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FED ERA L RESERVE B A NK OF DALLAS DALLAS, TEX A S 75222 Circular No. 70-26 February 2, 1970 REPRINT OF REGULATION F "SECURITIES OF MEMBER STATE BANKS” To All State Member Banks in the Eleventh Federal Reserve District: There is enclosed a copy of Regulation F of the Board of Governors of the Federal Reserve System, as amended effective December 31* 19^9* All amendments to the Regulation that have been issued and effective through December 31> 19£>9> have been incorporated in the reprinted copy. Also enclosed are copies of related Forms F-2, F-^f, F-5 and F-9, revised as of Decem ber 31, 1969* Additional copies of the Regulation and the forms are available upon request. The Regulation has been printed in the new larger size for insertion in the new regulation and bulletin binder furnished to all State member banks in November, 1969. The Regulation F effective January 1, 19&5* an(^ amend ments through December 31, 19&9* should be destroyed. Yours very truly, P. E. Coldwell President Enclosures (5) This publication was digitized and made available by the Federal Reserve Bank of Dallas' Historical Library (FedHistory@dal.frb.org) BOARD OF GOVERNORS of the FEDERAL RESERVE SYSTEM SECURITIES OF MEMBER STATE BANKS REGULATION F (12 CFR 206) As amended effective December 31, 1969 Any inquiry relating to this regulation should be addressed to the Federal Reserve Bank of the Federal Reserve district in which the inquiry arises. Forms necessary for the preparation of statements and reports may be obtained from any Federal Reserve Bank. . f CONTENTS Page Page 5 5 8 8 8 8 9 9 9 9 10 10 10 10 10 11 11 11 11 11 11 11 12 12 12 13 13 13 13 13 13 13 13 14 14 15 16 16 18 19 19 21 21 22 23 23 23 24 24 (b) Ownership of more than 10 per cent of an equity security .............................................. (c) Disclaimer of beneficial ow nersh ip ............. (d) Ownership o f securities held in trust . . . . (e) Certain transactions subject to section 16(a) ........................................................• (f) Exemption from section 16 o f securities purchased or sold by odd-lot d ea lers.. . (g) Exemption of small transactions from sec tion 16(a) ....................................................... (h) Temporary exemption of certain persons from sections 16(a) and ( b ) ..................... (i) Exemption from section 16(b) o f transac tions that need not be reported under section 16(a) ...........................................■ • (j) Exemption from section 16(b) of certain transactions by registered investment companies ............................................... .... (k) Exemption from section 16(b) of certain transactions effected in connection with a distribution ........................................... . (1) Exemption from section 16(b) of acquisi tions of shares of stock and stock op tions under certain stock bonus, stock option, or similar plans ........................... (m) Exemption from section 16(b) of long term profits incident to sales within six months of the exerciseo f an option . . . (n) Exemption of certain securities from sec tion 16(c) ................................................. • (o) Exemption from section 16(c) of certain transactions effected in connection with a distribution .............................................. (p) Exemption of sales of securities to be ac quired ............... ............................................ (q)Arbitrage transactions under section 16. . S e c . 206.7 — F o rm and C o n t e n t o f F ina n c ial S t a t e m e n t s .................................... 24 24 24 25 25 25 26 26 26 26 27 28 28 28 29 29 29 Principles of financial reporting ............. 29 29 Verification ............................... (1) General ...................................................... 29 (2) Opinions to be expressed by principal accounting officer and auditor . . . . . 29 (3) Certification by independent public accountants ........................................... 30 (c) Provisions of general application ............ 30 (1) Requirements as to form ....................... 30 (2) Items not material .................... ............ 31 (3) Inapplicable captions and omission of unrequired or inapplicable financial statements ......... ................................... 31 (4) Additional information ... ... ................ 31 (5) Changes in accounting principles and practices and retroactive adjustments of accounts ........................................... 31 (6) Summary of accounting principles and practices ................................................. 31 (7) Foreign currencies .................................. 31 (8) Commitments .......................................... 31 (9) General notes to balance s h e e t s ......... 31 (10) General notes to statements of income 32 (d) Consolidated financial statements ............ 32 (e)Statement of changes in capital accou n ts.. 33 (f) Schedules to be filed ....................... 33 A ppendix ..................................................................... 34 (a) (b) . S e c . 2 0 6 .1 — S co pe o f P a r t ......................................... S e c . 2 0 6 .2 — D e f i n it io n s .............................................. S ec . 2 0 6 .3 — In sp e c t io n and P u b lic a tion of I n f o r m a t io n F iled U n d e r th e A ct ........................................................ (a) F ilin g o f m aterial with the Board ......... (b) Inspection .............................................................. (c) N o n d isclo su re o f certain inform ation filed S ec . 2 0 6 4 — R egistration S t a t e m e n t s and R e ports ...................................................... (a) R equirem ent o f registration statem ent . . . (b) Registration effective as to class o r series. (c) A cce le ration o f effectiveness o f registration (d) E x c ha n g e certification .................................. (e) R eq u irem en t o f annual reports ................. (f) E xception fro m requirem ent for annual report ............................................................. (g) Current reports .................................................. (h) Quarterly reports ............................................ (i) A dd ition al in form ation .................................. (j) In fo rm ation n ot a v a i l a b l e ............................. (k) D isc la im er o f con trol ..................................... (1) Incorporation by reference ........................ (m) S u m m aries or o u tlin es o f d o cu m e n ts . . . . (n) O m ission o f su b stan tially identical d o c u m en ts .................................................................. (0) In corporation o f exhibits by r e f e r e n c e . . . . (p) Extension o f tim e for furnishing in fo r m a tion ....................................................................... (q) N u m b e r o f copies; signatures; binding . . . (r) R equirem ents as to paper, printing, and language ............................................................. (s) Preparation o f statem ent o r r e p o r t ......... (t) Riders; inserts .................................................... (u) A m en d m en ts ....................................................... (v) T itle o f securities ............................................ (w) Interpretation o f requirem ents ................ (x) W h en securities are d eem ed to be regis tered ..................................................................... S e c . 2 0 6 .5 — P roxy S t a t e m e n t s and O t h e r S o lic itations U n der S e ctio n 14 o f t h e A ct ...................................... (a) R eq u irem en t o f S t a t e m e n t ........................... (b) E xceptions ............................................................ (c) A nn u al report to security holders to a c c o m p a n y Statem ents .................................... (d) R equirem ents as to p r o x y ........................... (e) P resentation o f inform ation in S ta tem en t. (f) M aterial required to be f i l e d ...................... (g) M ailin g c o m m u n ica tio n s fo r security h old ers ............................................................... (h) F a lse or m isleading statem ents ................ (1) Special p rovisions ap p licab le to election con tests ............................................................. (j) P rohibition o f certain solicitatio ns . . . . . . (k) P rop osals o f security h o l d e r s ...................... (1) In vitations for tenders ................................... (m) R e c o m m en d a tio n s as to tender o f f e r s . . . . (n) C h a n g e in m ajority o f d i r e c t o r s .............. (o) Solicitation prior to furnishing required proxy statem ent ........................................... S ec . 20 6 .6 — “ I n sid er s ’ ” S ecuritie s T ransac t io n s and R epor ts U n d e r S ec t io n 16 of t h e A c t .................... (a) F ilin g o f statem ents b y directors, officers, and principal stock h old ers ....................... FORMS AND RELATED INSTRUCTIONS Forms and related instructions, which are integral parts o f this regula tion, are assembled separately as follows: Form F -l— Registration Statement for Securities o f a Bank Form F-2— Annual Report Form F-3— Current Report Form F-4— Quarterly Report Form F-5— Proxy Statement; Statement Where Management Does N ot Solicit Proxies Form F-6— Statement in Election Contest F orm F-7— Initial Statement of Beneficial Ownership of Equity Securities Form F-8— Statement of Changes in Beneficial Ownership of Equity Securities Form F-9— Financial Statements A. Balance Sheet B. Statement o f Income C. Statement o f Changes in Capital Accounts D. Schedules Form F-10— Registration Statement for Additional Classes of Securities of a Bank Form F -l 1— Statement to be Filed Pursuant to § 2 0 6 .4 (g )(2 ) or § 206.5 (1 ) of Regulation F Form F-12— Statement to be Filed Pursuant to § 206.5(m ) of Regulation F Form F-20— Amendment to Registration Statement or Periodic Report o f Bank REGULATION F (12 CFR 206) As amended effective December 31, 1969 SECURITIES OF MEMBER STATE BANKS SECTION 206.1— SCOPE O F PART* This Part is issued by the Board of Governors of the Federal Reserve System (the “Board” ) pursuant to section 12(i) of the Securities Ex change Act of 1934 (15 U.S.C. 78) (the “Act” ) and applies to all securities subject to registra tion pursuant to section 12(b) or section 12(g) of the Act by a bank that is organized under State law and is a member of the Federal Re serve System ( “bank” ). SECTION 206.2— DEFINITIONS For the purposes of this Part, including all forms and instructions promulgated for use in connection herewith, unless the context otherwise requires: (a) The terms “exchange”, “director”, “per son”, “security”, and “equity security” have the meanings given them in section 3 (a) of the A ct.1 (b) The term “affiliate” (whether referred to as an “affiliate” of, or a person “affiliated” with, a specified person) means a person that directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, the person specified. (c) The term “amount”, when used with re spect to securities, means the principal amount * This text corresponds to the Code of Federal Regula tions. Title 12, Chapter II, Part 206, cited as 12 CFR 206. The words “this Part”, as used herein, mean Regu lation F. 1See Appendix, page 34. if relating to evidences of indebtedness, the num ber of shares if relating to shares, and the number of units if relating to any other kind of security. (d) The term “associate”, when used to indi cate a relationship with any person, means (1) any corporation or organization (other than the bank or a majority-owned subsidiary of the bank) of which such person is an officer or part ner or is, directly or indirectly, either alone or together with one or more members of his im mediate family, the beneficial owner of 10 per cent or more of any class of equity securities, (2) any trust or other estate in which such per son has a substantial beneficial interest or as to which such person serves as trustee or in a simi lar fiduciary capacity, and (3) any relative or spouse of such person, or any relative of such spouse, who has the same home as such person, or who is a director or officer of the bank or any of its parents or subsidiaries. (e) The term “charter” includes articles of incorporation, declarations of trust, articles of association or partnership, or any similar instru ment, as amended, effecting (either with or with out filing with any governmental agency) the organization or creation of an incorporated or unincorporated person. (f) The term “control” (including the terms “controlling”, “controlled by”, and “under com mon control with” ) means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a person, whether through the ownership of voting securities, by contract, or otherwise. § 206.2 (DEFINITIONS) (g) The term “employee” does not include a director, trustee, or officer. (h) The term “equity capital accounts” means capital stock, surplus, undivided profits, and reserve for contingencies and other capital re serves. (i) The term “fiscal year” means the annual accounting period or, if no closing date has been adopted, the calendar year ending on December 31. (j) (1) For the purpose of determining whether the registration requirements of section 12(g )(1 ) of the Act are applicable, securities shall be deemed to be “held of record” by each person who is identified as the owner of such securities on records of security holders maintained by or on behalf of the bank, subject to the following: (i) In any case where the records of secu rity holders have not been maintained in ac cordance with accepted practice, any additional person who would be identified as such an owner on such records if they had been maintained in accordance with accepted practice shall be in cluded as a holder of record. (ii) Securities identified as held of record by a corporation, a partnership, a trust whether or not the trustees are named, or other organi zation shall be included as so held by one per son. (iii) Securities identified as held of record by one or more persons as trustees, executors, guardians, custodians, or in other fiduciary ca pacities with respect to a single trust, estate, or account shall be included as held of record by one person. (iv) Securities held by two or more per sons as co-owners shall be included as held by one person. (v) Each outstanding unregistered or bearer certificate shall be included as held of record by a separate person, except to the extent that the bank can establish that, if such securities were registered, they would be held of record, under the provisions of this paragraph (j), by a lesser number of persons. (vi) Securities registered in substantially similar names, where the bank has reason to believe because of the address or other indica tions that such names represent the same per REGULATION F son, may be included as held of record by one person. (2) Notwithstanding subparagraph (1 ): (i) Securities held subject to a voting trust, deposit agreement, or similar arrangement shall be included as held of record by the record holders of the voting trust certificates, certificates of deposit, receipts, or similar evidences of in terest in such securities; Provided, however, that the bank may rely in good faith on such informa tion as is received in response to its request from a nonaffiliated issuer of the certificates or in terests. (ii) If the bank knows or has reason to know that the form of holding securities of rec ord is used principally to circumvent the provi sions of section 1 2 (g )(1 ) of the Act, the bene ficial owners of such securities shall be deemed to be record owners thereof. (k) The term “immediate family” includes a person’s (1) spouse; (2) son, daughter, and de scendant of either; (3) father, mother, and an cestor of either; (4) stepson and stepdaughter; and (5) stepfather and stepmother. For the pur pose of determining whether any of the fore going relationships exist, a legally adopted child shall be considered a child by blood. (1) The term “listed” means admitted to full trading privileges upon application by the bank and includes securities for which authority to add to the list on official notice of issuance has been granted. (m) The term “majority-owned subsidiary” means a subsidiary more than 50 per cent of whose outstanding securities representing the right, other than as affected by events of de fault, to vote for the election of directors, is owned by the subsidiary’s parent an d /o r one or more of the parent’s other majority-owned sub sidiaries. (n) The term “material”, when used to qualify a requirement for furnishing of information as to any subject, limits the information required to those matters as to which an average prudent in vestor ought reasonably to be informed before buying or selling the security registered. (o) The term “officer” means a Chairman of the Board of Directors, Vice Chairman of the Board, Chairman of the Executive Committee, f REGULATION F . T (DEFINITIONS) § 206.2 President, Vice President (except as indicated in the next sentence), Cashier, Treasurer, Secretary, Comptroller, and any other person who partici pates in major policy-making functions of the bank. In some banks (particularly banks with offi cers bearing titles such as Executive Vice Presi dent, Senior Vice President, or First Vice Presi dent as well as a number of “Vice Presidents” ), some or all “Vice Presidents” do not participate in major policy-making functions, and such per sons are not officers for the purpose of this Part. (p) The term “option” means any option, war rant, or right other than those issued to security holders on a pro rata basis. (q) The term “parent” of a specified person is a person controlling such person directly, or indi rectly through one or more intermediaries. (r) The term “plan” includes all plans, con tracts, authorizations, or arrangements, whether or or not set forth in any formal document. (s) The term “predecessor” means a person the major portion of the business and assets of which another person acquired in a single succes sion or in a series of related successions. (t) The terms “previously filed” and “pre viously reported” mean previously filed with, or reported in, a registration statement under sec tion 12, a report under section 13, or a definitive proxy statement or statement where management does not solicit proxies under section 14 of the Act, which statement or report has been filed with the Board, except that information contained in any such document shall be deemed to have been previously filed with or reported to an ex change only if such document is filed with such exchange. (u) The term “principal underwriter” means an underwriter in privity of contract with the issuer of the securities as to which he is under writer. (v) The term “promoter” includes: (1) any person who, acting alone or in conjunction with one or more other persons, directly o r indirectly takes initiative in founding and organizing the bank; (2) any person who, in connection with the founding and organizing of the bank, directly or indirectly receives in consideration of services or property or both services and property 10 per cent or more of any class of securities of the bank or 10 per cent or more of the proceeds 7 from the sale of any class of such securities. A person who receives such securities or proceeds either solely as underwriting commissions or solely in consideration of property shall not, however, be deemed a promoter if such person does not otherwise take part in founding and organizing the bank. (w) The term “proxy” includes every proxy, consent, or authorization within the meaning of section 14(a) of the Act. The consent or authori zation may take the form of failure to object or to dissent. (x) The terms “qualified stock option”, “re stricted stock option”, and “employee stock pur chase plan” have the meanings given them in sections 422 through 424 of the Internal Revenue Code of 1954. (y) The term “share” means a share of stock in a corporation or unit of interest in an unin corporated person. (z) The term “significant subsidiary” means a subsidiary meeting either of the following con ditions: (1) The investments in the subsidiary by its parent plus the parent’s proportion of the in vestments in such subsidiary by the parent’s other subsidiaries, if any, exceed 5 per cent of the equity capital accounts of the bank. “Investments” refers to the amount carried on the books of the parent and other subsidiaries or the amount equivalent to the parent’s proportionate share in the equity capital accounts of the subsidiary, whichever is greater. (2) The parent’s proportion of the gross op erating revenues of the subsidiary exceeds 5 per cent of the gross operating revenues of the parent. (aa) The terms “solicit” and “solicitation” mean (1) any request for a proxy whether or not accompanied by or included in a form of proxy; (2) any request to execute or not to execute, or to revoke, a proxy; or (3) the fur nishing of a form of proxy or other communi cation to security holders under circumstances reasonably calculated to result in the procure ment, withholding, or revocation of a proxy. The terms do not apply, however, to the fur nishing of a form of proxy to a security holder upon the unsolicited request of such security holder, the performance by the bank of acts § 206.3 (INSPECTION) required by § 206.5(g), or the performance by any person of ministerial acts on behalf of a person soliciting a proxy. (bb) A “subsidiary” of a bank is (1) an affili ate controlled by the bank, directly or indi rectly, through one or more intermediaries, except where the control (i) exists by reason of owner ship or control of voting securities by the bank in a fiduciary capacity, or (ii) was obtained by the bank in the course of securing or collecting a debt previously contracted in good faith, or (2) a person a majority of whose voting securities are held in trust for the benefit of the holders of a class of stock of the bank pro rata. (cc) The term “succession” means the direct acquisition of the assets comprising a going busi ness, whether by merger, consolidation, purchase, or other direct transfer. The term does not in clude the acquisition of control of a business unless followed by the direct acquisition of its assets. The term “succeed” and “successor” have meanings correlative to the foregoing. (dd) The term “verified”, when used with re spect to financial statements, means either (1) certified by an independent public accountant, or (2) signed in accordance with § 206 .7 (b )(2 ) by the person principally responsible for the ac counting records of the bank (the “principal ac counting officer”) and by the person principally responsible for the audit procedures of the bank (the “auditor”); except that the term “verified” shall mean certified by an independent public accountant in any case in which the Board so informs the bank concerned, in writing, at least 90 days prior to the end of the fiscal year to which the financial statements will relate. (ee) The term “voting securities” means se curities the holders of which are presently en titled to vote for the election of directors. (ff) The terms “beneficial ownership”, “benefi cially owned”, and the like, when used with re spect to the reporting of ownership of the bank’s equity securities in any statement or report re quired by this Part, shall include, in addition to direct and indirect beneficial ownership by the reporting person, ownership of such securities (1) by the spouse (except where legally separated) and minor children of such reporting person, and (2) by any other relative of the reporting person who has the same home as such person. REGULATION F SECTION 206.3— INSPECTION AND PUBLICATION OF INFORM ATION FILED UNDER TH E ACT (a) Filing of material with the Board. All papers required to be filed with the Board pur suant to the Act or regulations thereunder shall be filed at its office in Washington, D. C. Mate rial may be filed by delivery to the Board, through the mails, or otherwise. The date on which papers are actually received by the Board shall be the date of filing thereof if all of the requirements with respect to the filing have been complied with. (b) Inspection. Except as provided in para graph (c), all information filed regarding a security registered with the Board will be avail able for inspection at the Federal Deposit In surance Corporation, 550 Seventeenth Street, N. W., Washington, D. C. In addition, copies of the registration statement and reports required by § 206.4 (exclusive of exhibits), the statements required by § 206.5(a), and the annual reports to security holders required by § 206.5(c), will be available for inspection at the New York, Chi cago, and San Francisco Federal Reserve Banks and at the Reserve Bank of the district in which the bank filing the statements or reports is located. (c) Nondisclosure of certain information filed. Any person filing any statement, report, or docu ment under the Act may make written objection to the public disclosure of any information con tained therein in accordance with the procedure set forth below: (1) The person shall omit from the statement, report, or document, when it is filed, the portion thereof that it desires to keep undisclosed (here inafter called the confidential portion). In lieu thereof, it shall indicate at the appropriate place in the statement, report, or document that the confidential portion has been so omitted and filed separately with the Board. (2) The person shall file with the copies of the statement, report, or document filed with the Board: (i) As many copies of the confidential portion, each clearly marked “CO N FID EN TIA L TREA TM EN T”, as there are copies of the state REGULATION F (REGISTRATION) § 206.4 filed a written statement that he intends in good ment, report, or document filed with the Board faith to seek judicial review of the finding and and with each exchange, if any. Each copy shall determination; contain the complete text of the item and, not withstanding that the confidential portion does (ii) upon the lapse of 60 days after the dis not constitute the whole of the answer, the entire patch of notice by registered or certified mail of answer thereto; except that in case the confiden the finding and determination of the Board, if tial portion is part of a financial statement or the statement described in clause (i) shall have schedule, only the particular financial statement been filed and if a petition for judicial review or schedule need be included. All copies of the shall not have been filed within such 60 days; or confidential portion shall be in the same form as (iii) if such petition for judicial review shall the remainder of the statement, report, or docu have been filed within such 60 days, upon final ment. disposition, adverse to the person, of the judicial (ii) An application making objection to theproceedings. disclosure of the confidential portion. Such ap (7) If the confidential portion is made avail plication shall be on a sheet or sheets separate able to the public, a copy thereof shall be at from the confidential portion, and shall contain tached to each copy of the statement, report, (a) an identification of the portion of the state or document filed with the Board and with each ment, report, or document that has bee/i omitted, exchange concerned. (b ) a statement of the grounds of objection, and (c) the name of each exchange, if any, with SECTION 206.4— REGISTRATION which the statement, report, or document is filed. STATEMENTS AND REPORTS The copies of the confidential portion and the application filed in accordance with this subpara graph shall be enclosed in a separate envelope (a) Requirement of registration statement. Se marked “C O N FID EN TIA L TREA TM EN T” and curities of a bank shall be registered under the addressed to Secretary, Board of Governors of provisions of either section 12(b) or section 12(g) the Federal Reserve System, Washington, D. C. of the Act by filing a statement in conformity 20551. with the requirements of Form F -l (or Form (3) Pending the determination by the Board F-10, in the case of registration of an additional as to the objection filed in accordance with subclass of securities). No registration shall be re paragraph (2), the confidential portion will not quired under the provisions of section 12(b) or be disclosed by the Board. section 12(g) of the Act of any warrant or cer (4) If the Board determines that the objection tificate evidencing a right to subscribe to or other shall be sustained, a notation to that effect will wise acquire a security of a bank if such warrant be made at the appropriate place in the statement, or certificate by its terms expires within 90 days report, or document. after the issuance thereof. (5) If the Board shall have determined that (b) Registration effective as to class or se disclosure of the confidential portion is in the ries. Depending upon whether the security is to public interest, a finding and determination to be listed on an exchange, registration shall be that effect will be entered and notice of the1find come effective as provided in section 12(d) or ing and determination will be sent by registered section 1 2 (g )(1 ) of the Act as to the entire class or certified mail to the person. of such security, then or thereafter authorized. If, however, a class of security is issuable in (6) The confidential portion shall be made two or more series with different terms, each such available to the public: (i) upon the lapse of 15 days after the dis series shall be deemed a separate class for the purposes of this paragraph. patch of notice by registered or certified mail of (c) Acceleration of effectiveness of registra the finding and determination of the Board tion. A request for acceleration of the effective described in subparagraph (5 ), if prior to the date of registration shall be made in writing by lapse of such 15 days the person shall not have § 206.4 (REGISTRATION) REGULATION F be filed within 90 days after the close of the fiscal either the bank, an exchange, or both and shall year or within 30 days of the mailing of the briefly describe the reasons therefor. bank’s annual report to stockholders, whichever (d) Exchange certification. (1) Certification occurs first. that a security has been approved by an ex (f) Exception from requirement for annual change for listing and registration pursuant to report. Notwithstanding paragraph (e) of this section 12(d) of the Act shall be made by the § 206.4, any bank that has filed, within the governing committee or other corresponding authority of the exchange. period prescribed for filing an annual report pursuant to that paragraph, a registration state (2) The certification shall specify (i) the ment that has become effective and is not sub approval of the exchange for listing and regis ject to any proceeding under section 15(c) or tration; (ii) the title of the security so