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FEDERAL RESERVE BANK
OF NEW YORK
SE C U R IT IE S OF M E M B E R ST A T E B A N K S
C om m ent In vited on Proposed A m en d m en ts to R egulation F
To Conform w ith SEC Rules
To All State Member Banks in the
Second Federal Reserve District:
The Board of Governors of the Federal Reserve System is proposing to amend its Regulation F,
“Securities of Member State Banks,” to make it substantially similar to comparable rules and
regulations issued by the Securities and Exchange Commission (which apply to various issuers
other than banks, including bank holding companies). The proposed changes relate principally
to (a) filing and disclosure req u irem en ts re la tin g to beneficial ow nership, (b) corporate
governance, (c) management remuneration, and (d) changes in independent accountant and
auditor fees.
In submitting the proposal for comment, the Board indicated that it is especially interested in
receiving comment on two of the proposed changes relating to disclosures on proxy statements. In
the first place, the Board has proposed lowering the dollar ceiling for the exemption from
reporting indebtedness of specified persons, from $10 million to $5 million; however, the Board
specificially requests comment on the alternative of continuing the $10 million ceiling. Secondly,
the Board requests comment on the extent to which personal benefits furnished to bank
management should be exempt from disclosure.
Enclosed, for State member banks in this District that are presently subject to Regulation F,
is a copy of the Board’s proposal. It will be published in the Federal Register and copies will be
furnished upon request (Tel. No. 212-791-5914). Comments thereon should be submitted by
August 22, and may be sent to our Regulations Division.
P a u l a . V olcker ,
President.
ftM 'I d ■
FEDERAL RESERVE SYSTEM
t
[1 2 C .F .R . P a r t 206]
[R e g . F ; D o c k e t N o. R -0 2 3 5 ]
SECURITIES OF MEMBER STATE BANK
AGENCY:
B o a rd o f G o v e rn o rs o f t h e F e d e r a l R e s e r v e S y s te m .
ACTION:
P r o p o s e d R u le .
SUMMARY:
P u rs u a n t to i t s
a u t h o r i t y u n d e r s e c t i o n 12 ( i )
o f th e S e c u r it i e s
E x ch a n g e A c t o f 1 9 3 4 , a s am ended (15 U .S .C . § 78 ( i ) )
(" A c t" ),
p r o p o s e s t o amend i t s
in o rd e r t h a t i t
R e g u l a t i o n F (12 C .F .R . § 206)
t h e B o a rd
w i l l b e s u b s t a n t i a l l y s i m i l a r t o c o m p a r a b le r u l e s a n d r e g u l a t i o n s
by t h e S e c u r i t i e s a n d E x c h a n g e C o m m issio n .
t o com ply w i t h s e c t i o n 1 2 ( i )
e i t h e r c o n fo rm i t s
in i t s
T h is p r o p o s a l i s
is s u e d
in te n d e d
o f t h e A c t, w h ich r e q u i r e s t h a t t h e B o a rd
R e g u l a t i o n F t o an y c h a n g e s made by t h e C o m m issio n
r e l e v a n t r u l e s an d r e g u l a t i o n s , o r p u b l i s h r e a s o n s why t h e B o a rd
h a s d e te r m in e d t h a t su c h c h a n g e s a r e n o t n e c e s s a r y o r a p p r o p r i a t e .
The p r o p o s e d c h a n g e s , w h ic h i n a l l m a jo r r e s p e c t s a r e c o n s i s t e n t w ith
r e c e n t am endm ents t o t h e r u l e s o f t h e C o m m issio n , c o n c e r n :
O w n e rsh ip an d A c q u i s i t i o n S t a t e m e n t s
(A) B e n e f i c i a l
(B) C o r p o r a te G o v e rn a n c e
(C) M anagem ent
R e m u n e ra tio n (D) C h a n g e s i n I n d e p e n d e n t A c c o u n ta n t a n d A u d i t o r F e e s
an d
(E) S i m p l i f i c a t i o n a n d o t h e r C o m m issio n A m endm ents.
T h ere a r e ,
h o w e v e r, tw o p r o v i s i o n s i n t h e p r o p o s e d am endm ents t h a t ,
w o u ld d i f f e r
d iffe r
fro m t h e B o a r d 's
p re se n t
re g u la tio n and,
fro m t h e r e g u l a t i o n s o f th e C o m m issio n .
s p e c ific a lly
in one c a se
i n a n o t h e r w o u ld
A c c o r d i n g l y , t h e B o a rd
r e q u e s t s com m ents on t h e d o l l a r e x e m p tio n s fro m r e p o r t i n g
m an agem ent i n d e b t e d n e s s p u r s u a n t t o Ite m 7 (d ) o f Form F -5
12 C .F .R .
§ 2 0 6 .5 1 , a n d p e r s o n a l b e n e f i t s p u r s u a n t t o I te m 7 on Form F -
5 (P ro x y S ta t e m e n t )
12 C .F .R . § 2 0 6 .5 1 , a s m ore f u l l y d e s c r i b e d b elo w
i n s e c t i o n s 36 an d C o f t h e s e c t i o n e n t i t l e d ,
DATES:
ADDRESS:
(P ro x y S ta te m e n t)
" S u p p le m e n ta r y I n f o r m a t i o n " .
Comments m u st b e r e c e i v e d by A u g u st 2 2 , 1 9 7 9 .
I n te r e s te d p e rso n s a re in v ite d
t o s u b m it w r i t t e n d a t a , v ie w s
-2 o r a r g u m e n ts r e g a r d i n g t h e p r o p o s e d r e g u l a t i o n t o t h e O f f i c e o f t h e
S e c r e t a r y , B o a rd o f G o v e rn o rs o f t h e F e d e r a l R e s e r v e S y s te m , W a s h in g to n D .C .
20551.
A l l m a t e r i a l s u b m i tt e d s h o u ld i n c l u d e t h e d o c k e t num ber R -0 2 3 5 .
A l l w r i t t e n com m ents w i l l b e made a v a i l a b l e f o r p u b l i c i n s p e c t i o n a t
th is a d d ress.
