Illinois General Assembly - Full Text of Public Act 095-0924
Illinois General Assembly

Previous General Assemblies

Public Act 095-0924


 

Public Act 0924 95TH GENERAL ASSEMBLY



 


 
Public Act 095-0924
 
SB2338 Enrolled LRB095 16921 MJR 42966 b

    AN ACT concerning regulation.
 
    Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
 
    Section 5. The Illinois Banking Act is amended by changing
Sections 2, 5c, 13, and 15 as follows:
 
    (205 ILCS 5/2)  (from Ch. 17, par. 302)
    Sec. 2. General definitions. In this Act, unless the
context otherwise requires, the following words and phrases
shall have the following meanings:
    "Accommodation party" shall have the meaning ascribed to
that term in Section 3-419 of the Uniform Commercial Code.
    "Action" in the sense of a judicial proceeding includes
recoupments, counterclaims, set-off, and any other proceeding
in which rights are determined.
    "Affiliate facility" of a bank means a main banking
premises or branch of another commonly owned bank. The main
banking premises or any branch of a bank may be an "affiliate
facility" with respect to one or more other commonly owned
banks.
    "Appropriate federal banking agency" means the Federal
Deposit Insurance Corporation, the Federal Reserve Bank of
Chicago, or the Federal Reserve Bank of St. Louis, as
determined by federal law.
    "Bank" means any person doing a banking business whether
subject to the laws of this or any other jurisdiction.
    A "banking house", "branch", "branch bank" or "branch
office" shall mean any place of business of a bank at which
deposits are received, checks paid, or loans made, but shall
not include any place at which only records thereof are made,
posted, or kept. A place of business at which deposits are
received, checks paid, or loans made shall not be deemed to be
a branch, branch bank, or branch office if the place of
business is adjacent to and connected with the main banking
premises, or if it is separated from the main banking premises
by not more than an alley; provided always that (i) if the
place of business is separated by an alley from the main
banking premises there is a connection between the two by
public or private way or by subterranean or overhead passage,
and (ii) if the place of business is in a building not wholly
occupied by the bank, the place of business shall not be within
any office or room in which any other business or service of
any kind or nature other than the business of the bank is
conducted or carried on. A place of business at which deposits
are received, checks paid, or loans made shall not be deemed to
be a branch, branch bank, or branch office (i) of any bank if
the place is a terminal established and maintained in
accordance with paragraph (17) of Section 5 of this Act, or
(ii) of a commonly owned bank by virtue of transactions
conducted at that place on behalf of the other commonly owned
bank under paragraph (23) of Section 5 of this Act if the place
is an affiliate facility with respect to the other bank.
    "Branch of an out-of-state bank" means a branch established
or maintained in Illinois by an out-of-state bank as a result
of a merger between an Illinois bank and the out-of-state bank
that occurs on or after May 31, 1997, or any branch established
by the out-of-state bank following the merger.
    "Bylaws" means the bylaws of a bank that are adopted by the
bank's board of directors or shareholders for the regulation
and management of the bank's affairs. If the bank operates as a
limited liability company, however, "bylaws" means the
operating agreement of the bank.
    "Call report fee" means the fee to be paid to the
Commissioner by each State bank pursuant to paragraph (a) of
subsection (3) of Section 48 of this Act.
    "Capital" includes the aggregate of outstanding capital
stock and preferred stock.
    "Cash flow reserve account" means the account within the
books and records of the Commissioner of Banks and Real Estate
used to record funds designated to maintain a reasonable Bank
and Trust Company Fund operating balance to meet agency
obligations on a timely basis.
    "Charter" includes the original charter and all amendments
thereto and articles of merger or consolidation.
    "Commissioner" means the Commissioner of Banks and Real
Estate or a person authorized by the Commissioner, the Office
of Banks and Real Estate Act, or this Act to act in the
Commissioner's stead.
    "Commonly owned banks" means 2 or more banks that each
qualify as a bank subsidiary of the same bank holding company
pursuant to Section 18 of the Federal Deposit Insurance Act;
"commonly owned bank" refers to one of a group of commonly
owned banks but only with respect to one or more of the other
banks in the same group.
    "Community" means a city, village, or incorporated town and
also includes the area served by the banking offices of a bank,
but need not be limited or expanded to conform to the
geographic boundaries of units of local government.