approved; section 19(a) of the Act, or to an order there (iii) the date of filing with the exchange of the under, need not file an annual report if such registration statement and of any amendments statement covers the fiscal period that would be thereto; and (iv) any conditions imposed on covered by such annual report and contains all such certification. The exchange shall promptly of the information, including financial state notify the Board of the partial or complete satis ments and exhibits, required for annual reports. faction of any such conditions. (g) Current reports. (1) Every registrant bank (3) The certification may be made by tele shall file a current report in conformity with the gram but in such case shall be confirmed in requirements of Form F-3 within 10 days after writing. All certifications in writing and all the close of any month during which any of the amendments thereto shall be filed with the Board events specified in that form occurs, unless sub in duplicate and at least one copy shall be stantially the same information as required by manually signed by the appropriate exchange that form has been previously reported by the authority. bank. (4) The date of receipt by the Board of the (2) Any person who, after acquiring, subse certification approving a security for listing and quent to July 29, 1968, directly or indirectly, the registration shall be the date on which the cer beneficial ownership of any equity security of a tification is actually received by the Board or member State bank, of a class which is registered the date on which the registration statement to pursuant to section 12 of the Act, is directly or which the certification relates is actually received indirectly the beneficial owner of more than 10 by the Board, whichever date is later. (5) If an amendment to the registration stateper cent of such class shall, within ten days after such acquisition, send to the bank at its principal ment is filed with the exchange and with the executive office, by registered or certified mail, Board after the receipt by the Board of the send to each exchange where the security is certification of the exchange approving the se traded, and file with the Board a statement con curity for listing and registration, the certifica taining the information required by Form F - ll . tion, unless withdrawn, shall be deemed made (3) If any material change occurs in the facts with reference to the statement as amended. set forth in the statement required by paragraph (6) An exchange may, by notice to the Board, ( g )(2 ), the person who filed such statement shall withdraw its certification prior to the time that promptly file with the Board and send to the bank the registration to which it relates first becomes and the exchange an amendment disclosing such effective pursuant to paragraph (b) of this change. § 206.4. (h) Quarterly reports. Every registrant bank (e) Requirement of annual reports. Every shall file a quarterly report in conformity with registrant bank shall file an annual report for the requirements of Form F-4 for each fiscal each fiscal year after the last full fiscal year for quarter ending after the close of the latest fiscal which financial statements were filed with the registration statement. The report, which shall year for which financial statements were filed conform to the requirements of Form F-2, shall in a registration statement, except that no report (REGISTRATION) § 206.4 REGULATION F need be filed for the fiscal quarter which coin cides with the end of the fiscal year of the bank. Such reports shall be filed not later than 30 days after the end of such quarterly period, except that the report for any period ending prior to the date on which a class of securities of the bank first becomes effectively registered may be filed not later than 30 days after the effective date of such registration. (i) Additional information, in addition to the information expressly required to be included in a statement or report, there shall be added such further material information, if any, as may be necessary to make the required statements, in the light of the circumstances under which they are made, not misleading. (j) Information not available. Information re quired need be given only insofar as it is known or reasonably available to the bank. If any re quired information is unknown and not reason ably available to the bank, either because the obtaining thereof would involve unreasonable ef fort or expense or because it rests peculiarly within the knowledge of another person not affili ated with the bank, the information may be omitted, subject to the following conditions: (1) The bank shall give such information on the subject as it possesses or can acquire without unreasonable effort or expense together with the sources thereof, and (2) The bank shall include a statement either showing that unreasonable effort or expense would be involved or indicating the absence of any affiliation with the person within whose knowledge the information rests and stating the result of a request made to such person for the information. No such request need be made, how ever, to any foreign government, or an agency or instrumentality thereof, if, in the opinion of the bank, such request would be harmful to existing relationships. (k) Disclaimer of control. If the existence of control is open to reasonable doubt in any in stance, the bank may disclaim the existence of control and any admission thereof; in such case, however, the bank shall state the material facts pertinent to the possible existence of control. (1) Incorporation by reference. (1) Matter contained in any part of a statement or report, other than exhibits, may be incorporated by ref 11 erence in answer or partial answer to any item of the statement or report. Matter contained in an exhibit may be so incorporated to the extent permitted in paragraph (m ) of this § 206.4. A registration statement for an additional class of securities of the bank may incorporate by refer ence any item contained in a previous registration statement or report. (2) Material incorporated by reference shall be clearly identified in the reference. An express statement that the specified matter is incorpo rated by reference shall be made at the particu lar place in the statement or report where the information is required. Matter shall not be incor porated by reference in any case where such in corporation would render the statement incom plete, unclear, or confusing. (m) Summaries or outlines of documents. Where an item requires a summary or outline of the provisions of any document, only a brief statement shall be made, in succinct and con densed form, as to the most important provisions. In addition to such statement, the summary or outline may incorporate by reference particular items, sections, or paragraphs of any exhibit and may be qualified in its entirety by such reference. M atter contained in an exhibit may be incorpo rated by reference in answer to an item only to the extent permitted by this paragraph (m ). (n) Omission of substantially identical docu ments. In any case where two or more indentures, contracts, franchises, or other documents required to be filed as exhibits are substantially identical in all material respects except as to the parties thereto, the dates of execution, or other details, the bank need file a copy of only one of such documents, with a schedule identifying the docu ments omitted and setting forth the material de tails in which such documents differ from the document of which a copy is filed. The Board may at any time in its discretion require the filing of copies of documents so omitted. (o) Incorporation of exhibits by reference. (1) Any document or part thereof previously filed with the Board pursuant to this Part may, subject to the following limitations, be incorpo rated by reference as an exhibit to any registra tion statement or report filed with the Board by the same or any other person. Any document or part thereof filed with an exchange pursuant to § 206.4 (REGISTRATION) the Act may be incorporated by reference as an exhibit to any registration statement or report filed with the exchange by the same or any other person. (2) Any document incorporated by reference pursuant to this paragraph (o) shall be so incor porated only by reference to the specific docu ment and to the prior filing in which it was physi cally filed, not to another file which incorporates it by reference. (3) If any modification has occurred in the text of any document incorporated by reference since the filing thereof, the bank shall file with the reference a statement containing the text of any such modification and the date thereof. (4) N o document which has been on file with the Board pursuant to this Part for a period of more than 10 years may be incorporated by ref erence. This limitation shall not, however, apply to a corporate charter or by-laws if such docu ment has not been amended more than twice since such filing. (p) Extension of time for furnishing informa tion. If the furnishing of any information, docu ment, or report at the time it is required to be filed is impracticable, the bank may file with the Board as a separate document an application (1) identifying the information, document, or re port in question, (2) stating why the filing thereof at the time required is impracticable, and (3) re questing an extension of time for filing the infor mation, document, or report to a specified date not more than 60 days after the date it would otherwise have to be filed. The application shall be deemed granted unless the Board, within 10 days after receipt thereof, shall enter an order denying the application. (q) Number of copies; signatures; binding. (1) Except where otherwise provided in a par ticular form, 8 copies of each registration state ment and report (including financial statements) and 4 copies of each exhibit and each other docu ment filed as a part thereof, shall be filed with the Board. At least one complete copy of each statement shall be filed with each exchange, if any, on which the securities covered thereby are being registered. A t least one copy of each report shall be filed with each exchange, if any, on which the bank has securities registered. REGULATION F (2) A t least one copy of each statement or report filed with the Board and one copy thereof filed with an exchange shall be manually signed. If the statement or report is typewritten, one of the signed copies filed with the Board shall be an original “ribbon” copy. Unsigned copies shall be conformed. If the signature of any person is af fixed pursuant to a power of attorney or other similar authority, a copy of such power or other authority shall also be filed with the statement or report. (3) Each copy of a statement or report filed with the Board or with an exchange shall be bound in one or more parts. Copies filed with the Board shall be bound without stiff covers. The statement or report shall be bound on the left side in such a manner as to leave the reading matter legible. (r) Requirements as to paper, printing, and language. (1) Statements and reports shall be filed on good quality, unglazed, white paper 8 V2 x 13 inches in size, insofar as practicable. Tables, charts, maps, and financial statements may, however, be on larger paper if folded to that size. (2) The statement or report and, insofar as practicable, all papers and documents filed as a part thereof, shall be printed, lithographed, mimeographed, xerocopied, or typewritten. The statement or report or any portion thereof may, however, be prepared by any similar process that, in the opinion of the Board, produces copies suitable for a permanent record. Irrespective of the process used, all copies of any such material shall be clear, easily readable, and suitable for repeated photocopying. Debits in credit categories and credits in debit categories shall be designated so as to be clearly distinguishable as such on photocopies. (3) The body of all printed statements and reports shall be in roman type at least as large as 10-point modem type. To the extent neces sary for convenient presentation, however, finan cial statements and other statistical or tabular data and the notes thereto may be in type at least as large as 8-point modern type. All type shall be leaded at least 2 points. (4) Statements and reports shall be in Eng lish. If any exhibit or other paper or document REGULATION F (PROXY STATEMENTS) § 206.5 filed with a statement or report is in a foreign contingency; a brief indication of the priority language, it shall be accompanied by a transla of the issue; and if convertible, a statement to that effect. tion into English. (s) Preparation of statement or report. Each (3) In the case of any other kind of security, statement and report shall contain the numbers appropriate information of comparable character. and captions of all items of the appropriate form, (w) Interpretation of requirements. Unless the but the text of the items may be omitted provided context clearly shows otherwise, the answers thereto are so prepared as to indicate (1) The forms require information only as to to the reader the coverage of the items without the bank. the necessity of his referring to the text of the (2) Whenever any fixed period of time in the items or instructions thereto. Where any item past is indicated, such period shall be computed requires information to be given in tabular form, from the date of filing. however, it shall be given in substantially the (3) Whenever words relate to the future, tabular form specified in the item. All instruc they have reference -solely to present intention. tions, whether appearing under the items of the (4) Any words indicating the holder of a form or elsewhere therein, are to be om ittejl U n position or office include persons, by whatever less expressly provided otherwise, if any item is titles designated, whose duties are those ordi inapplicable, or the answer thereto is in the nega narily performed by holders of such positions tive, an appropriate statement to that effect shall or offices. be made. (x) When securities are deemed to be regis (t) Riders; inserts. Riders shall not be used. tered. A class of securities with respect to which If the statement or report is typed on a printed an application for registration or a registration form, and the space provided for the answer to statement has been filed pursuant to section 12 any given item is insufficient, reference shall be of the Act shall be deemed to be registered for made in such space to a full insert page or pages the purposes of sections 13, 14, and 16 of the on which the item number and caption and the Act and this Part only when such application or complete answer are given. registration statement has become effective as (u) Amendments. All amendments shall com provided in section 12, and securities of said ply with all pertinent requirements applicable to class shall not be subject to sections 13, 14, and statements and reports. Amendments shall be filed 16 of the Act until such application or registra separately for each separate statement or report tion statement has become effective as provided amended. Amendments to a statement may be in section 12. filed either before or after registration becomes effective. SECTION 206.5—PROXY STATEMENTS (v) Title of securities. Wherever the title of AND OTHER SOLICITATIONS UNDER securities is required to be stated, information SECTION 14 OF T H E ACT. shall be given that will indicate the type and gen eral character of the securities, including: (a) Requirement of Statement. No solicita (1) In the case of shares, the par or stated' tion of a proxy with respect to a security of a value, if any; the rate of dividends, if fixed, and bank registered pursuant to section 12 of the whether cumulative or noncumulative; a brief Act shall be made unless each person solicited indication of the preference, if any; and if con is concurrently furnished, or has previously been vertible, a statement to that effect. furnished, with a written proxy statement con (2) In the case of funded debt, the rate of taining the information required by Form F-5. interest; the date of maturity, or if the issue If the management of any bank having such a matures serially, a brief indication of the serial security outstanding fails to solicit proxies from maturities, such as “maturing serially from 1976 the holders of any such security in such a man to 1980”; if payment of principal or interest is ner as to require the furnishing of such a proxy contingent, an appropriate indication of such § 206.5 (PROXY STATEMENTS) statement, such bank shall transmit to all holders of record of such security a statement containing the information required by Form F-5. The “in formation statement” required by the preceding sentence shall be transmitted (i) at least 20 calendar days prior to any annual or other meet ing of the holders of such security at which such holders are entitled to vote, or (ii) in the case of corporate action taken with the written authorization or consent of security holders, at least 20 days prior to the earliest date on which the corporate action may be taken. A proxy statement or an “information statement” required by this paragraph is hereinafter sometimes re ferred to as a “Statement”. (b) Exceptions. The requirements of the first sentence of paragraph (a) shall not apply to the following: (1) Any solicitation made otherwise than on behalf of the management of the bank where the total number of persons solicited is not more than 10. (2) Any solicitation by a person in respect to securities carried in his name or in the name of his nominee (otherwise than as voting trustee) or held in his custody, if such person (i) receives no commission or remunera tion for such solicitation, directly or indirectly, other than reimbursement of reasonable expenses; (ii) furnishes promptly to the person so licited a copy of all soliciting material with respect to the same subject matter or meeting received from all persons who will furnish cop ies thereof for such purpose and who will, if requested, defray the reasonable expenses to be incurred in forwarding such material; and (iii) in addition, does no more than (a) impartially instruct the person solicited to for ward a proxy to the person, if any, to whom the person solicited desires to give a proxy, or ( b ) impartially request from the person solicited in structions as to the authority to be conferred by the proxy and state that a proxy will be given if no instructions are received by a certain date. (3) Any solicitation by a person with respect to securities of which he is the beneficial owner. REGULATION F (4) Any solicitation through the medium of a newspaper advertisement that informs security holders of a source from which they may obtain copies of a proxy statement, form of proxy, and any other soliciting material and does no more than (i) name the bank; (ii) state the reason for the advertisement; and (iii) identify the proposal or proposals to be acted upon by security holders. (c) Annual report to security holders to ac company Statements. (1) Any Statement fur nished on behalf of the management of the bank that relates to an annual meeting of security holders at which directors are to be elected shall be accompanied or preceded by an annual report to such security holders containing such financial statements for the last 2 fiscal years as will, in the opinion of the management, adequately re flect the financial position of the bank at the end of each such year and the results of its operations for each such year. The financial statements in cluded in the annual report may omit details or summarize information if such statements, con sidered as a whole in the light of other informa tion contained in the report and in the light of the financial statements of the bank filed or to be filed with the Board, will not by such procedure omit any material information necessary to a fair presentation or to make the financial statements not misleading under the circumstances. Subject to the foregoing requirements with respect to financial statements, the annual report to security holders may be in any form deemed suitable by the management. This paragraph (c) shall not apply, however, to solicitations made on behalf of management before the financial statements are available if solicitation is being made at the time in opposition to the management and if the management’s Statement includes an undertaking in bold-faced type to furnish such annual report to all persons being solicited at least 20 days be fore the date of the meeting. NOTES: 1. To reflect adequately the financial posi tion and results of operations of a bank in its annual report to security holders, the financial presentation shall include, but not necessarily be limited to, the following: (a) Comparative statements of condition at the end of each of the last 2 fiscal years. REGULATION F (b ) Comparative statements of income in a form providing for the determination of “net income” for each fiscal year and per share earnings data. (c) Comparative statements of changes in capital accounts for each fiscal year similar in form to Form F-9C. (d ) A comparative reconciliation of the “Allow ance for Possible Loan Losses” account similar in form to Schedule VII, Form F-9D. (e) Supplemental notes to financial statements to the extent necessary to furnish a fair financial pres entation. 2. The financial statements should be prepared on a consolidated basis to the extent required by § 206.7 (d ). Any differences from the principles of consoli dation or other accounting principles or practices, or methods of applying accounting principles or prac tices, applicable to the financial statements of the bank filed or to be filed with the Board, which have a material effect on the financial position or results of operations of the bank, shall be noted and the effect thereof reconciled or explained in the annual report to security holders. 3. When financial statements included in the an nual report (Form F-2) filed, or proposed to be filed, with the Board are accompanied by an opinion of an independent public accountant, the financial state ments in the annual report to security holders should also be accompanied by an opinion of such independ ent public accountant. 4. The requirement for sending an annual report to each person being solicited will be satisfied with respect to persons having the same address by send ing at least one report to a holder of record at that address provided (i) that management has reason able cause to believe that the record holder to whom the report is sent is the “beneficial owner” (see defini tion in § 206.2(ff)) o f securities registered in the name of such person in other capacities or in the name of other persons at such address, or (ii) the security holders at such address consent thereto in writing. Nothing herein shall be deemed to relieve any person so consenting of any obligation to obtain or send such annual report to any other person. (PROXY STATEMENTS) § 206.5 be “filed” with the Board or otherwise subject to this § 206.5 or the liabilities of section 18 of the Act, except to the extent that the bank specif ically requests that it be treated as a part of the proxy soliciting material or incorporates it in the proxy statement by reference. (d) Requirements as to proxy. (1) The form of proxy (i) shall indicate in bold-face type whether or not the proxy is solicited on behalf of the management of the bank, (ii) shall pro vide a specifically designated blank space for dating the proxy, and (iii) shall identify clearly and impartially each matter or group of related matters intended to be acted upon, whether pro posed by the management or by security holders. No reference need be made, however, to pro posals as to which discretionary authority is con ferred pursuant to subparagraph (4) of this paragraph. (2) Means shall be provided in the form of proxy whereby the person solicited is afforded an opportunity to specify by ballot a choice be tween approval or disapproval of each matter or group of related matters referred to therein as intended to be acted upon, other than elections to office. A proxy may confer discretionary au thority with respect to matters as to which a choice is not so specified if the form of proxy states in bold-face type how the shares repre sented by the proxy are intended to be voted in each such case. (3) A form of proxy which provides both for the election of directors and for action on other specified matters shall be prepared so as clearly to provide, by a box or otherwise, means by which the security holder may withhold authority to vote for the election of directors. Any such form (2) Eight copies of each annual report sent of proxy which is executed by the security holder in such manner as not to withhold authority to to security holders pursuant to this paragraph (c) vote for the election of directors shall be deemed shall be sent to the Board not later than (i) the to grant such authority, provided the form of date on which such report is first sent or given proxy so states in bold-face type. This paragraph to security holders, or (ii) the date on which (3) does not apply (i) in the case of a merger, preliminary copies of the management Statement consolidation, or other plan if the election of are filed with the Board pursuant to paragraph directors is an integral part of the plan and is not (f), whichever date is later. Such annual report to be separately voted upon or (ii) if the only is not deemed to be “soliciting material” or to § 206.5 (PROXY STATEMENTS) matters to be acted upon are the election of direc tors and the election, selection, or approval of other persons such as clerks or auditors. (4) A proxy may confer discretionary author ity to vote with respect to any of the following m atters: (i) Matters that the persons making the solici tation do not know, within a reasonable time before the solicitation, are to be presented at the meeting, if a specific statement to that effect is made in the proxy statement or form of proxy; (ii) Approval of the minutes of the prior meet ing if such approval does not amount to ratifica tion of the action taken at that meeting; (iii) The election of any person to any office for which a bona fide nominee is named in the proxy statement and such nominee is unable to serve or for good cause refuses to serve; (iv) Any proposal omitted from the proxy state ment and form of proxy pursuant to § 206.5(k); (v) Matters incident to the conduct of the meeting. (5) No proxy shall confer authority (i) to vote for the election of any person to any office for which a bona fide nominee is not named in the proxy statement, or (ii) to vote at any an nual meeting other than the next annual meeting (or any adjournment thereof) to be held after the date on which the proxy statement and form of proxy are first sent or given to security holders. A person shall not be deemed to be a bona fide nominee and he shall not be named as such unless he has consented to being named in the proxy statement and to serve if elected. (6) The proxy statement or form of proxy shall provide, subject to reasonable specified condi tions, that the shares represented by the proxy will be voted and that where the person solicited specifies by means of a ballot provided pursuant to subparagraph (2) a choice with respect to any matters to be acted upon, the shares will be voted in accordance with the specifications so made. (e) Presentation of information in Statement. (1) The information included in the Statement shall be clearly presented and the statements made shall be divided into groups according to REGULATION F subject matter and the various groups of state ments shall be preceded by appropriate headings. The order of items in the form need not be fol lowed. Where practicable and appropriate, the information shall be presented in tabular form. All amounts shall be stated in figures. Informa tion required by more than one applicable item need not be repeated. No statement need be made in response to any item that is inapplicable. (2) Any information required to be included in the Statement as to terms of securities or other subject matter that from a standpoint of prac tical necessity must be determined in the future may be stated in terms of present knowledge and intention. To the extent practicable, the authority to be conferred concerning each such matter shall be confined within limits reasonably related to the need for discretionary authority. Subject to the foregoing, information that is not known to the persons on whose behalf the solicitation is to be made and is not reasonably within the power of such persons to ascertain or procure may be omitted, if a brief statement of the cir cumstances rendering such information unavail able is made. (3) There may be omitted from a proxy state ment any information contained in any other proxy soliciting material that has been furnished to each person solicited in connection with the same meeting or subject matter if a clear refer ence is made to the particular document contain ing such information. (4) All printed Statements shall be set in roman type at least as large as 10-point modern type except that, to the extent necessary for con venient presentation, financial statements and other statistical or tabular matter may be set in roman type at least as large as 8-point modem type. All type shall be leaded at least 2 points. ( f ) Material required to be filed. (1) Three preliminary copies of each Statement, form of proxy, and other items of soliciting material to be furnished to security holders concurrently therewith, shall be filed with the Board by man agement or any other person making a solicitation subject to this § 206.5 at least 10 calendar days REGULATION F (or 15 calendar days in the case of other than routine meetings, as defined below) prior to the date such item is first sent or given to any security holders, or such shorter period prior to that date as may be authorized. For the purposes of this subparagraph (1 ), a routine meeting means a meeting with respect to which no one is soliciting proxies subject to this § 206.5 other than on be half of management and at which management intends to present no matters other than the elec tion of directors, election of inspectors of elec tion, and other recurring matters. In the absence of actual knowledge to the contrary, management may assume that no other such solicitation of the bank’s security holders is being made. In cases of annual meetings, one additional preliminary copy of the Statement, the form of proxy, and any other soliciting material, marked to show changes from the material sent or given to secu rity holders with respect to the preceding annual meeting, shall be filed with the Board. (2) Three preliminary copies of any additional soliciting material, relating to the same meeting or subject matter, furnished to security holders subsequent to the proxy statement shall be filed with the Board at least two days (exclusive of