FOR FURTHER INFORMATION CONTACT:
Thom as S id m a n , A s s i s t a n t D i r e c t o r ,
D i v i s i o n o f 3 a n k in g S u p e r v i s i o n a n d R e g u l a t i o n , B o a rd o f G o v e r n o r s o f
t h e F e d e r a l R e s e r v e S y s te m , W a s h in g to n , D .C . 20551 ( 2 0 2 / 4 5 2 - 3 5 0 3 ) , o r
R i c h a r d M. W h i t i n g , S e n i o r A t t o r n e y , L e g a l D i v i s i o n , B o a rd o f G o v e rn o rs
o f t h e F e d e r a l R e s e r v e S y s te m , W a s h in g to n , D. C. 2 0551 ( 2 0 2 / 4 5 2 - 3 7 8 6 ) .
SUPPLEMENTARY INFORMATION:
The F e d e r a l R e s e r v e 3 o a r d w o u ld make th e
fo llo w in g c h a n g e s:
A.
FILING AND DISCLOSURE REQUIREMENTS RELATING TO BENEFICIAL
OWNERSHIP.
G e n e r a l l y , s e c t i o n 1 3 (d) o f t h e A c t r e q u i r e s t h a t a n y p e r s o n
( o r g ro u p o f p e r s o n s ) who, a s a r e s u l t o f a n a c q u i s i t i o n , b eco m es th e
b e n e f i c i a l ow ner o f m ore t h a n 5 p e r c e n t o f c e r t a i n c l a s s e s o f e q u i t y
s e c u ritie s o f c e rta in
a c q u is itio n .
i s s u e r s m u st f i l e
a r e p o r t w i t h r e s p e c t t o su c h
S e c t i o n 1 3 (d ) o f t h e A c t w as d e s i g n e d t o p r o v i d e
m a tio n t o t h e p u b l i c and a f f e c t e d
o f th e ir e q u ity s e c u r itie s
th e n have th e a b i l i t y
in fo r
i s s u e r s a b o u t r a p i d a c c u m u l a t io n s
i n t h e h a n d s o f " b e n e f i c i a l o w n e rs " who c o u ld
to change o r in f lu e n c e c o n tr o l o f th e is s u e r .
To im p le m e n t t h i s p r o v i s i o n ,
t h e C o m m issio n p r o p o s e d i n 1977 r u l e s d e f i n i n g
t h e te rm " b e n e f i c i a l o w n e r s h i p " , SEC R e le a s e No. 3 4 - 1 3 2 9 1 , 43 F e d e r a l
R e g i s t e r 12342
(F e b ru a ry 2 4 , 1 9 7 7 ).
L a t e r C o n g r e s s d e te r m in e d t h a t
t h e i n f o r m a t i o n r e q u i r e d by s e c t i o n 1 3 (d) a n d t h e r e g u l a t i o n s a n d fo rm s
p r o m u lg a te d t h e r e u n d e r d i d n o t p r o v i d e a d e q u a t e i n v e s t m e n t i n f o r m a t i o n .
C o n g re ss t h e r e f o r e e n a c te d l e g i s l a t i o n ,
p rin c ip a lly
t h e D o m e s tic and
F o r e i g n I n v e s tm e n t D i s c l o s u r e A c t o f 1 9 7 7 , P .L . No. 9 5 -2 1 3 , 91 S t a t .
1494
-3 (1 9 7 7 ) , a m en d in g s e c t i o n 1 3 (d )
o f th e A ct
to s p e c if ic a l l y
e n u m e r a te d d i s c l o s u r e s s u c h a s r e s i d e n c e , c i t i z e n s h i p
o f th e b e n e f i c i a l o w n e rs h ip .
t o t h e A c t.
S e c t i o n 1 3 (g )
re q u ire c e r ta in
an d t h e n a t u r e
I n a d d i t i o n , a new s e c t i o n 1 3 (g )
w as a d d e d
a u t h o r i z e d t h e C o m m issio n t o a c h i e v e a c o m p r e h e n s iv e ,
c e n t r a l i z e d an d m in im a lly b u rd e n so m e r e p o r t i n g s y s te m a n d t o c l o s e t h e
g a p s w h ich e x i s t i n t h e p r e s e n t schem e f o r r e q u i r i n g d i s c l o s u r e b y p e r s o n s
w hose b e n e f i c i a l o w n e r s h ip e x c e e d s 5 p e r c e n t o f c e r t a i n
e q u ity s e c u r i t i e s .
SEC R e l e a s e No. 3 4 - 1 5 3 4 8 , 43 F e d e r a l R e g i s t e r 5 5751 (N ovem ber 2 9 , 1 9 7 8 ) .
A c c o r d i n g l y , t h e C o m m issio n h a s a d o p te d am endm ents t o i t s
r e g u l a t i o n s a n d fo rm s t h a t r e f l e c t t h e i n t e n t o f C o n g r e s s .
F irs t,
th e
C o m m issio n b r o a d e n e d t h e d e f i n i t i o n o f " b e n e f i c i a l o w n e r s h ip " by am en d in g
its
R u le 1 3 d - 3 .
(A p ril 29, 1 9 7 8 ).
SEC R e l e a s e N o. 3 4 -1 4 6 9 2 , 43 F e d e r a l R e g i s t e r 18434
U nder am ended R u le 1 3 d -3 b e n e f i c i a l o w n e r s h ip i s
d e t e r m in e d w i t h r e f e r e n c e t o v o t i n g pow er o r i n v e s t m e n t p o w er
to d is p o s e o r d i r e c t d i s p o s it i o n o f th e s e c u r i t y ) .
( t h e pow er
F or p u rp o se s o f
r e p o r t i n g p u r s u a n t t o s e c t i o n 1 3 (d ) o f t h e A c t, o n e who h a s t h e r i g h t
t o a c q u i r e b e n e f i c i a l o w n e r s h ip i s deem ed t o b e a b e n e f i c i a l o w n e r.
The o w n e r s h ip w i l l a l s o a p p l y f o r p u r p o s e s o f r e p o r t i n g u n d e r s e c t i o n
1 4 ( d ) (1) o f t h e A c t.
