Chapter 1105: BANKS - BOARD OF DIRECTORS

1105.01 Authority, number, terms and classes of directors.

(A) Except where the Revised Code, the articles of incorporation, or the code of regulations require action to be authorized or taken by shareholders, all of the authority of a bank shall be exercised by or under the direction of the bank's board of directors. The board of directors shall consist of not less than five directors.

(B) Unless the articles of incorporation or the code of regulations provide for a different term, which may not exceed three years from the date of the director's election and until the director's successor is elected and qualified, each director shall hold office until the next annual meeting of the shareholders and until the director's successor is elected and qualified, or until the director's earlier resignation, removal from office, or death.

(C) The articles of incorporation or the code of regulations may provide for the classification of directors into either two or three classes consisting of not less than three directors each. The terms of office of the several classes need not be uniform, except that no term shall exceed the maximum time specified in division (B) of this section.

Effective Date: 01-01-1997

1105.02 Qualifications of board members.

(A)

(1) Of the directors on the board of directors of a bank:

(a) A majority of the directors shall be outside directors. However, if eighty per cent or more of any class of the bank's voting shares are owned by a company, a majority of the directors may be officers or directors of one or more affiliates of the bank.

(b) A majority of the directors shall be residents of this state or live within one hundred miles of this state.

(2)

(a) If during a term of office a director causes the total membership of the board to be in violation of division (A)(1)(a) or (b) of this section, the director forfeits the directorship, and the director's office is then vacant.

(b) If the membership of a board of directors of a bank on July 14, 1987, is composed in violation of division (A)(1)(a) or (b) of this section, the directors who are holding office on that date may continue to hold office, and may be reelected or reappointed if there is no interruption in their respective service.

(c) No new director, or former director who is elected or appointed to the board after an interruption in service, shall be elected or appointed in violation of division (A)(1)(a) or (b) of this section.

(B)

(1) No person who has been convicted of, or has pleaded guilty to, a felony involving dishonesty or breach of trust shall take office as a director.

(2) If during a term of office any director is convicted of, or pleads guilty to, a felony described under division (B)(1) of this section, the director forfeits the directorship, and the director's office is then vacant.

Effective Date: 01-01-1997

1105.03 Director oath.

(A) To qualify as a director, each person elected or appointed to the board of directors shall, within sixty days after election or appointment, take and subscribe an oath to diligently and honestly perform the duties of a director and to not knowingly violate or permit to be violated any federal banking law or any provision of Chapters 1101. to 1127. of the Revised Code.

(B) Promptly upon execution, and within sixty days of the person's election or appointment, the oath shall be filed with the secretary of the bank.

Effective Date: 01-01-1997

1105.04 Individual, schedule, or blanket fidelity bonds.

Each officer and employee of a bank, prior to the discharge of the officer's or employee's duties, shall be covered by an individual, schedule, or blanket fidelity bond in favor of the bank, with terms and issuing insurer approved by the board of directors. The amount of the bond shall be set by the board of directors, and shall be reasonable given the size of the bank and nature of its business. The board of directors are not required to provide a bond covering their duties as directors.

Effective Date: 01-01-1997

1105.05 [Repealed].

Effective Date: 01-01-1997

1105.06 Executive committee and other board committees.

(A) A bank's code of regulations may authorize the board of directors to create an executive committee or any other committee of the board of directors, to consist of at least three directors, and to delegate to such a committee of the board of directors any authority of the board of directors, however conferred, other than the authority to fill vacancies on the board of directors or on a committee of the board of directors.

(B) The board of directors may appoint one or more directors as alternate members of a committee of the board of directors to take the place of any absent member at any meeting of the committee of the board of directors.

(C) Each committee of the board of directors shall serve at the pleasure of the board of directors, shall act only in the intervals between meetings of the board of directors, and is subject to the control and direction of the board of directors.

(D) Unless otherwise provided in the code of regulations or ordered by the board of directors, a committee of the board of directors may act by a majority of its members at a meeting or by a writing or writings signed by all of its members.

(E) An act or authorization of an act by a committee of the board of directors that is within the authority delegated to the committee shall be as effective for all purposes as an act or authorization of an act by the board of directors.