    "Company" means a corporation, limited liability company,
partnership, business trust, association, or similar
organization and, unless specifically excluded, includes a
"State bank" and a "bank".
    "Consolidating bank" means a party to a consolidation.
    "Consolidation" takes place when 2 or more banks, or a
trust company and a bank, are extinguished and by the same
process a new bank is created, taking over the assets and
assuming the liabilities of the banks or trust company passing
out of existence.
    "Continuing bank" means a merging bank, the charter of
which becomes the charter of the resulting bank.
    "Converting bank" means a State bank converting to become a
national bank, or a national bank converting to become a State
bank.
    "Converting trust company" means a trust company
converting to become a State bank.
    "Court" means a court of competent jurisdiction.
    "Director" means a member of the board of directors of a
bank. In the case of a manager-managed limited liability
company, however, "director" means a manager of the bank and,
in the case of a member-managed limited liability company,
"director" means a member of the bank. The term "director" does
not include an advisory director, honorary director, director
emeritus, or similar person, unless the person is otherwise
performing functions similar to those of a member of the board
of directors.
    "Eligible depository institution" means an insured savings
association that is in default, an insured savings association
that is in danger of default, a State or national bank that is
in default or a State or national bank that is in danger of
default, as those terms are defined in this Section, or a new
bank as that term defined in Section 11(m) of the Federal
Deposit Insurance Act or a bridge bank as that term is defined
in Section 11(n) of the Federal Deposit Insurance Act or a new
federal savings association authorized under Section
11(d)(2)(f) of the Federal Deposit Insurance Act.
    "Fiduciary" means trustee, agent, executor, administrator,
committee, guardian for a minor or for a person under legal
disability, receiver, trustee in bankruptcy, assignee for
creditors, or any holder of similar position of trust.
    "Financial institution" means a bank, savings bank,
savings and loan association, credit union, or any licensee
under the Consumer Installment Loan Act or the Sales Finance
Agency Act and, for purposes of Section 48.3, any proprietary
network, funds transfer corporation, or other entity providing
electronic funds transfer services, or any corporate
fiduciary, its subsidiaries, affiliates, parent company, or
contractual service provider that is examined by the
Commissioner. For purposes of Section 5c and subsection (b) of
Section 13 of this Act, "financial institution" includes any
proprietary network, funds transfer corporation, or other
entity providing electronic funds transfer services, and any
corporate fiduciary.
    "Foundation" means the Illinois Bank Examiners' Education
Foundation.
    "General obligation" means a bond, note, debenture,
security, or other instrument evidencing an obligation of the
government entity that is the issuer that is supported by the
full available resources of the issuer, the principal and
interest of which is payable in whole or in part by taxation.
    "Guarantee" means an undertaking or promise to answer for
payment of another's debt or performance of another's duty,
liability, or obligation whether "payment guaranteed" or
"collection guaranteed".
    "In danger of default" means a State or national bank, a
federally chartered insured savings association or an Illinois
state chartered insured savings association with respect to
which the Commissioner or the appropriate federal banking
agency has advised the Federal Deposit Insurance Corporation
that:
        (1) in the opinion of the Commissioner or the
    appropriate federal banking agency,
            (A) the State or national bank or insured savings
        association is not likely to be able to meet the
        demands of the State or national bank's or savings
        association's obligations in the normal course of
        business; and
            (B) there is no reasonable prospect that the State
        or national bank or insured savings association will be
        able to meet those demands or pay those obligations
        without federal assistance; or
        (2) in the opinion of the Commissioner or the
    appropriate federal banking agency,
            (A) the State or national bank or insured savings
        association has incurred or is likely to incur losses
        that will deplete all or substantially all of its
        capital; and
            (B) there is no reasonable prospect that the
        capital of the State or national bank or insured
        savings association will be replenished without
        federal assistance.
    "In default" means, with respect to a State or national