(c)
to i t s
S e c o n d , t h e C o m m issio n a d o p te d a new p a r a g r a p h
R u le 1 3 d ~ l t h a t r e q u i r e s f i l i n g s by p e r s o n s c u r r e n t l y n o t
re q u ire d to r e p o r t -
i.e .,
(1)
t h o s e who a c q u i r e d b e n e f i c i a l o w n e r s h ip
o f s e c u r i t i e s p r i o r t o D ecem ber 2 2 , 1 9 7 0 ,
(2)
t h o s e who a c q u i r e d n o t
m ore t h a n 2 p e r c e n t o f a c l a s s o f s e c u r i t i e s w i t h i n a 1 2 -m o n th p e r i o d ,
an d (3)
t h o s e who a c q u i r e d s e c u r i t i e s
in a s to c k - f o r - s to c k
exchange
r e g i s t e r e d u n d e r t h e S e c u r i t i e s A c t o f 1 9 3 3 , SEC R e l e a s e N o. 3 4 - 1 5 3 4 8 ,
43 F e d e r a l R e g i s t e r 5 5751 (N ovem ber 2 9 , 1 9 7 8 ) .
T h ird ,
t h e C o m m issio n
-4am ended i t s
R u le 1 3 d - l ( b )
may b e u s e d b y s p e c i f i e d
a n d a d o p t e d new s h o r t fo rm S c h e d u le G t h a t
i n s t i t u t i o n a l p e r s o n s o n l y when s u c h p e r s o n s
a r e a c q u ir in g and h o ld in g s e c u r i t i e s
in th e o r d in a r y c o u rs e o f b u s in e s s
.
a n d n o t w i t h t h e p u r p o s e o r e f f e c t o f c h a n g in g o r i n f l u e n c i n g c o n t r o l
o f th e i s s u e r o r in c o n n e c tio n w ith a p a r t i c i p a n t in any t r a n s a c t i o n
h a v in g s u c h p u r p o s e o r e f f e c t .
R e g i s t e r 18484
(A p r il 2 8 , 1 9 7 8 ).
SEC R e l e a s e N o. 3 4 -1 4 6 9 2 , 43 F e d e r a l
U nder t h e am ended C o m m issio n r u l e s ,
S c h e d u le 13G i s a v a i l a b l e f o r u s e by i n s t i t u t i o n a l i n v e s t o r s s u c h a s
c e r ta in b ro k e rs , d e a le r s , b anks,
i n v e s t m e n t c o m p a n ie s ,
in v e s tm e n t a d v is o r s ,
e m p lo y e e b e n e f i t p l a n s , p e n s i o n f u n d s , p a r e n t h o l d i n g c o m p a n ie s , g r o u p s ,
a n d i n s u r a n c e c o m p a n ie s .
am ended i t s
F o u r t h , o n A p r i l 2 1 , 1 9 7 8 , t h e C o m m issio n
R u le s 1 3 d —1 ( b ) ( i ) ( G )
and 1 3 d -3 (d )(3 )
to c l a r i f y
th e a p p l i c a
t i o n o f t h e new d e f i n i t i o n o f b e n e f i c i a l o w n e r s h ip t o p a r e n t h o l d i n g
c o m p a n ie s a n d c e r t a i n o f t h e i r s u b s i d i a r i e s a n d t o p l e d g e e s o f s e c u r i t i e s .
SEC R e l . No. 3 4 -1 4 9 1 0 , 43 F e d e r a l R e g i s t e r 29767
(J u ly 11, 1 9 7 8 ).
The R u le no l o n g e r e x e m p ts a b s o l u t e l y fro m t h e d e f i n i t i o n o f b e n e f i c i a l
o w ner a p e r s o n w h o se o n l y i n t e r e s t i n t h e s e c u r i t i e s
is
t h a t o f a p le d g e e
in th e o r d in a r y c o u r s e o f h is b u s in e s s , a lth o u g h su ch p le d g e e s c o n tin u e
to be exem pt p ro v id e d th e y m eet c e r t a i n c o n d i t i o n s . F i n a l l y ,
h a s am ended i t s
t h e C om m issio n
R u le 1 3 d - l ( c ) t o r e q u i r e an y p e r s o n who i s n o t " o t h e r w i s e "
r e q u i r e d t o r e p o r t p u r s u a n t t o R u le 13 d - 1 .
b u t who i s a b e n e f i c i a l
o w ner o f m ore t h a n 5 p e r c e n t o f a s p e c i f i e d c l a s s o f e q u i t y s e c u r i t i e s ,
t o r e p o r t o n S c h e d u l e 13G, 43 F e d e r a l R e g i s t e r 5 5 7 5 1 .
fa ll
in to
t h i s c a te g o ry i f ,
o f a c la s s o f s e c u r itie s
A p e r s o n c o u ld
f o r e x a m p le , h e a c q u i r e d b e n e f i c i a l o w n e rs h ip
t h a t , w h i l e n o t r e g i s t e r e d p u r s u a n t t o s e c t i o n 1 2 (g )
o f t h e A c t a t t h e tim e o f a c q u i s i t i o n , h a s s u b s e q u e n t l y becom e r e g i s t e r e d .
-5 -
H o w ev er, R u le 1 3 d - l ( c )
e x e m p ts i s s u e r s who a c q u i r e t h e i r own s e c u r i t i e s
fro m t h e c l a s s o f p e r s o n s n o t " o t h e r w i s e " r e q u i r e d t o r e p o r t .
T hus,
i s s u e r s who s a t i s f y
t h e e x e m p tio n u n d e r s e c t i o n 1 3 ( d ) ( 6 ) ( c )
o f th e A ct
do n o t h a v e t o f i l e
e i t h e r S c h e d u le 13D o r S c h e d u le 13G.
u n d e r R u le 1 3 d - l ( c )
a r e t o b e made o n a m o d if ie d v e r s i o n o f t h e C o m m is s io n 's
A ll f i l i n g s
S c h e d u le 13G.
The B o a rd p r o p o s e s t o amend i t s
r e g u l a t i o n s a n d fo rm s t o e x p a n d
t h e d e f i n i t i o n o f b e n e f i c i a l o w n e r s h ip a s d e s c r i b e d a b o v e a n d t o p r o v i d e
a new s h o r t fo rm
a c q u is itio n n o tic e .
A c c o rd in g ly ,
a p p r o p r i a t e am endm ents t o 12 C .F .R . §§ 2 0 6 .4 ( h )
t h e B o a rd p r o p o s e s
a n d 2 0 6 .5 ( 1 )
o f R e g u la tio n F,
Form P - 1 1 , ( A c q u i s i t i o n F o rm ), 12 P .R . § 2 0 6 .4 7 , I te m 5 o f Form F - 5 ,
(P ro x y S t a t e m e n t ) , 12 C .F .R . § 2 0 6 .5 1 , a n d p r o p o s e s new Form F -1 1 A ,
( S h o r t Form O w n e rsh ip S t a t e m e n t ) , 12 C .F .R . § 2 0 6 .4 8
, a s s e t f o r t h b e lo w .
