State of Illinois
92nd General Assembly
Legislation

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92_HB1903

 
                                               LRB9206832JSpc

 1        AN ACT concerning banking.

 2        Be it enacted by the People of  the  State  of  Illinois,
 3    represented in the General Assembly:

 4        Section  5.  The  Illinois  Banking  Act  is  amended  by
 5    changing Section 16 as follows:

 6        (205 ILCS 5/16) (from Ch. 17, par. 323)
 7        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:
10        (1)  Directors  shall be elected as provided in this Act.
11    Any omission to elect  a  director  or  directors  shall  not
12    impair any of the rights and privileges of the bank or of any
13    person  in  any  way interested. The existing directors shall
14    hold office until their successors are elected and qualify.
15        (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
20        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
24        directors is thereafter changed by similar action.
25             (b)  Notwithstanding the minimum number of directors
26        specified  in  paragraph  (a) of this subsection, a State
27        bank that has been in existence for 10 years or more  and
28        has  less  than $20,000,000 in assets, as of the December
29        31  immediately   preceding   the   annual   meeting   of
30        shareholders at which directors are elected, may, subject
31        to  the approval of the Commissioner, have a minimum of 3
 
                            -2-                LRB9206832JSpc
 1        directors; provided that if a State bank has fewer than 5
 2        directors, at least one director shall not be an  officer
 3        or  employee of the bank. The Commissioner shall annually
 4        review the appropriateness of the grant of  authority  to
 5        have  a  reduced  minimum number of directors pursuant to
 6        this paragraph (b).
 7        (3)  Except as otherwise provided in this paragraph  (3),
 8    directors  shall hold office until the next annual meeting of
 9    the stockholders succeeding their  election  or  until  their
10    successors are elected and qualify. If the board of directors
11    consists  of  6  or  more  members,  in  lieu of electing the
12    membership of the whole  board  of  directors  annually,  the
13    charter  or  by-laws  of  a  State  bank may provide that the
14    directors shall be divided into either 2 or 3  classes,  each
15    class  to  be  as  nearly equal in number as is possible. The
16    term of office of directors of the first class  shall  expire
17    at  the  first annual meeting of the stockholders after their
18    election, that of the second class shall expire at the second
19    annual meeting after their election, and that  of  the  third
20    class, if any, shall expire at the third annual meeting after
21    their  election. At each annual meeting after classification,
22    the number of directors equal to  the  number  of  the  class
23    whose  terms  expire  at  the  time  of  the meeting shall be
24    elected to hold office until  the  second  succeeding  annual
25    meeting, if there be 2 classes, or until the third succeeding
26    annual  meeting,  if  there  be  3  classes. Vacancies may be
27    filled by stockholders at a special meeting  called  for  the
28    purpose.
29        If  authorized  by  the  bank's  by-laws  or an amendment
30    thereto, the directors of a State bank may  properly  fill  a
31    vacancy  or vacancies arising between shareholders' meetings,
32    but at no time may the number of directors selected to fill a
33    vacancy in this manner  during  any  interim  period  between
34    shareholders' meetings exceed 33 1/3% of the total membership
 
                            -3-                LRB9206832JSpc
 1    of the board of directors.
 2        (4)  The  board  of directors shall hold regular meetings
 3    at least once each month, provided that, upon  prior  written
 4    approval by the Commissioner, the board of directors may hold
 5    regular  meetings less frequently than once each month but at
 6    least once each calendar quarter.  A special meeting  of  the
 7    board of directors may be held as provided by the by-laws.  A
 8    special  meeting  of  the board of directors may also be held
 9    upon call by the Commissioner or a  bank  examiner  appointed
10    under  the provisions of this Act upon not less than 12 hours
11    notice of the meeting by personal service of the notice or by
12    mailing the notice to each of the directors at his  residence
13    as  shown  by the books of the bank.  A majority of the board
14    of directors shall constitute a quorum for the transaction of
15    business unless a greater number is required by  the  charter
16    or  the  by-laws.   The  act of the majority of the directors
17    present at a meeting at which a quorum is  present  shall  be
18    the act of the board of directors unless the act of a greater
19    number is required by the charter or by the by-laws.
20        (5)  A  member of the board of directors shall be elected
21    president. The board of directors may appoint other officers,
22    as the by-laws may provide, and fix their salaries  to  carry
23    on the business of the bank.  The board of directors may make
24    and  amend  by-laws  (not inconsistent with this Act) for the
25    government of the bank and may, by the affirmative vote of  a
26    majority  of  the  board  of  directors, establish reasonable
27    compensation of all directors for services to the corporation
28    as directors, officers, or otherwise.   An  officer,  whether
29    elected  or  appointed by the board of directors or appointed
30    pursuant to the by-laws, may  be  removed  by  the  board  of
31    directors at any time.
32        (6)  The  board  of  directors shall cause suitable books
33    and records of all the bank's transactions to be kept.
34        (7) (a)  In discharging the duties  of  their  respective
 
                            -4-                LRB9206832JSpc
 1        positions,  the  board  of  directors,  committees of the
 2        board, and individual directors may, in  considering  the
 3        best  long  term  and  short  term interests of the bank,
 4        consider the effects of any  action  (including,  without
 5        limitation, action that may involve or relate to a merger
 6        or potential merger or to a change or potential change in
 7        control   of   the   bank)  upon  employees,  depositors,
 8        suppliers,  and  customers  of  the  corporation  or  its
 9        subsidiaries,  communities  in  which  the  main  banking
10        premises, branches, offices, or other  establishments  of
11        the  bank  or  its  subsidiaries  are  located,  and  all
12        pertinent factors.
13             (b)  In  discharging  the duties of their respective
14        positions, the board  of  directors,  committees  of  the
15        board, and individual directors shall be entitled to rely
16        on  advice, information, opinions, reports or statements,
17        including  financial  statements  and   financial   data,
18        prepared  or  presented  by:  (i) one or more officers or
19        employees of the bank whom the director  believes  to  be
20        reliable  and competent in the matter presented; (ii) one
21        or more counsels, accountants, or other consultants as to
22        matters that the director  believes  to  be  within  that
23        person's  professional  or  expert competence; or (iii) a
24        committee of the board upon which the director  does  not
25        serve,  as  to matters within that committee's designated
26        authority; provided that the  director's  reliance  under
27        this  paragraph  (b)  is  placed  in  good  faith,  after
28        reasonable  inquiry  if  the  need  for  such  inquiry is
29        apparent under the circumstances  and  without  knowledge
30        that would cause such reliance to be unreasonable.
31    (Source: P.A. 90-301, eff. 8-1-97; 91-452, eff. 1-1-00.)

32        Section  99.  Effective date.  This Act takes effect upon
33    becoming law.

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