Saturdays, Sundays, and holidays) prior to the date copies of such material are first sent or given to security holders, or such shorter period prior to such date as may be authorized upon a show ing of good cause therefor. (3) Eight copies of each Statement, form of proxy, and other items of soliciting material, in the form in which such material is furnished to security holders, shall be filed with, or mailed for filing to, the Board not later than the date such material is first sent or given to any security hold ers. Three copies of such material shall at the same time be filed with, or mailed for filing to, each exchange upon which any security of the bank is listed. (4) If the solicitation is to be made in whole or in part by personal solicitation, three copies of all written instructions or other material that discusses or reviews, or comments upon the merits of, any matter to be acted upon, and is furnished to the individuals making the actual solicitation for their use directly or indirectly in connection with the solicitation, shall be filed with the Board by the (PROXY STATEMENTS) § 206.5 person on whose behalf the solicitation is made at least five days prior to the date copies of such ma terial are first sent or given to such individuals, or such shorter period prior to that date as may be authorized upon a showing of good cause there for. (5) All copies of material filed pursuant to subparagraphs (1) and (2) shall be clearly marked “Preliminary Copies” and shall be for the information of the Board only, except that such material may be disclosed to any depart ment or agency of the United States Government and the Board may make such inquiries or in vestigation with respect to the material as may be necessary for an adequate review thereof. All m a terial filed pursuant to subparagraphs ( 1 ) ,‘ (2), or (3) shall be accompanied by a statement of the date upon which copies thereof are intended to be, or have been, sent or given to security hold ers. All material filed pursuant to subparagraph (4) shall be accompanied by a statement of the date upon which copies thereof are intended to be released to the individuals who will make the actual solicitation. (6) Copies of replies to inquiries from secu rity holders requesting further information and copies of communications that do no more than request that forms of proxy theretofore solicited be signed, dated, and returned need not be filed pursuant to this paragraph ( f ). (7) Notwithstanding the provisions of para graphs ( f ) ( 1 ) , ( f ) ( 2 ) , and ( i ) (5 ), copies of soliciting material in the form of speeches, press releases, and radio or television scripts may, but need not, be filed with the Board prior to use or publication. Definitive copies, however, shall be filed with or mailed for filing to the Board as required by paragraph ( f ) ( 3 ) not later than the date such material is used or published. The provision of paragraphs ( f ) ( 1 ) , ( f ) ( 2 ) , and (i) (5) shall apply, however, to any reprints or reproductions of all or any part of such mate rial. (8) Where any Statement, form of proxy, or other material filed pursuant to this paragraph (f) is revised, two of the copies of such revised material filed pursuant to paragraph ( f ) ( 3 ) shall be marked to indicate clearly the changes. If the revision alters the text of the material, the changes § 206.5 (PROXY STATEMENTS) in such text shall be indicated by means of under scoring or in some other appropriate manner. (9) The date that proxy material is “filed” with the Board for purposes of subparagraphs (1 ), (2 ), and (4) of this paragraph is the date of receipt of the material by the Board, not the date of mailing to the Board. In computing the advance filing period for preliminary copies of proxy soliciting material referred to in such subparagraphs, the filing date of the preliminary ma terial is to be counted as the first day of the period and definitive material should not be planned to be mailed or distributed to security holders until after the expiration of such period. Where additional time is required for final print ing after receipt of comments, the preliminary proxy material should be filed as early as pos sible prior to the intended mailing date. (10) Where preliminary copies of material are filed with the Board pursuant to this subsection, the printing of definitive copies for distribution to security holders should be deferred until the comments of the Board’s staff have been re ceived and considered. (g) Mailing communications for security hold ers. If the management of the bank has made or intends to make any proxy solicitation subject to this § 206.5, the bank shall perform such of the following acts as may be requested in writing with respect to the same subject matter or meet ing by any security holder who is entitled to vote on such matter or to vote at such meeting and who shall first defray the reasonable expenses to be incurred by the bank in the performance of the act or acts requested: (1) The bank shall mail or otherwise furnish to such security holder the following information as promptly as practicable after the receipt of such request: (i) A statement of the approximate number of holders of record of any class of securities, any of the holders of which have been or are to be solicited on behalf of the management, or any group of such holders that the security holder shall designate; (ii) If the management of the bank has made or intends to make, through bankers, brokers, or other persons, any solicitation of the beneficial owners of securities of any class, a state REGULATION F ment of the approximate number of such bene ficial owners, or any group of such owners that the security holder shall designate; (iii) An estimate of the cost of mailing a specified proxy statement, form of proxy, or other communication to such holders, including insofar as known or reasonably available, the estimated handling and mailing costs of the bank ers, brokers, or other persons specified in (ii). (2 ) ( i) Copies of any proxy statement, form of proxy, or other communication furnished by the security holder shall be mailed by the bank to such of the holders of record specified in (1) (i) above as the security holder shall desig nate. The bank shall also mail to each banker, broker, or other persons specified in (1) (ii) above, a sufficient number of copies of such proxy statement, form of proxy, or other com munication as will enable the banker, broker, or other person to furnish a copy thereof to each beneficial owner solicited or to be solicited through him; (ii) Any such material that is furnished by the security holder shall be mailed with reasonable promptness by the bank after receipt of a tender of the material to be mailed, of envelopes or other containers therefor, of postage or payment for postage, and of evidence that such material has been filed with the Board pursuant to para graph (f). The bank need not, however, mail any such material that relates to any matter to be acted upon at an annual meeting of security holders prior to the earlier of (a) a day cor responding to the first date on which manage ment proxy soliciting material was released to security holders in connection with the last an nual meeting of security holders, or ( b) the first day on which solicitation is made on behalf of management. With respect to any such material that relates to any matter to be acted upon by security holders otherwise than at an annual meet ing, such material need not be mailed prior to the first day on which solicitation is made on behalf of management; (iii) Neither the management nor the bank shall be responsible for such proxy statement, form of proxy, or other communication. (3) In lieu of performing the acts specified REGULATION F above, the bank may, at its option, furnish promptly to such security holder a reasonably current list of the names and addresses of such of the holders of record specified in (1) (i) above as the security holder shall designate, and a list of the names and addresses of the bankers, bro kers, or other persons specified in (1) (ii) above as the security holder shall designate together with a statement of the approximate number of bene ficial owners solicited or to be solicited through each such banker, broker, or other person and a schedule of the handling and mailing costs of each such banker, broker, or other person, if such schedule has been supplied to the manage ment of the bank. The foregoing information shall be furnished promptly upon the request of the security holder or at daily or other reasonable intervals as it becomes available to the manage ment of the bank. (h) False or misleading statements. (1) No solicitation or communication subject to this sec tion shall be made by means of any Statement, form of proxy, notice of meeting, or other com munication, written or oral, containing any state ment that, at the time and in the light of the circumstances under which it is made, is false or misleading with respect to any material fact, or that omits to state any material fact necessary in order to make the statements therein not false or misleading or necessary to correct any state ment in any earlier communication with respect to the solicitation of a proxy for the same meet ing or subject, matter that has become false or misleading. Depending upon particular circum stances, the following may be misleading within the meaning of this paragraph: predictions as to specific future market values, earnings, or divi dends; material that directly or indirectly impugns character, integrity, or personal reputation, or di rectly or indirectly makes charges concerning improper, illegal, or immoral conduct or asso ciations, without factual foundation; failure so to identify a Statement, form of proxy, and other soliciting material as clearly to distinguish it from the soliciting material of any other person or persons soliciting for the same meeting or subject matter; claims made prior to a meeting regarding the results of a solicitation. (2) The fact that a proxy statement, form of (PROXY STATEMENTS) § 206.5 proxy, or other soliciting material has been filed with or reviewed by the Board or its staff shall not be deemed a finding by the Board that such material is accurate or complete or not false or misleading, or that the Board has passed upon the merits of or approved any statement therein or any matter to be acted upon by security hold ers. No representation contrary to the foregoing shall be made. (i) Special provisions applicable to election contests. (1) Solicitations to which this paragraph applies. This paragraph (i) applies to any solicitation sub ject to this § 206.5 by any person or group of persons for the purpose of opposing a solicitation subject to this section by any other person or group of persons with respect to the election or removal of directors at any annual or special meeting of security holders. (2) Participant defined. (i) For purposes of this paragraph (i) the terms “participant” and “participant in a solicita tion” include the following: (a) the bank; (b) any director of the bank, and any nominee for whose election as a director prox ies are solicited; (c) any committee or group that solicits proxies, any member of such committee or group, and any person whether or not named as a mem ber who, acting alone or with one or more other persons, directly or indirectly, takes the initiative in organizing, directing, or financing any such committee or group; (d ) any person who finances or joins with another to finance the solicitation of proxies, ex cept persons who contribute not more than $500 and who are not otherwise participants; (e) any person who lends money or fur nishes credit or enters into any other arrange ments, pursuant to any contract or understand ing with a participant, for the purpose of financing or otherwise inducing the purchase, sale, holding, or voting of securities of the bank by any partici pant or other person, in support of or in opposi tion to a participant, except a bank, broker, or dealer who, in the ordinary course of business, lends money or executes orders for the purchase or § 206.5 (PROXY STATEMENTS) sale of securities and who is not otherwise a participant; (/) any other person who solicits proxies. (ii) Such terms do not include (a) any person or organization retained or employed by a participant to solicit security holders, or any person who merely transmits proxy soliciting material or performs ministerial or clerical duties; (b ) any person employed by a participant in the capacity of attorney, accountant, or adver tising, public relations, or financial adviser, and whose activities are limited to the performance of his duties in the course of such employment; (c) any person regularly employed as an officer or employee of the bank or any of its subsidiaries who is not otherwise a participant; or (d) any officer or director of, or any person regularly employed by, any other par ticipant, if such officer, director, or employee is not otherwise a participant. (3) Filing of information required by Form F-6. (i) No solicitation subject to this para graph (i) shall be made by any person other than the management of the bank unless at least five business days prior thereto, or such shorter period as the Board may authorize upon a show ing of good cause therefor, there has been filed with the Board and with each exchange upon which any security of the bank is listed, by or on behalf of each participant in such solicitation, a statement in duplicate containing the informa tion specified by Form F-6. (ii) Within five business days after a solicita tion subject to this paragraph (i) is made by the management of the bank, or such longer period as the Board may authorize upon a showing of good cause therefor, there shall be filed with the Board and with each exchange upon which any security of the bank is listed, by or on behalf of each participant in such solicitation, other than the bank, a statement in duplicate containing the information specified by Form F-6. (iii) If any solicitation on behalf of man agement or any other person has been made, or if proxy material is ready for distribution, prior to a solicitation subject to this paragraph (i) in opposition thereto, a statement in duplicate con taining the information specified in Form F-6 REGULATION F shall be filed by or on behalf of each participant in such prior solicitation, other than the bank, as soon as reasonably practicable after the com mencement of the solicitation in opposition thereto, with the Board and with each exchange on which any security of the bank is listed. (iv) If, subsequent to the filing of the statements required by subparagraphs (i), (ii), and (iii) above, additional persons become partici pants in a solicitation subject to this paragraph (i), there shall be filed, with the Board and each appropriate exchange, by or on behalf of each such person a statement in duplicate containing the information specified by Form F-6, within three business days after such person becomes a participant, or such longer period as the Board may authorize upon a showing of good cause therefor. (v) If any material change occurs in the facts reported in any statement filed by or on behalf of any participant, an appropriate amend ment to such statement shall be filed promptly with the Board and each appropriate exchange. (vi) Each statement and amendment thereto filed pursuant to this paragraph (i) shall be part of the official public files of the Board and shall be deemed a communication subject to the pro visions of paragraph (h) of this § 206.5. (4) Solicitations prior to furnishing required Statement. Notwithstanding the provisions of § 206.5(a), a solicitation subject to this para graph (i) may be made prior to furnishing security holders a written Statement containing the information specified in Form F-5 with re spect to such solicitation if (i) the statements required by subparagraph (3) of this paragraph (i) are filed by or on behalf of each participant in such solicitation; (ii) no form of proxy is furnished to security holders prior to the time the Statement is furnished to security holders, except that this clause (ii) shall not apply where a Statement then meeting the requirements of Form F-5 has been furnished to security holders; (iii) at least the information specified in Items 2(a) and 3(a) of the statement required by subparagraph (3) of this paragraph (i) to be filed by each participant, or an appropriate summary thereof, is included in each communication sent or given to security holders in connection with REGULATION F the solicitation; and (iv) a written Statement containing the information specified in Form F-5 with respect to a solicitation is sent or given security holders at the earliest practicable date. (5) Solicitations prior to furnishing required Statement—filing requirements. Three copies of any soliciting material proposed to be sent or given to security holders prior to the furnishing of the proxy statement required by § 206.5(a) shall be filed with the Board in preliminary form, at least five business days prior to the date copies of such material are first sent or given to security holders, or such shorter period as the Board may authorize upon a showing of good cause therefor. (6) Application of this paragraph to annual re port. Notwithstanding the provisions of § 206.5(c), three copies of any portion of the annual report referred to in that paragraph that comments upon or refers to any solicitation subject to this para graph (i), or to any participant in any such solicitation, other than the solicitation by the management, shall be filed with the Board as proxy material subject to this § 206.5. Such por tion of the annual report shall be filed with the Board in preliminary form at least five business days prior to the date copies of the report are first senti or given to security holders. (7) Application of paragraph (f). The pro visions of subparagraphs (3 ), (4 ), (5 ), (6 ), and (7) of paragraph (f) of this § 206.5 shall apply, to the extent pertinent, to soliciting material sub ject to subparagraphs (5) and (6) of this para graph (i). (8) Use of reprints or reproductions. In any solicitation subject to this paragraph (i), solic iting material that includes, in whole or in part, any reprints or reproductions of any previously published material shall: (i) state the name of the author and publica tion, the date of prior publication, and identify any person who is quoted without being named in the previously published material. (ii) except in the case of a public, official document or statement, state whether or not the consent of the author and publication has been obtained to the use of the previously published material as proxy soliciting material. (iii) if any participant using the previously published material, or anyone on his behalf, paid, (PROXY STATEMENTS) § 206.5 directly or indirectly, for the preparation or prior publication of the previously published material, or has made or proposes to make any payments or give any other consideration in connection with the publication or republication of such material, state the circumstances. (j) Prohibition of certain solicitations. No person making a solicitation that is subject to this § 206.5 shall solicit (1) any undated or post dated proxy; or (2) any proxy that provides that it shall be deemed to be dated as of any date subsequent to the date on which it is signed by the security holder. (k) Proposals of security holders. (1) If any security holder entitled to vote at a meeting of security holders of the bank shall submit to the management of the bank, within the time herein after specified, a proposal which is accompanied by notice of his intention to present the proposal for action at the meeting, the management shall set forth the proposal in its proxy statement and shall identify it in its form of proxy and provide means by which security holders can approve or disapprove the proposal. The management of the bank shall not be required by this section to in clude the proposal in its proxy statement for an annual meeting unless the proposal is submitted to management not less than 60 days in advance of a day corresponding to the first date on which the management’s Statement was released to secu rity holders in connection with the preceding an nual meeting of security holders. A proposal to be presented at any other meeting shall be sub mitted to the management of the bank a reason able time before the solicitation is made. This paragraph (k) shall not apply, however, to elec tions to office. (2) If the management opposes the proposal, it shall also, at the written request of the security holder, include in the proxy statement (i) the name and address of the security holder, or a statement that such name and address will be fur nished upon request, and (ii) a statement of the security holder (which shall not include such name and address) of not more than 100 words in support of the proposal. The statement and re quest of the security holder shall be furnished to the management at the same time that the pro § 206.5 (PROXY STATEMENTS) posal is furnished. Neither the management nor the bank shall be responsible for such statement. (3) Notwithstanding subparagraphs (1) and (2) of this paragraph, the management may omit a proposal and any statement in support thereof from its proxy statement and form of proxy under any of the following circumstances: (i) if the proposal is impossible to accomplish or, under applicable law, is not a proper subject for action by security holders; or (ii) if the proposal consists of a recommenda tion or request that the management take action with respect to a matter relating to the conduct of the ordinary business operations of the bank; or (iii) if it appears that the proposal is submitted by the security holder principally for the purpose of enforcing a personal claim or redressing a per sonal grievance against the bank or its manage ment, or principally for the purpose of promoting general economic, political, racial, religious, so cial, or similar causes; or (iv) if the management has at the security holder’s request included a proposal in its proxy statement and form of proxy relating to either of the two preceding annual meetings of security holders or any special meeting held subsequent to the earlier of such two annual meetings, and such security holder has failed without good cause to present the proposal, in person or by proxy, for action at the meeting; or (v) if substantially the same proposal has pre viously been submitted to security holders in the management’s proxy statement and form of proxy relating to any meeting of security holders held within the preceding five calendar years, it may be omitted from the proxy statement relating to any meeting of security holders held within the three calendar years after the latest such previous submission, provided that (a) if the proposal was submitted at only one meeting during such pre ceding period, it received less than 5 per cent of the total number of votes cast in regard thereto, or ( b ) if the proposal was submitted at only two meetings during such preceding period, it received at the time of its second submission less than 10 per cent of the total number of votes cast in re gard thereto, or (c) if the proposal was submitted at three or more meetings during such period, it received at the time of its latest submission less REGULATION F than 20 per cent of the total number of votes cast in regard thereto; or (vi) if, prior to the receipt of such proposal, substantially the same proposal has been received by the management from another security holder and is to be included in the bank’s proxy solicit ing material. (4) Whenever the management asserts that a proposal and any statement in support thereof may properly be omitted from the proxy state ment and form of proxy, it shall file with the Board, not later than 20 days prior to the date the preliminary copies of the proxy statement and form of proxy are filed pursuant to § 206.5 ( f) ( 1 ) or such shorter period prior to such date as the Board may permit, a copy of the propo sal and any statement in support thereof as re ceived from the security holder, together with a statement of the reasons why the management deems such omission to be proper in the par ticular case, and, where such reasons are based on matters of law, a supporting opinion of coun sel. The management shall at the same time, if it has not already done so, notify the security holder submitting the proposal of its intention to omit the proposal from its proxy statement and shall forward to him a copy of the statement of the reasons why the management deems the omission of the proposal to be proper and a copy of such supporting opinion of counsel. (/) Invitations for tenders. (1) No person, di rectly or indirectly, by use of the mails or by any means or instrumentality of interstate commerce or of any facility of a national securities exchange or otherwise, shall make a tender offer for, or a request or invitation for tenders of, any class of any equity security, which is registered pursuant to section 12 of the Act, of a member State bank if, after consummation thereof, such person would, directly or indirectly, be the beneficial owner of more than 10 per cent of such class, unless, at the time copies of the offer or request or invita tion are first published or sent or given to security holders, such person has filed with the Board a statement containing the information and exhibits required by Form F - l l : Provided, however, That any person making a tender offer for or a request or invitation for tenders which commenced prior to August 6, 1968, shall, if such offer, request or invitation continues after such date, file the state REGULATION F ment required by this paragraph on or before August 15, 1968. (2) If any material change occurs in the facts set forth in the statement required by subpara graph (1), the person who filed such statement shall promptly file with the Board an amendment disclosing such change. (3) All requests or invitations for tenders or advertisements making a tender offer or request ing or inviting tenders shall contain the name of the persons making such requests, invitations, or advertisements and the information required by Items 2(a) and (c), 3, 4, 5 and 6 of Form F - l l, or a fair and adequate summary thereof, and shall be filed with the Board as part of the statement required by subparagraph (1). (4) Any additional material soliciting or re questing such tender offers subsequent to the in itial solicitation or request shall contain the name of the persons making such solicitation or request and the information required by Items 2(a) and (c), 3, 4, 5 and 6 of Form F - l l , or a fair and adequate summary thereof: Provided, however, That such material may omit any of such informa tion previously furnished to the persons solicited or requested for tender offers. Copies of such ad ditional material soliciting or requesting such ten der offers shall be filed with the Board not later than the time copies of such material are first published or sent or given to security holders. (m) Recommendations as to tender offers. (1) N o solicitation or recommendation to the holders of a security to accept or reject a tender offer or request or invitation for tenders subject to section 14(d) of the Act shall be made unless, at the time copies of the solicitation or recommendation are first published or sent or given to holders of the security, the person making such solicitation or recommendation has filed with the Board a state ment containing the information specified by Form F-12: Provided, however, That this para graph shall not apply to (i) a person required by § 206.5(/) to file a statement, or (ii) a person, other than the bank or the management of the bank, who makes no written solicitations or recommendations other than solicitations or rec ommendations copies of which have otherwise been filed with the Board: And, provided further, That any person making a solicitation or recom (PROXY STATEMENTS) § 206.5 mendation to the holders of a security to accept or reject a tender offer or request or invitation for tenders which solicitation or recommendation commenced prior to August 6, 1968 shall, if such solicitation or recommendation continues after such date, file the statement required by this para graph on or before August 15, 1968. (2) If any material change occurs in the facts set forth in the statement required by subpara graph (1), the person who filed such statement shall promptly file with the Board an amendment disclosing such change. (3) Any written solicitation or recommenda tion to the holders of a security to accept or reject a tender offer or request or invitation for tenders subject to section 14(d) of the Act shall include the name of the person making such solicitation or recommendation and the information required by Items 1(b) and 2(b) of Form F-12, or a fair and adequate summary thereof: Provided, how ever, That such written solicitation or recommen dation may omit any of such information previ ously furnished to the persons to whom the solici tation or recommendation is made. (n) Change in majority of directors. If, pur suant to any arrangement or understanding with the person or persons acquiring securities in a transaction subject to section 13(d) or 14(d) of the Act, any persons are to be elected or designa ted as directors of the bank, otherwise than at a meeting of security holders, and the persons so elected or designated will constitute a majority of the directors of the bank, then, not less than 10 days prior to the date any such person takes office as a director, or such shorter period prior to that date as the Board may authorize upon a showing of good cause therefor, the bank shall file with the Board and transmit to all holders of record of se curities of the bank who would be entitled to vote at a meeting for election of directors, information substantially equivalent to the information which would be required by Items 5(a), (d), (e) and (f), 6 and 7 of Form F-5 to be transmitted if such person or persons were nominees for elec tion as directors at a meeting of such security holders. (o) Solicitation prior to furnishing required proxy statement. (1) Notwithstanding the pro visions of § 206.5(a), a solicitation (other than § 206.6 (INSIDERS’ REPORTS) REGULATION F (2) A person who is already filing statements with the Board pursuant to section 16(a) need not file an additional statement on Form F-7 when an additional class of equity securities of the same bank becomes registered or when he assumes another or an additional relationship to the bank; for example, when an officer becomes a director. (3) Any bank that has equity securities listed on more than one national securities exchange may designate one of them as the only exchange with which reports pursuant to section 16(a) need be filed. Such designation shall be filed with the Board and with each national securities exchange on which any