I n c o n s i d e r i n g t h e s e p r o p o s a l s t h e B o a rd n o t e d t h a t p u r s u a n t
t o s e c t i o n 1 3 ( g ) (5) o f t h e A c t th e C o m m issio n i s
re q u ir e d to ta b u la te
a n d make a v a i l a b l e t o t h e p u b l i c t h e i n f o r m a t i o n f i l e d w i t h i t r e l a t i n g
t o b e n e f i c i a l o w n e rs h ip a n d t h a t f o r su c h p u r p o s e , t h e C o m m issio n h a s
added co v e r p ag es to i t s
fo rm s t h a t s e t f o r t h s u c h d a t a
f o r i t s d a t a p r o c e s s i n g s y s te m .
H o w ev er, t h e B o a rd b e l i e v e s t h a t t h e
a d d itio n o f s im ila r co v e r s h e e ts to i t s
on t h o s e f i l i n g
su ch fo rm s.
s m a l l num ber o f f i l i n g s
its
fo rm s i s u n n e c e s s a r i l y b u rd e n so m e
In a d d itio n ,
i n v ie w o f t h e r e l a t i v e l y
t h e B o a rd e x p e c t s t o r e c e i v e ,
s t a f f c a n c o m p ile s i m i l a r
i n a fo rm s u i t a b l e
t h e B o a rd b e l i e v e s
i n f o r m a t i o n w h i l e r e v ie w in g t h e f i l i n g s .
The B o a rd w i l l make s u c h a t a b u l a t i o n o f s h a r e o w n e r s h ip a v a i l a b l e
th e p u b l i c .
3.
CORPORATE GOVERNANCE
The C o m m issio n am ended i t s
ru le s r e la tin g
t o C o r p o r a te
to
-6G o v e rn a n c e .
1 9 7 8 ).
SEC R e l e a s e No. 3 4 -1 5 3 8 4 , 43 F e d e r a l R e g i s t e r 58522
T he o b j e c t i v e o f t h e s e am endm ents i s
(D ecem ber 1 4 ,
to p ro v id e th e in v e s tin g
p u b l i c w i t h a d d i t i o n a l i n f o r m a t i o n upon w h ic h t o a s s e s s a n d p a r t i c i p a t e
i n t h e c o r p o r a t e e l e c t o r a l p r o c e s s an d c o r p o r a t e g o v e r n a n c e .
The am endm ents
re q u ir e d is c lo s u r e re g a rd in g :
1.
S h a re h o ld e r P r o p o s a ls .
The C o m m issio n r e v i s e d
its
ru le s
t o a l l o w a s h a r e h o l d e r p r o p o n e n t t h e o p p o r t u n i t y t o b r i n g an a l l e g e d l y
f a l s e o r m i s l e a d i n g s t a t e m e n t i n m a n a g e m e n t’ s s t a t e m e n t o p p o s in g t h e
s h a r e h o l d e r 's p r o p o s a l t o t h e a t t e n t i o n o f m an ag em en t a n d t h e C o m m issio n .
The C o m m issio n l i s t e d
th r e e re a s o n s f o r a d o p tin g t h i s
s im p ly w o u ld b e m ore e q u i t a b l e i f
(1)
it
s h a r e h o l d e r p r o p o n e n t s w e re p e r m i t t e d
t o s e e m a n a g e m e n t's o p p o s in g s t a t e m e n t b e f o r e i t
(2)
ru le :
i s m a ile d t o s h a r e h o l d e r s ;
i n l i g h t o f t h e p ro b le m s a s s o c i a t e d w i t h a t o t a l r e l i a n c e o n j u d i c i a l
r e m e d ie s a n d t h e l i m i t e d C o m m issio n r e s o u r c e s a v a i l a b l e f o r r e v ie w o f
p ro x y m a t e r i a l s ,
i t a p p e a rs a p p r o p r ia te f o r an e f f e c t i v e a d m i n i s tr a t i o n
o f t h e p ro x y r u l e s t h a t a s h a r e h o l d e r p r o p o n e n t b e g i v e n t h e o p p o r t u n i t y
t o e x a m in e m a n a g e m e n t's o p p o s in g s t a t e m e n t f o r a c c u r a c y a n d
a p p e a r to be in th e b e s t i n t e r e s t s o f a l l p a r t i e s
(3)
i t w o u ld
t h a t q u e s t i o n s c o n c e rn in g
t h e f a c t u a l a c c u r a c y o f t h e o p p o s in g s t a t e m e n t s b e r e s o l v e d d u r i n g
com m ent p r o c e s s .
SEC R e l e a s e 3 4 -1 5 3 8 4 , 43 F e d e r a l R e g i s t e r 58522
th e
(D ecem ber 1 4 ,
1 9 7 8 ).
T he B o a rd b e l i e v e s i t a p p r o p r i a t e t o a d o p t a s i m i l a r r u l e
a n d , t h e r e f o r e , p r o p o s e s t o am end § 2 0 6 . 5 ( k ) (5) o f R e g u l a t i o n F a s s e t
f o r t h b e lo w .
2.
R e s ig n a tio n o f D ir e c to r s .
The C o m m issio n r e v i s e d
r u le s to r e q u ir e d is c lo s u r e o f a d i r e c t o r 's r e s ig n a tio n
h as fu r n is h e d
re la tin g
t h e r e g i s t r a n t w ith a l e t t e r d e s c r i b i n g
if
its
th e d ir e c to r
th e d is a g re e m e n t
to th e r e g i s t r a n t 's o p e r a tio n s , p o l i c i e s o r p r a c t i c e s
and r e q u e s t i n g
-7 t h a t th e m a tte r be d is c lo s e d .
p r o v i d e d by t h e d i r e c t o r
is
I f th e is s u e r b e l i e v e s th e d e s c r i p t i o n
in a c c u r a te o r in c o m p le te ,
a s t a t e m e n t o f i t s v ie w s o f t h e d i s a g r e e m e n t .
t h a t , a s re v is e d ,
i t may i n c l u d e
T he C o m m issio n b e l i e v e s
t h e ite m s w i l l b e l e s s l i k e l y
t o c r e a t e c o m p lia n c e
p ro b le m s and y e t w i l l s t i l l a s s u r e t h a t d i r e c t o r s who h a v e r e s i g n e d
o r d e c lin e d to s ta n d f o r r e - e l e c t i o n w i l l be a b le to d i s c l o s e
th is
in fo rm a tio n
i n a m anner w h ich i s m o st l i k e l y t o r e a c h s h a r e h o l d e r s .
