093_HB2861

 
                                     LRB093 08392 LRD 08612 b

 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 17 as follows:

 6        (205 ILCS 5/17) (from Ch. 17, par. 324)
 7        Sec. 17.  Changes in charter.
 8        (a)  By  compliance  with  the  provisions  of this Act a
 9    State bank may:
10             (1)  (blank);
11             (2)  increase, decrease or change its capital stock,
12        whether issued or unissued,  provided  that  in  no  case
13        shall  the  capital be diminished to the prejudice of its
14        creditors;
15             (3)  provide for  authorized  but  unissued  capital
16        stock  reserved  for  issuance  for  one  or  more of the
17        purposes provided for in subsection  (5)  of  Section  14
18        hereof;
19             (4)  authorize   preferred   stock,   or   increase,
20        decrease   or  change  the  preferences,  qualifications,
21        limitations, restrictions or special or  relative  rights
22        of  its  preferred  stock, whether issued or unissued, or
23        delegate authority to its board of directors as  provided
24        in  subsection  (d),  provided  that in no case shall the
25        capital be diminished to the prejudice of its creditors;
26             (5)  increase, decrease or change the par  value  of
27        its  shares  of  its  capital  stock  or preferred stock,
28        whether issued or unissued, or delegate authority to  its
29        board of directors as provided in subsection (d);
30             (6)  (blank);
31             (7)  eliminate cumulative voting rights under all or
 
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 1        specified   circumstances,  or  eliminate  voting  rights
 2        entirely, as to any class or classes or series  of  stock
 3        of  the  bank  pursuant  to  paragraph (3) of Section 15,
 4        provided that one class of shares or series thereof shall
 5        always have voting in respect to all matters in the bank,
 6        and provided further that the proposal to eliminate  such
 7        voting rights receives the approval of the holders of 70%
 8        of  the  outstanding  shares of stock entitled to vote as
 9        provided in paragraph  (7)  of  subsection  (b)  of  this
10        Section 17;
11             (8)  increase, decrease, or change its capital stock
12        or  preferred  stock, whether issued or unissued, for the
13        purpose of eliminating fractional shares or avoiding  the
14        issuance  of  fractional shares, provided that in no case
15        shall the capital be diminished to the prejudice  of  its
16        creditors; or
17             (9)  make such other change in its charter as may be
18        authorized in this Act.
19        (b)  To  effect  a  change  or  changes in a State bank's
20    charter as provided for in this Section 17:
21             (1)  The board of directors shall adopt a resolution
22        setting forth the proposed amendment and  directing  that
23        it  be  submitted to a vote at a meeting of stockholders,
24        which may be either an annual or special meeting.
25             (2)  If the meeting is a special meeting, written or
26        printed notice setting forth the  proposed  amendment  or
27        summary  thereof  shall  be  given to each stockholder of
28        record entitled to vote at such meeting at least 30  days
29        before  such  meeting  and in the manner provided in this
30        Act for the giving of notice of meetings of stockholders.
31             (3)  At  such  special  meeting,  a  vote   of   the
32        stockholders  entitled  to  vote  shall  be  taken on the
33        proposed amendment.  Except as provided in paragraph  (7)
34        of  this  subsection (b), the proposed amendment shall be
 
                            -3-      LRB093 08392 LRD 08612 b
 1        adopted  upon  receiving  the  affirmative  vote  of  the
 2        holders of at least two-thirds of the outstanding  shares
 3        of stock entitled to vote at such meeting, unless holders
 4        of  preferred  stock  are  entitled to vote as a class in
 5        respect thereof, in which event  the  proposed  amendment
 6        shall  be  adopted upon receiving the affirmative vote of
 7        the holders of at least  two-thirds  of  the  outstanding
 8        shares  of  each  class  of  shares entitled to vote as a
 9        class in respect thereof and  of  the  total  outstanding
10        shares  entitled  to vote at such meeting.  Any number of
11        amendments may be submitted to the stockholders and voted
12        upon by them  at  one  meeting.   A  certificate  of  the
13        amendment, or amendments, verified by the president, or a
14        vice-president,   or   the   cashier,   shall   be  filed
15        immediately in the office of the Commissioner.
16             (4)  At any annual meeting without a  resolution  of
17        the  board  of  directors  and without a notice and prior
18        publication, as hereinabove provided, a proposition for a
19        change in the bank's charter  as  provided  for  in  this
20        Section 17 may be submitted to a vote of the stockholders
21        entitled  to  vote  at the annual meeting, except that no
22        proposition for authorized  but  unissued  capital  stock
23        reserved  for  issuance  for  one or more of the purposes
24        provided for in subsection (5) of Section 14 hereof shall
25        be submitted without complying  with  the  provisions  of
26        said subsection.  The proposed amendment shall be adopted
27        upon  receiving the affirmative vote of the holders of at
28        least two-thirds  of  the  outstanding  shares  of  stock
29        entitled  to  vote  at  such  meeting,  unless holders of
30        preferred stock are  entitled  to  vote  as  a  class  in
31        respect  thereof,  in  which event the proposed amendment
32        shall be adopted upon receiving the affirmative  vote  of
33        the  holders  of  at  least two-thirds of the outstanding
34        shares of each class of shares  entitled  to  vote  as  a
 