bank or an insured savings association, any adjudication or
other official determination by any court of competent
jurisdiction, the Commissioner, the appropriate federal
banking agency, or other public authority pursuant to which a
conservator, receiver, or other legal custodian is appointed
for a State or national bank or an insured savings association.
    "Insured savings association" means any federal savings
association chartered under Section 5 of the federal Home
Owners' Loan Act and any State savings association chartered
under the Illinois Savings and Loan Act of 1985 or a
predecessor Illinois statute, the deposits of which are insured
by the Federal Deposit Insurance Corporation. The term also
includes a savings bank organized or operating under the
Savings Bank Act.
    "Insured savings association in recovery" means an insured
savings association that is not an eligible depository
institution and that does not meet the minimum capital
requirements applicable with respect to the insured savings
association.
    "Issuer" means for purposes of Section 33 every person who
shall have issued or proposed to issue any security; except
that (1) with respect to certificates of deposit, voting trust
certificates, collateral-trust certificates, and certificates
of interest or shares in an unincorporated investment trust not
having a board of directors (or persons performing similar
functions), "issuer" means the person or persons performing the
acts and assuming the duties of depositor or manager pursuant
to the provisions of the trust, agreement, or instrument under
which the securities are issued; (2) with respect to trusts
other than those specified in clause (1) above, where the
trustee is a corporation authorized to accept and execute
trusts, "issuer" means the entrusters, depositors, or creators
of the trust and any manager or committee charged with the
general direction of the affairs of the trust pursuant to the
provisions of the agreement or instrument creating the trust;
and (3) with respect to equipment trust certificates or like
securities, "issuer" means the person to whom the equipment or
property is or is to be leased or conditionally sold.
    "Letter of credit" and "customer" shall have the meanings
ascribed to those terms in Section 5-102 of the Uniform
Commercial Code.
    "Main banking premises" means the location that is
designated in a bank's charter as its main office.
    "Maker or obligor" means for purposes of Section 33 the
issuer of a security, the promisor in a debenture or other debt
security, or the mortgagor or grantor of a trust deed or
similar conveyance of a security interest in real or personal
property.
    "Merged bank" means a merging bank that is not the
continuing, resulting, or surviving bank in a consolidation or
merger.
    "Merger" includes consolidation.
    "Merging bank" means a party to a bank merger.
    "Merging trust company" means a trust company party to a
merger with a State bank.
    "Mid-tier bank holding company" means a corporation that
(a) owns 100% of the issued and outstanding shares of each
class of stock of a State bank, (b) has no other subsidiaries,
and (c) 100% of the issued and outstanding shares of the
corporation are owned by a parent bank holding company.
    "Municipality" means any municipality, political
subdivision, school district, taxing district, or agency.
    "National bank" means a national banking association
located in this State and after May 31, 1997, means a national
banking association without regard to its location.
    "Out-of-state bank" means a bank chartered under the laws
of a state other than Illinois, a territory of the United
States, or the District of Columbia.
    "Parent bank holding company" means a corporation that is a
bank holding company as that term is defined in the Illinois
Bank Holding Company Act of 1957 and owns 100% of the issued
and outstanding shares of a mid-tier bank holding company.
    "Person" means an individual, corporation, limited
liability company, partnership, joint venture, trust, estate,
or unincorporated association.
    "Public agency" means the State of Illinois, the various
counties, townships, cities, towns, villages, school
districts, educational service regions, special road
districts, public water supply districts, fire protection
districts, drainage districts, levee districts, sewer
districts, housing authorities, the Illinois Bank Examiners'
Education Foundation, the Chicago Park District, and all other
political corporations or subdivisions of the State of
Illinois, whether now or hereafter created, whether herein
specifically mentioned or not, and shall also include any other
state or any political corporation or subdivision of another
state.
    "Public funds" or "public money" means current operating
funds, special funds, interest and sinking funds, and funds of
any kind or character belonging to, in the custody of, or
subject to the control or regulation of the United States or a