The B o a rd b e l i e v e s t h a t t h e r u l e c h a n g e s a d o p te d b y t h e SEC
a r e b e n e f i c i a l a n d w o u ld a d o p t t h e am endm ents s u b s t a n t i a l l y
fo rm a d o p te d by t h e SEC by am en d in g I te m 5 o f Form F -3
12 C .F .R . § 2 0 6 .4 3 , a n d I te m 6 ( i )
o f Form F -5
in th e
(C u rre n t R e p o rt),
(P ro x y S t a t e m e n t , 12 C .F .R .
§ 2 0 6 .5 1 , a s s e t f o r t h b e lo w .
3.
D i s c l o s u r e o f Term s o f S e t t l e m e n t o f E l e c t i o n C o n t e s t s .
The C o m m issio n am ended i t s
r u l e s t o r e q u i r e an i s s u e r t o d i s c l o s e
s e t t l e m e n t te rm s o f an e l e c t i o n c o n t e s t ,
in c lu d in g
th e
th e a n t i c i p a t e d c o s t
to is s u e r .
The B o a rd h a s d e t e r m in e d t o a d o p t s i m i l a r r u l e s a n d , a c c o r d i n g l y ,
p r o p o s e s t o r e v i s e I te m 7 (d )
§ 2 0 6 .4 4 a n d I te m 3 ( b ) ( 6 )
o f Form F -4
o f Form F -5
( Q u a r t e r l y R e p o r t ) , 12 C .F .R .
(P ro x y S t a t e m e n t ) , 12 C .F .R . § 2 0 6 .5 1 ,
a s s e t f o r t h b e lo w .
4.
D ir e c to r s and O f f i c e r s .
T he C o m m issio n r e v i s e d i t s
an d r e g u l a t i o n s t o r e q u i r e a d d i t i o n a l i n f o r m a t i o n t o p r o v i d e
ru le s
in v e s to rs
' w i t h m ore c o m p r e h e n s iv e i n f o r m a t i o n a b o u t t h e b a c k g r o u n d , q u a l i f i c a t i o n s
a n d a f f i l i a t i o n s o f d i r e c t o r s who s e r v e o n t h e b o a r d s o f p u b l i c c o m p a n ie s .
T hus, d is c lo s u r e
i s r e q u i r e d o f a l l o t h e r d i r e c t o r s h i p s h e l d by e a c h d i r e c t o r
o n t h e b o a r d o f a n y o t h e r com pany w ith a c l a s s o f s e c u r i t i e s
p u r s u a n t t o t h e A c t.
In a d d itio n , d is c lo s u r e
is
re g is te re d
r e q u ir e d o f c e r t a i n fa m ily
an d b u s i n e s s r e l a t i o n s h i p s b e tw e e n an y d i r e c t o r o r o f f i c e r o r n o m in ee
-8 fo r such o f f ic e .
The am ended r u l e s a l s o r e q u i r e i n f o r m a t i o n a b o u t l i t i g a t i o n
i n w h ic h o f f i c e r s an d d i r e c t o r s o r n o m in e e s
h a v e b e e n i n v o l v e d w h ich
may b e m a t e r i a l t o an e v a l u a t i o n o f t h e a b i l i t y o r i n t e g r i t y o f s u c h
p erso n s.
lim ite d
The tim e p e r i o d c o v e r e d b y t h i s d i s c l o s u r e r e q u i r e m e n t i s
to th e f i v e y e a rs p r i o r to f i l i n g .
in fo rm a tio n a b o u t:
i n j u n c t i o n s p r o h i b i t i n g d i r e c t o r s a n d o f f i c e r s fro m
e n g a g in g i n a n y t y p e o f b u s i n e s s p r a c t i c e ,
fe d e ra l or s ta te
The am ended r u l e s r e q u i r e
s e c u ritie s
o f fe d e ra l or s ta te
fu tu re v io la tio n s o f
la w s an d c i v i l a c t i o n s w h e re t h e r e a r e v i o l a t i o n s
s e c u r i t i e s la w s a n d a n y c o u r t o r d e r ,
d e c re e e n jo in in g o r r e s t r i c t i n g
c a p a c itie s p a r tic u la rly
re la tin g
s u c h p e r s o n s fro m a c t i n g
ju d g m e n t o r
in c e r t a i n
to c e r t a i n b u s in e s s a c t i v i t i e s .
W here
t h e r e a r e m i t i g a t i n g c irc u m s ta n c e s s u rro u n d in g c o n s e n t o r d e r s , d e c re e s
o r j u d g m e n ts , o r w h e re t h e r e a r e r e a s o n s why i n f e r e n c e s s h o u l d n o t b e
d ra w n fro m p r i o r a f f i l i a t i o n s w i t h a b u s i n e s s a s s o c i a t i o n ,
t h e s e c irc u m s ta n c e :
may b e e x p l a i n e d .
S p e c i f i e d i d e n t i t y a n d b a c k g ro u n d i n f o r m a t i o n m u st a l s o be
d i s c l o s e d c o n c e rn in g p e rs o n s su ch a s a t t o r n e y s o r s p e c i a l c o n s u l t a n t s
e m p lo y e d by t h e b a n k who, a l t h o u g h n o t o f f i c e r s , make o r a r e e x p e c t e d
t o make s i g n i f i c a n t c o n t r i b u t i o n s t o t h e b u s i n e s s o f t h e b a n k .
The
B o a rd h a s c o n s i d e r e d t h e C o m m issio n s r e v i s i o n s a n d h a s d e t e r m in e d t h a t
s im ila r
re v is io n s
to i t s
r e g u l a t i o n s w o u ld be a p p r o p r i a t e .
t h e B o a rd h a s a d o p te d r e v i s i o n s t o I te m 6 o f Form F -5
A c c o rd in g ly ,
(P ro x y S t a t e m e n t ) ,
12 C .F .R . § 2 0 6 .5 1 , a s s e t f o r t h b e lo w .
5.
