KRS 286.3-172: Conditions of and procedure for conversion of national banking

association to state bank or merger or consolidation with state bank.

(1) A national banking association may convert into, or merge or consolidate with, a

state bank under a state charter in the manner provided by federal law.

(2) In the case of each conversion:

(a) A written plan of conversion shall be submitted to the commissioner;

(b) The conversion plan shall:

1. Be in a form satisfactory to the commissioner;

2. Prescribe the terms and conditions of the conversion and the mode of

carrying it into effect; and

3. Include:

a. The proposed articles of incorporation of the state bank that is to

result from the conversion, which shall be in the form prescribed

by law for the organiz ation of state banks, with variations, if any,

as are satisfactory to the commissioner; and

b. A certificate of the president, secretary, or cashier of the national

banking association certifying that all steps have been taken which

are necessary under federal law for the conversion;

(c) The commissioner shall approve or disapprove a conversion plan within sixty

(60) days of the plan's submission;

(d) In considering the approval or disapproval of a conversion plan, the

commissioner shall take into account:

1. Whether there are any significant supervisory or compliance concerns

that exist with respect to the national banking association or any officer

or director of the association;

2. The performance of the converting national banking association for the

five (5) years preceding the application for conversion as compared to

similarly situated state banks; and

3. The proposed name of the bank after conversion which shall not be the

same as or deceptively similar to any existing state bank;

(e) The commissioner shall approve or disapprove a conversion plan in writing,

which shall be sent to the applicant and filed in the office of the

commissioner; and

(f) After a conversion plan has been approved in writing and filed in the office of

the commissioner, the conversion shall become effective upon the filing and

recording of the articles of incorporation, as provided in KRS 286.3 -050,

unless a later date is specified in the plan, in which event the conversion shall

become effective upon the later date.

(3) In the case of each merger or consolidation:

(a) A written plan of merger or consolidation shall be subm itted to the

commissioner;

(b) The merger or consolidation plan shall:

1. Be in a form satisfactory to the commissioner;

2. Prescribe the terms and conditions of the merger or consolidation and

the mode of carrying it into effect;

3. Provide the name to be borne by the state bank, as receiving corporation,

if the state bank's name is to be changed;

4. Either:

a. Name the persons who will constitute the first board of directors of

the state bank after the merger or consolidation; or

b. Provide for:

i. Conducting the affairs of the state bank until a meeting of the

stockholders to elect the first board of directors of the state

bank after the merger or consolidation occurs; and

ii. A stockholder meeting to elect the first board of directors,

which shall occur within sixty (60) days after the merger or

consolidation; and

5. Include:

a. By the national banking association, a certificate of the president,

secretary, or cashier of the association certifying that all steps have

been taken which are necessary under f ederal law for the merger

or consolidation; and

b. By the state bank, a certificate of the president, secretary, or

cashier of the bank certifying that the plan:

i. Has been approved by the board of directors of the state bank

by a majority vote of all the members thereof;

ii. Has been submitted to the stockholders of the state bank at a

meeting held, upon notice of at least fifteen (15) days

specifying the time and place and object of the meeting and

addressed to each stockholder at the address appearing u pon

the books of the state bank and published pursuant to KRS

Chapter 424; and

iii. Has been approved by the vote of at least two -thirds (2/3) of

the stockholders of the state bank;

(c) The first board of directors of the state bank after the merger or consolidation

shall be in accordance with the provisions of this subtitle relating to the

number and qualifications of directors of a state bank;

(d) The commissioner shall approve or disap prove a plan of merger or

consolidation:

1. Within sixty (60) days of the plan's submission; and

2. In writing, which shall be sent to the applicant and filed in the office of

the commissioner; and

(e) A merger or consolidation shall become effective upon the filing of an

approval of the merger or consolidation plan in the office of the

commissioner, unless a later date is specified in the plan, in which event the

merger or consolidation shall become effective upon the later date.

(4) If the commissioner disapproves a conversion, merger, or consolidation plan:

(a) The commissioner shall state the reasons for disapproval in the filing made

under this section; and

(b) The applicant or applicants seeking conversion, merger, or consolidation shall

have a right of appeal as permitted by law.

(5) At the time when a conversion, merger, or consolidation becomes effective:

(a) The resulting state bank shall be considered the same business and corporate

entity as the national banking association, although as to rights, powers, and

duties, the resulting bank is a state bank;

(b) All of the property, rights, and powers and franchises of the national banking

association shall vest in the resulting state bank and the resulting state bank

shall be subject to and deemed to ha ve assumed all of the debts, liabilities,

obligations, and duties of the national banking association and to have

succeeded to all of its relationships, fiduciary or otherwise, as fully and to the

same extent as if the national banking association's proper ty, rights, powers,

franchises, debts, liabilities, obligations, duties, and relationships had been

originally acquired, incurred, or entered into by the resulting state bank,

except the resulting state bank shall not, through the conversion, merger, or

consolidation, acquire the power to engage in any business or to exercise any

right, privilege, or franchise that is not conferred by the provisions of Subtitle

3 of KRS Chapter 286 upon the resulting state bank;

(c) Any reference to the national banking ass ociation in any contract, will, or

document, whether executed or taking effect before or after the conversion,

merger, or consolidation, shall be considered a reference to the resulting state

bank if not inconsistent with the other provisions of the contra ct, will, or

document; and

(d) A pending action or other judicial proceeding to which the national banking

association is a party shall not be deemed to have abated or to have

discontinued by reason of the conversion, merger, or consolidation, but may

be prosecuted to final judgment, order, or decree in the same manner as if the

conversion, merger, or consolidation had not been made. The resulting state

bank may be substituted as a party to any action or proceeding to which the

national banking association is a party and any judgment, order, or decree

may be rendered for or against the resulting state bank that might have been

rendered for or against the national banking association if the conversion,

merger, or consolidation had not occurred.