(a) In accordance with section 412 of the Agricultural Credit Act of 1987, representatives of each Farm Credit Bank Board are required to participate in the development of a proposal under which the stockholders of each or some of such banks will vote on merger plans. The proposal may provide for mergers of Farm Credit Banks that will result in the reduction in the number of Farm Credit Banks to no less than six such banks.

(b)(1) For the purpose of developing the merger proposal for the Farm Credit Banks and the individual merger plans, there will be established not later than July 5, 1988, a Special Committee on the Merger of Farm Credit Banks. The Special Committee shall be composed of one director from the board of directors of each Farm Credit Bank and the members of the Farm Credit System Assistance Board. The Special Committee shall elect a chairman from among its members.

(2) The Board of Directors of each Farm Credit Bank shall elect its representative to the Special Committee by majority vote from among its members. In those districts where the Farm Credit Bank will not have its first board of directors’ meeting prior to July 5, 1988, the Special Committee member shall be elected prior to such date by the members of the District Board elected by the Federal land bank associations, production credit associations and borrowers at large. Each board of directors shall also elect an alternate member of the Special Committee who shall attend meetings and vote on matters when the principal representative is unable to attend.

(c) The proposal developed by the Special Committee may include one or more merger plans involving two or more Farm Credit Banks. Upon approval of the entire proposal by a majority of the members of the Farm Credit System Assistance Board and approval of any merger plan contained in the proposal by the Special Committee representatives of the banks involved in such merger, the merger plans shall be submitted to the stockholders of the banks involved.

(d) The proposal of the Special Committee and each merger plan, together with the disclosure materials, shall be submitted to the Farm Credit Administration for approval not later than 120 days prior to the scheduled date for the stockholder votes for each merger involved. The stockholder votes shall be scheduled to occur not later than July 5, 1989, and the effective dates of the mergers shall not be later than January 1, 1990.

(e) If the proposed effective date of the merger is scheduled to occur more than 60 days after the stockholder vote, the boards of directors of the Farm Credit Banks involved shall enter into an agreement in connection with their approval of the merger agreement. The agreement shall contain adequate procedures and approval requirements that will govern the activities of the banks involved during the interim period between an affirmative stockholder vote and the effective date of the merger.