C o m m itte e s .
The C o m m issio n a d o p te d r u l e s r e g a r d i n g
i s s u e r s c o m m itte e s t r u c t u r e an d m a n ag e m en ts p a r t i c i p a t i o n
E ach i s s u e r m u st d i s c l o s e :
th e re in .
(1) w h e th e r i t h a s a s t a n d i n g a u d i t ,
n o m in ee
th e
an d c o m p e n s a tio n c o m m itte e ;
p e rfo rm ;
(3)
(2) t h e f u n c t i o n s t h a t s u c h c o m m itte e s
t h e num ber o f m e e tin g s a n n u a l l y h e l d , a n d
o f any d i r e c t o r a tte n d in g
(4)
th e
id e n tity
fe w e r th a n 75 p e r c e n t o f b o a r d o f d i r e c t o r s
o r c o m m itte e m e e t i n g s .
The B o a rd h a s p r o p o s e d s u b s t a n t i a l l y s i m i l a r am endm ents t o
its
r e g u la tio n s as s e t f o r th
i n Ite m 6 o f Form F -5
(P ro x y S t a t e m e n t ) ,
12 C .F .R . § 2 0 6 .5 1 , a s s e t f o r t h b e lo w .
6.
t o amend i t s
In d e b te d n e s s o f S p e c if ie d P e r s o n s .
r u le s to r e q u ir e a d d itio n a l d is c lo s u r e
T he 3 o a r d p r o p o s e s
re la tin g
to th e
i n d e b t e d n e s s t o t h e b a n k , by i t s o f f i c e r s , d i r e c t o r s a n d p r i n c i p a l s e c u r i t y
h o ld e rs .
In p a r t i c u l a r ,
t h e B o a rd w o u ld r e q u i r e
a s ta te m e n t o f th e
p e r c e n ta g e o f e q u ity c a p i t a l a c c o u n ts o f any d i s c l o s e d
in d e b te d n e s s
an d o f t o t a l i n d e b t e d n e s s o f a l l d i r e c t o r s an d o f f i c e r s .
In a d d itio n ,
t h e B o a rd w o u ld i n c l u d e re p a y m e n t te r m s a s o n e o f t h e f a c t o r s t o b e
c o n s i d e r e d i n d e t e r m i n i n g w h e th e r an e x t e n s i o n o f c r e d i t i s made i n
s u b s t a n t i a l l y t h e sam e te r m s a s th o s e r e q u i r e d o f o t h e r s .
s t r u c t i o n 2 (d ) o f I te m 7 (d )
o f Form F -5
A ls o , I n
(P ro x y S t a t e m e n t ) , 12 C .F .R .
§ 2 0 6 .5 1 , w h ic h p r e s e n t l y p r o v i d e s a n e x c l u s i o n fro m r e p o r t i n g
th e
i n d e b t e d n e s s o f s p e c i f i e d p e r s o n s when s u c h i n d e b t e d n e s s d o e s n o t e x c e e d
t h e l e s s e r o f 10 p e r c e n t o f e q u i t y c a p i t a l o r $10 m i l l i o n , w o u ld b e
*T he
fo llo w in g
page
is
9a.
-9 a -
am ended by l o w e r in g t h e d o l l a r am ount o f s u c h e x e m p tio n t o $5 m i l l i o n
w h ile r e ta i n in g
b e lie v e s
t h e 10 p e r c e n t o f e q u i t y c a p i t a l t e s t .
The B o a rd
t h a t t h i s c h a n g e w o u ld p r o v i d e m ore m e a n i n g f u l d i s c l o s u r e f o r
s h a r e h o l d e r e v a l u a t i o n o f m anagem ent i n d e b t e d n e s s .
T h u s, th e p ro p o se d
am endm ent c o n t a i n s t h e $5 m i l l i o n e x e m p tio n d i s c u s s e d a b o v e ; h o w e v e r,
t h e B o a rd s p e c i f i c a l l y
r e q u e s t s com m ent o n t h e a l t e r n a t i v e o f m a i n t a i n i n g
s u c h e x e m p tio n a t $10 m i l l i o n .
S uch com m ents w i l l b e c o n s i d e r e d when
t h e B o a rd a d o p t s t h e s e am endm ents i n a f i n a l fo rm .
B o a rd p r o p o s e s t o amend Itj.m 7 o f Form F -5
A c c o rd in g ly , th e
(P ro x y S t a t e m e n t )
12 C .F .R .
§ 2 0 6 .5 1 , a s s e t f o r t h b e lo w .
C.
MANAGEMENT REMUNERATION
On D ecem ber 4 , 1 9 7 8 , t h e C o m m issio n am ended i t s
r e s p e c t t o m an ag em en t r e m u n e r a t i o n .
4
R e g i s t e r 5 8 1 8 1 (D ecem ber 1 3 , 1 9 7 8 ) .
*T he
fo llo w in g
page
is
10.
r u l e s w ith
SEC R e l . No. 3 4 -1 5 3 8 0 , 43 F e d e r a l
T he p u r p o s e o f t h e s e am endm en ts i s
-10t o p r o v i d e t h e p u b l i c w i t h m ore c o m p le te a n d q u a n t i t a t i v e
re g a rd in g th e re m u n e ra tio n ,
in fo rm a tio n
i n c l u d i n g p e r q u i s i t e s , o f c o r p o r a t e m a n a g e m e n t.
The am ended r u l e s w o u ld r e q u i r e d i s c l o s u r e n o t o n l y o f r e m u n e r a t i o n
p a i d d i r e c t l y by t h e r e g i s t r a n t an d i t s
s u b s id ia r ie s , b u t a ls o o f a l l
r e m u n e r a t i o n from t h i r d p a r t i e s f o r s e r v i c e s t o t h e r e g i s t r a n t an d i t s
s u b s id ia rie s .
In a d d itio n , d is c lo s u r e i s re q u ire d
in c e r t a i n
r e g a r d i n g r e m u n e r a t i o n n o t p r e v i o u s l y d i s c l o s e d w h ic h i s
p e rfo rm e d in p r i o r
in s ta n c e s
fo r s e r v ic e s
fis c a l y e a rs.