equity security of the bank is listed. After the filing of such designation the securities of such bank shall be exempted with respect to the filing of statements pursuant to section 16(a) with any exchange other than the designated ex change. (b) Ownership of more than 10 per cent of an equity security. In determining, for the purpose of section 16(a), whether a person is the bene ficial owner, directly or indirectly, of more than 10 per cent of any class of equity security of a bank, such class shall be deemed to consist of the total amount of such class that has been issued, regardless of whether any part of such amount is held by or for the account of the bank. (c) Disclaimer of beneficial ownership. Any person filing a statement may expressly declare therein that the filing of such statement shall not be construed as an admission that such per son is, for the purpose of section 16, the bene ficial owner of any equity securities covered by the statement. SECTION 206.6— “INSIDERS’ ” (d) Ownership of securities held in trust. SECURITIES TRANSACTIONS AND (1) Beneficial ownership of a bank’s securities REPORTS U N D ER SECTION 16 for the purpose of section 16(a) shall include: O F T H E ACT (i) the ownership of such securities as a trustee where either the trustee or members of (a) Filing of statements by directors, officers, his immediate family have a vested interest in and principal stockholders. (1) Initial statements the income or corpus of the trust, of beneficial ownership of equity securities of a (ii) the ownership of a vested beneficial in bank required by section 16(a) of the Act, and terest in a trust, and statements of changes in such beneficial owner (iii) the ownership of such securities as a ship, shall be prepared and filed in accordance settlor of a trust in which the settlor has the with the requirements of Form F-7 and Form power to revoke the trust without obtaining the F-8, respectively. consent of all beneficiaries. one subject to § 206.5(i)) may be made prior to furnishing security holders a written proxy state ment containing the information specified in Form F-5 with respect to such solicitation if— (1) The solicitation is made in opposition to a prior solicitation or an invitation for tenders or other publicized activity, which if successful, could reasonably have the effect of defeating the action proposed to be taken at the meeting; (ii) N o form of proxy is furnished to security holders prior to the time the written proxy state ment required by § 206.5(a) is furnished to security holders: Provided, however, That this subparagraph (ii) shall not apply where a proxy statement then meeting the requirements of Form F-5 has been furnished to security holders by or on behalf of the person making the solicitation; (iii) The identity of the person or persons by or on whose behalf the solicitation is made and a description of their interests, direct or indirect, by security holdings or otherwise, are set forth in each communication sent or given to security holders in connection with the solicitation; and (iv) A written proxy statement meeting the requirements of this section is sent or given to security holders at the earliest practicable date. (2) Three copies of any soliciting material pro posed to be sent or given to security holders prior to the furnishing of the written proxy statement required by § 206.5(a) shall be filed with the Board in preliminary form at least 5 business days prior to the date definitive copies of such material are first sent or given to security holders, or such shorter period as may be authorized. REGULATION F (2) Except as provided in subparagraph (3) of this paragraph (d ), beneficial ownership of securities of registrant banks solely as a settlor or beneficiary of a trust shall be exempt from the provisions of section 16(a) where less than 20 per cent in market value of the securities having a readily ascertainable market value held by such trust (determined as of the end of the preceding fiscal year of the trust) consists of equity securities with respect to which reports are required by section 16(a) or would be re quired but for an exemption by the Securities and Exchange Commission, the Comptroller of the Currency, or the Federal Deposit Insurance Corporation similar to the exemption provided for by this sentence. Exemption from section 16(a) is likewise accorded with respect to any obligation that would otherwise be imposed solely by reason of ownership as settlor or beneficiary of a bank’s securities held in trust, where the ownership, acquisition, or disposition of such securities by the trust is made without prior ap proval by the settlor or beneficiary. No exemption pursuant to this subparagraph shall, however, be acquired or lost solely as a result of changes in the value of the trust assets during any fiscal year or during any time when there is no trans action by the trust in the securities otherwise subject to the reporting requirements of section 16(a). (3) In the event that 10 per cent of any class of any equity security of a bank is held in a trust, that trust and the trustees thereof as such shall be deemed a person required to file the reports speci fied in section 16(a). (4) N ot more than one report need be filed to report any holdings of a bank’s securities or with respect to any transaction in such securities held by a trust, regardless of the number of officers, directors, or 10-per cent stockholders who are either trustees, settlors, or beneficiaries of a trust if the report filed discloses the names of all trustees, settlors, and beneficiaries who are officers, directors, or 10-per cent stockholders. A person having an interest only as a beneficiary of a trust shall not be required to file any such report so long as he relies in good faith upon an under standing that the trustee of such trust will file (INSIDERS' REPORTS) § 206.6 whatever reports might otherwise be required of such beneficiary. (5) In determining, for the purposes of par agraph (a) of this § 206.6, whether a person is the beneficial owner, directly or indirectly, of more than 10 per cent of any class of equity security of a bank, the interest of such person in the remainder of a trust shall be excluded. (6) No report shall be required by any per son, whether or not otherwise subject to the requirement of filing reports under section 16(a), with respecf to his indirect interest in portfolio securities held by (i) any holding company registered under the Public Utility Holding Company Act, (ii) any investment company registered un der the Investment Company Act, (iii) a pension or retirement plan holding securities of a bank whose employees generally are the beneficiaries of the plan, (iv) a business trust with over 25 bene ficiaries. (e) Certain transactions subject to section 16(a). The acquisition or disposition of any trans ferable option, put, call, spread, or straddle shall be deemed such a change in the beneficial owner ship of the bank’s security to which such privilege relates as to require the filing of a statement reflecting the acquisition or disposition of such privilege. Nothing in this paragraph (e), however, shall exempt any person from filing the statements required upon the exercise of such option, put, call, spread, or straddle. (f) Exemption from section 16 of securities purchased or sold by odd-lot dealers. A bank’s securities purchased or sold by an odd-lot dealer (1) in odd lots so far as reasonably necessary to carry on odd-lot transactions, or (2) in round lots to offset odd-lot transactions previously or simultaneously executed or reasonably anticipated in the usual course of business, shall be exempt from the provisions of section 16 with respect to participation by such odd-lot dealer in such trans actions. (g) Exemption of small transactions from section 16(a). (1) Any acquisition of a bank’s securities shall be exempt from section 16(a) where (i) the person effecting the acquisition does § 206.6 (INSIDERS’ REPORTS) REGULATION F tions that need not be reported under section not within six months thereafter effect any dis position, otherwise than by way of gift, of secu 16(a). Any transaction that has been or shall be rities of the same class, and exempted by the Board from the requirements of (ii) the person effecting such acquisitionsection 16(a) shall, insofar as it is otherwise sub does not participate in acquisitions or in dis ject to the provisions of section 16(b), be like positions of securities of the same class having wise exempted from section 16(b). a total market value in excess of $3,000 for any (j) Exemption from section 16(b) of certain six-month period during which the acquisition transactions by registered investment companies. occurs. Any transaction of purchase and sale, or sale (2) Any acquisition or disposition of a bank’s and purchase, of any equity security of a bank securities by way of gift, where the total amount shall be exempt from the operation of section of such gifts does not exceed $3,000 in market 16(b), as not comprehended within the purpose value for any six-month period, shall be exempt of that section, if the transaction is effected by from section 16(a) and may be excluded from an investment company registered under the In the computations prescribed in subparagraph vestment Company Act of 1940 and both the (1) (ii) of this paragraph (g). purchase and sale of such security have been (3) Any person exempted by subparagraph exempted from the provisions of section 17(a) (1) or (2) of this paragraph (g) shall include of the Investment Company Act of 1940 by an in the first report filed by him after a transac order of the Securities and Exchange Commission tion within the exemption a statement showing entered pursuant to section 17(b) of that Act. his acquisitions and dispositions for each six(k) Exemption from section 16(b) of certain month period or portion thereof that has elapsed transactions effected in connection with a distri since his last filing. bution. (1) Any transaction of purchase and sale, (h) Temporary exemption of certain persons or sale and purchase, of an equity security of a from sections 16(a) and (b). During the period bank that is effected in connection with the dis of 12 months following their appointment and tribution of a substantial block of such securities qualification, a bank’s securities held by the fol shall be exempt from the provisions of section lowing persons shall be exempt from sections 16(b), to the extent specified in this paragraph 16(a) and 1 6 (b ): (k ), as not comprehended within the purpose of (1) executors or administrators of the es said section, upon the following conditions: tate of a decedent; (i) The person effecting the transaction is (2) guardians or committees for an incom engaged in the business of distributing securities petent; and and is participating in good faith, in the ordinary (3) receivers, trustees in bankruptcy, as course of such business, in the distribution of signees for the benefit of creditors, conservators, such block of securities; liquidating agents, and similar persons duly au (ii) The security involved in the transac thorized by law to administer the estate or assets tion is (a) a part of such block of securities and of other persons. is acquired by the person effecting the transac A fter the 12-month period following their ap tion, with a view to the distribution thereof, from pointment and qualification the foregoing persons the bank or other person on whose behalf such shall be required to file reports under section securities are being distributed or from a person 16(a) with respect to a bank’s securities held by who is participating in good faith in the distribu the estates that they administer and shall be liable tion of such block of securities, or (b) a security for profits realized from trading in such securities purchased in good faith by or for the account of pursuant to section 16(b) only when the estate the person effecting the transaction for the pur being administered is a beneficial owner of more pose of stabilizing the market price of securities than 10 per cent of any class of equity security of the class being distributed or to cover an overof a bank. allotment or other short position created in con (i) Exemption from section 16(b) of transac nection with such distribution; and REGULATION F (INSIDERS’ REPORTS) § 206.6 (iii) Other persons not within the purview the bank to whom stock may be allocated (or to whom qualified, restricted, or employee stock of section 16(b) are participating in the distribu purchase plan stock options may be granted pur tion of such block of securities on terms at least suant to the plan) or the determination of the as favorable as those on which such person is number or maximum number of shares of stock participating and to an extent at least equal to that may be allocated to any such director or the aggregate participation of all persons ex officer (or that may be covered by qualified, re empted from the provisions of section 16(b) by stricted, or employee stock purchase plan stock this paragraph (k). However, the performance of options granted to any such director or officer) the functions of manager of a distributing group is subject to the discretion of any person, then and the receipt of a bona fide payment for per such discretion shall be exercised only as follows: forming such functions shall not preclude an exemption that would otherwise be available (i) With respect to the participation of di under this paragraph. rectors (a) by the board of directors of the bank, (2) The exemption of a transaction pursuant a majority of which board and a majority of the directors acting in the matter are disinterested to this paragraph (k) with respect to the par persons; (b) by, or only in accordance with the ticipation therein of one party thereto shall not recommendation of, a committee of three or more render such transaction exempt with respect to persons having full authority to act in the matter, participation of any other party therein unless all of the members of which committee are dis such other party also meets the conditions of interested persons; or (c) otherwise in accordance this paragraph. (1) Exemption from section 16(b) of acqui with the plan, if the plan specifies the number or maximum number of shares of stock that directors sitions of shares of stock and stock options un may acquire (or that may be subject to qualified, der certain stock bonus, stock option, or similar restricted, or employee stock purchase plan stock plans. Any acquisition of shares of a bank’s stock options granted to directors) and the terms upon (other than stock acquired upon the exercise of which and the times at which, or the periods with an option, warrant, or right) pursuant to a stock in which, such stock may be acquired (or such bonus, profit sharing, retirement, incentive, thrift, options may be acquired and exercised); or sets savings, or similar plan, or any acquisition of a forth, by formula or otherwise, effective and qualified or restricted stock option pursuant to a qualified or restricted stock option plan, or ofdeterminable limitations with respect to the fore a going based upon earnings of the bank, dividends stock option pursuant to an employee stock pur paid, compensation received by participants, op chase plan, by a director or officer of the bank tion prices, market value of shares, outstanding issuing such stock or stock option shall be exempt shares or percentages thereof outstanding from from the operation of section 16(b) if the plan time to time, or similar factors. meets the following conditions: (ii) With respect to the participation of offi (1) The plan has been duly approved, directly cers who are not directors (a) by the board of or indirectly, directors of the bank or a committee of three (i) by the holders of a majority of the securi or more directors; or (b) by, or only in accord ties of the bank present, or represented, and en ance with the recommendations of, a committee titled to vote at the meeting at which it was ap of three or more persons having full authority proved, or by the written consent of the holders to act in the matter, all of the members of which of a majority of the securities of the bank en committee are disinterested persons. titled to vote, or For the purposes of this subparagraph (2), a (ii) by the holders of a majority of the se director or committee member shall be deemed curities of a predecessor so entitled to vote, if to be a disinterested person only if such person the plan or obligations to participate thereunder is not at the time such discretion is . exercised were assumed by the bank in connection with the succession. eligible and has not at any time within one year prior thereto been eligible for selection as a (2) If the selection of any director or officer of 27 § 206.6 (INSIDERS’ REPORTS) person to whom stock may be allocated (or to whom qualified, restricted, or employee stock purchase plan stock options may be granted) pursuant to the plan or any other plan of the bank or any of its affiliates entitling the partici pants therein to acquire stock or qualified, re stricted, or employee stock purchase plan stock options of the bank or any of its affiliates. (3) As to each participant or as to all par ticipants the plan effectively limits the aggregate dollar amount or the aggregate number of shares of stock that may be allocated (or may be sub ject to qualified, restricted, or employee stock purchase plan stock options granted) pursuant to the plan. The limitations may be established on an annual basis, or for the duration of the plan, whether or not the plan has a fixed termination date. Such limitations may be determined either by fixed or maximum dollar amounts, fixed or maximum numbers of shares, formulas based upon earnings of the bank, dividends paid, com pensation received by participants, option prices, market value of shares, outstanding shares or percentages thereof outstanding from time to time, or similar factors that will result in an effective and determinable limitation. Such limi tations may be subject to any provisions for ad justment of the plan or of stock allocable (or options outstanding thereunder) to prevent dilu tion or enlargement of rights. (m) Exemption from section 16(b) of long term profits incident to sales within six months of the exercise of an option. (1) To the extent specified in subparagraph (2) below, transac tions involving the purchase and sale, or sale and purchase, of any equity security of a bank shall be exempt from the operation of section 16(b), as not comprehended within the purpose of that section, if such purchase is pursuant to the exercise of an option, warrant, or right either (i) acquired more than six months before its exercise, or (ii) acquired pursuant to the terms of an employment contract entered into more than six months before its exercise. (2) W ith respect to transactions specified in subparagraph (1) above, the profits inuring to the bank pursuant to section 16(b) shall not ex ceed the difference between the proceeds of sale REGULATION F and the lowest market price of any security of the same class within six months before or after the date of sale. Nothing in this paragraph (m) shall be deemed to enlarge the amount of profit that would inure to the bank in the absence of this paragraph. (3) The disposition of any equity security of a bank shall also be exempt from the operation of section 16(b), as not comprehended within the purpose of that section, if purchased in a transaction specified in subparagraph (1) above pursuant to a plan or agreement for merger or consolidation, or reclassification of the bank’s securities, or for the exchange of its securities for the securities of another person that has acquired its assets, where the terms of such plan or agreement are binding upon all stockholders of the bank except to the extent that dissenting stockholders may be entitled, under statutory provisions or provisions contained in the bank’s charter, to receive the appraised or fair value of their holdings. (4) The exemptions provided by this para graph (m ) shall not apply to any transaction made unlawful by section 16(c) or by any regu lations thereunder. (5) The burden of establishing market price of a security for the purpose of this paragraph (m) shall rest upon the person claiming the exemption. (n) Exemption of certain securities from sec tion 16(c). Any equity security of a bank shall be exempt from the operation of section 16(c) to the extent necessary to render lawful under such section the execution by a broker of an order for an account in which he had no direct or indirect interest. (0) Exemption from section 16(c) of certain transactions effected in connection with a dis tribution. Any equity security of a bank shall be exempt from the operation of section 16(c) to the extent necessary to render lawful under such section any sale made by or on behalf of a dealer in connection with a distribution of a substantial block of the bank’s securities, upon the following conditions: (1) The sale is made with respect to an over allotment in which the dealer is participating as a member of an underwriting group, or the dealer REGULATION F or a person acting on his behalf intends in good faith to offset such sale with a security to be acquired by or on behalf of the dealer as a par ticipant in an underwriting, selling, or soliciting-dealer group of which the dealer is a member at the time of the sale, whether or not the security to be so acquired is subject to a prior offering to existing security holders or some other class of persons; and (FINANCIAL STATEMENTS) § 206.7 those to be received by him pursuant to his right of acquisition. (q) Arbitrage transactions under section 16. It shall be unlawful for any director or officer of a bank to effect any foreign or domestic arbitrage transaction in any equity security of the bank unless he shall include such transaction in the statements required by section 16(a) of the Act and § 206.6(a) and shall account to such (2) Other persons not within the purview of bank for the profits arising from such transaction, as provided in section 16(b). The provisions of section 16(c) are participating in the distribu section 16(c) shall not apply to such arbitrage tion of such block of securities on terms at least transactions. The provisions of § 206.6(a) and of as favorable as those on which such dealer is section 16 shall not apply to any bona fide foreign participating and to an extent at least equal to or domestic arbitrage transaction insofar as it is the aggregate participation of all persons ex effected by any person other than such director empted from the provisions of section 16(c) by or officer of the bank issuing such security. this paragraph (o). The performance of the func tions of manager of a distributing group and the SECTION 206.7— FORM AND CONTENT receipt of a bona fide payment for performing OF FINANCIAL STATEMENTS such functions shall not, however, preclude an exemption that would otherwise be available un der this paragraph. (a) Principles of financial reporting. Financial statements filed with the Board pursuant to this (p) Exemption of sales of securities to be ac Part shall be prepared in accordance with gener quired. (1) Whenever any person is entitled, as ally accepted accounting principles and practices an incident to his ownership of an issued equity applicable to banks. The Board may from time security of a bank and without the payment of to time issue releases on accounting principles and consideration, to receive another security of the practices to be used with respect to specific areas. bank “when issued” or “when distributed”, the (b) Verification. (1) General. security to be acquired shall be exempt from the (i) Every verification with respect to fi operation of section 16(c) if nancial statements filed pursuant to this Part (i) the sale is made subject to the same shall be dated, shall be signed manually, and shall conditions as those attaching to the right of identify without detailed enumeration the financial acquisition, * statements covered by the verification. (ii) such person exercises reasonable dili (ii) If the person or persons making a veri gence to deliver such security to the purchaser fication considers that he must take exceptions promptly after his right of acquisition matures, or express qualifications with respect thereto, each and such exception or qualification shall be stated (iii) such person reports the sale on the specifically and clearly and, to the extent prac appropriate form for reporting transactions by ticable, shall indicate the effect of the matter on persons subject to section 16(a). the financial statements to which it relates. (2) This paragraph (p) shall not be construed (2) Opinions to be expressed by principal ac as exempting transactions involving both a sale counting officer and auditor. Every verification by of a security “when issued” or “when distributed” a bank’s principal accounting officer and auditor and a sale of the security by virtue of which the shall state: seller expects to receive the “when-issued” or (i) The opinions of such persons with re “when-distributed” security, if the two transac spect to the financial statements covered by the tions combined result in a sale of more units than verification and the accounting principles and practices reflected therein; and the aggregate of those owned by the seller plus § 206.7 (FINANCIAL STATEMENTS) REGULATION F (iii) Opinions to be expressed. The inde (ii) The opinions of such persons as to any pendent public accountant’s certificate shall state: material changes in accounting principles or (a) The opinion of the accountant with practices or in the method of applying the ac respect to the financial statements covered by counting principles or practices, or adjustments the certificate and the accounting principles and of the accounts, required to be set forth by practices reflected therein; paragraph (c )(5 ) of this § 206.7. (b) The opinion of the accountant as to (3) Certification by independent public ac any material changes in accounting principles or countants— practices or in the method of applying the ac (i) Qualifications of independent public counting principles or practices, or adjustments accountants. of the accounts, required to be set forth by para (a ) The Board will not recognize any graph (c )(5 ) of this § 206.7; and person as an independent public accountant who (c) The nature of, and the opinion of the is not registered or licensed to practice as ". public a accountant as to, any material differences be accountant by a regulatory authority of a State tween the accounting principles and practices and in good standing with such authority as reflected in the financial statements and those such an accountant. reflected in the accounts after the entry of ad ( b ) The Board will not recognize as in justments for the period under review. dependent a public accountant who is not in fact (iv) Certification of financial statements independent. For example, an accountant will be by more than one independent public account considered not independent with respect to any ant. If, with respect to the certification of the person in which he has, or had during the period financial statements of any bank, the principal of report, any direct financial interest or material independent public accountant relies on an ex indirect financial interest; or with which he is, or amination made by another independent public was during such period connected as a promoter, accountant of certain of the accounts of such underwriter, voting trustee, director, officer, or bank or its affiliates, the certificate of such other employee. accountant shall be filed (and the provisions of (c) In determining whether a public ac this subparagraph shall be applicable thereto); countant is in fact, independent with respect to however, the certificate of such other account a particular person, the Bpard will give appro ant need not be filed (a) if no reference is made priate consideration to all relevant circumstances, directly or indirectly to such other accountant’s including evidence bearing on all relationships examination in the principal accountant’s cer between the accountant and that person or any tificate, or (b) if, having referred to such other affiliate thereof, and will not confine itself to the accountant’s examination, the principal accountant relationships existing in connection with the filing states in his certificate that he assumes responsi of reports with the Board. bility for such other accountant’s examination in (ii) Representations as to the audit. The the same manner as if it had been made by him. independent public accountant’s certificate— (a) shall state whether the audit was (c) Provisions of general application. (1) Re made in accordance with generally accepted audit quirements as to form. Financial statements shall ing standards; and be prepared in accordance with the applicable (b ) shall designate any auditing proce requirements of Forms 9A, B, C, and D. All dures generally recognized as normal (or deemed money amounts required to be shown in financial necessary by the accountant under the circum statements may be expressed in even dollars or stances of the particular case) that have been thousands of dollars. If shown in even thousands, omitted, and the reasons for their omission, but an indication to that effect shall be inserted im no procedure that independent accountants or mediately beneath the caption of the statement dinarily employ in the course of an audit made or schedule, or at the top of each money column. for the purpose of expressing the opinions re The individual amounts shown need not be ad quired by clause (iii) below shall be omitted. justed to the nearest dollar or thousand if the REGULATION F failure of the items to add to the totals shown is stated in a note as due to the dropping of amounts of less than $1.00 or $1,000, as appropriate. (2) Items not material. If the amount that would otherwise be required to be shown with respect to any item is not material, it need not be separ ately set forth. (3) Inapplicable captions and omission of un required or inapplicable financial statements. No caption need be shown in any financial statement required by the forms set forth in this Part as to which the items and conditions are not present. Financial statements not required or inapplicable because the required matter is not present need not be filed, but the statements omitted and the reasons for their omission shall be indicated in the list of financial statements required by the applic able form. (4) Additional information. In addition to the information required with respect to any financial statement, such further information shall be fur nished as is necesary to make the required state ments, in the light of the circumstances under which they are made, not misleading. (5) Changes in accounting principles and prac tices and retroactive adjustments of accounts. Any change in accounting