| (a) Scope. This section governs an application for
merger or share exchange pursuant to Finance Code, §§182.301
et seq. This section does not apply to a merger that results in a
trust company becoming another fiduciary institution under another
regulatory system pursuant to Finance Code, §182.501, or other
applicable law, and such transactions are governed by §21.67
of this title (relating to Notice of Merger, Reorganization, or Conversion
of a Trust Company Into Another Fiduciary Institution).
(b) Form of application. The applicant shall submit
a fully completed, verified application on a form prescribed by the
banking commissioner and simultaneously tender the required filing
fee pursuant to §21.2 of this title (relating to Filing and Investigation
Fees). The application must, except to the extent waived by the banking
commissioner, include the following information:
(1) a summary of the proposed transaction;
(2) a copy of all agreements related to the proposed
transaction executed by an authorized representative of each party
to the merger or share exchange;
(3) certificate and plan of merger or share exchange
in accordance with the Texas Business Organizations Code, which must
include the following:
(A) a current draft of the certificate of merger or
share exchange, and such number of additional copies equal to the
number of surviving, new, or acquired entities, executed and acknowledged
by an authorized officer for each party to the merger or share exchange;
(B) the plan of merger or share exchange;
(C) the certificate or restated certificate of formation
of each resulting trust company;
(D) the certificate or restated certificate of formation,
or other constitutive documents, of each newly created or surviving
entity other than a resulting trust company; and
(E) if a party to a merger is an entity required to
file documents with the Texas secretary of state before the transaction
can be legally consummated, a provision in the certificate of merger
conditioning the merger upon the approval of the banking commissioner,
containing wording substantially as follows, as applicable: This merger
shall become effective upon the final approval and filing of the certificate
of merger by the Secretary of State of Texas and with the Banking
Commissioner of Texas which shall be on or before _________ (date),
which is the 90th day after the date of filing of such certificate
of merger with the Secretary of State;
(4) for each party to the merger or share exchange,
a certified copy of those portions of the minutes of board meetings
and shareholder or participant meetings (or their equivalent) at which
action was taken regarding approval of the merger or share exchange,
or a certificate of an officer verifying the action taken by the board
of directors and the shareholders or participants approving the merger
or share exchange, or an explanation of the basis for concluding such
action was not required;
(5) for each resulting trust company, an assessment
of its future prospects, proposed officers and directors, and proposed
offices and other locations;
(6) an assessment of the current regulatory and financial
condition of each party to the transaction;
(7) a copy of current financial statements for each
entity involved in the proposed transaction, accompanied by an affidavit
of no material change dated no earlier than 30 days prior to the date
of submission of the application;
(8) a copy of the latest annual report for each fiduciary
institution and holding company involved in the proposed transaction;
(9) a copy of that portion of the most recent watch
list for each fiduciary institution involved in the proposed transaction
that identifies low-quality assets;
(10) a description of the due diligence review conducted
by or for each trust company that is a party to the transaction and
a summary of findings;
(11) a description of all material legal or administrative
proceedings involving any party to the merger or share exchange;
(12) an opinion of legal counsel that conforms with §21.68
of this title (relating to Opinion of Legal Counsel), concluding the
following:
(A) each resulting trust company will be solvent and
will have adequate capitalization for its business and location;
(B) the merger or share exchange has been duly authorized
by the board and shareholders or participants of each participating
trust company, fiduciary institution, or other entity, including trust
companies in accordance with applicable law;
(C) the merger or share exchange will not cause or
result in a material violation of the laws of this state relative
to the organization and operation of trust companies;
(D) all liabilities of each trust company that is a
party to the merger or share exchange will be discharged or otherwise
assumed or retained by a trust company or other fiduciary;
(E) each surviving, new, or acquiring entity that is
not authorized to engage in the trust business will not engage in
the trust business and has in all respects complied with the laws
of this state;
(F) all conditions with respect to the merger or share
exchange that have been imposed by the banking commissioner have been
satisfied or otherwise resolved or, to the best knowledge of legal
counsel, no such conditions have been imposed;
(13) a copy of each filing or application regarding
the proposed merger or share exchange that is required to be made
with another state or federal regulatory agency, complete with all
related attachments, exhibits, and correspondence;
(14) a current pro forma balance sheet and income statement
for each party to the transaction, with adjustments, reflecting the
proposed merger or share exchange as of the most recent quarter ended
immediately prior to the filing of the application. The pro forma
must include a statement of fiduciary assets as well as corporate
assets;
(15) for each resulting trust company, a copy of the
strategic plan that complies with the banking commissioner's Memorandum
1009, including projections of the balance sheet and income statement
of each resulting trust company as of the quarter ending one year
from the date of the pro forma financial statement required by paragraph
(14) of this subsection;
(16) an explanation of compliance with or nonapplicability
of provisions of governing law relating to rights of dissenting shareholders
or participants to the merger or share exchange;
(17) a copy of all securities offering documents, proxy
statements, or other disclosure materials delivered or to be delivered
to shareholders or participants of a party concerning the merger or
share exchange;
(18) an explanation of the manner and basis of converting
or exchanging any of the shares or other evidences of ownership of
an entity that is a party to the merger or share exchange into shares,
obligations, evidences of ownership, rights to purchase securities,
or other securities of one or more of the surviving, acquiring, or
new entities, into cash or other property, including shares, obligations,
evidences of ownership, rights to purchase securities, or other securities
of another person or entity, or into a combination of the foregoing;
(19) for antitrust purposes, an analysis of the anticipated
competitive effect of the proposed transaction in the affected markets
and a statement of the basis of the analysis of the competitive effects,
or if applicable, a copy of the analysis of competitive effects of
the proposed transaction addressed in a companion federal regulatory
agency application; and
(20) such other information that the banking commissioner,
in the exercise of discretion, requires to be included in the particular
application as considered necessary to an informed decision to approve
or deny the proposed merger or share exchange.
(c) Applicant's duty to disclose. The applicant bears
the burden to supply all material information necessary to enable
the banking commissioner to make a fully informed decision regarding
the application.
(d) Public notice. Not earlier than the 14th day before
or later than the 14th day after the date of the initial submission
of the application, the applicant shall publish notice in accordance
with the requirements of §21.5 of this title (relating to Public
Notice) in the specified communities where the home office of the
applicant, the target entity, and the resulting trust company are
located.
(e) Approval by the banking commissioner and filings
with a chartering agency.
(1) The banking commissioner shall approve a merger
or share exchange only if the application indicates substantial compliance
with all conditions of Finance Code, §182.302(c).
Cont'd... |
