Federal Credit Union Conversion Regulations — 3
3 (1) A conversion proposal must be written in language that is clear and simple and in a manner that is not misleading, and must include all information that members and shareholders, if any, of the converting credit union would reasonably require or expect to be given to make an informed decision about the proposed conversion, including (a) the proposed date of conversion or a description of the event with which the converting credit union proposes that its conversion coincide; (b) the proposed name of the converted credit union; (c) a description of the advantages and disadvantages of the proposed conversion in relation to the converting credit union and to its members and shareholders, if any, as a whole; (d) a description of the alternatives to conversion that the converting credit union’s board of directors considered, and the reasons why, in their opinion, the conversion is in the best interests of the converting credit union and its members and shareholders, if any, as a whole; (e) a description of the converting credit union’s business plan for the three-year period following the day on which the conversion occurs, including (i) a description of the services it intends to provide, (ii) a description of any services it no longer intends to provide, (iii) if any service is proposed to be provided by another entity, the name of that entity and its relationship to the converting credit union and its related parties, if any, and (iv) a description of any anticipated changes to the geographic area within which the converting credit union intends to provide its services; (f) a description, including the value, of any securities that are proposed to be issued, or cash that is proposed to be paid, as a result of the conversion, to a person that owns a membership share or share of the converting credit union; (g) a statement of the number of members and shareholders, if any, of the converting credit union that, on the day on which the conversion occurs, will become common or other shareholders of the converted credit union; (h) information as to whether the converted credit union is expected, within the three-year period following the day on which the conversion occurs, to be controlled by a shareholder or shareholder group or to have any shareholder with a significant interest in any class of its shares; (i) a description of any proposed changes to the following that would arise from conversion: (i) the number of directors of the converting credit union, and (ii) the rights of its members and shareholders, if any, with respect to its governance, including their rights to participate in meetings and elect directors and the rights of shareholders to control the converted credit union; (j) a description of any changes to the rights of shareholders arising from the requirements of section 5; (k) for the one-year period before the day on which the board authorization occurs, (i) a statement of any related party’s interest in or relationship to the converting credit union and any change in a related party’s ownership of membership shares or shares of the converting credit union, and (ii) a description of any transactions between the converting credit union and a related party; (l) a discussion of the fairness of the conversion proposal to the converting credit union’s members and shareholders, if any, as a whole, as well as an independent opinion on the fairness of the proposal by a person with the necessary skills and experience to provide such an opinion; (m) a summary of the valuation report referred to in paragraph 6(k), which must include the certification of the reasonableness of the values and assumptions contained in the report and the information referred to in subparagraphs 6(k)(iii) to (v); (n) summary pro forma financial statements for the converted credit union for the three-year period following the day on which the conversion occurs that are based on one of the following and prepared in a manner consistent with the an