CHAPTER 7. CONSOLIDATION OF NATIONAL BANKS. 99. Instructions and form of agree- | 101. Transfer of bonds under act of ment under act of November 7, 1918. 100. Resolution of shareholders under act of November 7, 1918. November 7, 1918. 102. Consolidation when one bank is placed in liquidation. 103. Assumption of liability for circulation. 99. CONSOLIDATION OF NATIONAL BANKS UNDER THE ACT OF NOVEMBER 7, 1918-INSTRUCTIONS AND FORM OF AGREEMENT. National banks proposing to consolidate under the act of November 7, 1918, should advise the Comptroller of the plan of consolidation under consideration and apply for his approval. If the condition of the banks is such as to warrant approval of the consolidation and the terms of consolidation are unobjectionable, instructions relative to the course of procedure, together with forms to be executed in connection therewith, will be furnished. The initial proceeding under the act, after the plan adopted has received the approval of the Comptroller, is to have the directors of the two associations enter into an agreement covering the terms of the consolidation. The following is a form of agreement for adoption by the directors of the associations. If the form of agreement submitted does not include all that may be desired to be included in the proposed consolidation, the Comptroller should be advised of desired changes or additions, and if they meet with approval an amended form, providing for such changes or additions, will be furnished. AGREEMENT OF CONSOLIDATION BETWEEN THE UNDER THE TITLE OF THE and the AND THE each This agreement made between the located in and each acting pursuant to a resolution of its board of directors and by a majority of said boards, pursuant to the authority given by, and in accordance with the provisions of an act of the Congress of the United States entitled, "An act to provide for the consolidation of national banking associations," approved on the 7th day of November, 1918, witnesseth as follows: 1. The (hereafter referred to as the (hereafter referred to as the -) and the -) are hereby consolidated under the charter of the said first-named association as hereby modified. -), divided into shares (- -) of one hundred dollars ($100.00) each, subject to the right to change the amount of said capital hereafter as is now or shall hereafter be authorized by law. On the date of con solidation its surplus shall be dollars ($- -). Said capital, surplus, and undivided profits at the date of consolidation shall then aggregate dollars ($). Of this capital the present shareholders of the held by them, and of the, being being -) shares shall be allotted to shares for each share now -) shall be allotted to the present shareholders for each share now held by them. The assets contributed by each of said associations shall, upon the effective date of the consolidation, be passed upon and be acceptable to a committee of six, three to be appointed by the board of directors of each association, and the shareholders of the present shall furnish net assets above all liabilities of that as sociation equal to of the capital and surplus of the consolidated bank, and the present shareholders of the shall furnish net assets equal to Such assets of either association as it shall not consider desirable to carry into the consolidation, or as shall not be necessary to make up its contribution to the capital, surplus, and undivided profits, as aforesaid, shall be transferred by it, before the effective date of the consolidation, to a trustee or trustees for the ultimate benefit of its shareholders, upon whatever terms and under whatever conditions shall be deemed proper. In the event that there is not sufficient net assets in either association to make good its proportion of capital and surplus of ($) herein provided for, the shareholders of the association not having sufficient assets to make good its proportion shall pay the difference in cash. 4. The directors of the consolidating associations shall constitute the board of directors of the consolidated bank for the remainder of the current year. 5. This consolidation shall become effective when it shall have been ratified and confirmed by the affirmative vote of the shareholders of each of said associations owning at least two-thirds of its capital stock outstanding, at a meeting to be held pursuant to a call by the directors heretofore made, and shall have been approved by the Comptroller of the Currency of the United States. Witness the signatures and seals of said associations, this day of 1919, each hereunto set by the president and attested by its cashier, pursuant to a resolution of its board of directors, acting by a majority thereof, and witness the signatures hereto of a majority of each of said boards of directors. acknowledged the foregoing instrument to be the act and deed of said association and the seal affixed thereto to be its seal; and came also being a majority of the board of directors of said association, and each of them acknowledged said instrument to be the act and deed of said association and of himself as a director thereof. Witness my official seal and signature this day and year aforesaid. as president, and as National Bank of and each in his said capacity and county aforesaid, personally came cashier of the acknowledged the foregoing instrument to be the act and deed of said association and the seal affixed thereto to be its seal; and came also being a majority of the board of directors