principle or practice, or in the method of applying any accounting principle or practice, made during any period for which financial statements are filed that affects com parability of such financial statements with those of prior or future periods, and the effect thereof upon the net income for each period for which financial statements are filed, shall be disclosed in a note to the appropriate financial statement. Any material retroactive adjustment made during any period for which financial statements are filed, and the effect thereof upon net income of prior periods, shall be disclosed in a note to the appro priate financial statement. (6) Summary of accounting principles and practices. Information required in notes as to ac counting principles and practices reflected in the financial statements may be presented in the form of a single statement. In such a case speccific references shall be made in the appropriate financial statements to the applicable portion of such single statement. (FINANCIAL STATEMENTS) § 206.7 (7) Foreign currencies. The basis of conver sion of all items in foreign currencies shall be stated, and the amount and disposition of the resulting unrealized profit or loss shown. Dis closure should be made as to the effect, insofar as this can be reasonably determined, of foreign exchange restrictions upon the consolidated fi nancial position and operating results of the bank and its subsidiaries. (8) Commitments. If material in amount, the pertinent facts relative to firm commitments for the acquisition, directly or indirectly, of fixed assets and for the purchase, repurchase, con struction, or rental of assets under long-term leases shall be stated briefly in the balance sheet or in footnotes referred to therein. Where the rentals or obligations under long-term leases are material there shall be shown the amounts of annual rentals under such leases with some indi cation of the periods for which they are payable, together with any important obligation assumed or guarantee made in connection therewith. If the rentals are conditional, the minimum annual amounts shall be stated, unless inappropriate in the circumstances. (9) General notes to balance sheets. If present with respect to the person for which the state ment is filed, the following shall be set forth in the balance sheet or in referenced notes thereto: (i) Assets subject to lien. The amounts of assets mortgaged, pledged, or otherwise subject to a lien or security interest shall be designated and the obligation secured thereby, if any, shall be identified briefly. (ii) Intercompany profits and losses. The effect upon any balance sheet item of profits or losses resulting from transactions with affiliated companies not consolidated shall be stated. If impracticable of accurate determination without unreasonable effort or expense, an estimate or explanation shall be given. (iii) Preferred shares. (a) If callable, the date or dates and the amount per share at which such shares are callable shall be stated; (b) Arrears in cumulative dividends per share and in total for each class of shares shall be stated; (c) Pref erences on involuntary liquidation, if other than the par or stated value, shall be shown. When the excess involved is material, there shall be shown § 206.7 (FINANCIAL STATEMENTS) the difference between the aggregate preference on involuntary liquidation and the aggregate par or stated value, a statement that this difference (plus any arrears in dividends) exceeds the sum of the par or stated value of the junior capital shares, surplus, and undivided profits if such is the case, and a statement as to the existence (or ab sence) of any restrictions upon surplus an d /o r un divided profits growing out of the fact that upon involuntary liquidation the preference of the pre ferred stock exceeds its par or stated value. (iv) Pension and retirement plans, (a) A brief description of the essential provisions of any em ployee pension or retirement plan shall be given; (b) The estimated annual cost of the plan shall be stated; (c) If a plan has not been funded or otherwise provided for, the estimated amount that would be necessary to fund or otherwise provide for the past-service cost of the plan shall be disclosed. (v) Capital stock, optioned to officers and employees. (a) A brief description of the terms of each option arrangement shall be given, includ ing the title and amount of securities subject to the option, the year or years during which the options were granted, and the year or years dur ing which the optionees became, or will become, entitled to exercise the options; (b) There shall be stated the number of shares under option at the balance sheet date, and the option price and the fair value thereof (per share and in total) at the dates the options were granted; the number of shares with respect to which options became exercisable during the period, and the option price and the fair value thereof (per share and in total) at the dates the options became exercisable; and the number of shares with respect to which options were ex ercised during the period, and the option price and the fair value thereof (per share and in total) at the dates the options were exercised. The re quired information may be summarized as ap propriate with respect to each of the categories referred to in this subclause (b); ( c ) The basis of accounting for such op tion arrangements and the amount of charges, if REGULATION F any, reflected in income with respect thereto shall be stated. (vi) Restrictions that limit the availability of surplus an d /o r undivided profits for dividend pur poses. Any such restriction, other than as re ported in subparagraph (9) (iii) of this paragraph (c) shall be described, indicating briefly its source, its pertinent provisions, and, where appropriate and determinable, the amount of the surplus an d/o r undivided profits so restricted. (vii) Contingent liabilities. A brief statement as to contingent liabilities not reflected in the bal ance sheet shall be made. (10) General notes to statements of income. If present with respect to the person for which the statement is filed, the following shall be set forth in the statement of income or in referenced notes thereto: (i) Intercompany profits and losses. The amount of any profits or losses resulting from transactions between unconsolidated affiliated companies shall be stated. If impracticable of determination without unreasonable effort and expense, an estimate or explanation shall be given. (ii) Depreciation and amortization. For the period for which statements of income are filed, there shall be stated the policy followed with respect to: (a) The provision for depreciation of physical properties or valuation allowances cre ated in lieu thereof, including the methods and, if practicable, the rates used in computing the annual amounts; ( b ) The provision for deprecia tion and amortization of intangibles, or valuation allowances created in lieu thereof, including the methods and, if practicable, the rates used in computing the annual amounts; (c) The account ing treatment for maintenance, repairs, renewals, and improvements; and (d ) The adjustment of the accumulated valuation allowances for depreci ation and amortization at the time the properties were retired or otherwise disposed of, including the disposition made of any profit or loss on sale of such properties. (d) Consolidated financial statements. (1) Con solidated statements generally present more mean ingful information to the investor than unconsoli dated statements. Except where good reason exists, consolidated statements of the bank and REGULATION F its majority-owned significant subsidiaries should be filed. (2) Every majority-owned bank-premises sub sidiary and every majority-owned subsidiary operating under the provisions of section 25 or section 25(a) of the Federal Reserve Act ( “Agree ment Corporations” and “Edge Act Corporations”) shall be consolidated with that of the reporting bank irrespective of whether such subsidiary is a significant subsidiary. (3) If the financial statements of a subsidiary are as of a date or for periods different from those of the bank, such statements may be used as the basis for consolidation of the subsidiary only if the date of such statements is not more than 93 days from the date of the close of the bank’s fiscal year; the closing date of the subsidiary is specified; the necessity for the use of different closing dates is explained briefly; and any changes in the respective fiscal periods of the bank and the subsidiary made during the period of report are indicated clearly. (4) There shall be set forth in a note to each consolidated balance sheet filed a statement of any difference between the investment in sub sidiaries consolidated, as shown by the bank’s books, and the bank’s equity in the net assets of sush subsidiaries as shown by the subsidiaries’ books. If any such difference exists, there shall be set forth the amount of the difference and the disposition made thereof in preparing the con solidated statements, naming the balance sheet captions and stating the amount included in each. (FINANCIAL STATEMENTS) § 206.7 (5) Minority interests in the net assets of sub sidiaries consolidated shall be shown in each consolidated balance sheet. The aggregate amount of profit or loss accruing to minority interests shall be stated separately in each consolidated statement of income. (6) In general, intercompany items and trans actions shall be eliminated. If not eliminated, a statement of the reasons for inclusion and the methods of treatment shall be made. (e) Statement of changes in capital accounts. A statement of changes in capital accounts shall be filed with each statement of income filed pur suant to this Part. (f) Schedules to be filed. (1) The following schedules shall be filed with each balance sheet filed pursuant to this Part: Schedule I— U.S. Treasury Securities, Securities of other U. S. Government Agencies and Corporations, and Ob ligations of States and Political Subdivisions; Schedule II— Other Securities; Schedule III— Other Loans; Schedule IV— Bank Premises and Equipment; Schedule V— Investments in, Divi dend Income from, and Share in Earnings or Losses of Unconsolidated Subsidiaries; and Sched ule VI— “Other” Liabilities for Borrowed Money. (2) The following schedule shall be filed with each statement of income filed pursuant to this Part: Schedule VII—Allowance for Possible Loan Losses. (3) Reference to the schedules referred to in subparagraphs (1) and (2) shall be made against the appropriate captions of the balance sheet or statement of income. REGULATION F APPENDIX APPENDIX (10) The term “security” means any note, stock, treasury stock, bond, debenture, certificate of SECURITIES EXCHANGE ACT OF 1934 interest or participation in any profit-sharing agreement or in any oil, gas, or other mineral Act of June 6, 1934 (48 Stat. 881) royalty or lease, any collateral-trust certificate, (U.S. Code, Title 15, Sec. 78) preorganization certificate or subscription, trans ferable share, investment contract, voting-trust D EFINITIONS certificate, certificate of deposit, for a security, Sec . 3. (a) When used in this title, unless the or in general, any instrument commonly known context otherwise requires— as a “security”; or any certificate of interest or participation in, temporary or interim certificate (1) The term “exchange” means any organiza for, receipt for, or warrant or right to subscribe tion, association, or group of persons, whether to or purchase, any of the foregoing; but shall not incorporated or unincorporated, which constitutes, include currency or any note, draft, bill of ex maintains, or provides a market place or facilities change, or banker’s acceptance which has a ma for bringing together purchasers and sellers of turity at the time of issuance of not exceeding securities or for otherwise performing with re nine months, exclusive of days of grace, or any spect to securities the functions commonly per renewal thereof the maturity of which is likewise formed by a stock exchange as that term is gen limited. erally understood, and includes the market place and the market facilities maintained by such (11) The term “equity security” means any exchange. stock or similar security; or any security con * * * vertible, with or without consideration, into such (7) The term “director” means any director of a security; or carrying any warrant or right to a corporation or any person performing similar subscribe to or purchase such a security; or any functions with respect to any organization, such warrant or right; or any other security which whether incorporated or unincorporated. the Commission shall deem to be of similar na * * * ture and consider necessary or appropriate, by (9) The term “person” means an individual, a such rules and regulations as it may prescribe in the public interest or for the protection of in corporation, a partnership, an association, a jointvestors, to treat as an equity security. stock company, a business trust, or an unincor * * H = porated organization. * * * [U.S.C., title 15, sec. 78c.] (Revised Dec. 31, 1969) BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM FORM F-2 ANNUAL REPORT Pursuant to Section 13 of the Securities Exchange Act of 1934 For the fiscal year ended________________ (Exact name of bank as specified in charter) (Address of principal office) GENERAL INSTRUCTIONS A. Preparation of report. This form is not to be used as a blank form to be filled in but only as a guide in the preparation of an annual report. The report shall contain the numbers and captions of all items required to be an swered, but the text of such items may be omitted if the answers with respect thereto are prepared in the manner specified in section 206.4(s) of this Part. Particular attention should be given to the definitions in section 206.2 and the general requirements in section 206.4 of this Part. Except as otherwise stated, the informa tion required shall be given as of the end of the bank’s fiscal year, or as of the latest practicable date subsequent thereto. B. Reports by banks filing proxy statements and statements where management does not solicit proxies. Items 4 through 6 shall not be restated or answered by any bank that, since the close of its fiscal year, has filed with the Board, with respect to an election of directors, a proxy statement or statement where manage ment does not solicit proxies pursuant to section 206.5(a) of this Part. The incorporation of such Statement by reference in answer to such items is not required. Any financial statements contained in such Statement or in an annual report to security holders furnished to the Board pursuant to section 206.5(c) of this Part may be incorporated by reference if such financial state ments substantially meet the requirements of this form. C. Reports by banks not filing proxy state ments or statements where management does not solicit proxies. Information contained in an annual report to security holders furnished to the Board pursuant to Instruction D below, by any bank not subject to Instruction B, may be incorporated by reference in answer or par tial answer to any item of this form. In addi tion, any financial statements contained in any such annual report may be incorporated by reference if such financial statements substan tially meet the requirements of this form. D. Annual reports to stockholders. Every bank that files an annual report on this form shall furnish to the Board for its information eight copies of any annual report to security holders covering such registrant bank’s latest fiscal year, unless copies thereof are furnished to the Board pursuant to section 206.5 of this Part. Such report shall be mailed to the Board not later than the date on which it is first sent or given to security holders, but shall not be deemed to be “filed” with the Board or other wise subject to the liabilities of section 18 of the Act, except to the extent that the bank spe cifically requests that it be treated as a part of its annual report on this form or incorporates it herein by reference. If no annual report is submitted to security holders for the bank’s latest fiscal year, the Board shall be so advised. INFORMATION REQUIRED IN REPORT Item 1. Securities registered. As to each class Form F-2 (A n n u a l R ep o rt) of securities of the bank that is registered pur suant to section 12 of the Act, state the title of such class, the name of the exchange, if any, on which registered, and the number of holders of record of such class. Item 2. Parents and subsidiaries of the bank. Furnish a list or diagram showing the relation ship of the bank to all parents and subsidiaries, and as to each person named indicate the per centage of voting securities owned, or other basis of control, by its immediate parent. Instructions. 1. This item need not be answered if there has been no change in the list or diagram as last previously reported. 2. The list or diagram shall include the bank and shall be so prepared as to show clearly the relation ship of each person named to the bank and to the other persons named. If any person is controlled by means of the direct ownership of its securities by two or more persons, so indicate by appropriate cross reference. 3. Designate by appropriate symbols (a) subsidi aries for which separate financial statements are filed; (b ) subsidiaries included in the respective consolidated financial statements; and (c) other subsidiaries, indi cating briefly why statements of such subsidiaries are not filed. 4. Indicate the name of the country in which each foreign subsidiary was organized. 5. The names of particular subsidiaries may be omitted if the unnamed subsidiaries, considered in the aggregate as a single subsidiary, would not constitute a significant subsidiary. 6. A person, approximately 50 per cent of whose voting securities are owned, directly or indirectly, by the bank, and approximately 50 per cent of whose voting securities are owned, directly or indirectly, by another person, shall be considered a subsidiary for the purpose of this item. REGULATION F approximate amount of such securities owned of record but not owned beneficially, the ap proximate amount owned beneficially and the percentage of outstanding voting securities rep resented by the amount so owned in each such manner. Instruction. To the extent that the information re quired by this item is given in answer to Item 2, a reference to such item will suffice. Item 5. Directors of bank. Furnish the fol lowing information, in tabular form to the extent practicable, with respect to each director of the bank: (a) Name each such director, state the date on which his present term of office will expire and list all other positions and offices with the bank presently held by him. (b) State his present principal occupation or employment and give the name and principal business of any corporation or other organiza tion in which such employment is carried on. If not previously reported, furnish similar infor mation as to all of his principal occupations or employments during the last five years. (c) State, as of the most recent practicable date, the approximate amount of each class of equity securities of the bank, or any of its parents or subsidiaries, “beneficially owned” (as defined in section 206.2(ff)) directly or in directly by him. If he is not the beneficial owner of any such securities, make a statement to that effect. Item 3. Changes in business. Describe briefly any material changes during the fiscal year, not previously reported, in the business of the bank and its subsidiaries. Item 6. Remuneration of director and officers and related matters. Set forth the same infor mation as to remuneration of officers and direc tors and their transactions with management and others as is required to be furnished by Item 7 of Form F-5. Item 4. Principal holders of voting securities. If, to the knowledge of the bank, any person individually, or together with his associates, owns of record or beneficially more than 10 per cent of the outstanding voting securities of the bank, name each such person, state the Item 7. Financial statements and exhibits. List below all financial statements and exhibits filed as a part of the annual report: (a) Financial statements. (b) Exhibits. REGULATION F SIGNATURES Pursuant to the requirements of the Securi ties Exchange Act of 1934, the bank has duly caused this annual report to be signed on its behalf by the undersigned, thereunto duly au thorized. (Name of bank) D ate____ B y ____________________________ (Name and title of signing officer) INSTRUCTIONS AS TO FINANCIAL STATEMENTS These instructions specify the balance sheets and statements of income required to be filed as a part of annual reports on this form. Sec tion 206.7 of this Part governs the verification, form, and content of the balance sheets and statements of income required, including the basis of consolidation, and prescribes the state ment of changes in capital accounts and the schedules to be filed in support thereof. 1. Financial statements of the bank, (a) There shall be filed for the bank, in compara tive columnar form, verified balance sheets as of the close of the last two fiscal years and verified statements of income for such fiscal years. (b) Notwithstanding paragraph (a), the indi vidual financial statements of the bank may be omitted if consolidated statements of the bank and one or more of its subsidiaries are filed. 2. Consolidated statements. There shall be filed for the bank and its majority-owned (i) bank premises subsidiaries, (ii) subsidiaries op erating under the provisions of section 25 or section 25(a) of the Federal Reserve Act (“Agreement Corporations” and “Edge Act Corporations”), and (iii) significant subsidiar ies, in comparative columnar form, verified F orm F -2 ( A n n u a l R epo r t ) consolidated balance sheets as of the close of the last two fiscal years of the bank and veri fied consolidated statements of income for such fiscal years. 3. Separate statements of unconsolidated subsidiaries and other persons. There shall be filed such other verified financial statements with respect to unconsolidated subsidiaries and other persons as are material to a proper understanding of the financial position and re sults of operations of the total enterprise. 4. Filing of other statements in certain cases. The Board may, upon the request of the bank and where consistent with the pro tection of investors, permit the omission of one or more of the statements herein required or the filing in substitution therefor of appro priate statements of comparable character. The Board may also require the filing of other statements in addition to, or in substitution for, the statements herein required in any case where such statements are necessary or appro priate for an adequate presentation of the financial condition of any person whose finan cial statements are required, or whose state ments are otherwise necessary for the protec tion of investors. INSTRUCTIONS AS TO EXHIBITS Subject to provisions regarding incorpora tion by reference, the following exhibits shall be filed as part of the report: 1. Copies of all amendments or modifica tions, not previously filed, to all exhibits pre viously filed (or copies of such exhibits as amended or modified). 2. Copies of all documents of the character required to be filed as an exhibit to an original form for registration of securities of a bank which have been executed or otherwise put into effect during the fiscal year and not previously filed. (Revised Dec. 31, 1969) BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM FORM F-4 Q U A R T E R L Y REPORT OF (Name of bank) (City and State) Fiscal year to date months ending------ 3 months en d in g----------- 19Item (current year) 19(prior year) 19(current year) 19(prior year) Operating income: (a) Interest and fees on loans (b) Interest and dividends on securities (c) Other operating income (d) Total operating income 2 . Operating expenses: (a) Salaries and other compensation (b) Interest expense (c) Other operating expenses (d) Total operating expenses Income before income taxes and securities gains (losses) Applicable income taxes Income before securities gains (losses) Net security gains (losses), less related tax effect Net income Pursuant to the requirements of the Securities Exchange Act of 1934, the bank has duly caused this quarterly report to be signed on its behalf by the undersigned, thereunto duly authorized. (Name of bank) Date (a) Use of Form F-4. Form F-4 is a guide for use in preparation of the quarterly report to be filed with the Board. (b) Persons for whom the information is to be given. The required information is to be given as to the registrant bank or, if the bank files consolidated financial statements with the annual reports filed with the Board, it shall cover the bank and its consolidated subsidiaries. If the information is given as to the bank and its consolidated subsidiaries, it need not be given separately for the bank. (c) Presentation of information. The form calls only for the items of information specified. It is not necessary to furnish a formal statement of income. The information is not required to be verified (see section 206.7(b) of this Part). The report may carry a notation to that effect and any other qualification con- By (Name and title of signing officer) sidered necessary or appropriate. Amounts may be stated in thousands of dollars if a notation to that effect is made. (d) Incorporation by reference to published state ments. If the bank makes available to its stockholders or otherwise publishes, within the period prescribed for filing the report, a financial statement containing the information required by this form, such informa tion may be incorporated by reference to such pub lished statement if copies thereof are filed as an ex hibit to this report. (e) Extraordinary items. If present with respect to any interim period reported herein, extraordinary items less applicable income tax effect shall be ap propriately segregated and included in the determina tion of net income. (See Form F-9B, Statement of Income.) (Revised Dec. 31, 1969) BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM FORM F-5 PROXY STATEMENT; STATEMENT WHERE MANAGEMENT DOES NOT SOLICIT PROXIES GENERAL INSTRUCTIONS Each Statement required under section 206.5(a) of this Part shall, to the extent appli cable, include the information called for under each of the items below. In the preparation of the Statement, particular attention should be given to the definitions in section 206.2 of this Part. This form is not to be used as a blank form to be filled in nor is it intended to prescribe a form for presentation of material in the State ment. Its purpose is solely to prescribe the in formation required to be set forth in the State ment; any additional information that manage ment or the soliciting persons deem appropriate may be included. INFORMATION REQUIRED IN STATEMENT Item 1. Revocability of proxy. State whether the person giving the proxy has the power to revoke it. If the right of revocation before the proxy is exercised is limited or is subject to compliance with any formal procedure, briefly describe such limitation or procedure. Item 2. Dissenters’ rights of appraisal. Out line briefly the rights of appraisal or similar rights of dissenters with respect to any matter to be acted upon and indicate any statutory procedure required to be followed by dissenting security holders in order to perfect such rights. Where such rights may be exercised only within a limited time after the date of the adoption of a proposal, the filing of a charter amendment or other similar act, state whether the person solicited will be notified of such date. Instruction. Indicate whether a security holder’s failure to vote against a proposal will constitute a waiver of his appraisal or similar rights and whether a vote against a proposal will be deemed to satisfy any notice requirements under State law with respect to appraisal rights. If the State law is unclear, state what position will be taken in regard to those matters. Item 3. Persons making the solicitation, (a) Solicitations not subject to section 206.5(i). (1) If the solicitation is made by the man agement of the bank, so state. Give the name of any director of the bank who has informed the management in writing that he intends to oppose any action intended to be taken by the management and indicate the action which he intends to oppose. (2) If the solicitation is made otherwise than by the management of the bank, so state and give the names of the persons by whom and the persons on whose behalf it is made. (3) If the solicitation is to be made other wise than by the use of the mails, describe the methods to be employed. If the solicitation is to be made by specially engaged employees or paid solicitors, state (i) the material features of any contract or arrangement for such solicita tion and identify the parties, and (ii) the cost or anticipated cost thereof. (4) State the names of the persons by whom the cost of solicitation has been or will be borne, directly or indirectly. (b) Solicitations subject to section 206.5 (i). (1) State by whom the solicitation is made and describe the methods employed and to be employed. (2) If regular employees of the bank or any other participants in a solicitation have been or are to be employed to solicit security holders, describe the class or classes of em ployees to be so employed, and the manner and nature of their employment for such purpose. REGULATION F (3) If specially engaged employees, repre sentatives, or other persons have been or are to be employed to solicit security holders, state (i) the material features of any contract or arrangement for such solicitation and identify the parties, (ii) the cost or anticipated cost thereof, and (iii) the approximate number of such employees or employees of any other per son (naming such other person) who will solicit security holders. (4) State the total amount estimated to be spent and the total expenditures to date for, in furtherance of, or in connection with, the solicitation of security holders. (5) State by whom the cost of the solici tation will be borne. If such cost is to be borne initially by any person other than the bank, state whether reimbursement will be sought from the bank, and, if so, whether the ques tion of such reimbursement will be submitted to a vote of security holders. Instruction. With respect to solicitations subject to section 206.5(i), costs and expenditures within the meaning of this Item 3 shall include fees for attorneys, accountants, public relations or financial advisers, solicitors, advertising, printing, transportation, litiga tion, and other costs incidental to the solicitation, except that the bank may exclude the amounts of such costs represented by the amount normally expended for a solicitation for an election of directors in the absence of a contest, and costs represented by salaries and wages of regular employees and officers, pro