursuant to the by-laws, may be removed by the board
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| directors at any time.
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| (6) The board of directors shall cause suitable books and
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| records of all
the bank's transactions to be kept.
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| (7) (a) In discharging the duties of their respective | 34 |
| positions, the
board
of directors, committees of the board, | 35 |
| and individual directors may, in
considering the best long | 36 |
| term and short term interests of the bank,
consider the |
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| effects of any action (including, without limitation, | 2 |
| action
that may involve or relate to a merger or potential | 3 |
| merger or to a change
or potential change in control of the | 4 |
| bank) upon employees, depositors,
suppliers, and customers | 5 |
| of the corporation or its subsidiaries,
communities in | 6 |
| which the main banking premises, branches, offices, or | 7 |
| other
establishments of the bank or its subsidiaries are | 8 |
| located, and all pertinent
factors.
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| (b) In discharging the duties of their respective | 10 |
| positions, the board
of
directors, committees of the board, | 11 |
| and individual directors shall be entitled
to rely on | 12 |
| advice, information, opinions, reports or statements, | 13 |
| including
financial statements and financial data, | 14 |
| prepared or presented by: (i) one or
more officers or | 15 |
| employees of the bank whom the director believes to be
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| reliable and competent in the matter presented; (ii) one or | 17 |
| more counsels,
accountants, or other consultants as to | 18 |
| matters that the director believes to
be within that | 19 |
| person's professional or expert competence; or (iii) a | 20 |
| committee
of the board upon which the director does not | 21 |
| serve, as to matters within that
committee's designated | 22 |
| authority; provided that the director's reliance under
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| this paragraph (b) is placed in good faith, after | 24 |
| reasonable inquiry if the
need for such inquiry is apparent | 25 |
| under the circumstances and without knowledge
that would | 26 |
| cause such reliance to be unreasonable.
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| (Source: P.A. 91-452, eff. 1-1-00; 92-476, eff. 8-23-01.)
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