public agency. "Public funds" or "public money" shall include
funds held by any of the officers, agents, or employees of the
United States or of a public agency in the course of their
official duties and, with respect to public money of the United
States, shall include Postal Savings funds.
    "Published" means, unless the context requires otherwise,
the publishing of the notice or instrument referred to in some
newspaper of general circulation in the community in which the
bank is located at least once each week for 3 successive weeks.
Publishing shall be accomplished by, and at the expense of, the
bank required to publish. Where publishing is required, the
bank shall submit to the Commissioner that evidence of the
publication as the Commissioner shall deem appropriate.
    "Qualified financial contract" means any security
contract, commodity contract, forward contract, including spot
and forward foreign exchange contracts, repurchase agreement,
swap agreement, and any similar agreement, any option to enter
into any such agreement, including any combination of the
foregoing, and any master agreement for such agreements. A
master agreement, together with all supplements thereto, shall
be treated as one qualified financial contract. The contract,
option, agreement, or combination of contracts, options, or
agreements shall be reflected upon the books, accounts, or
records of the bank, or a party to the contract shall provide
documentary evidence of such agreement.
    "Recorded" means the filing or recording of the notice or
instrument referred to in the office of the Recorder of the
county wherein the bank is located.
    "Resulting bank" means the bank resulting from a merger or
conversion.
    "Securities" means stocks, bonds, debentures, notes, or
other similar obligations.
    "Stand-by letter of credit" means a letter of credit under
which drafts are payable upon the condition the customer has
defaulted in performance of a duty, liability, or obligation.
    "State bank" means any banking corporation that has a
banking charter issued by the Commissioner under this Act.
    "State Banking Board" means the State Banking Board of
Illinois.
    "Subsidiary" with respect to a specified company means a
company that is controlled by the specified company. For
purposes of paragraphs (8) and (12) of Section 5 of this Act,
"control" means the exercise of operational or managerial
control of a corporation by the bank, either alone or together
with other affiliates of the bank.
    "Surplus" means the aggregate of (i) amounts paid in excess
of the par value of capital stock and preferred stock; (ii)
amounts contributed other than for capital stock and preferred
stock and allocated to the surplus account; and (iii) amounts
transferred from undivided profits.
    "Tier 1 Capital" and "Tier 2 Capital" have the meanings
assigned to those terms in regulations promulgated for the
appropriate federal banking agency of a state bank, as those
regulations are now or hereafter amended.
    "Trust company" means a limited liability company or
corporation incorporated in this State for the purpose of
accepting and executing trusts.
    "Undivided profits" means undistributed earnings less
discretionary transfers to surplus.
    "Unimpaired capital and unimpaired surplus", for the
purposes of paragraph (21) of Section 5 and Sections 32, 33,
34, 35.1, 35.2, and 47 of this Act means the sum of the state
bank's Tier 1 Capital and Tier 2 Capital plus such other
shareholder equity as may be included by regulation of the
Commissioner. Unimpaired capital and unimpaired surplus shall
be calculated on the basis of the date of the last quarterly
call report filed with the Commissioner preceding the date of
the transaction for which the calculation is made, provided
that: (i) when a material event occurs after the date of the
last quarterly call report filed with the Commissioner that
reduces or increases the bank's unimpaired capital and
unimpaired surplus by 10% or more, then the unimpaired capital
and unimpaired surplus shall be calculated from the date of the
material event for a transaction conducted after the date of
the material event; and (ii) if the Commissioner determines for
safety and soundness reasons that a state bank should calculate
unimpaired capital and unimpaired surplus more frequently than
provided by this paragraph, the Commissioner may by written
notice direct the bank to calculate unimpaired capital and
unimpaired surplus at a more frequent interval. In the case of
a state bank newly chartered under Section 13 or a state bank
resulting from a merger, consolidation, or conversion under
Sections 21 through 26 for which no preceding quarterly call
report has been filed with the Commissioner, unimpaired capital
and unimpaired surplus shall be calculated for the first
calendar quarter on the basis of the effective date of the
charter, merger, consolidation, or conversion.
(Source: P.A. 92-483, eff. 8-23-01; 93-561, eff. 1-1-04.)
 