vided a statement to that effect is included in the proxy statement. Item 4. Interest of certain persons in matters to be acted upon, (a) Solicitations not subject to section 206.5 (i). Describe briefly any sub stantial interest, direct or indirect, by security holdings or otherwise, of each of the following persons in any matter to be acted upon, other than elections to office: (1) If the solicitation is made on behalf of management, each person who has been a director or officer of the bank at any time since the beginning of the last fiscal year. (2) If the solicitation is made otherwise than on behalf of management, each person on whose behalf the solicitation is made. Any per F o rm F -5 ( P roxy S t a t e m e n t ) son who would be a participant in a solicitation for purposes of section 206.5 (i), as defined in subparagraph 2 (i) (c), (d ), (e ), and (/) thereof, shall be deemed a person on whose behalf the solicitation is made for purposes of this paragraph (a). (3) Each nominee for election as a direc tor of the bank. (4) Each associate of the foregoing per sons. Instruction. Except in the case of a solicitation sub ject to section 206.5 of this Part made in opposition to another solicitation subject to section 206.5 of this Part, this sub-item (a) shall not apply to any interest arising from the ownership of securities of the bank where the security holder receives no extra or special benefit not shared on a pro rata basis by all other holders of the same class. (b) Solicitations subject to section 206.5(i). (1) Describe briefly any substantial inter est, direct or indirect, by security holdings or otherwise, of each participant, as defined in section 2 0 6 .5 (i)( 2 ) (i), (b ), (c), (d), and (e ), in any matter to be acted upon at the meeting, and include with respect to each par ticipant the information, or a fair and adequate summary thereof, required by Items 2 (a ), 2 (d ), 3, 4 (b ), and 4(c) of Form F-6. (2) With respect to any person named in answer to Item 6 (b ), describe any substantial interest, direct or indirect, by security holdings or otherwise, that he has in any matter to be acted upon at the meeting, and furnish the in formation called for by Item 4(b ) and (c) of Form F-6. Item 5. Voting securities and principal hold ers thereof, (a) State, as to each class of voting securities of the bank entitled to be voted at the meeting, the number of shares outstanding and the number of votes to which each class is entitled. (b) Give the date as of which the record of security holders entitled to vote at the meeting will be determined. If the right to vote is not limited to security holders of record on that date, indicate the conditions under which other security holders may be entitled to vote. F o r m F - 5 ( P ro x y S t a t e m e n t ) (c ) If action is to be taken with respect to the election of directors and if the persons solicited have cum ulative voting rights, m ake a statem ent th a t they have such rights and state briefly the conditions precedent to the exercise thereof. ( d ) If to the knowledge of the persons on whose behalf the solicitation is m ade, any p er son, individually, o r together with his asso ciates, owns of record o r beneficially m ore than 10 p er cent of the oustanding voting securities of the bank, nam e such person o r persons, state the approxim ate am ount of such securities owned of record but n ot owned beneficially, and the approxim ate am ount ow ned benefi cially, and the percentage of outstanding voting securities represented by the am ount of securi ties so ow ned in each such m anner. (e ) If to the knowledge of the persons on whose behalf the solicitation is m ade, a change in control of the bank has occurred since the beginning of its last fiscal year, state the nam e of the person o r persons who ac quired such control, the basis of such control, the date and a description of the transaction or transactions in which control was acquired and the percentage of voting securities of the bank now ow ned by such person o r persons. (f) D escribe any contractual arrangem ents, including any pledge of securities of the bank o r any of its parents, know n to the persons on whose behalf the solicitation is m ade, the o p eration of the term s of which m ay at a sub sequent date result in a change in control of the bank. Instruction. Paragraph (f) does not require a de scription of ordinary default provisions contained in the charter, trust indentures or other governing instru ments relating to securities of the bank. Item 6. Nominees and directors, (a) If action is to be taken w ith respect to the election of di rectors, furnish the following inform ation, in tab ular form to the extent practicable, with respect to each person nom inated for election as a director and each other person whose term of office as a director will dontinue after the meeting: REGULATION F (1 ) N am e each such person, state when his term of office o r the term of office for which he is a nom inee will expire, and all o ther posi tions and offices with the b an k presently held by him , and indicate which persons are nom inees for election as directors at th a t meeting. (2 ) State his present principal occupation or em ploym ent and give the nam e and p rin cipal business of any corporation o r other organization in which such em ploym ent is carried on. Furnish similar inform ation as to all of his principal occupations o r em ploym ents during the last five years, unless he is now a director and was elected to his present term of office by a vote of security holders at a meeting with respect to which a proxy state m ent o r statem ent where m anagem ent does not solicit proxies was subm itted to security hold ers pursuant to section 2 0 6 .5 (a ) of this Part. (3 ) If he is o r has previously been a director of the bank state the period o r periods during w hich he has served as such. ( 4 ) State, as of the m ost recent practica ble date, the approxim ate am ount of each class of equity securities of the bank, o r any of its parents or subsidiaries, “ beneficially ow ned” (as defined in section 206.2(ff)) directly o r in directly by him. If he disclaims beneficial ow nership of any such securities, m ake a state m ent to th a t effect. (b ) If any nom inee for election as a director is proposed to be elected pu rsu ant to any a r rangem ent or understanding betw een th e nom i nee and any other person or persons, except the directors and officers of the b ank acting solely in th a t capacity, nam e such other person o r persons and describe briefly such arrange m ent or understanding. (c ) If fewer nom inees are nam ed th an the num ber fixed by or pursuant to the governing instrum ents, state (1) the reasons for this p ro cedure, and (2) th at the proxies cannot be voted for a greater nu m b er of persons than the num ber of nom inees nam ed. REGULATION F F o r m F -5 ( P roxy S t a t e m e n t ) Item 7. Remuneration and other transactions with management and others. Furnish the in formation called for by this item if action is to be taken with respect to (i) the election of directors, (ii) any bonus, profit sharing or other remuneration plan, contract or arrange ment in which any director, nominee for elec tion as a director, or officer of the bank will participate, (iii) any pension or retirement plan in which any such person will participate, or (iv) the granting or extension to any such person of any options, warrants, or rights to purchase any securities, other than warrants or rights issued to security holders, ,as such, on a pro rata basis. However, if the solicitation is made on behalf of persons other than the man agement, the information required need be furnished only as to nominees for election as directors and as to their associates. (a) Furnish the following information in substantially the tabular form indicated below as to all direct remuneration paid by the bank and its subsidiaries during the bank’s latest fiscal year to the following persons for services in all capacities: (1) Each director of the bank whose aggregate direct remuneration exceeded $30,000, and each of the two highest paid officers of the bank whose aggregate direct remunera tion exceeded that amount, naming each such director and officer. (2) All directors and officers of the bank as a group, without naming them, but stating the number of persons included. (A) Name of individual or number of persons m group (B) Capacities in which remuneration was received (C) Aggregate direct remuneration Instructions. 1. This item applies to any person who was a director or officer of the bank at any time dur ing the period specified. However, information need not be given for any portion of the period during which such person was not a director or officer. 2. The information is to be given on an accrual basis, if practicable. The tables required by this para graph and paragraph (b) may be combined if the bank so desires. 3. D o not include remuneration paid to a partner ship in which any director or officer was a partner. But see paragraph (f) below. (b) Furnish the following information, in substantially the tabular form indicated, as to all pension or retirement benefits proposed to be paid und^r any existing plan in the event of retirement at normal retirement date, directly or indirectly, by the bank or any of its subsid iaries to each director or officer named in answer to paragraph (a) (1): (A) Name of individual (B) Amount set aside or accrued during bank’s last fiscal year (C) Estimated annual benefits upon retirement Instructions. 1. Column (B) need not be answered with respect to payments computed on an actuarial basis under any plan which provides for fixed benefits in the event of retirement at a specified age or after a specified number of years of service. 2. The information called for by Column (C) may be given in a table showing the annual benefits pay able upon retirement to persons in specified salary classifications. 3. In the case of any plan (other than those speci fied in Instruction 1) where the amount set aside each year depends upon the amount of earnings of the bank or its subsidiaries for such year or a prior year (or where otherwise impracticable to state the estimated annual benefits upon retirement) there shall be set forth, in lieu of the information called for by Column (C), the aggregate amount set aside or ac crued to date, unless impracticable to do so, in which case the method of computing such benefits shall be stated. In addition, furnish a brief description of the material terms of the plan, including the method used in computing the bank’s contribution, and the amount set aside or accrued during the bank’s last fiscal year for. all officers and directors as a group, indicating the number o f persons in such group without naming them. F o r m F - 5 ( P ro x y S t a t e m e n t ) REGULATION F Instruction. Information need not be included as to payments to be made for, or benefits to be received from, group life or accident insurance, group hospitali zation, or similar group payments or benefits. If it is impractiable to state the amount of remuneration payments proposed to be made, the aggregate amount set aside or accrued to date in respect of such pay ments shall be stated, together with an explanation of the basis for future payments. Instructions. 1. The extension, regranting, or material amendment of options shall be deemed the granting of options within the meaning of this para graph. 2. This item need not be answered with respect to options granted, exercised, or outstanding, as may be specified therein, where the total market value (i) on the granting date of the securities called for by all options granted during the period specified, (ii) on the dates of purchase of all securities purchased through the exercise of options during the period specified, or (iii) as of the latest practicable date of the securities called for by all options held at such time, does not exceed $10,000 for any officer or director named in answer to paragraph (a) (1), or $30,000 for all officers and directors as a group. 3. The information for all directors and officers as a group regarding market value of the securities on the granting date of the options and on the purchase date may be given in the form of price ranges for each calendar quarter during which options were granted or exercised. (d ) Furnish the following inform ation as to all options to purchase securities, from the bank o r any of its subsidiaries, which were granted to or exercised by the following per sons since the beginning of the b a n k ’s last fis cal year and as to all options held by such p er sons as of the latest practicable date: (i) each director or officer nam ed in answ er to p a ra graph ( a ) ( 1 ) , nam ing each such person; and (ii) all directors and officers of the b an k as a group, w ithout nam ing them: ( 1 ) A s to options granted, state (i) the title and am ount of securities called for; (ii) the prices, expiration dates, and other m aterial p ro visions; and (iii) the m arket value of the se curities called for on the granting date. ( 2 ) A s to options exercised, state (i) the title and am ount of securities purchased; (ii) the aggregate purchase price; and (iii) the ag gregate m arket value of the securities p u r chased on the date of purchase. ( 3 ) A s to all unexercised options held as of the latest practicable date, regardless of when such options were granted, state (i) the title and aggregate am ount of securities called for; (ii) the range of option prices; and (iii) the per share m arket prices of the securities sub ject to option, as of the latest practicable date. (e ) If to the knowledge of m anagem ent any indebtedness to the b ank has arisen since the beginning of the b an k ’s last fiscal year u nd er section 1 6 (b ) of the Securities Exchange A ct of 1934, as a result of transactions in the b an k ’s stock (o r other equity securities) by any director, officer, o r security holder nam ed in answ er to Item 5 ( d ) , w hich indebtedness has no t been discharged by paym ent, state the am ount of any profit realized and w hether suit will be brought or o ther steps taken to recover such profit. If, in the opinion of counsel, a question reasonably exists as to the recover ability of such profit, only facts necessary to describe the transactions, including the prices and num ber of shares involved, need be stated. (f) D escribe briefly, and w here practicable state the approxim ate am ount of, any m aterial interest, direct o r indirect, of any of the follow ing persons in any m aterial transactions since the beginning of the b a n k ’s last fiscal year, or in any m aterial proposed transactions, to which the b ank o r any of its subsidiaries was o r is to be a party: (1) A ny director or officer of the bank; ( 2 ) A ny nom inee for election as a di rector; ( 3 ) A ny security holder nam ed in answ er to Item 5 ( d ) ; or (c ) D escribe briefly all rem uneration pay m ents (o th er than paym ents reported under paragraph (a ) or ( b ) of this item ) proposed to be m ade in the future, directly o r indirectly, by the b ank o r any of its subsidiaries pursuant to any existing plan o r arrangem ent to (i) each director o r officer nam ed in answ er to p a ra graph ( a ) ( 1 ) , nam ing each such person, and (ii) all directors and officers of the b an k as a group, w ithout nam ing them . REGULATION F (4 ) persons. F o r m F -5 ( P roxy St a t e m e n t ) A ny associate of any of the foregoing in this instruction, transactions which are exempted Instructions. 1. See, Instruction 1 to paragraph (a). Include the name of each person whose interest in any transaction is described and the nature of the relation ship by reason of which such interest is required to be described. Where it is not practicable to state the approximate amount of the interest, the approximate amount involved in the transaction shall be indicated. 2. As to any transaction involving the purchase or sale of assets by or to the bank or any subsidiary, otherwise than in the ordinary course of business, state the cost of the assets to the purchaser and the cost thereof to the seller if acquired by the seller within two years prior to the transaction. 3. The instruction to Item 4 shall apply to this item. 4. N o information need be given under this para graph as to any remuneration or other transaction reported in response to (a), (b), (c), (d), or (e) of this item. 5. N o information need be given under this para graph as to any transaction or any interest therein where: (i) The rates of charges invloved in the trans action are fixed by law or determined by competi tive bids; (ii) The interest of the specified person in the transaction is solely that of a director of another corporation which is a party to the transaction; (iii) The specified person is subject to this Item 7(f) solely as a director of the bank (or associate of a director) and his interest in the transaction is solely that of a director, officer of, and/or owner of less than a 10 per cent interest in, another per son that is a party to the transaction. (iv) The transaction consists of extensions of credit by the bank in the ordinary course of its business that (A) are made on substantially the same terms, including interest rates and collateral, as those prevailing at the time for comparable transactions with other than specified persons, (B) at no time exceed 10 per cent of the equity capital accounts of the bank, or $10 million, whichever is less, and (C) do not involve more than the normal risk of collectibility or present other unfavorable features. Notwithstanding the foregoing, if ag gregate extensions of credit to the specified persons, as a group, exceeded 20 per cent of the equity cap ital accounts of the bank at any time during the preceding year, (1) the aggregate amount of such extensions of credit shall be disclosed, and (2) a statement shall be included, to the extent appli cable, that the bank has had, and expects to have in the future, banking transactions in the ordinary course of its business with directors, officers, prin cipal stockholders, and their associates, on the same terms, including interest rates and collateral on loans, as those prevailing at the same time for comparable transactions with others. For the pur pose of determining “aggregate extensions of credit” from disclosure pursuant to other instructions to this Item 7(f) may be excluded. (v) The transaction involves services as a bank depositary of funds, transfer agent, registrar, trustee under a trust indenture, or other similar services; or (vi) The interest of the specified person, includ ing all periodic installments in the case of any lease or other agreement providing for periodic install ments, does not exceed $30,000. 6. Information shall be furnished under this para graph with respect to transactions not excluded above which involve remuneration, directly or indirectly, to any of the specified persons for services in any capac ity unless the interest of such persons arises solely from the ownership, individually and in the aggregate, of less than a 10 per cent interest in another person furnishing the services to the bank or its subsidiaries. Item 8. Selection of auditors. If action is to be taken with respect to the selection or approval of auditors, or if it is proposed th a t particular auditors shall be recom m ended by any com m ittee to select auditors fo r whom votes are to be cast, nam e the auditors and de scribe briefly any direct financial interest or any m aterial indirect financial interest in the bank or any of its parents o r subsidiaries, or any connection during the past three years with the b ank or any of its parents or subsid iaries in the capacity of prom oter, underw riter, voting trustee, director, officer, o r employee. Item 9. Bonus, profit-sharing, and other re muneration plans. If action is to be taken with respect to any bonus, profit-sharing, or other rem uneration plan, furnish the following infor m ation: ( a ) D escribe briefly the m aterial features of the plan, identify each class of persons who will participate therein, indicate the approxi m ate num ber of persons in each such class and state the basis of such participation. (b ) State separately the am ounts which would have been distributable u nd er the plan during the last fiscal year of the b an k (1 ) to directors and officers, and (2) to em ployees, if the plan had been in effect. (c ) State the nam e and position with the bank of each person specified in Item 7 ( a ) F o r m F -5 ( P r o x y S t a t e m e n t ) who will participate in the plan and the am ount which each such person would have received u nder the plan for the last fiscal year of the b an k if the plan had been in effect. (d ) Furnish such inform ation, in addition to that required by this item and Item 7, as m ay be necessary to describe adequately the provisions already m ade pursuant to all bonus, profit sharing, pension, retirem ent, stock op tion, stock purchase, deferred com pensation, o r other rem uneration o r incentive plans, now in effect or in effect within the p ast 2 years, for (i) each director o r officer nam ed in an sw er to Item 7 ( a ) who may participate in the plan to be acted upon; (ii) all directors and officers of the bank as a group, if any director or officer m ay participate in the plan, and (iii) all employees, if employees m ay partici pate in the plan. (e ) If the plan to be acted upon can be am ended otherw ise than by a vote of stock holders to increase the cost thereof to the bank or to alter the allocation of the benefits as be tween the groups specified in ( b ) , state the n a ture of the am endm ents which can be so made. (f) If action is to be taken w ith respect to the am endm ent or m odification of an existing plan, this item shall be answ ered with respect to the plan as proposed to be am ended or modified and shall indicate any m aterial dif ferences from the existing plan. Instruction. If the plan is set forth in a formal plan, contract, or arrangement, three copies thereof shall be filed with the Board at the time preliminary copies of the Statement are filed pursuant to section 206.5(f). REGULATION F (b ) State ( 1 ) the approxim ate total am ount necessary to fund the plan with respect to past services, the period over w hich such am ount is to be paid, and the estim ated annual paym ents necessary to pay the total am ount over such period, (2 ) the estim ated annual paym ent to be m ade with respect to current services, and ( 3 ) the am ount of such annual paym ents to be m ade for the benefit of (i) directors and officers, and (ii) employees. (c ) State (1 ) the nam e and position with the b ank of each person specified in Item 7 ( a ) who will be entitled to participate in the plan, ( 2 ) the am ount which would have been paid o r set aside by the bank and its subsidiaries for the benefit of such person for the last fiscal year of the bank if the plan had been in effect, and ( 3 ) the am ount of the annual benefits esti m ated to be payable to such person in the event of retirem ent at norm al retirem ent date. ( d ) F urnish such inform ation, in addition to th at required by this item and Item 7, as m ay be necessary to describe adequately the provisions already m ade pursu an t to all bonus, profit sharing, pension, retirem ent, stock op tion, stock purchase, deferred com pensation, or other rem uneration or incentive plans, now in effect or in effect within the past 2 years, for (i) each director or officer nam ed in answ er to Item 7 ( a ) who m ay participate in the plan to be acted upon; (ii) all directors and officers of the b ank as a group, if any director o r offi cer may participate in the plan, and (iii) all employees, if employees m ay participate in the plan. (e ) If the plan to be acted upon can be am ended otherwise th an by a vote of stock action is to be taken w ith respect to any pen holders to increase the cost thereof to the bank sion o r retirem ent plan, furnish the following or alter the allocation of the benefits as be inform ation: tween the groups specified in (b ) ( 3 ) , state the nature of the am endm ents which can be so (a ) D escribe briefly the m aterial features of made. the plan, identify each class of persons who (f) If action is to be taken w ith respect to will be entitled to participate therein, indicate the am endm ent or modification of an existing the approxim ate num ber of persons in each plan, this item shall be answ ered with respect such class, and state the basis of such partici to the plan as proposed to be am ended o r m od pation. Item 10. Pension and retirement plans. If REGULATION F ified and shall indicate any material differences from the existing plan. Instructions. 1. The information called for by para graph (b) (3) or (c) (2) need not be given as to pay ments made on an actuarial basis pursuant to any group pension plan which provides for fixed benefits in the event of retirement at a specified age or after a specified number of years of service. 2. The instruction to Item 9 shall apply to this item. Item 11. Options, warrants, or rights. If action is to be taken with respect to the grant ing, extension or amendment of any options, warrants, or rights to purchase securities of the bank or any subsidiary, furnish the following information: (a) State (i) the title and amount of securi ties called for or to be called for by such op tions, warrants, or rights; (ii) the prices, ex piration dates, and other material conditions upon which the options, warrants, or rights may be exercised; and (iii) in the case of op tions, the Federal income tax consequences of the issuance and exercise of such options to the recipient and to the bank. (b) State separately the amount of options, warrants, or rights received or to be received by the following persons, naming each such person: (i) each director or officer named in answer to Item 7 (a ); (ii) each nominee for election as a director of the bank; (iii) each associate of such directors, officers, or nomi nees; and (iv) each other person who received or is to receive 5 per cent or more of such options, warrants or rights. State also the total amount of such options, warrants, or rights received or to be received by all directors and officers of the bank as a group, without naming them. (c) Furnish such information, in addition to that required by this item and Item 7, as may be necessary to describe adequately the provisions already made pursuant to all bonus, profit sharing, pension, retirement, stock op tion, stock purchase, deferred compensation, or other remuneration or incentive plans, now in effect or in effect within the past 2 years, for (i) each director or officer named in an F o r m F - 5 ( P ro x y S t a t e m e n t ) swer to Item 7 (a) who may participate in the plan to be acted upon; (ii) all directors and officers of the bank as a group, if any director or officer may participate in the plan, and (iii) all employees, if employees may partici pate in the plan. Instruction. 1. Paragraphs (b) and (c) do not apply to warrants or rights to be issued to security holders as such on a pro rata basis. 