---
kind: "section"
citation: "12 C.F.R. § 1278.3"
title: "12"
number: "1278.3"
heading: "Merger agreement."
url: "https://uscodex.org/cfr/12/1278.3"
---

# §1278.3. Merger agreement.


A merger of Banks under the authority of [§ 1278.2](/cfr/12/1278.2.md) shall require a written merger agreement that:

- (a) Has been authorized by the affirmative vote of a majority of a quorum of the board of directors of each Constituent Bank at a meeting on the record and has been executed by authorized signing officers of each Constituent Bank; and
- (b) Sets forth all material terms and conditions of the merger, including, without limitation, provisions addressing each of the following matters—
  - (1) The proposed Effective Date and the proposed acquisition date for purposes of accounting for the transaction under GAAP, if that date is to be different from the Effective Date;
  - (2) The proposed organization certificate and bylaws of the Continuing Bank;
  - (3) The proposed capital structure plan for the Continuing Bank;
  - (4) The proposed size and structure of the board of directors for the Continuing Bank;
  - (5) The formula to be used to exchange the stock of the Constituent Banks for the stock of the Continuing Bank, and a provision prohibiting the issuance of fractional shares of stock;
  - (6) Any conditions that must be satisfied prior to the Effective Date, which must include approval by the Director and ratification by the members of the Constituent Banks;
  - (7) A statement of the representations or warranties, if any, made or to be made by any Constituent Bank;
  - (8) A description of the legal or accounting opinions or rulings, if any, that are required to be obtained or furnished by any party in connection with the proposed merger; and
  - (9) A statement that the board of directors of a Constituent Bank may terminate the merger agreement before the Effective Date upon a determination that:
    - (i) The information disclosed to members contained material errors or omissions;
    - (ii) Material misrepresentations were made to members regarding the impact of the merger;
    - (iii) Fraudulent activities were used to obtain members' approval; or
    - (iv) An event occurred subsequent to the members' vote that would have a significant adverse impact on the future viability of the Continuing Bank.

## Notes

### Authority

Authority: 12 U.S.C. 1432(a), 1446, 4511.

### Source

Source: 76 FR 72833, Nov. 28, 2011, unless otherwise noted.