Effective Date: 01-01-1997

1105.07 Bylaws.

For its own governance, the board of directors may adopt bylaws not inconsistent with the law of this state, the articles of incorporation, or the code of regulations. Without limiting their generality, the bylaws may include provisions with respect to:

(A) The time and place of holding, the manner of and authority for calling, giving notice of, and conducting meetings of the board of directors;

(B) The appointment of committees of the board of directors, their authority, and the time, place, and manner of calling, giving notice of, and conducting their meetings.

Effective Date: 01-01-1997

1105.08 Board and committee meetings.

(A)

(1) A bank's board of directors shall meet monthly unless the bank's code of regulations provides for a different frequency of meetings, which shall not be less than quarterly.

(2) Division (A)(1) of this section does not prohibit either of the following:

(a) A bank's board of directors meeting more frequently than required by division (A)(1) of this section or the bank's code of regulations;

(b) The superintendent of financial institutions requiring a bank's board of directors to meet more frequently than required by division (A)(1) of this section or the bank's code of regulations if the superintendent determines more frequent meetings are appropriate because of circumstances regarding the bank.

(B) Unless prohibited by the articles of incorporation, the code of regulations, or, in the case of a committee of the board of directors, an order of the board of directors, meetings of the board of directors or a committee of the board of directors may be held through any communications equipment if all persons participating can communicate with each of the others. Participation in a meeting in accordance with this division constitutes presence at the meeting.

(C) Minutes shall be kept of all meetings of a bank's board of directors and of any committees of the board of directors, and shall be recorded in a readable and reproducible form and kept at the bank. The minutes shall show the action of the board of directors or any committee of the board of directors on loans, discounts, and investments made or authorized. The minutes of all committees of the board of directors shall be submitted to the board of directors for review at each meeting of the board of directors.

Effective Date: 01-01-1997

1105.09 Amended and Renumbered RC 1107.11.

Effective Date: 1996 HB538 01-01-1997

1105.10 Removing director - vacancy.

(A) Once elected or appointed, a director may be removed by the board of directors or the superintendent of financial institutions if either of the following applies:

(1) The director has filed for relief or is a debtor in a case filed under Title XI of the United States Code;

(2) A court has determined the director is incompetent.

(B)

(1)

(a) Except as provided in division (B)(1)(b) of this section, unless the articles of incorporation or the code of regulations expressly provide that removal of members of the board of directors shall require a greater vote, the shareholders may remove all the directors, all the directors of a particular class, or any individual director from office, without assigning any cause, by the vote of the holders of a majority of the voting power entitling them to elect directors in place of those to be removed.

(b) If the shareholders have the right to vote cumulatively in the election of directors of the bank, unless all the directors or all the directors of a particular class are removed, the vote of shareholders does not remove an individual director if the votes cast against the director's removal, if cumulatively voted at an election of all the directors or all the directors of a particular class, as the case may be, would be sufficient to elect at least one director.

(2) If one or more directors is removed pursuant to division (B)(1) of this section, the shareholders may elect a new director at the same meeting for the unexpired term of each director removed. Failure of the shareholders to elect a director to fill the unexpired term of any director removed is deemed to create a vacancy in the board.

(C) Unless the articles of incorporation or the code of regulations otherwise provide, the remaining directors, though less than a majority of the whole authorized number of directors, may, by the vote of a majority of their number, fill any vacancy in the board for the unexpired term.

(1) A vacancy exists if the shareholders increase the authorized number of directors but fail at the meeting at which the increase is authorized, or an adjournment of the meeting, to elect the additional directors provided for, or if the shareholders fail at any time to elect the whole authorized number of directors.

(2) The office of a member of the board of directors becomes vacant if the director dies or resigns. A resignation takes effect immediately unless the director specifies another time.

Effective Date: 01-01-1997

1105.11 Personal liability of director.

Any director of a bank who knowingly violates or knowingly permits any of the officers, agents, or employees of the bank to violate any provision of Chapters 1101. to 1127. of the Revised Code shall be liable personally and individually for all damages the bank, its shareholders, or any other person sustains in consequence of the violation.

Effective Date: 01-01-1997

1105.12, 1105.13 [Repealed].

Effective Date: 07-01-1962

1105.14 to 1105.30 [Repealed].

Effective Date: 01-01-1968