2. The Instruction to Item 9 shall apply to para graph (c) of this item. 3. Include in the answer to paragraph (c) as to each director or officer named in answer to Item 7(a) and as to all directors and officers as a group (i) the amount of securities acquired during the past two years through the exercise of options granted during the period or prior thereto, (ii) the amount o f securi ties sold during such period of the same class as those acquired through the exercise of such options, and (iii) the amount of securities subject to all unexer cised options held as of the latest practicable date. Item 12. Authorization or issuance of secu rities otherwise than for exchange. If action is to be taken with respect to the authorization or issuance of any securities otherwise than in exchange for outstanding securities of the bank, furnish the following information: (a) State the title and amount of securities to be authorized or issued. (b) Furnish a description of the material provisions of the securities such as would be required in a registration statement filed pur suant to this Part. If the terms of the securities cannot be stated or estimated with respect to any or all of the securities to be authorized, because no offering thereof is contemplated in the proximate future, and if no further authori zation by security holders for the issuance thereof is to be obtained, it should be stated that the terms of the securities to be author ized, including dividend or interest rates, con version prices, voting rights, redemption prices, maturity dates, and similar matters will be determined by the board of directors of the bank. If the securities are additional shares of common stock of a class outstanding, the de scription may be omitted. (c) Describe briefly the transaction in which the securities are to be issued, including a F o r m F -5 ( P ro x y S t a t e m e n t ) statem ent as to ( 1 ) the nature and approxi m ate am ount of consideration received o r to be received by the bank, and ( 2 ) the approxi m ate am ount devoted to each purpose so far as determ inable, fo r w hich the n et proceeds have been or are to be used. If it is im practica ble to describe the transaction in w hich the securities are to be issued, indicate the purpose of the authorization of the securities, and state (i) w hether further authorization for the issu ance of the securities by a vote of security holders will be solicited prior to such issuance, and (ii) w hether present security holders will have preem ptive rights to purchase such secu rities. Item 13. Modification or exchange of securi ties. If action is to be taken w ith respect to the modification of any class of securities of the bank, or the issuance or authorization fo r issu ance of securities of the bank in exchange for outstanding securities of the bank, furnish the following inform ation: (a ) If outstanding securities are to be m odi fied, state th e title and am ount thereof. If secu rities are to be issued in exchange fo r out standing securities, state the title and am ount of securities to be so issued, the title and am ount of outstanding securities to be ex changed therefor, and the basis of the ex change. (b ) D escribe any m aterial differences be tween the outstanding securities and the m odi fied or new securities w ith respect to any of the m atters concerning w hich inform ation would be required in the description of the securities in a registration statem ent filed pu rsu an t to this Part. (c) State the reasons for the proposed m odi fication o r exchange and the general effect thereof up on the rights of existing security holders. (d ) Furnish a brief statem ent as to arrears in dividends o r as to defaults in principal or interest w ith respect to the outstanding securi ties which are to be modified or exchanged and such other inform ation as m ay be appropriate REGULATION F in the particular case to disclose adequately the nature and effect of the proposed action. (e ) O utline briefly any other m aterial fea tures of the proposed m odification or exchange. (f) T he instruction to Item 9 shall apply to this item. Item 14. Mergers, consolidations, acquisi tions, and similar matters. If action is to be taken with respect to any plan for (i) the m erger or consolidation of th e b an k into o r with any oth er person, o r of any other person into or w ith the bank, (ii) the acquisition by the bank o r any of its subsidiaries of securities of another bank, (iii) the acquisition by the bank of any other going business o r of the assets thereof, (iv) the sale o r other transfer of all or any substantial p a rt of the assets of the bank, o r (v ) the voluntary liquidation o r dissolution of the bank: (a ) O utline briefly the m aterial features of the plan. State the reasons therefore and the general effect thereof upon the interests of ex isting security holders. If the plan is set forth in a written docum ent, file three copies thereof with the B oard when prelim inary copies of the Statem ent are filed pursuant to section 2 0 6 .5 (f). (b ) F urnish the following inform ation as to the b ank and each person (o th er than sub sidiaries substantially all of the stock of which is ow ned by the b a n k ) which is to be m erged into the bank, or into o r with w hich the bank is to be m erged o r consolidated, o r the business or assets of which are to be acquired, or which is the issuer of securities to be acquired by the ban k o r any of its subsidiaries in exchange for all or a substantial p a rt of its assets: (1 ) A brief description of the business and property of each such person in substan tially the m ann er required by Item s 3 and 4 of F o rm F - l. (2 ) A brief statem ent as to defaults in principal o r interest with respect to any securi ties of the b ank o r of such person, and as to REGULATION F the effect of the plan thereon and such other information as may be appropriate in the par ticular case to disclose adequately the nature and effect of the proposed action. (3) Such information with respect to the proposed management of the surviving bank as would be required by Items 6 and 7 of this Form F-5. Information concerning remunera tion of management may be projected for the current year based on remuneration actually paid or accrued by each of the constituent per sons during the last calendar year. If signifi cantly different, proposed compensation ar rangements should also be described. (4) A tabular presentation of the existing and pro forma capitalization. (5) In columnar form, for each of the last three fiscal years, a historical summary of earnings. Such summary is to be concluded by indicating per share amounts of income before securities gains (losses), net income, and dividends declared for each period reported. (Extraordinary items, if any, should be appro priately reported and per share amounts of securities gains (losses) should be included.) (6) In columnar form, for each of the last three fiscal years, a combined pro forma summary of earnings, as appropriate in the circumstances, similar in structure to the his torical summary of earnings. If the transaction establishes a new basis of accounting for assets of any of the persons included therein, the pro forma summary of earnings shall be furnished only for the most recent fiscal year and interim period and shall reflect appropriate pro forma adjustments resulting from such new basis of accounting. (7) A tabular presentation of compara tive per share data of the constitutent banks or other persons pertaining to: (A )(i) Income before securities gains (losses), (ii) net income, and (iii) divi dends declared, for each of the last three fiscal years; and (B) book value per share, at the date of F o r m F -5 ( P r o x y S t a t e m e n t ) the balance sheets included in the State ment. The comparative per share data shall be presented on a historical and pro forma basis (except dividends which are to be furnished on historical basis only) and equated to a com mon basis in exchange transactions. (8) To the extent material for the exer cise of prudent judgment, the historical and pro forma earnings data specified in (5 ), (6 ), and (7) above for the latest available interim period of the current and prior fiscal years. Instructions. 1. Historical statements of income in their entirety, as required by Item 15, may be furnished in lieu of the summary of earnings specified in para graph (5). If summary earnings information is pre sented, include, as a minimum, operating revenues, operating expenses, income before income taxes and security gains (losses), applicable income taxes, in come before securities gains (losses), securities gains (losses), and net income. The summary shall reflect retroactive adjustments of any material items affect ing the comparability of the results. 2. In connection with any interim period or periods between the end of the last fiscal year and the bal ance sheet date, and any comparable prior period, a statement shall be made that all adjustments necessary to a fair statement o f the results for such interim period or periods have been included, and results of the interim period for the current year are not nec essarily indicative of results for the entire year. In addition, there shall be furnished in such cases, as supplemental information but not as a part of the proxy statement, a letter describing in detail the na ture and amount of any adjustments, other than nor mal recurring accruals, entering into the determination o f the results shown. 3. The information required by this Item 14(b) is required in a Statement of the “acquiring” or “sur viving” bank only where a “significant” merger or ac quisition is to be voted upon. For purposes of this item, the term “significant” merger or acquisition shall mean a transaction where either (1 ) the net book value of assets to be acquired or the amount to be paid therefore exceed 5 per cent of the equity capital accounts of the acquiring bank, or (2) in an exchange transaction, the number of shares to be issued exceeds 5 per cent of the outstanding shares of the acquiring bank, or (3 ) gross operating revenues for the last fiscal year of the person to be acquired exceeded 5 per cent of the gross operating revenues for the last fiscal year of the acquiring bank. If less than a “sig nificant” merger acquisition is to be voted upon, such information need only be included to the extent neces sary for the exercise of prudent judgment with res pect thereto. F orm F -5 ( P roxy S t a t e m e n t ) (c) As to each class of securities of the bank, or of any person specified in paragraph (b), which is admitted to dealing on a national securities exchange or with respect to which a market otherwise exists, and which will be materially affected by the plan, state the high and low sale prices (or, in the absence of trad ing in a particular period, the range of the bid and asked prices) for each quarterly period within two years. This information may be omitted if the plan involves merely the voluntary liquidation or dissolution of the bank. Item 15. Financial statements, (a) If action is to be taken with respect to any matter speci fied in Items 12, 13, or 14 above, furnish verified financial statements of the bank and its subsidiaries such as would be required in a registration statement filed pursuant to this Part. In addition, the latest available interim date balance sheet and statement of income for the interim period between the end of the last fiscal year and the interim balance sheet date, and comparable prior period, shall be furnished. All schedules, except Schedule VII — “Allowance for Possible Loan Losses,” may be omitted. REGULATION F (c)Notwithstanding paragraphs (a) and (b) above, any or all of such financial statements which are not material for the exercise of pru dent judgment in regard to the matter to be acted upon may be omitted. Such financial statements are deemed material to the exercise of prudent judgment in the usual case involving the authorization or issuance of any material amount of senior securities, but are not deemed material in cases involving the author ization or issuance of common stock, otherwise than in an exchange, merger, consolidation, acquisition, or similar transaction. (d) The Statement may incorporate by ref erence any financial statements contained in an annual report sent to security holders pursuant to section 206.5(c) with respect to the same meeting as that to which the Statement relates, provided such financial statements substantially meet the requirements of this item. Item 16. Action with respect to reports. If action is to be taken with respect to any report of the bank or of its directors, officers, or com mittees or any minutes of a meeting of its secu rity holders, furnish the following information: (a) State whether or not such action is to constitute approval or diapproval of any of the (b) If action is to be taken with respect to matters referred to in such reports of minutes. any matter specified in Item 14(b), furnish (b) Identify each of such matters which it is for each person specified therein, other than intended will be approved or disapproved, and the bank, financial statements such as would furnish the information required by the appro be required in a registration statement filed priate item or items of this schedule with re pursuant to this Part. In addition, the latest spect to each such matter. available interim date balance sheet and state Item 17. Matters not required to be sub ment of income for the interim period between mitted. If action is to be taken with respect to the end of the last fiscal year and the interim any matter which is not required to be sub balance sheet date, and comparable prior mitted to a vote of security holders, state the period, shall be furnished. However, the fol nature of such matter, the reasons for submit lowing may be omitted: (1) all schedules, ting it to a vote of security holders and what except Schedule VII— “Allowance for Possible action is intended to be taken by the manage Loan Losses” ; and (2) statements for a sub ment in the event of a negative vote on the sidiary, all of the stock of which is owned by matter by the security holders. the bank, that is included in the consolidated Item 18. Amendment of charter, by-laws, or statement of the bank and its subsidiaries. Such other documents. If action is to be taken with statements shall be verified, if practicable. REGULATION F F o r m F - 5 ( P ro x y S t a t e m e n t ) the substance of each such matter in substan tially the same degree of detail as is required by Items 5 to 18, inclusive, above. Item 20. Vote required for approval. As to each matter which is to be submitted to a vote of security holders, other than elections to office or the selection or approval of auditors, state the vote required for its approval. respect to any amendment of the bank’s char ter, by-laws, or other documents as to which information is not required above, state briefly the reasons for and general effect of such amendment. Item 19. Other proposed action. If action is to be taken with respect to any matter not specifically referred to above, describe briefly 12 (Revised Dec. 31, 1969) BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM FORM F-9: FINANCIAL STATEMENTS A. BALANCE SHEET (Form F-9 A) B. STATEMENT OF INCOME (From F-9B) C. STATEMENT OF CHANGES IN CAPITAL ACCOUNTS (Form F-9C) D. SCHEDULES (Form F-9D) omitted, the detailed instructions that relate to applicable items shall be followed. GENERAL INSTRUCTIONS 1. Preparation of forms. The forms for fi nancial statements are not to be used as blank forms to be filled in but only as guides in the preparation of financial statements. The re quirements with respect to the filing of balance sheets and statements of income are contained in the instructions as to certain other forms required by this Part. Particular attention should be given to the general requirements as to financial statements in section 206.7 of this Part, including paragraphs (e) and (f) thereof, which prescribe when statements of changes in capital accounts and schedules will be filed. Although inapplicable items specified in the forms for financial statements should be 2. Accrual accounting. Financial statements shall generally be prepared on the basis of ac crual accounting whereby all revenues and all expenses shall be recognized during the period earned or incurred regardless of the time re ceived or paid, with certain exceptions: (a) where the results would be only insignificantly different on a cash basis, or (b) where accrual is not feasible. Statements with respect to the first fiscal year that a bank reports on the ac crual basis shall indicate clearly, by footnote or otherwise, the beginning-of-year adjustments that were necessary and their effect on prior financial statements filed under this Part, 1 REGULATION F (B a la n c e S h e e t) F orm A. B a l a n c e Sh e e t Liabilities Assets 1. Cash and due from b a n k s.............................. 2. Investment securities: (a) U.S. Treasury securities .......................... (b) Securities of other U.S. Government agencies and corporations .................. (c) Obligations of States and political sub divisions ................................................ (d) Other securities ...................................... 3. Trading account securities .......................... 12. 13. 14. 15. 16. 17. 18. 19. 4. Federal funds sold and securities purchased under agreements to resell ...................... 5. Other lo a n s ...................................................... 7. Other real estate owned ................................ 8. Investments in subsidiaries not consolidated 9. Customers’ acceptance liability .................... 10. Other assets .................................................... 11. Total a ssets...................................................... Deposits: (a) Demand deposits in domestic offices . . . (b) Savings deposits in domestic offices . . . . (c) Time deposits in domestic o ff ic e s ........... (d) Deposits in foreign offices ......................... Federal funds purchased and securities sold under agreements to repurchase ................ Other liabilities for borrowed money ........... Bank’s acceptances outstanding .................... Mortgages p a y a b le ............................................... Other liabilities ................................................... Total liabilities .................................................... Minority interests in consolidated subsidiaries Reserves 2 0. Allowance for posible loan lo s s e s .................... Capital Accounts 6. Bank premises and equipment .................... ASSETS F-9A Capital notes and debentures ......................... Equity capital: (a) Capital stock: Preferred stock ................ Common s t o c k .................. (b) Surplus ............................................................ (c) Undivided Profits ......................................... (d) Reserve for contingencies and other capita] reserves ........................................ 23. Total capital accounts ...................................... 24. Total liabilities, reserves, and capital ........... 21. 22. mediately upon presentation (including checks 1. Cash and due from banks, (a) State the with a Federal Reserve Bank in process of col lection and checks on hand that will be pre total of (1) currency and coin (A ) owned and sented for payment or forwarded for collection held in the bank’s vaults and (B) in transit to on the following business day); (2) Govern or from a Federal Reserve Bank; (2) the ment checks and warrants drawn on the Treas bank’s total reserve balance with the Federal urer of the United States that are in process Reserve Bank as shown by the bank’s books; (3) demand and time balances with other of collection; and (3) such other items in proc ess of collection, including redeemed United banks; and (4) cash items in process of collec Staes savings bonds, payable immediately upon tion. presentation in the United States, as are cus (b) Reciprocal demand balances with banks tomarily cleared or collected by banks as cash in the United States, except those of private items. banks and American branches of foreign (e) Checks drawn on a bank other than banks, shall be reported net. the reporting bank that have been deposited (c) Do not include unavailable balances in the reporting bank (or offices or branches with closed or liquidating banks. Such bal of such bank) and have been forwarded for ances should be reported in “other assets”. collection to other offices or branches of the reporting bank are cash items in the process (d) Cash items in process of collection in of collection. clude: (1) checks in process of collection drawn on another bank, private bank, or any (f) Do not include commodity or bill-ofother banking institution that are payable imlading drafts payable upon arrival of goods * REGULATION F F o r m F - 9 A ( B a l a n c e Sh e e t ) 3. Trading account securities. State the ag gregate value at the balance sheet date, of secu rities of all types carried by the bank in a dealer trading account (or accounts) that are held principally for resale to customers. Indi cate parenthetically, or otherwise in a note to financial statements, whether the inventory is valued at (1) cost, (2) lower of cost or mar (g) Unposted debits should preferably be ket, or (3) market. If cost basis of valuation is used, furnish aggregate market value of the deducted from the appropriate deposit liability trading account inventory at the current fiscal caption. If such items are included hereunder, year balance sheet date. the amount shall be stated parenthetically. against which drawn, whether or not deposit credit therefor has been given to a customer. If deposit credit has been given, such drafts should be reported as “loans”; but if the drafts were received by the reporting bank on a col lection basis they should not be included in the reporting bank’s statement until such time as the funds have been actually collected. 2. Investment securities, (a) State separately book value of (1) U.S. Treasury securities; (2) Securities of other U.S. Government agen cies and corporations; (3) Obligations of States and political subdivisions; and (4) Other securities owned by the bank; include securities pledged, loaned or sold under repurchase agreements and similar arrangements. (b) Book value with respect to investment quality securities reported in paragraph (a) shall be cost adjusted for amortization of pre mium and, at the option of the bank, for ac cretion of discount. There shall be set forth in a note to financial statements (1) the basis of accounting for book value, and (2) if bond discount is systematically accrued and amounts to 5 per cent or more of interest and dividends on investments, the total of accretion income and deferred income taxes applied thereto. (c) Include in category (3) of paragraph (a) obligations, including warrants and tax anticipation notes, of the States of the United States and their political subdivisions, agen cies, and instrumentalities; also obligations of territorial and insular possessions of the United States. Do not include obligations of foreign states. 4. Federal funds sold and securities pur chased under agreements to resell, (a) State the aggregate value of Federal funds sold and securities purchased under resale agreement or similar arrangements. All securities purchased under transactions of this type should be in cluded regardless of (1) whether they are called simultaneous purchases and sales, buy backs, turnarounds, overnight transactions, de layed deliveries, etc., and (2) whether the transactions are with the same or different in stitutions if the purpose of the transactions is to resell identical or similar securities. (b) Federal funds sold and purchases of se curities under resale agreements should be reported gross and not netted against purchases of Federal funds and sales of securities under repurchase agreements. 5. Other Loans, (a) State the aggregate gross value of all loans including (1) accept ances of other banks and commercial paper purchased in the open market; (2) acceptances executed by or for the account of the reporting bank and subsequently acquired by it through purchase or discount; (3) customers’ liability to the reporting bank on drafts paid under let ters of credit for which the bank has not been reimbursed; and (4) “cotton overdrafts” or “advances,” and commodity or bill-of-lading drafts payable upon arrival of goods against (d) Do not include borrowed securities or securities purchased under resale agreements or similar arrangements. 3 REGULATION F ( B a l a n c e Sh e e t ) F o r m F - 9 A which draw n, for which the reporting bank has given deposit credit to custom ers. erty and will revert to the lessor o n expiration of the lease. ( b ) Include ( 1 ) paper rediscounted the F ed eral Reserve o r o ther banks; and paper pledged as collateral to secure payable, as m arginal collateral to secure rediscounted, or for any o ther purpose. with (2 ) bills bills (e) B ank prem ises includes vaults, fixed m achinery and equipm ent, parking lots owned adjoining or not adjoining the bank premises th at are used by custom ers o r employees, and potential building sites. (c ) D o not include contracts of sale or other loans indirectly representing bank prem ises o r other real estate; these should be in cluded in “bank prem ises” o r “other real estate” . (f) E quipm ent includes all movable furni ture and fixtures of the bank. ( d ) D o not deduct bona fide deposits ac cum ulated by borrow ers for the paym ent of loans. 6. Bank premises and equipment, (a) State the aggregate cost of (1) bank prem ises owned, ( 2 ) leasehold im provem ents, and ( 3 ) equip m ent less any accum ulated depreciation or am ortization with respect to such assets. (b) All fixed assets acquired subsequent to D ecem ber 31, 1959, shall be stated at cost less accum ulated depreciation or am ortization. (c ) All fixed assets acquired p rior to Ja n u ary 1, 1960, th at are not presently accounted for by the bank on the basis of cost less accu m ulated depreciation o r am ortization, m ay be stated at book value. Any such assets th at are still in use and would n ot have been fully de preciated on an acceptable m ethod of account ing for depreciation if the b ank had recorded depreciation on such basis shall be described briefly in a footnote, together with an explana tion of the accounting th at was used with re spect to such assets. ( d ) T he term “leasehold im provem ents” com prehends two types of situations: (1) w here the b ank erects a building on leased property; and (2 ) where a b ank occupies leased quarters o r uses leased parking lots and appropriately capitalizes disbursem ents for vaults, fixed m a chinery and equipm ent directly related to such leased quarters, or resurfacing o r oth er im provem ents directly related to such parking lots th a t will becom e an integral p a rt of the p ro p 7. Other real estate owned, ( a ) State the aggregate cost of all real estate owned by the bank th at is not a part of bank prem ises. ( b ) W ith respect to real estate acquired through default of a loan, aggregate cost shall include the unpaid balance on the defaulted loan plus the b an k ’s out-of-pocket costs in ac quiring clear title to the property. A ny adjust ments from aggregate cost shall be explained in a footnote. (c ) T he aggregate m arket value of all real estate ow ned by the bank that is not a p a rt of bank premises shall be set forth in a footnote, together with an explanation of the m ethod of determ ining such m arket value. 8 . Investments in subsidiaries not consoli dated. State the aggregate investm ent, includ ing advances, in subsidiaries not consolidated. 9. Customers’ acceptance liability, ( a ) State the liability to the reporting bank of its custom ers on drafts and bills of exchange that have been accepted by the reporting b an k or by other banks for its account and th at are out standing— th at is, not held by the bank, on the reporting date. (If held by the reporting bank, they should be reported as “loans” ). (b ) In case a custom er anticipates his lia bility to the bank on outstanding acceptances by paying the bank either the full am ount of his liability or any p a rt thereof in advance of the actual m aturity of the acceptance, the bank should decrease the am ount of the custom er’s liability on outstanding acceptances. If such funds are not received for im m ediate applica tion to the reduction of the indebtedness to the F o r m F - 9 A ( B a l a n c e Sh e e t ) REGULATION F bank or the receipt thereof does n ot im m edi ately reduce o r extinguish the indebtedness, then such funds held to m eet acceptances m ust be reported in “dem and deposits” . (e ) Include outstanding drafts (including advices o r authorizations to charge the b a n k ’s balance in another b a n k ) draw n in the regular course of business by the reporting b ank on (c ) D o not include custom er’s liability on other banks pu rsu ant to custom er order. (f) D o not include trust funds held in the unused com m ercial and travelers’ letters of credit issued under guaranty or against the de b an k ’s own tru st departm ent th a t the bank posit of security— th at is, not issued for money keeps segregated and a p a rt from its general o r its equivalent. assets and does not use in the conduct of its business. 10. Other assets. State separately, if m ate rial, ( 1 ) incom e earned b ut no t collected; 13. Federal funds purchased and securities ( 2 ) prepaid expenses; ( 3 ) property acquired sold under agreements to repurchase, (a ) for the purpose of direct lease financing; and State the aggregate value of F ed eral funds p u r ( 4 ) any other asset not included in the preced chased and securities sold under repurchase or ing items. sim ilar arrangem ents. All securities sold under transactions of this type should be included 11. Total assets. State the sum of all asset regardless of ( 1 ) w hether they are called sim ul items. taneous purchases and sales, buy-backs, tu rn arounds, overnight transactions, delayed de LIABILITIES liveries, etc., and (2 ) w hether the transactions 12. Deposits, (a ) State separately (1) de are with the same o r different institutions if m and deposits in dom estic offices of the bank, the purpose of the transactions is to repurchase ( 2 ) savings deposits in dom estic offices of the identical o r sim ilar securities. bank, ( 3 ) tim e deposits in dom estic offices of (b ) F ederal funds purchased and sales of the bank, and (4) deposits in foreign offices. securities u n der repurchase agreem ents should R elated unposted debits, if any, should pref be reported gross and not netted against sales erably be deducted from dom estic deposists. of F ed eral funds and purchases of securities ( b ) T he dom estic deposit liability categories u nder resale agreements. shall be segregated in accordance w ith the Rules and R egulations of the Federal D eposit In sur 14. Other liabilities for borrowed money. ance C orporation, P art 327.2— Classification State the aggregate am ount borrow ed by the of D eposits. reporting b an k on its ow n prom issory notes, on notes and bills rediscounted (including com (c ) T he term “unposted debit” m eans a cash m odity drafts rediscounted), o r on any other item in the b an k ’s possession draw n on itself instrum ents given for the purpose of borrow ing th a t has been paid or credited an d is chargeable money. against, bu t has not been charged against, de posit liabilities at the close of the reporting period. This term does not include items th at have been reflected in deposit accounts on the general ledger, although they have not been debited to individual deposit accounts. (d ) R eciprocal dem and deposit balances with banks in the U nited States, except those of private banks and A m erican branches of foreign banks, shall be reported net. 15. Bank’s acceptances outstanding, (a) State the aggregate of unm atured drafts and bills of exchange accepted by th e reporting b ank , o r by some other b ank as agent for the reporting bank (o th er th an those reported in “dem and de posits” ) , less the am ount of such acceptances acquired by the reporting b ank through dis count or purchase and held on the reporting date. REGULATION F (b ) Include bills of exchange accepted by the reporting b an k th a t Were draw n by banks or bankers in foreign countries, or in dependencies o r insular possessions o f the U nited States, for the purpose of creating dollar exchange as re quired by usage of trad e in the respective coun tries, dependencies, o r insular possessions. 