Statute: 1971 ACT AS AMENDED
Title: Title VII Restructuring of System Institutions
Subtitle: Subtitle D Mergers of Like Entities
U.S. Code Citation: 12 U.S.C. 2279f
Subtitle D—Mergers of Like Entities
12 U.S.C. 2279f SEC. 7.12. MERGER OF SIMILAR BANKS.
(a) IN GENERAL. Banks organized or operating under this Act may merge with banks in other districts operating under the same title if the plan of merger is approved by—
(1) the Farm Credit Administration Board;
(2) the respective Boards of Directors of the banks involved;
(3) a majority vote of the stockholders of each bank voting, in person or by proxy, at a duly authorized stockholders' meeting, with each association having a number of votes equal to the number of such association's voting stockholders; and
(4) in the case of a bank for cooperatives, a majority of the total equity interests in such merging bank for cooperatives (including allocated, but not unallocated, surplus and reserves) held by those stockholders or subscribers to the guaranty fund of the bank voting.
(b) POWERS AND CAPITALIZATION. Sections 7.2 and 7.3 shall apply to banks merged under this section.
(c) BOARD OF DIRECTORS.
(1) IN GENERAL. After a merger under subsection (a) of this section, a board of directors shall be created for the resulting bank.
(2) COMPOSITION. The board shall be composed of—
(A) two directors elected by each of the bank boards, with at least one such director from each bank being elected by the eligible stockholders of, or subscribers to, the guaranty fund of the merging banks; and
(B) one outside director elected by the directors elected under subparagraph (A).
(3) OUTSIDE DIRECTOR.
(A) QUALIFICATIONS. The outside director elected under paragraph (2)(B) shall be experienced in financial services and credit, and within the 2-year period prior to such election, shall not have been a borrower from, shareholder in, or director, officer, employee, or agent of any institution of the Farm Credit System.
(B) FAILURE TO ELECT. If the other members of the board fail to elect an outside director, the Farm Credit Administration Board shall appoint a qualified person to serve on the board of directors until such member is so elected.
(4) BYLAWS. Notwithstanding paragraph (2), the bylaws of the merged bank may, with the approval of the Farm Credit Administration, provide for a different number of directors to be selected in a different manner, except that the bylaws shall provide for at least one outside director.
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