The C o m m issio n h a s am ended i t s
f o r th e f iv e h ig h e s t p a id o f f i c e r s
r u le s to re q u ir e d is c lo s u r e
( r a t h e r th a n t h r e e h i g h e s t p a i d o f f i c e r s )
i n o r d e r t o p r o v i d e i n v e s t o r s w i t h f u r t h e r d a t a w i t h w h ic h t o a s s e s s
t h e p e r f o r m a n c e o f k ey m em bers o f m an ag e m en t.
H o w e v er, t h e d i s c l o s u r e
f l o o r h a s b e e n r a i s e d by 25 p e r c e n t fro m $ 4 0 ,0 0 0 t o $ 5 0 ,0 0 0
o f i n f l a t i o n a r y e f f e c t s on r e m u n e r a t i o n .
in r e c o g n itio n
T hus, l a r g e r
is s u e rs w ill
b e r e q u i r e d t o d i s c l o s e m ore i n f o r m a t i o n w h i l e s m a l l e r
is s u e rs w ill
e n j o y m ore p r i v a c y .
The r e m u n e r a t i o n t a b l e a d o p te d by t h e C o m m issio n , w h ic h d i s c l o s e s
i n f o r m a t i o n c o n c e r n i n g t h e fo rm s o f r e m u n e r a t i o n r e c e i v e d , h a s b e e n
m o d ifie d in c e r t a i n
re s p e c ts .
The e x p a n d e d f o r m a t i n c l u d e s a l l c a s h
o r c a s h e q u i v a l e n t fo rm s o f r e m u n e r a t i o n t h a t h a v e b e e n d i s t r i b u t e d
d u r i n g t h e f i s c a l y e a r o r w h ic h h a v e b e e n a c c r u e d d u r i n g t h e f i s c a l
y e a r and w ith r e a s o n a b l e c e r t a i n t y w i l l b e d i s t r i b u t e d o r u n c o n d i t i o n a l l y
v e s te d in th e f u t u r e ,
y e a r.
i f th e y r e l a t e
to s e r v ic e s p e rfo rm e d in th e f i s c a l
C a s h - e q u i v a l e n t r e m u n e r a t i o n i n c l u d e s t h e s p r e a d b e tw e e n t h e
a c q u i s i t i o n p r i c e a n d t h e f a i r m a rk e t p r i c e o f s e c u r i t i e s o r p r o p e r t y
a c q u i r e d u n d e r an y p l a n o r a r r a n g e m e n t i n c l u d i n g s e c u r i t i e s
i s s u e d on
-li
t h e e x e r c i s e o f o p t i o n s , l e s s a n y am o u n t p r e v i o u s l y r e p o r t e d
re m u n e ra tio n t a b l e
w o u ld a l s o
fo r a p rio r f i s c a l y e a r.
in c lu d e b e n e f its r e l a t i n g
a n d m e d i c a l r e im b u r s e m e n t p l a n s .
to l i f e
in th e
C a s h - e q u iv a le n t re m u n e ra tio n
in s u ra n c e , h e a lth
in s u ra n c e
H o w ev er, n o n d i s c r i m i n a t o r y g r o u p l i f e
i n s u r a n c e p ro g r a m s a r e ex e m p t from t h e r e p o r t i n g
re q u ir e m e n ts .
A ls o i n c l u d e d a s c a s h - e q u i v a l e n t r e m u n e r a t i o n a r e c e r t a i n p e r s o n a l b e n e f i t s
w h ic h a r e n o t d i r e c t l y
b e n e fits .
re la te d
to jo b p e rfo rm a n c e in c lu d in g
T h e s e i n c l u d e , among o t h e r s ,
r e p a i r s an d im p ro v e m e n ts ;
d o m e s tic s e r v ic e )
p ro v id e d
m an ag em en t p e r s o n n e l ;
i s s u e r p a y m e n ts f o r :
(2) h o u s in g and o t h e r l i v i n g
in d ire c t
(1)
ex p en ses
home
(in c lu d in g
a t p r i n c i p a l a n d /o r v a c a tio n re s id e n c e s o f
(3) p e r s o n a l u s e o f com pany p r o p e r t y ,
such as
a u t o m o b i l e s , p l a n e s , y a c h r s , a p a r t m e n t s , h u n t i n g l o d g e s o r com pany v a c a t i o n
h o u ses;
(4) p e r s o n a l t r a v e l e x p e n s e s ;
le g a l,
(5) p e r s o n a l e n t e r t a i n m e n t and
r e l a t e d e x p e n s e s ; an d
(6)
a c c o u n tin g and o th e r p r o f e s s i o n a l fe e s
fo r m a tte rs u n re la te d
t o t ’.e b u s i n e s s o f t h e
is s u e r.
O th e r p e r s o n a l
b e n e f i t s t h a t may b e c o n s i d e r e d fo rm s o f r e m u n e r a t i o n a r e t h e f o l l o w i n g :
th e a b i l i t y
o f m anagem ent t o o b t a i n b e n e f i t s
a s f a v o r a b le bank lo a n s e
fro m t h i r d p a r t i e s ,
su c h
o e n e f i t s fro m s u p p l i e r s , w h e re t h e c o r p o r a t i o n
c o m p e n s a te s , d i r e c t l y o r i ' l i r e c t l y ,
t h e b an k o r s u p p l i e r f o r p r o v i d i n g
t h e l o a n o r s e r v i c e s t o m an ag e m en t; a n d t h e u s e o f t h e c o r p o r a t e s t a f f
fo r p e rs o n a l p u rp o se s.
The C o m m issio n h a s a d o p te d a c o n d i t i o n a l e x c l u s i o n
p e rso n a l b e n e fits
fo r c e r ta in
i f a n i s s u e r c a n n o t d e t e r m in e w i t h o u t u n r e a s o n a b l e
e f f o r t o r e x p e n s e t h e s p e - ' i ' i c am ount o f p e r s o n a l b e n e f i t s o r t h e e x t e n t
t o w h ic h b e n e f i t s a r e p e r
' a l r a t h e r th a n b u s i n e s s .
c o n c l u d e s s u c h b e n e f i t s d c n o t e x c e e d $ 1 0 ,0 0 0 an d i t s
If
th e
is s u e r
b o ard o f d i r e c t o r s
-12c o n c lu d e s t h a t t h e i r o m i s s i o n d o e s n o t r e n d e r t h e t a b l e m a te i
a l l y m is le a d in g ,
th e y may b e o m i t t e d .
rso n a l
F o o tn o t e d i s c l o s u r e i s r e q u i r e d w h e re j
b e n e f i t s e x c e e d 10 p e r c e n t o f a n o f f i c e r o r d i r e c t o r ' s
reraune
a tio n
i n c l u d e s t h e ty p e o f r e m u n e r a t i o n t i
t may
o r $ 2 5 ,0 0 0 , w h ic h e v e r i s l e s s .