16. Mortgages payable, (a) State separately here, o r in a note referred to herein, such in form ation as will indicate ( 1 ) the general char acter of the debt including the rate of interest; ( 2 ) th e date of m aturity; ( 3 ) if the paym ent of principal or interest is contingent, an ap pro priate indication of such contingency; and ( 4 ) a brief indication of priority. ( B a l a n c e Sh e e t ) F o r m F - 9 A judgm ent as to possible loss o r value depre ciation and (B ) has been established through a charge against income. (b)A ny provision for possible loan losses th at the b ank establishes as a precautionary m easure th at is in excess of the am ount reported in p a ra graph (a) shall not be included in this allowance but shall be reported as a contingency reserve— th a t is, as a segregation of undivided profits. Note. Any allowance that (1) represents manage ment’s judgment as to possible loss or value deprecia tion in investment securities and (2 ) has been estab lished through an appropriate charge against income shall be separately stated. Any provision for possible security losses that the bank establishes as a precau tionary measure only (such as to reflect normal fluc tuations in market value of readily marketable secur ities) shall not be included in this allowance but shall be reported as a contingency reserve— that is, as a segregation o f undivided profits. (b ) If there are any liens on b ank premises or other real estate ow ned by th e bank o r its consolidated subsidiaries w hich have not been assum ed by the b an k o r its consolidated subsi CAPITAL ACCOUNTS diaries, rep ort in a footnote the am ount thereof 21. Capital notes and debentures. State together with an appropriate explanation. separately here, o r in a note referred to herein, 17. Other liabilities. State separately, if each issue o r type of obligation and such infor m aterial, ( a ) accrued payrolls; ( b ) accrued m ation as will indicate ( a ) the general charac income tax liability (F ederal and State com ter of each type of debt including the rate of b in e d ); (c ) accrued interest; ( d ) cash divi interest; ( b ) the date of m aturity (o r dates if dends declared b ut no t paid; (e) incom e col m aturing serially) and call provisions; (c ) the lected but n ot earned; and ( f ) any other liability aggregate am ount of m aturities, and sinking not included in Item s 12 through 16. fund requirem ents, each y ear for the 5 years following the date of the balance sheet; ( d ) if 18. Total liabilities. State the sum of Item s the paym ent of principal o r interest is contin 12 through 17. gent, an appropriate indication of the n atu re of 19. Minority interests in consolidated sub the contingency; (e ) a brief indication of prior sidiaries. State the aggregate am ount of m inor ity; and (f) if convertible, the basis. ity stockholders’ interests in capital stock, sur 22. Equity capital, (a) C apital stock. State plus, and undivided profits of consolidated sub for each class of shares the title of issue, the sidiaries. num ber of shares authorized, the num ber RESERVES of shares outstanding and the capital share liability thereof, and, if convertible, 20. Allowance for possible loan losses, (a) the basis of conversion. Show also the dollar State the balance of the loan losses allpwance am ount, if any, of capital shares subscribed but account at the end of th e fiscal year. Include in unissued, and of subscriptions receivable this allow ance only ( 1 ) any provision th a t the thereon. bank m akes for possible loan losses p ursuan t to the T reasury tax form ula and ( 2 ) any am ount in excess of the provision tak en u nder such form ula th at (A ) represents m anagem ent’s (b ) Surplus. State the n et am ount form ally transferred to the surplus account on o r before the reporting date. Form F-9A REGULATION F (B a la n c e S h e e t) element of know n losses, o r losses the am ount of which can be estim ated with reasonable accuracy. (c ) U ndivided profits. State the am ount of undivided profits shown by the b a n k ’s books. ( d ) R eserve for contingencies and other capital reserves. (4 ) Reserves for possible security losses, reserves fo r possible loan losses, and other contingency reserves th a t are established as precautionary m easures only shall be in cluded in these reserves, as they represent seg regations of “undivided profits” . ( 1 ) State separately each such reserve and its purpose. ( 2 ) These reserves constitute am ounts set aside for possible decrease in the book value of assets, o r for other unforseen o r indeter m inable liabilities not otherw ise reflected on the b a n k ’s books and n o t covered by insurance. 23. Total capital accounts. State the total of Item s 21 and 22. 24. Total liabilities, reserves and capital. State the total of Item s 18, 19, 20 and 23. ( 3 ) A s these reserves represent a segre gation of undivided profits, do not include any 7 REGULATION F ( S t a t e m e n t o f I n c o m e ) F o r m F -9 B B. St a t e m e n t o f I n c o m e 1. Operating Income: (a ) Interest and fees on lo a n s ............................................................................................................................. (b ) Income on Federal funds sold and securities purchased under agreements to resell .............. (c ) Interest and dividends on investments: (1 ) U.S. Treasury secu rities........................................................................................................................ (2 ) Securities of other U.S. Government agencies and corp oration s............................................. (3 ) Obligations of States and political subdivisions ....................................................................... (4 ) Other securities ...................................................................................................................................... (d) Trust department income ............................................................................................................................. (e) Service charges on deposit a c co u n ts........................................................................................................... (f) Other service charges, collection and exchange charges, commissions, and f e e s ......................... (g) Other operating in c o m e ................................................................................................................................. (h ) Total operating income .................................................................................................................................. 2. Operating Expenses: (a ) Salaries and wages ........................................................................................................................................... (b ) Pensions and other employee b e n e fits....................................................................................................... (c) Interest on d ep o sits.......................................................................................................................................... (d) Expenses of Federal funds purchased and securities sold under agreements to repurchase (e) Interest on other borrowed m o n e y .............................................................................................................. (f) Interest on capital notes and debentures................................................................................................... (g) Occupancy expense of bank premises, net: Gross occupancy expense -------------------Less: Rental income ................................... .......................................................................................... (h) Furniture and equipment expense (Including depreciation of $-------- ) ........................................... (i) Provision for loan l o s s e s ...................................................... ! ....................................................................... (j) Other operating expenses ............................................................................................................................. (k) Total operating e x p e n se s............................................................................................................................... 3. Income before Income Taxes and Securities Gains (Losses) ..................................................................... 4. Applicable Income T a x e s ........................................................................................................................................ 5. Income before Securities Gains (Losses) .................................................................................................. 6. Net Security Gains (Losses), less related tax effect, $........... ........................................................................ 7. Net income ............................................................................................................................................... OR 7. Income before Extraordinary I te m s .......... 8. Extraordinary Items, less related tax effect, $ 9. Net In c o m e .................................................... 10. Earnings per common share*: Income before securities gains (losses) ............................................................................................. Net Income ............................................................................................................................................. * Per share amount of securities gains (losses) may be stated separately. If extraordinary items are reported, per share amount of income before extraordinary items and per share amount of extraordinary items shall be stated separately. 1. Operating income. State separately : (a) Interest and fees on loans. (1) Include interest, fees and other charges on all assets that are reported on the balance sheet as other loans. (2) Include interest on acceptances, com mercial paper purchased in the open market, drafts for which the bank has given deposit credit to customers, etc. Also include interest on loan paper that has been rediscounted with Federal Reserve or other banks or pledged as collateral to secure bills payable or for any other purpose. (3) Include service charges and other fees on loans. F orm F -9 B (S ta te m e n t of In c o m e ) (4) Include profits (or losses) resulting from the sale of acceptances and commercial paper at discount rates other than those at which such paper was purchased. (5) Current amortization of premiums on mortgages or other loans shall be deducted from interest on loans and current accumula tion of discount on such items shall be added to interest on loans. (b) Income on Federal funds sold and se curities purchased under agreements to resell. Include the total gross revenue from Federal funds sold and securities purchased under agreements to resell. (c) Interest and dividends on investments. (1) State separately interest and dividens from (A ) U.S. Treasury securities, (B) securities and other U. S. Government agencies and corporations, (C) obligations of States and political subdivisions, and (D ) other se curities owned by the bank, including securities pledged, loaned, or sold under repurchase agreements and similar arrangements. (2) Include accretion of discount on se curities, if any; deduct amortization of pre miums on securities. If the reporting bank ac crues bond discount and such income amounts to 5 per cent or more of the total of interest and dividends on investments, state in a note to financial statements, the amount of accretion income and deferred income taxes applicable thereto. (3) When securities are purchased, any payment for accrued interest shall not be charged to expenses, nor when collected be credited to earnings. Such interest shall be charged to a separate account that will be cred ited upon collection of the next interest pay ment. The balance in the account shall be shown as “Other assets” in the balance sheet. REGULATION F (2) This item may be reported on the cash basis in those instances where the presen tation of the item on the financial statements would not be materially affected thereby. The cash basis may also be used with respect to an individual trust or estate if accrual of income therefrom is not feasible. If any portion of trust department income is not reported on the accrual basis, there shall be a footnote ex plaining the method of reporting and the rea son for departing from reporting on the accrual basis. (e) Service charges on deposit accounts. In clude amounts charged depositors that fail to maintain specified minimum deposit balances; charges based on the number of checks drawn on and deposits made in deposit accounts; charges for account maintenance and for checks drawn on “no minimum balance” de posit accounts; return check charges; etc. (f) Other service charges, collection and exchange charges, commissions, and fees. State the aggregate of other service charges, collec tion and exchange charges, commissions, and fees. Exclude charges on loans and deposits and those related to the Trust Department. Do not include reimbursements for out-of-pocket expenditures made by the bank for the account of customers. If expense accounts were charged with the amount of such expenditures, the re imbursements should be credited to the same expense accounts. (g) Other operating income. (1) Include all operating income not re ported in Items 1(a) through 1(f). (2) Include (A ) net trading account in come consisting of profits and losses, interest, and other income and expense related to secu rities carried in a dealer trading account or accounts that are held principally for resale to customers, but exclude salaries, commis (d) Trust department income. sions, and other indirect expenses; (B) income from lease financing; (C) gross rentals from (1) Include income from commissions “other real estate” and safe deposit boxes; and fees for services performed by the bank in (D ) net remittable profits (or losses) of for any authorized fiduciary capacity. REGULATION F eign branches and consolidated subsidiaries less any minority interests (unless the report ing bank preferably combines or consolidates each item of income and expense); (E ) inter est on time balances with other banks; and (F ) all other recurring credits (such as mis cellaneous recoveries) and immaterial non recurring credit items. (3) Do not include rentals from bank premises. Such rental income shall be reported in the inset to Item 2 (g). In the event there is a net occupancy income, the income shall be shown in parenthesis in Item 2(g). (4) Itemize (A ) net trading account in come, (B) net remittable profits (or losses) of foreign branches and consolidated subsidiaries (if included in this sub-item), and (C) all other amounts that represent 25 per cent or more of the total of this sub-item, unless “other operating income” is less than 5 per cent of “total operating income.” ( S t a t e m e n t o f I n c o m e ) F o r m F -9 B and related functions. Such compensation shall be included in Item 2(g). (5) Do not include amounts paid to legal, management, and investment counsel for pro fessional services if such counsel are not sala ried officers or employees of the bank. Such amounts shall be included in Item 2 (j). (b) Pensions and other employee benefits. (1) Include all supplementary benefits, other than direct compensation included in Item 2 (a) accrued during the report period on behalf of all officers and employees except building department personnel (see Item 2 (g )). (2) Include the bank’s own contribution to its pension fund; unemployment and Social Security taxes for the bank’s own account; life insurance premiums (net of dividends re ceived) and hospitalization insurance payable by the bank; and other employee benefits. (3) Do not include expenses related to testing, training, or education of officers and (h) Total operating income. State the sum employees; the cost of bank newspapers and of Items 1(a) through 1(g). magazines; premiums on insurance policies 2. Operating expenses. State separately: where the bank is beneficiary; and athletic ac tivities where the principal purpose is for pub (a) Salaries. licity or public relations and employee benefits (1) Include compensation for personal are only incidental. Such amounts shall be services of all officers and employees, including included in Item 2 (j). dinning room and cafeteria employees but not (c) Interest on deposits. Include interest on building department employees. all deposits. (2) Include amounts withheld from sala (d) Expense of Federal funds purchased ries for Social Security taxes and contributions and securities sold under agreements to re to the bank’s pension fund. Do not include purchase. Include the total gross expenses of Social Security taxes paid by the bank for its Federal funds purchased and securities sold own account and the bank’s contribution to under agreements to repurchase. pension funds. Such amounts shall be included in Item 2 (b ). (e) Interest on other borrowed money. (3) Include bonus and profit sharing (1) Include all interest on bills payable, paid directly or through a trustee. Such com rediscounts, unsecured notes payable, and pensation that is deferred and not distributed other instruments issued for the purpose of to employees shall be reported in Item 2 (b ). borrowing money other than Federal funds purchased and securities sold under agreements (4) Do not include compensation of offi to repurchase. cers and employees who spent the major por tion of their working time on bank building (2) Do not include interest on mortgages Form F-9B (S ta te m e n t o f Incom e) on bank premises. Such interest shall be in cluded in Item 2(g). (f) Interest on capital notes and debentures. (1) Include all interest on capital notes and debentures. (2) Amortization of premium or discount shall be deducted from or included in the amount reported. (3) Do not include premium or discount paid or realized on retirement of such securi ties. Such amounts shall be reported in Item 1(g) or 2 (j). REGULATION F amount for credit losses. Such amount shall be determined by management in light of past loan loss experience and evaluation of potential loss in the current loan portfolio. The estimated loan loss factor allocable to operating expense shall not be less than the amount computed under one of the elective methods set forth in sub-item (2 ). (2) The bank may elect in 1969, and thereafter consistently use for financial report ing purposes, one of the following methods for allocating loan losses to operating expense: (A ) Average ratio of loss over the past five years applied to average loans out standing during the current year. Ratio of loss shall be the single decimal quotient of total net charge-offs (losses less recoveries) and total average loans for the five most recent years, including the current year. (B) Average ratio of loss on a forward moving average beginning with the year 1969 applied to average loans outstanding during the current year. Ratio of loss shall be the single decimal quotient of total net charge-offs and total average loans for the number of years beginning with 1969 and ending with the year of report. In 1973, banks which elect the for ward moving average method will compute the minimum allocable credit loss expense on the same basis as banks which elect method ( 1). (g) Occupancy expense of bank premises, net. (1) Include in “gross occupancy expense” inset the aggregate amount of (A ) salaries, wages, and supplementary compensation of bank personnel who devote the major portion of their time to the operation of bank premises or its consolidated premises subsidiaries; (B) depreciation of bank premises and amortization of leasehold improvements; (C) rent expense of bank premises; (D ) real estate taxes; (E) interest on mortgages on bank premises owned; and (F ) other bank premises operating and maintenance expenses. (2) Include in “rental income” inset the aggregate amount of rentals from bank prem ises leased by the bank or its consolidated premises subsidiaries. (3) Report the net occupancy expense Note. For purposes of Items 2(A) and (B), annual (or net income) of bank premises. If net income “average loans outstanding” (1) shall include Federal funds sold and securities purchased under agreements is reported, the amount shall be shown in paren to resell, and (2 ) may be computed on any reasonable thesis. schedule of frequency. In the absence of other pro (h) Furniture and equipment expense. cedures, “Other loans”, and “Federal funds sold and securities purchased under agreements to resell”, as (1) Include normal and recurring de reported in the Statements of Condition called by the preciation charges; rental costs of office ma supervisory authorities, shall be averaged. chines and tabulating and data processing (C) Actual net charge-offs as experi equipment; and ordinary repairs to furniture enced in the current year. and office machines, including servicing costs. (3) An estimated amount for loan losses The amount applicable to depreciation charges allocable to operating expense in excess of the shall be shown in parenthesis. minimum amount computed as instructed in sub-item (2) should be provided when judged (2) Include taxes on equipment. appropriate in the opinion of management. (i) Provision for loan losses. (4) Furnish in a note to financial state (1) Banks which provide for loan losses ments an explanation of the basis for allocating on a reserve basis shall include an estimated REGULATION F loan losses to operating expense including (A ) the method followed, and (B) amount added at the discretion of management, if any. (5) The amount may be expressed in even dollars or thousands of dollars. Note. The amount reported for loan losses in operating expense shall be adjusted, if necessary, to the amount transferred to the allowance for loan losses recorded on the books of the bank by an entry to the undivided profits account in the statement of changes in capital accounts. For example, if the esti mated loan loss expense reported in the statement of income is less than the amount transferred to the allowance for loan losses, the amount of difference, less related tax effect, should be charged against the undivided profits account. If the estimated loan loss expense reported in the statement of income (1) is more than the amount transferred to the allowance for loan losses, and (2) represents the minimum amount the bank is required to allocate under its elected method, the amount of difference, less related tax effect, should be credited to the undivided profits account. (6) Banks which do not provide for loan losses on a reserve basis shall include the amount of actual net charge-offs (losses less recoveries) for the current year. (j) Other operating expenses. (1) Include all operating expenses not reported in Items 2 (a) through 2 (i). (2) Include advertising, business promo tion, contributions, cost of examinations by supervisory authorities, deposit insurance as sessment, fees paid to directors and members of committees, memberships, net cash shortages or overages, operating expenses (except sala ries) of “Other real estate owned”, postage, premium on fidelity insurance, publicity, re tainer fees, stationery and office supplies, sub scriptions, taxes not reported against other items, telegrams and cables, telephone, tempo rary agency help, travel, unreimbursed losses on counterfeits, forgeries, payments over stops, and all other recurring expenses and imma terial nonrecurring charges. (3) Deposit insurance assessment expense shall be reported as a net figure— that is, all assessment credits during the period shall be applied against the assessment expense. (4) Itemize all amounts that represent 25 per cent or more of this item. ( S t a t e m e n t o f I n c o m e ) F o r m F -9 B (k) Total operating expenses. State the sum of Items 2 (a) through 2 (j). 3. Income before income taxes and security gains (losses). State the difference of Item 1(h) minus Item 2 (k ). 4. Applicable income taxes, (a) State the aggregate of Federal and State taxes applicable to the amount reported in Item (3 ). (b) Do not include taxes applicable to net security gains (losses) and extraordinary items. Such taxes (or tax reductions) shall be re ported in Items 6 and 8. 5. Income before securities gains (losses). State the difference of Item 3 minus Item 4. 6. Net security gains (losses). State the net result of security gains and losses realized. Re lated income taxes (or tax reductions) shall be shown parenthetically. 7. Net income. State the sum or difference of Items 5 and 6. Note. If extraordinary items are reported (See Item 8) the caption to this Item shall read, “Income before extraordinary items.” 8. Extraordinary items. State the material results of non-recurring transactions that have occurred during the current reporting period. Only the results of major events outside of the ordinary operating activity of the bank are to be reported herein. Such events would include, but not be limited to, material gain or loss from sale of bank premises, expropriation of properties, and major devaluation of foreign currency. Related income taxes (or tax re ductions) shall be shown parenthetically. (Less than material results of non-recurring transac tions are to be included in Items 1 (g) or 2 (j), as appropriate.) 9. Net income. State the sum or difference of Items 7 and 8. 10. Earnings per common share. State the per share amounts applicable to common stock (including common stock equivalents) and per share amounts on a fully diluted basis, if ap plicable. The basis of computation, including the number of shares used, shall be furnished in a note to financial statements. REGULATION F C . St a t e m e n t of C hanges Increase (decrease) in C a p it a l A c c o u n t s Pre Capital ferred notes stock and deben $ par tures Com mon stock $ par Surplus Undi vided profits Reserve for contin gencies and other capital reserves 1. N et income transferred to undivided profits . . . . 2. Capital notes and debentures, preferred stock and common stock sold (par or face value) 3. Stock issued incident to mergers and acquisitions 4. Premium on capital stock sold 5. Additions to, or reductions in, surplus, undi vided profits, and reserves incident to mergers 6. Transfer to allowance for loan loss, exclusive of portion charged against income, less related income tax effect $ 7. Cash dividends declared on preferred stock 8. Cash dividends declared on common stock 9. Stock issued in payment of stock dividend, shares at par value. 10. A ll other increases (decreases)1 11. N et increase (decrease) for the year 12. Balance at beginning of year 2 13. Balance at end of year 1 State separately any material amounts, indicating clearly the nature of the transaction out of which the item arose. - If the statement is filed as part of an annual or other periodic report and the balances at the beginning of the period differ from the closing balances as filed for the previous fiscal period, state in a footnote the difference and explain. REGULATION F (S c h e d u le s) F orm F-9D D. S c h e d u l e s SCHEDULE I— U.S. TREASURY SECURITIES, SECURITIES OF OTHER U.S. GOVERNMENT AGENCIES A N D CORPORATIONS, A N D OBLIGATIONS OF STATES A N D POLITICAL SUBDIVISIONS Principal amount Type and maturity grouping Book value 1 U.S. Treasury securities Within 1 year After 1 but within 5 years After 5 but within 10 years After 10 years Total U.S. Treasury securities Securities of other U.S. Government agencies and corporations Within 1 year After 1 but within 5 years After 5 but within 10 years After 10 years Total securities o f other U.S. Government agencies and corporations Obligations of states and political subdivisions 2 3 Within 1 year After 1 but within 5 years After 5 but within 10 years After 10 years Total obligation of states and political subdivisions 1 State briefly in a footnote the basis for determining the amounts in this column. 2 Include obligations of the States of the United States and their political subdivisions, agencies, and instrumen talities; also obligations of territorial and insular possessions of the United States. Do not include obligations of foreign States. 3 State in a footnote the aggregate (a) principal amount, (b) book value, and (c) market value of securities that are less than “investment grade.” If market value is determined on any basis other than market quotations at bal ance sheet date, explain. SCHEDULE II— OTHER SECURITIES Type Amount Book value 1 Bonds, notes, and debentures 2 3 Stock o f the Federal Reserve Bank Other stocks 2 4 Total 1 State briefly in a footnote the basis for determining the amounts shown in this column. 2 State in a footnote the aggregate amount and book value of foreign securities included. 3 State in a footnote the aggregate (a) principal amount, (b) book value, and (c) market value of bonds, notes, and debentures that are less than “investment grade." If market value is determined on any basis other than market quotations at balance sheet date, explain. 4 State in a footnote the aggregate market value. 1 Form F-9D REGULATION F (S c h e d u l e s ) SCHEDULE HI— OTHER LOANS 1 Type Book value Real estate loans: Insured or guaranteed by the U.S. Government or its agencies Other Loans to financial institutions Loans for purchasing or carrying securities (secured or unsecured) Commercial and industrial loans Loans to individuals for household, family, apd other consumer expenditures A ll other loans (including overdrafts) Total other loans reported in balance sheet 1 If impractical to classify foreign branch and foreign subsidiary loans in accordance with this schedule, a separate caption stating the total amount of such loans may be inserted. Such action should be explained in a footnote. SCHEDULE IV— BANK PREMISES A N D EQUIPMENT Bank premises (including land $ Amount at which Accumulated depreciation carried on balance sheet and amortization 3 4 Gross book value 2 Classification 1 ) Equipment Leasehold improvements Totals 5 1 If impractical to consolidate foreign branch and foreign subsidiary bank premises and equipment in accordance with the breakdown required by this schedule, a separate caption stating the total amount of all such property may be inserted. Such action should be explained in a footnote. 2 State briefly in a footnote the basis of determining the amounts in this column. 3 If provision for depreciation and amortization is credited in the books directly to the asset accounts, the amounts for the last fiscal year shall be stated in an explanatory footnote. 4 The nature and amount of significant additions (other than provisions for depreciation and amortization) and deductions shall be stated in an explanatory footnote. 3 Show in a footnote totals (corresponding to the first two columns) representing amounts reported for Federal income tax purposes. 15 REGULATION F (S c h e d u le s) F orm F-9D SCHEDULE V — INVESTMENTS IN, D IV IDEND INCOME FROM, A N D SHARE IN EARNINGS OR LOSSES OF UNCONSOLIDATED SUBSIDIARIES Totals Total investment, including advances Equity in underlying net assets at balance sheet date 1 Amount of dividends 2 $ Name of subsidiary Per cent of voting stock owned $ $ Bank’s proportionate part of earnings or loss for the period $ 1 Equity shall include advances reported in preceding column to the extent recoverable. In a footnote state as to any dividends other than cash, the basis on which they have been reported as income. Also, if any such dividend received has been credited to income in an amount differing from that charged to surplus and/or undivided profits by the disbursing subsidiary, state the amount of such difference and explain. 2 SCHEDULE VI— “OTHER” LIABILITIES FOR BORROWED MONEY Item Borrowings from Federal Reserve Bank Unsecured notes payable within 1 year Unsecured notes payable after 1 year Other obligations Total Amount REGULATION F F orm F -9 D (S c h ed u l es) SCHEDULE VII—ALLOWANCE FOR POSSIBLE LOAN LOSSES Amount set up pursuant to Treasury tax formula Item Other amount1 Balances at beginning of period Recoveries credited to Allowance Additions due to mergers and absorptions 2 Transfers to Allowance: From income From undivided profits 3 Totals Losses charged to Allowance Balances at end of period 4 1 Do not include any provision for possible loan losses that the bank establishes as a precautionary measure. Include only any provision that (1) has been established through a charge against income, (2) represents management’s judg ment as to possible loss or value depreciation, and (3) is in excess of the provision taken under the Treasury tax formula. 2 Describe briefly in a footnote any such addition. 3 Indicate by parenthesis the gross amount of any credit adjustment to undivided profits. 4 Describe briefly in a footnote the basis used in computing the amount accumulated in the Allowance at the end of the period. State the amount that could have been deducted for Federal income tax purposes if such amount is in excess of the amount provided by the bank pursuant to the Treasury tax formula. N o te . —The sum of the balances should equal the amount of “Allowance for possible loan losses” reported in the balance sheet. 17