    (205 ILCS 5/5c)  (from Ch. 17, par. 312.2)
    Sec. 5c. Ownership of a bankers' bank. A With the approval
of the Commissioner, a bank may acquire shares of stock of a
bank or holding company which owns or controls such bank if the
stock of such bank or company is owned exclusively (except to
the extent directors' qualifying shares are required by law) by
depository institutions or depository institution holding
companies and such bank or company and all subsidiaries thereof
are engaged exclusively in providing services to or for other
financial depository institutions, their holding companies,
and the officers, directors, and employees of such institutions
and companies, and in providing correspondent banking services
at the request of other financial depository institutions or
their holding companies (also referred to as a "bankers'
bank"). The bank may also provide products and services to its
officers, directors, and employees. In no event shall the total
amount of such stock held by a bank in such bank or holding
company exceed 10 percent of its capital and surplus (including
undivided profits) and in no event shall a bank acquire more
than 5 percent of any class of voting securities of such bank
or company.
(Source: P.A. 89-603, eff. 8-2-96.)
 
    (205 ILCS 5/13)  (from Ch. 17, par. 320)
    Sec. 13. Issuance of charter.
    (a) When the directors have organized as provided in
Section 12 of this Act, and the capital stock and the preferred
stock, if any, together with a surplus of not less than 50% of
the capital, has been all fully paid in and a record of the
same filed with the Commissioner, the Commissioner or some
competent person of the Commissioner's appointment shall make a
thorough examination into the affairs of the proposed bank, and
if satisfied (i) that all the requirements of this Act have
been complied with, (ii) that no intervening circumstance has
occurred to change the Commissioner's findings made pursuant to
Section 10 of this Act, and (iii) that the prior involvement by
any stockholder who will own a sufficient amount of stock to
have control, as defined in Section 18 of this Act, of the
proposed bank with any other financial institution, whether as
stockholder, director, officer, or customer, was conducted in a
safe and sound manner, upon payment into the Commissioner's
office of the reasonable expenses of the examination, as
determined by the Commissioner, the Commissioner shall issue a
charter authorizing the bank to commence business as authorized
in this Act. All charters issued by the Commissioner or any
predecessor agency which chartered State banks, including any
charter outstanding as of September 1, 1989, shall be
perpetual. For the 2 years after the Commissioner has issued a
charter to a bank, the bank shall request and obtain from the
Commissioner prior written approval before it may change senior
management personnel or directors.
    The original charter, duly certified by the Commissioner,
or a certified copy shall be evidence in all courts and places
of the existence and authority of the bank to do business. Upon
the issuance of the charter by the Commissioner, the bank shall
be deemed fully organized and may proceed to do business. The
Commissioner may, in the Commissioner's discretion, withhold
the issuing of the charter when the Commissioner has reason to
believe that the bank is organized for any purpose other than
that contemplated by this Act. The Commissioner shall revoke
the charter and order liquidation in the event that the bank
does not commence a general banking business within one year
from the date of the issuance of the charter, unless a request
has been submitted, in writing, to the Commissioner for an
extension and the request has been approved. After commencing a
general banking business, a bank may change its name by filing
written notice with the Commissioner at least 30 days prior to
the effective date of such change. A bank chartered under this
Act may change its main banking premises by filing written
application with the Commissioner, on forms prescribed by the
Commissioner, provided (i) the change shall not be a removal to
a new location without complying with the capital requirements
of Section 7 and of subsection (1) of Section 10 of this Act;
(ii) the Commissioner approves the relocation or change; and
(iii) the bank complies with any applicable federal law or
regulation. The application shall be deemed to be approved if
the Commissioner has not acted on the application within 30
days after receipt of the application, unless within the 30-day
time frame the Commissioner informs the bank that an extension
of time is necessary prior to the Commissioner's action on the
application.
    (b) (1) The Commissioner may also issue a charter to a bank
    that is owned exclusively by other depository institutions
    or depository institution holding companies and is
    organized to engage exclusively in providing services to or
    for other financial depository institutions, their holding
    companies, and the officers, directors, and employees of
    such institutions and companies, and in providing
    correspondent banking services at the request of other
    financial depository institutions or their holding
    companies (also referred to as a "bankers' bank"). The bank
    may also provide products and services to its officers,
    directors, and employees.
        (2) A bank chartered pursuant to paragraph (1) shall,
    except as otherwise specifically determined or limited by
    the Commissioner in an order or pursuant to a rule, be
    vested with the same rights and privileges and subject to
    the same duties, restrictions, penalties, and liabilities
    now or hereafter imposed under this Act.
    (c) A bank chartered under this Act after November 1, 1985,
and an out-of-state bank that merges with a State bank and
establishes or maintains a branch in this State after May 31,
1997, shall obtain from and, at all times while it accepts or
retains deposits, maintain with the Federal Deposit Insurance
Corporation, or such other instrumentality of or corporation
chartered by the United States, deposit insurance as authorized
under federal law.
    (d) (i) A bank that has a banking charter issued by the
    Commissioner under this Act may, pursuant to a written
    purchase and assumption agreement, transfer substantially
    all of its assets to another State bank or national bank in
    consideration, in whole or in part, for the transferee
    banks' assumption of any part or all of its liabilities.
    Such a transfer shall in no way be deemed to impair the
    charter of the transferor bank or cause the transferor bank
    to forfeit any of its rights, powers, interests,
    franchises, or privileges as a State bank, nor shall any
    voluntary reduction in the transferor bank's activities
    resulting from the transfer have any such effect; provided,
    however, that a State bank that transfers substantially all
    of its assets pursuant to this subsection (d) and following
    the transfer does not accept deposits and make loans, shall
    not have any rights, powers, interests, franchises, or
    privileges under subsection (15) of Section 5 of this Act
    until the bank has resumed accepting deposits and making
    loans.
        (ii) The fact that a State bank does not resume
    accepting deposits and making loans for a period of 24
    months commencing on September 11, 1989 or on a date of the
    transfer of substantially all of a State bank's assets,
    whichever is later, or such longer period as the
    Commissioner may allow in writing, may be the basis for a
    finding by the Commissioner under Section 51 of this Act
    that the bank is unable to continue operations.
        (iii) The authority provided by subdivision (i) of this
    subsection (d) shall terminate on May 31, 1997, and no bank
    that has transferred substantially all of its assets
    pursuant to this subsection (d) shall continue in existence
    after May 31, 1997.
(Source: P.A. 91-322, eff. 1-1-00; 92-483, eff. 8-23-01.)
 