                            -4-      LRB093 08392 LRD 08612 b
 1        class in respect thereof and the total outstanding shares
 2        entitled  to  vote at such meeting.  A certificate of the
 3        amendment, or amendments, verified by the president, or a
 4        vice-president or cashier, shall be filed immediately  in
 5        the office of the Commissioner.
 6             (5)  If an amendment or amendments shall be approved
 7        in   writing   by  the  Commissioner,  the  amendment  or
 8        amendments  so  adopted  and   so   approved   shall   be
 9        accomplished   in   accordance   with  the  vote  of  the
10        stockholders.  The Commissioner may impose such terms and
11        conditions on the approval of the amendment or amendments
12        as he deems necessary or appropriate.   The  Commissioner
13        shall revoke such approval in the event such amendment or
14        amendments are not effected within one year from the date
15        of  the  issuance  of  the Commissioner's certificate and
16        written approval except for transactions permitted  under
17        subsection (5) of Section 14 of this Act.
18             (6)  No  amendment  or amendments shall affect suits
19        in which the bank  is  a  party,  nor  affect  causes  of
20        action,  nor  affect rights of persons in any particular,
21        nor shall actions brought against such bank by its former
22        name be abated by a change of name.
23             (7)  A proposal to amend the  charter  to  eliminate
24        cumulative   voting   rights   under   all  or  specified
25        circumstances, or to eliminate voting rights entirely, as
26        to any class or classes or series or  stock  of  a  bank,
27        pursuant to paragraph (3) of Section 15 and paragraph (7)
28        of  subsection  (a)  of this Section 17, shall be adopted
29        only upon such proposal receiving  the  approval  of  the
30        holders  of  70%  of  the  outstanding  shares  of  stock
31        entitled  to  vote  at  the meeting where the proposal is
32        presented for approval, unless holders of preferred stock
33        are entitled to vote as a class in  respect  thereof,  in
34        which  event the proposed amendment shall be adopted upon
 
                            -5-      LRB093 08392 LRD 08612 b
 1        receiving the approval of  the  holders  of  70%  of  the
 2        outstanding  shares  of  each class of shares entitled to
 3        vote as a class in  respect  thereof  and  of  the  total
 4        outstanding  shares entitled to vote at the meeting where
 5        the proposal is presented for approval.  The proposal  to
 6        amend  the  charter pursuant to this paragraph (7) may be
 7        voted upon at the annual meeting or a special meeting.
 8             (8)  Written or printed notice  of  a  stockholders'
 9        meeting  to  vote  on a proposal to increase, decrease or
10        change the capital stock or preferred stock  pursuant  to
11        paragraph (8) of subsection (a) of this Section 17 and to
12        eliminate  fractional  shares  or  avoid  the issuance of
13        fractional shares shall be given to each  stockholder  of
14        record  entitled  to vote at the meeting at least 30 days
15        before the meeting and in the manner provided in this Act
16        for the giving of notice of meetings of stockholders, and
17        shall include all of the following information:
18                  (A)  A statement of the purpose of the proposed
19             reverse stock split.
20                  (B)  A statement of the amount of consideration
21             being offered for the bank's stock.
22                  (C)  A statement that the  bank  considers  the
23             transaction   fair   to   the  stockholders,  and  a
24             statement of the  material  facts  upon  which  this
25             belief is based.
26                  (D)  A  statement  that the bank has secured an
27             opinion from a  third  party  with  respect  to  the
28             fairness,  from  a  financial  point of view, of the
29             consideration  to  be   paid,   the   identity   and
30             qualifications  of  the  third  party, how the third
31             party was selected, and  any  material  relationship
32             between the third party and the bank.
33                  (E)  A  summary  of  the  opinion including the
34             basis  for  and  the  methods  of  arriving  at  the
 
                            -6-      LRB093 08392 LRD 08612 b
 1             findings and any limitation imposed by the  bank  in
 2             arriving  at  fair  value and a statement making the
 3             opinion available for reviewing or  copying  by  any
 4             stockholder.
 5                  (F)  A  statement  that  objecting stockholders
 6             will be entitled to the fair value of  those  shares
 7             that  are  voted against the charter amendment, if a
 8             proper  demand  is  made  on  the   bank   and   the
 9             requirements  are  satisfied  as  specified  in this
10             Section.
11    If a stockholder shall file with the bank, prior to or at the
12    meeting  of  stockholders  at  which  the  proposed   charter
13    amendment  is submitted to a vote, a written objection to the
14    proposed charter  amendment  and  shall  not  vote  in  favor
15    thereof,  and  if  the  stockholder,  within  20  days  after
16    receiving  written  notice  of the date the charter amendment
17    was accomplished pursuant to paragraph (5) of subsection  (a)
18    of this Section 17, shall make written demand on the bank for
19    payment  of  the fair value of the stockholder's shares as of
20    the day prior to  the  date  on  which  the  vote  was  taken
21    approving  the  charter  amendment, the bank shall pay to the
22    stockholder,   upon   surrender   of   the   certificate   or
23    certificates representing the stock, the fair value  thereof.
24    The  demand  shall  state  the  number of shares owned by the
25    objecting stockholder.  The bank shall provide written notice
26    of the date on which the charter amendment  was  accomplished
27    to  all  stockholders  who  have  filed written objections in
28    order that the objecting stockholders may know when they must
29    file written demand if they choose to do so.  Any stockholder
30    failing to make demand within  the  20-day  period  shall  be
31    conclusively  presumed  to  have  consented  to  the  charter
32    amendment and shall be bound by the terms thereof.  If within
33    30  days  after  the  date  on  which a charter amendment was
34    accomplished the value of the shares is agreed  upon  between
 
