§ 708a.303 Board of directors' approval and members' opportunity to comment. ( a ) *Merger valuation.* Before selecting a bank merger partner and voting on a proposal to merge, a credit union's board of directors must determine, as part of its due diligence, the merger value of the credit union. In making its determination of the merger value of the credit union, the credit union must either: ( 1 ) Conduct a well-publicized merger auction and obtain purchase quotations from at least three banks, two or more of which must be stock banks; or
( 2 ) Retain a qualified appraisal entity to analyze and estimate the merger value of the credit union.
( b ) *Advance notice.* A credit union that does not conduct a public auction as described in paragraph (a)(1) of this section must comply with the following notice requirements before voting on a proposal to merge. ( 1 ) No later than 30 days before a board of directors votes on a proposal to merge, it must publish a notice in a general circulation newspaper, or in multiple newspapers if necessary, serving all areas where the credit union has an office, branch, or service center. It must also post the notice in a clear and conspicuous fashion in the lobby of the credit union's home office and branch offices and on the credit union's Web site, if it has one. If the notice is not on the home page of the Web site, the home page must have a clear and conspicuous link, visible on a standard monitor without scrolling, to the notice.
( 2 ) The public notice must include the following: ( i ) The name and address of the credit union;
( ii ) The name and type of institution into which the credit union's board is considering a proposal to merge;
( iii ) A brief statement of why the board is considering the merger and the major positive and negative effects of the proposed merger;
( iv ) A statement that directs members to submit any comments on the proposal to the credit union's board of directors by regular mail, electronic mail, or facsimile;
( v ) The date on which the board plans to vote on the proposal and the date by which members must submit their comments for consideration; which submission date may not be more than 5 days before the board vote;
( vi ) The street address, electronic mail address, and facsimile number of the credit union where members may submit comments; and
( vii ) A statement that, in the event the board approves the proposal to merge, the proposal will be submitted to the membership of the credit union for a vote following a notice period that is no shorter than 90 days.
( 3 ) The board of directors must approve publication of the notice.
( c ) *Member comments.* A credit union must collect and review any member comments about the merger received during the merger process. The credit union must retain the comments until the merger is consummated.
( d ) *Approval of proposal to merge.* The merger proposal may only be approved by an affirmative vote of a majority of board members who have determined: ( 1 ) A merger with a bank is in the best interests of the members, and
( 2 ) The merger partner selected by the directors is the best choice for the members, taking into account the merger value of the credit union and the amount that the selected merger partner is willing to pay the credit union's members to effect the merger.