The business and affairs of a commercial bank shall be managed under the direction of a board of directors.

Each commercial bank shall have at least 5 and not more than 30 directors, as its charter or bylaws provide.

After the initial issuance of capital stock by a commercial bank, each of its directors shall own in good faith and of record unencumbered shares of the capital stock of: The commercial bank; or A corporation that owns more than 80 percent of the capital stock of the commercial bank. The unencumbered capital stock owned by the director shall be in the amount of at least: $500; or $250, if the commercial bank is a State bank that has $50,000 or less in capital stock. To determine the amount of capital stock owned by a director: Based on the value of the stock on the date of purchase or on the date the director took office, whichever is greater, any one or more of the following may be considered: Aggregate par value in the amount required under either paragraph (2)(i) or (ii) of this subsection; Aggregate shareholder’s equity in the amount required under either paragraph (2)(i) or (ii) of this subsection; or Aggregate fair market value in the amount required under paragraph (2)(i) or (ii) of this subsection; and Debt instruments of the commercial bank or corporation may not be considered. At least 30% of the directors of a commercial bank shall be residents of this State.

Each director of a commercial bank shall take an oath: To perform diligently and honestly the duties of the office; and Not to violate knowingly or permit knowingly a violation of any law that relates to the commercial bank.

Until successors are elected and qualify, the board of directors of a commercial bank consists of the individuals named as directors in the articles of incorporation. Except as provided in paragraph (2) of this subsection, at each annual meeting of stockholders, the stockholders shall elect directors to hold office until the earlier of: The next annual meeting of stockholders and until their successors are elected and qualify; or The time provided in the terms of any class or series of stock pursuant to which the directors are elected. Subject to subparagraphs (ii) and (iii) of this paragraph, if the directors are divided into classes, the term of office may be provided in the bylaws. The term of office of a director may not be longer than 5 years or, in the case of an initial or substitute director, shorter than the period between annual meetings. The term of office of at least one class of directors shall expire each year.

Each director of a commercial bank shall attend at least one half of the regularly scheduled board meetings that are held during the director’s term of office. Any director who fails to attend meetings of the board of directors as required by this section is disqualified automatically from serving as director for a succeeding term. The Commissioner may waive the disqualification of a director if the director shows to the Commissioner good cause for the failure to attend the meetings.

The board of directors of a commercial bank may fill any vacancy on the board by electing an individual to serve until the next annual meeting of the stockholders and until a successor is elected and qualifies.

A majority of the directors of a State bank then serving is a quorum. The articles of incorporation or bylaws of a trust company may specify the number of directors that is a quorum, but the number shall be at least the greater of one third of the directors or four directors.

Within 15 days after the annual meeting of the stockholders and after the directors–elect have qualified, the board of directors of a commercial bank shall meet and elect the officers of the commercial bank. Unless the bylaws provide otherwise, each officer serves for a term of 1 year and until a successor is elected and qualifies. The board of directors may remove any officer at any time.