    (205 ILCS 5/15)  (from Ch. 17, par. 322)
    Sec. 15. Stock and stockholders. Unless otherwise provided
for in this Act, provisions of general application to capital
stock, preferred stock, and stockholders of a State bank shall
be as follows:
    (1) There shall be an annual meeting of the stockholders
for the election of directors each year on the first business
day in January, unless some other date shall be fixed by the
by-laws. A special meeting of the stockholders may be called at
any time by the board of directors, and otherwise as may be
provided in the bylaws.
    (2) Written or printed notice stating the place, day, and
hour of the meeting, and in case of a special meeting, the
purpose or purposes for which the meeting is called, shall be
delivered not less than 10 nor more than 40 days before the
date of the meeting either personally or by mail, by or at the
direction of the president, or the secretary, or the officer or
persons calling the meeting, to each stockholder of record
entitled to vote at the meeting. If mailed, the notice shall be
deemed to be delivered when deposited in the United States mail
with postage thereon prepaid addressed to the stockholder at
his address as it appears on the records of the bank.
    (3) Except as provided below in this paragraph (3), each
outstanding share shall be entitled to one vote on each matter
submitted to a vote at a meeting of stockholders. Shares of its
own stock belonging to a bank shall not be voted, directly or
indirectly, at any meeting and shall not be counted in
determining the total number of outstanding shares at any given
time, but shares of its own stock held by it in a fiduciary
capacity may be voted and shall be counted in determining the
total number of outstanding shares at any given time. A
stockholder may vote either in person or by proxy executed in
writing by the stockholder or by his duly authorized
attorney-in-fact. No proxy shall be valid after 11 months from
the date of its execution, unless otherwise provided in the
proxy. Except as provided below in this paragraph (3), in all
elections for directors every stockholder (or subscriber to the
stock prior to the issuance of a charter) shall have the right
to vote, in person or by proxy, for the number of shares of
stock owned by him, for as many persons as there are directors
to be elected, or to cumulate the shares and give one candidate
as many votes as the number of directors multiplied by the
number of his or her shares of stock shall equal, or to
distribute them on the same principle among as many candidates
as he or she shall think fit. The bank charter of any bank
organized on or after January 1, 1984 may limit or eliminate
cumulative voting rights in all or specified circumstances, or
may eliminate voting rights entirely, as to any class or
classes or series of stock of the bank; provided that one class
of shares or series thereof shall always have voting rights in
respect of all matters in the bank. A bank organized prior to
January 1, 1984 may amend its charter to eliminate cumulative
voting rights under all or specified circumstances, or to
eliminate voting rights entirely, as to any class or classes or
series of stock of the bank; provided that one class of shares
or series thereof shall always have voting rights in respect of
all matters in the bank, and provided further that the proposal
to eliminate the voting rights receives the approval of the
holders of 70% of the outstanding shares of stock entitled to
vote as provided in paragraph (b) (7) of Section 17. A majority
of the outstanding shares represented in person or by proxy
shall constitute a quorum at a meeting of stockholders. In the
absence of a quorum a meeting may be adjourned from time to
time without notice to the stockholders.
    (4) Whenever additional stock of a class is offered for
sale, stockholders of record of the same class on the date of
the offer shall have the right to subscribe to the proportion
of the shares as the stock of the class held by them bears to
the total of the outstanding stock of the class, and the price
thereof may be in excess of par value. This right shall be
transferable but shall terminate if not exercised within 60
days of the offer, unless the Commissioner shall authorize a
shorter time. If the right is not exercised, the stock shall
not be re-offered for sale to others at a lower price without
the stockholders of the same class again being accorded a
preemptive right to subscribe at the lower price.
Notwithstanding any of the provisions of this paragraph (4) or
any other provision of law, stockholders shall not have any
preemptive or other right to subscribe for or to purchase or
acquire shares of capital stock issued or to be issued under a
stock-option plan or upon conversion of preferred stock or
convertible debentures or other convertible indebtedness that