of said association, and each of them acknowledged said instrument to be the act and deed of said association and of himself as a director thereof. Witness my official seal and signature this day and year aforesaid. My commission expires Notary Public, County. If an increase in capital is provided for, by the agreement between the directors of the associations, of an amount in excess of the total capital of the existing banks, or if there is a provision in the agreement requiring the paying in of cash in addition to the transfer of assets to equalize the value of capital stock, or for other reason, it will be necessary to furnish a certificate sworn to by the president or cashier of the consolidated associations, showing that such increase has been paid in cash. In the event that the capital of the consolidated association is less than the capital of either one of the existing associations, it will be necessary to secure the consent of the Federal Reserve Board to such reduction, in the same manner as in case of reduction of capital of national banks. 100. RESOLUTION OF SHAREHOLDERS UNDER ACT OF NOVEMBER 7, 1918. When the approval of the Comptroller has been secured to the provisions of the agreement for consolidation of the associations, and the agreement has been signed by the directors of each association and acknowledged before a notary public, it may be submitted to the shareholders. Notice of the meeting of the shareholders of each asso ciation to vote upon this agreement must be published for four consecutive weeks in some newspaper published in the place where the associations are located, and if no newspaper is published in the place, then in a paper published nearest thereto, and this notice must state the time, place, and object of the meeting. In addition to this published notice, the law requires a notice to be sent to each shareholder of record by registered mail at least 10 days prior to said meeting. When the agreement between the directors is ratified and confirmed by the affirmative vote of the shareholders of each such association owning at least two-thirds of its capital stock, a certified copy of the resolution evidencing ratification and confirmation, should be sent to the Comptroller. Upon receipt of the resolution, evidencing compliance with the requirements of law, etc., the Comptroller will issue his certificate approving the consolidation. The agreement between the directors of the associations must be recited in full in the resolution of the shareholders, and the names of all the directors who sign the agreement and the officers before whom they acknowledge it should be typewritten. The following is a form of resolution for adoption by the shareholders: held on at the hour At a meeting of the shareholders of the of —, at the banking house of the association in the town or city of notice having been given of the time, place and object of the meeting for four consecutive weeks in the a newspaper published in the place where said association is located, and notice having been sent to each shareholder of record by registered mail at least 10 days prior to said meeting, the following resolution was adopted by the vote of shareholders of the -, owning at located in the town or city of have entered into an agreement with located in the town or city of county of and State of -, providing for the consolidation of the two associations into one national bank under the charter of the under the title of ' and ' in accordance with the provisions of the act of Congress approved November 7, 1918, said agreement entered into between the two boards of directors reading as follows: : Therefore be it 66 National Bank of and the National Bank of Resolved, That the agreement entered into between the directors of the be ratified and confirmed, and that these banks be consolidated under the charter of the and under the title of ' -,' with capital stock of -$) -), such consolidation to become effective immediately upon its approval by the Comptroller of the Currency." The foregoing resolution was adopted by the following vote representing two-thirds or more of the capital stock of the association outstanding, no director, other officer, or employee having acted as proxy. Total number of shares voted in favor of resolution.... Total number of shares voted against resolution Total number of shares represented at meeting Total number of shares of capital stock I hereby certify that this is a true and correct report of the vote and of the resolution adopted at a meeting of the shareholders of this bank held on the date mentioned. 101. TRANSFER OF BONDS UNDER ACT OF NOVEMBER 7, 1918. Bonds held by either bank contemplating consolidation under this act in excess of the amount of capital of the consolidated bank must be withdrawn prior to the date on which the consolidation is approved by the Comptroller's Office. These bonds will be released upon the deposit of lawful money to retire outstanding circulation, provided the resolution of the directors authorizing the withdrawal and the Treasurer's duplicate receipts for the bonds have been furnished. If bonds are to be transferred to the consolidated association it will be necessary to furnish the Treasurer's receipts therefor, and the bonds will be transferred to the Treasurer of the United States in trust as security for circulation of the consolidated bank without other authority than that contained in the agreement and resolution for consolidation. |