                            -7-      LRB093 08392 LRD 08612 b
 1    the  objecting  stockholders  and  the bank, payment therefor
 2    shall be made within 90 days after  the  date  on  which  the
 3    charter amendment was accomplished, upon the surrender of the
 4    stockholder's  certificate  or  certificates representing the
 5    shares. Upon  payment  of  the  agreed  value  the  objecting
 6    stockholder shall cease to have any interest in the shares or
 7    in   the  bank.   If  within  such  period  of  30  days  the
 8    stockholder and the bank do not so agree, then the  objecting
 9    stockholder  may,  within 60 days after the expiration of the
10    30-day period, file a complaint in the circuit  court  asking
11    for  a  finding  and  determination  of the fair value of the
12    shares, and shall be entitled to judgment  against  the  bank
13    for  the  amount of the fair value as of the day prior to the
14    date on which  the  vote  was  taken  approving  the  charter
15    amendment  with interest thereon to the date of the judgment.
16    The practice, procedure and judgment shall be governed by the
17    Civil Practice Law. The judgment shall be payable  only  upon
18    and  simultaneously  with  the  surrender  to the bank of the
19    certificate or certificates representing  the  shares.   Upon
20    payment  of  the  judgment,  the  objecting stockholder shall
21    cease to have any interest in the shares or  the  bank.   The
22    shares  may  be held and disposed of by the bank.  Unless the
23    objecting stockholder shall file such  complaint  within  the
24    time herein limited, the stockholder and all persons claiming
25    under  the stockholder shall be conclusively presumed to have
26    approved and ratified the charter  amendment,  and  shall  be
27    bound  by  the  terms  thereof.  The  right  of  an objecting
28    stockholder to be paid the fair value  of  the  stockholder's
29    shares  of  stock  as herein provided shall cease if and when
30    the bank shall abandon the charter amendment.
31        (c)  The  purchase  and  holding  and  later  resale   of
32    treasury  stock of a state bank pursuant to the provisions of
33    subsection (6) of Section 14 may be  accomplished  without  a
34    change  in its charter reflecting any decrease or increase in
 
                            -8-      LRB093 08392 LRD 08612 b
 1    capital stock.
 2        (d)  A State bank may amend its charter for  the  purpose
 3    of  authorizing  its  board  of  directors to issue preferred
 4    stock; to increase, decrease, or  change  the  par  value  of
 5    shares of its preferred stock, whether issued or unissued; or
 6    to   increase,   decrease,   or   change   the   preferences,
 7    qualifications,  limitations,  restrictions,  or  special  or
 8    relative  rights  of  its  preferred stock, whether issued or
 9    unissued; provided that in  no  case  shall  the  capital  be
10    diminished  to  the  prejudice  of  the  bank's creditors. An
11    amendment to the bank's charter granting such authority shall
12    establish  ranges,  limits,  or  restrictions  that  must  be
13    observed when the board exercises the  discretion  authorized
14    by the amendment.
15        Once  such  an  amendment  is  adopted  and  approved  as
16    provided  in  this  subsection, and without further action by
17    the bank's stockholders, the board may exercise its delegated
18    authority by adopting a  resolution  specifying  the  actions
19    that  it  is  taking with respect to the preferred stock. The
20    board may fully exercise its delegated authority through  one
21    resolution or it may exercise its delegated authority through
22    a  series  of  resolutions, provided that the board's actions
23    remain at all  times  within  the  ranges,  limitations,  and
24    restrictions   specified  in  the  amendment  to  the  bank's
25    charter.
26        A resolution adopted by the board  under  this  authority
27    shall  be  submitted  to  the  Commissioner for approval. The
28    Commissioner shall  approve  the  resolution,  or  state  any
29    objections  to  the  resolution,  within  30  days  after the
30    receipt of  the  resolution  adopted  by  the  board.  If  no
31    objections are specified by the Commissioner within that time
32    frame,  the  resolution  will be deemed to be approved by the
33    Commissioner.  Once  approved,  the   resolution   shall   be
34    incorporated  as  an  addendum  to the bank's charter and the
 
                            -9-      LRB093 08392 LRD 08612 b
 1    board may proceed to effect the  changes  set  forth  in  the
 2    resolution.
 3    (Source: P.A. 91-322, eff. 1-1-00; 92-483, eff. 8-23-01.)

 4        Section  99.  Effective date.  This Act takes effect upon
 5    becoming law.