has been approved by stockholders in the manner required by the
provisions of subsection (5) of Section 14 hereof or to
treasury stock acquired pursuant to subsection (6) of Section
14.
    (5) For the purpose of determining stockholders entitled to
notice of or to vote at any meeting of stockholders, or
stockholders entitled to receive payment of any dividend, or in
order to make a determination of stockholders for any other
proper purpose, the board of directors of a bank may provide
that the stock transfer books shall be closed for a stated
period not to exceed, in any case, 40 days. In lieu of closing
the stock transfer books, the board of directors may fix in
advance a date as the record date for any determination of
stockholders, the date in any case to be not more than 40 days,
and in case of a meeting of stockholders, not less than 10 days
prior to the date on which the particular action, requiring the
determination of stockholders, is to be taken. If the stock
transfer books are not closed and no record date is fixed for
the determination of stockholders entitled to notice of or to
vote at a meeting of stockholders, or stockholders entitled to
receive payment of a dividend, the date on which notice of a
meeting is mailed or the date on which the resolution of the
board of directors declaring the dividend is adopted, as the
case may be, shall be the record date for the determination of
stockholders.
    (6) Stock standing in the name of another corporation,
domestic or foreign, may be voted by the officer, agent, or
proxy as the by-laws of the corporation may prescribe, or, in
the absence of such provision, as the board of directors of the
corporation may determine. Stock standing in the name of a
deceased person may be voted by his or her administrator or
executor, either in person or by proxy. Stock standing in the
name of a guardian or trustee may be voted by that fiduciary
either in person or by proxy. Shares standing in the name of a
receiver may be voted by the receiver, and shares held by or
under control of a receiver may be voted by the receiver
without the transfer thereof into his or her name if authority
so to do be contained in an appropriate order of the court by
which the receiver was appointed. A stockholder whose shares of
stock are pledged shall be entitled to vote those shares until
the shares have been transferred into the name of the pledgee,
and thereafter the pledgee shall be entitled to vote the shares
so transferred.
    (7) Shares of stock shall be transferable in accordance
with the general laws of this State governing the transfer of
corporate shares.
    (8) The president and any other officer designated by the
board of directors and cashier of every State bank shall cause
to be kept at all times a full and correct list of the names and
residences of all the shareholders in the State bank and the
number of shares held by each in the office where its business
is transacted. The list shall be subject to the inspection of
all the shareholders of the State bank and the officers
authorized to assess taxes under State authority during
business hours of each day in which business may be legally
transacted. A copy of the list, verified by the oath of the
president or cashier, shall be transmitted to the Commissioner
of Banks and Real Estate within 10 days of any demand therefor
made by the Commissioner.
    (9) Any number of shareholders of a bank may create a
voting trust for the purpose of conferring upon a trustee or
trustees the right to vote or otherwise represent their shares
for a period of not to exceed 10 years by entering into a
written voting trust agreement specifying the terms and
conditions of the voting trust and by transferring their shares
to the trustee or trustees for the purposes of the agreement.
The trust agreement shall not become effective until a
counterpart of the agreement is deposited with the bank at its
main banking premises. The counterpart of the voting trust
agreement so deposited with the bank shall be subject to the
same right of examination by a shareholder of the bank, in
person or by agent or attorney, as is the record of
shareholders of the bank and shall be subject to examination by
any holder of a beneficial interest in the voting trust, either
in person or by agent or attorney, at any reasonable time for
any proper purpose.
    (10) Voting agreements. Shareholders may provide for the
voting of their shares by signing an agreement for that
purpose. A voting agreement created under this paragraph is not
subject to the provisions of paragraph (9).
    A voting agreement created under this paragraph is
specifically enforceable in accordance with the principles of
equity.
(Source: P.A. 92-483, eff. 8-23-01.)
 
    Section 99. Effective date. This Act takes effect upon
becoming law.

Effective Date: 8/26/2008