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91_HB3405
LRB9112240JSpc
1 AN ACT to amend the Illinois Banking Act by changing
2 Section 16.
3 Be it enacted by the People of the State of Illinois,
4 represented in the General Assembly:
5 Section 5. The Illinois Banking Act is amended by
6 changing Section 16 as follows:
7 (205 ILCS 5/16) (from Ch. 17, par. 323)
8 Sec. 16. Directors. The business and affairs of a State
9 bank shall be managed by its board of directors that shall
10 exercise its powers as follows:
11 (1) Directors shall be elected as provided in this Act.
12 Any omission to elect a director or directors shall not
13 impair any of the rights and privileges of the bank or of any
14 person in any way interested. The existing directors shall
15 hold office until their successors are elected and qualify.
16 (2) (a) Notwithstanding the provisions of any charter
17 heretofore or hereafter issued, the number of directors,
18 not fewer than 5 nor more than 25, may be fixed from time
19 to time by the stockholders at any meeting of the
20 stockholders called for the purpose of electing directors
21 or changing the number thereof by the affirmative vote of
22 at least two-thirds of the outstanding stock entitled to
23 vote at the meeting, and the number so fixed shall be the
24 board regardless of vacancies until the number of
25 directors is thereafter changed by similar action.
26 (b) Notwithstanding the minimum number of directors
27 specified in paragraph (a) of this subsection, a State
28 bank that has been in existence for 10 years or more and
29 has less than $20,000,000 in assets, as of the December
30 31 immediately preceding the annual meeting of
31 shareholders at which directors are elected, may, subject
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1 to the approval of the Commissioner, have a minimum of 3
2 directors; provided that if a State bank has fewer than 5
3 directors, at least one director shall not be an officer
4 or employee of the bank. The Commissioner shall annually
5 review the appropriateness of the grant of authority to
6 have a reduced minimum number of directors pursuant to
7 this paragraph (b).
8 (3) Except as otherwise provided in this paragraph (3),
9 directors shall hold office until the next annual meeting of
10 the stockholders succeeding their election or until their
11 successors are elected and qualify. If the board of directors
12 consists of 6 or more members, in lieu of electing the
13 membership of the whole board of directors annually, the
14 charter or by-laws of a State bank may provide that the
15 directors shall be divided into either 2 or 3 classes, each
16 class to be as nearly equal in number as is possible. The
17 term of office of directors of the first class shall expire
18 at the first annual meeting of the stockholders after their
19 election, that of the second class shall expire at the second
20 annual meeting after their election, and that of the third
21 class, if any, shall expire at the third annual meeting after
22 their election. At each annual meeting after classification,
23 the number of directors equal to the number of the class
24 whose terms expire at the time of the meeting shall be
25 elected to hold office until the second succeeding annual
26 meeting, if there be 2 classes, or until the third succeeding
27 annual meeting, if there be 3 classes. Vacancies may be
28 filled by stockholders at a special meeting called for the
29 purpose.
30 If authorized by the bank's by-laws or an amendment
31 thereto, the directors of a State bank may properly fill a
32 vacancy or vacancies arising between shareholders' meetings,
33 but at no time may the number of directors selected to fill a
34 vacancy in this manner during any interim period between
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1 shareholders' meetings exceed 33 1/3% of the total membership
2 of the board of directors.
3 (4) The board of directors shall hold regular meetings
4 at least once each month, provided that, upon prior written
5 approval by the Commissioner, the board of directors may hold
6 regular meetings less frequently than once each month but at
7 least once each calendar quarter. A special meeting of the
8 board of directors may be held as provided by the by-laws. A
9 special meeting of the board of directors may also be held
10 upon call by the Commissioner or a bank examiner appointed
11 under the provisions of this Act upon not less than 12 hours
12 notice of the meeting by personal service of the notice or by
13 mailing the notice to each of the directors at his residence
14 as shown by the books of the bank. A majority of the board
15 of directors shall constitute a quorum for the transaction of
16 business unless a greater number is required by the charter
17 or the by-laws. The act of the majority of the directors
18 present at a meeting at which a quorum is present shall be
19 the act of the board of directors unless the act of a greater
20 number is required by the charter or by the by-laws.
21 (5) A member of the board of directors shall be elected
22 president. The board of directors may appoint other officers,
23 as the by-laws may provide, and fix their salaries to carry
24 on the business of the bank. The board of directors may make
25 and amend by-laws (not inconsistent with this Act) for the
26 government of the bank and may, by the affirmative vote of a
27 majority of the board of directors, establish reasonable
28 compensation of all directors for services to the corporation
29 as directors, officers, or otherwise. An officer, whether
30 elected or appointed by the board of directors or appointed
31 pursuant to the by-laws, may be removed by the board of
32 directors at any time.
33 (6) The board of directors shall cause suitable books
34 and records of all the bank's transactions to be kept.
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1 (7) (a) In discharging the duties of their respective
2 positions, the board of directors, committees of the board,
3 and individual directors may, in considering the best long
4 term and short term interests of the bank, consider the
5 effects of any action (including, without limitation, action
6 that may involve or relate to a merger or potential merger or
7 to a change or potential change in control of the bank) upon
8 employees, depositors, suppliers, and customers of the
9 corporation or its subsidiaries, communities in which the
10 main banking premises, branches, offices, or other
11 establishments of the bank or its subsidiaries are located,
12 and all pertinent factors.
13 (b) In discharging the duties of their respective
14 positions, the board of directors, committees of the board,
15 and individual directors shall be entitled to rely on advice,
16 information, opinions, reports, or statements, including
17 financial statements and financial data, prepared or
18 presented by: (i) one or more officers or employees of the
19 bank whom the director believes to be reliable and competent
20 in the matter presented; (ii) one or more counsels,
21 accountants, or other consultants as to matters which the
22 director believes to be within such person's professional or
23 expert competence; or (iii) a committee of the board upon
24 which the director does not serve, as to matters within that
25 committee's designated authority; provided that the
26 director's reliance under this paragraph (b) is placed in
27 good faith after reasonable inquiry, if the need for such
28 inquiry is apparent under the circumstances, and without
29 knowledge that would cause such reliance to be unreasonable.
30 Directors who perform their duties in accordance with the
31 provisions of this subsection (7) shall have no liability
32 based upon any alleged failure to perform their obligations
33 or based upon the manner in which they perform their
34 obligations as directors.
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1 (Source: P.A. 90-301, eff. 8-1-97; 91-452, eff. 1-1-00.)
2 Section 99. Effective date. This Act takes effect upon
3 becoming law.