12 U.S.C. § 214a — Procedure for conversion, merger, or consolidation; vote of stockholders

submitted 76 years ago by ch. 729 to r/title-12-BANKS-AND-BANKING · 623 words · no verdicts yet

in plain englishAI-generated · not legal advice

A national bank can convert into, merge with, or consolidate with a state bank in the same state, if two-thirds of each class of its stockholders approve. The board must approve the plan first, and shareholders must get proper notice through publication and mail. Shareholders who vote against the plan can demand to be paid the cash value of their shares instead of joining the new bank.

A national banking association may convert into, merge with, or consolidate with a state bank located in the same state, as long as at least two-thirds of the holders of each class of its stock vote for it. (a) Approval of board of directors; publication of notice of stockholders' meeting; waiver of publication; notice by registered or certified mail — A majority of the bank's entire board of directors must approve the conversion, merger, or consolidation plan first. Then the bank must publish notice of the shareholders' meeting — when, where, and why — in a newspaper with general circulation where the bank's main office is, once a week for four straight weeks. All shareholders together can waive this publication requirement. For a merger or consolidation, one notice published at least ten days before the meeting is enough if holders of at least two-thirds of each class of stock waive the four-week requirement and the Comptroller of the Currency agrees in writing beforehand. The bank must also mail this notice to every shareholder of record, by registered or certified mail, at least ten days before the meeting — though any shareholder can specifically waive getting this mailed notice. (b) Rights of dissenting stockholders — A shareholder who votes against the plan, or who tells the bank in writing before or at the meeting that they disagree with it, can demand cash instead of joining the new bank. They must make a written request to the resulting state bank, and turn in their stock certificates, within thirty days after the deal closes. The value of their shares is set as of the date of the shareholders' meeting, by a three-person committee: one person picked by a majority vote of the dissenting shareholders, one picked by the new state bank's board, and a third picked by those two. If two of the three appraisers agree on a value, that value applies. If a dissenting shareholder isn't satisfied with the value, they can appeal to the Comptroller of the Currency within five days of learning the appraised value; the Comptroller then orders a final, binding reappraisal. If, within ninety days of the deal closing, one or more appraisers still hasn't been chosen, or the appraisers can't agree on a value, the Comptroller — on request from anyone involved — will order an appraisal that is final and binding on everyone. The Comptroller's costs for this appraisal or reappraisal are paid by the resulting state bank. Finally, the merger or consolidation plan must spell out how the resulting state bank's shares that the dissenting shareholders didn't take will be handled.

the actual law source: uscode.house.gov ↗public domain

A national banking association may, by vote of the holders of at least two-thirds of each class of its capital stock, convert into, or merge or consolidate with, a State bank in the same State in which the national banking association is located, under a State charter, in the following manner:

(a) Approval of board of directors; publication of notice of stockholders’ meeting; waiver of publication; notice by registered or certified mail

The plan of conversion, merger, or consolidation must be approved by a majority of the entire board of directors of the national banking association. The bank shall publish notice of the time, place, and object of the shareholders’ meeting to act upon the plan, in some newspaper with general circulation in the place where the principal office of the national banking association is located, at least once a week for four consecutive weeks: Provided, That newspaper publication may be dispensed with entirely if waived by all the shareholders and in the case of a merger or consolidation one publication at least ten days before the meeting shall be sufficient if publication for four weeks is waived by holders of at least two-thirds of each class of capital stock and prior written consent of the Comptroller of the Currency is obtained. The national banking association shall send such notice to each shareholder of record by registered mail or by certified mail at least ten days prior to the meeting, which notice may be waived specifically by any shareholder.

(b) Rights of dissenting stockholders

A shareholder of a national banking association who votes against the conversion, merger, or consolidation, or who has given notice in writing to the bank at or prior to such meeting that he dissents from the plan, shall be entitled to receive in cash the value of the shares held by him, if and when the conversion, merger, or consolidation is consummated, upon written request made to the resulting State bank at any time before thirty days after the date of consummation of such conversion, merger, or consolidation, accompanied by the surrender of his stock certificates. The value of such shares shall be determined as of the date on which the shareholders’ meeting was held authorizing the conversion, merger, or consolidation, by a committee of three persons, one to be selected by majority vote of the dissenting shareholders entitled to receive the value of their shares, one by the directors of the resulting State bank, and the third by the two so chosen. The valuation agreed upon by any two of three appraisers thus chosen shall govern; but, if the value so fixed shall not be satisfactory to any dissenting shareholder who has requested payment as provided herein, such shareholder may within five days after being notified of the appraised value of his shares appeal to the Comptroller of the Currency, who shall cause a reappraisal to be made, which shall be final and binding as to the value of the shares of the appellant. If, within ninety days from the date of consummation of the conversion, merger, or consolidation, for any reason one or more of the appraisers is not selected as herein provided, or the appraisers fail to determine the value of such shares, the Comptroller shall upon written request of any interested party, cause an appraisal to be made, which shall be final and binding on all parties. The expenses of the Comptroller in making the reappraisal, or the appraisal as the case may be, shall be paid by the resulting State bank. The plan of conversion, merger, or consolidation shall provide the manner of disposing of the shares of the resulting State bank not taken by the dissenting shareholders of the national banking association.

Source credit: (Aug. 17, 1950, ch. 729, § 2, 64 Stat. 455; Pub. L. 86–507, § 1(10), June 11, 1960, 74 Stat. 200; Pub. L. 96–221, title VII, § 706, Mar. 31, 1980, 94 Stat. 188.)

history & why it existsrecord from the source credit

1950Enacted · Act of Aug. 17, 1950, ch. 729 · 64 Stat. 455
1960Amended · Pub. L. 86-507 · 74 Stat. 200
1980Amended · Pub. L. 96-221 · 94 Stat. 188

A history note hasn’t been published yet. The record shows enactment by ch. 729 on 1950-08-17.

all 0 arguments · sorted by: best

no arguments yet — make the first case