Texas Administrative Code › Title 7 - BANKING AND SECURITIES › Part 2 - TEXAS DEPARTMENT OF BANKING › Chapter 21 - TRUST COMPANY CORPORATE ACTIVITIES › Subchapter F - APPLICATION FOR MERGER, CONVERSION, OR SALE OF ASSETS › Section 21.64 - Application for Merger or Share Exchange

Current through Reg. 49, No. 28; July 12, 2024
(a) Scope. This section governs an
				  application for merger or share exchange pursuant to Finance Code, §§
										RSA 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, §
										RSA
				  182.501, or other applicable law, and such
				  transactions are governed by §
										RSA
				  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 §
										RSA
				  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 §
											RSA
				  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.