The t a b l e a l s o
b e o f a c o n t i n g e n t n a t u r e w h e re t h e d i s t r i b u t i o n o f t h e rem ui
ra tio n
o r t h e u n c o n d i t i o n a l v e s t i n g o r m e a su re m e n t o f b e n e f i t s th e r e
nder is
s u b je c t to f u tu r e e v e n ts .
d fro m
C o n t in g e n t r e m u n e r a t i o n i s s e p a ra *
c a s h an d c a s h - e q u i v a l e n t r e m u n e r a t i o n i n a s e p a r a t e c o lu m n ,
h is
a n y am o u n ts e x p e n s e d u n d e r a n y p e n s i o n o r r e t i r e m e n t p l a n , ai
u ity ,
in c lu d e s
em p lo y m en t c o n t r a c t , d e f e r r e d c o m p e n s a tio n p l a n , o r s i m i l a r < r a n g e m e n t.
C o n t r i b u t i o n s t o t a x q u a l i f i e d p l a n s w o u ld b e i n c l u d e d b u t a
e n e ra l
e x c lu s io n
, i n w h ic h
is p e rm itte d
i f t h e am ount i s n o t r e a d i l y c a lc u la b ^
c a s e a n e x p l a n a t o r y f o o t n o t e w ould b e r e q u i r e d .
A ls o in c lu d *
a r e any
a m o u n ts e x p e n s e d i n c o n n e c t i o n w ith s t o c k o p t i o n s , s t o c k app:
c ia tio n
r i g h t s , p h a n to m s t o c k p l a n s an d a n y o t h e r c o m p e n s a tio n p l a n i
rsu a n t
t o w h ic h t h e m e a s u re o f b e n e f i t s
ds or
th e v a lu e o f s e c u r i t i e s .
i s b a s e d on o b j e c t i v e s ta n d ,
T h i s w ould en c o m p a ss n o t o n l y thos<
a r r a n g e m e n ts
i n w h ic h t h e m e a s u re o f b e n e f i t s i s b a s e d on t h e m a r k e t p ric <
o f s e c u ritie s
b u t a l s o t h o s e i n w h ich b e n e f i t s r e s u l t ,
is s u e r
f o r e x a m p le ,
fro m t
h a v in g m et p r e d e t e r m i n e d e a r n i n g s g o a l s .
T h e re i s a l s o a r e q u ir e m e n t t h a t d i s c l o s u r e b e mad*
s to c k p u rc h a s e , p r o f i t s h a r in g ,
n o te d t h a t p la n s o f t h i s
t h r i f t o r s im ila r p la n .
It
t y p e m ig h t n o t i n v o l v e c o n t i n g e n c i e
t o f u t u r e e v e n t s an d may i n s t e a d b e i n c l u d a b l e a s a c a s h - e q u
fo rm o f r e m u n e r a t i o n
o f any
o u ld be
g e a re d
a le n t
-1 3 -
A f t e r r e v ie w i n g t h e C o m m is s io n 's am ended r u l e s ,
t h e B o a rd
h a s d e t e r m in e d t h a t , w i t h o n e p o s s i b l e e x c e p t i o n , s u b s t a n t i a l l y
am endm ents t o
its
re g u la tio n s a re a p p ro p ria te .
T hat i s ,
s im ila r
I te m 7
o f t h e B o a r d 's p r o p o s a l w ould ex e m p t fro m t h e d i s c l o s u r e r e q u i r e m e n t s
re la tin g
to p e rs o n a l b e n e f i t s ,
b e n e f i t s t h a t do n o t
e x c e e d $ 5 ,0 0 0 f o r e a c h s p e c i f i e d p e r s o n a n d t h a t t h e b an k f i l e
w i t h t h e B o a rd a s t a t e m e n t o f i t s p r a c t i c e s a n d p o l i c i e s
such p e r s o n a l b e n e f i t s .
in
to
The B o a rd b e l i e v e s t h i s p r o v i s i o n w o u ld r e s u l t
m ore m e a n i n g f u l d i s c l o s u r e o f p e r s o n a l b e n e f i t s
u n d e r c o m p a r a b le C o m m issio n r e g u l a t i o n s .
i s c o n s id e rin g
re la tin g
th e n i s
In th e a l t e r n a t i v e ,
a d o p tio n o f p r o v is io n s r e l a t i n g
re q u ire d
t h e B o ard
to d is c lo s u r e o f p e rs o n a l
b e n e f i t s t h a t w o u ld b e i d e n t i c a l t o t h o s e o f t h e C o m m issio n , a s d e s c r i b e d
above.
To r e i t e r a t e ,
t h o s e p r o v i s i o n s w o u ld c o n t a i n a n e x e m p tio n r e l a t i n g '
t o u n a s c e r t a i n a b l e p e r s o n a l b e n e f i t s w h e re s u c h b e n e f i t s do n o t e x c e e d
$ 1 0 ,0 0 0 a n d w h e re t h e b o a r d o f d i r e c t o r s o f t h e b an k d e t e r m i n e s t h a t
t h e i r n o n d i s c l o s u r e w ould n o t b e a m a t e r i a l o m i s s i o n fro m t h e f i l i n g .
T he B o a rd s p e c i f i c a l l y
r e q u e s t s com m ent o n w h e th e r i t s h o u l d a d o p t i n
f i n a l fo rm I t e m 7
w h e th e r i t
A c c o rd in g ly ,
t h e 3 o a r d i s p r o p o s i n g t o am end I te m 7
(P ro x y S t a t e m e n t ) , 12 C .F .R . § 2 0 6 .5 1 , a s s e t f o r t h b e lo w .
*The f o l l o w i n g p a g e i s 13a
in th e a l t e r n a t i v e ,
s h o u l d c o n fo rm i t s p r o p o s a l t o t h a t o f t h e C o m m issio n a s
d e s c rib e d h e r e in .
o f Form F -5
a s i t h a s p ro p o se d o r ,
-1 3 a -
D.
CHANGES IN INDEPENDENT ACCOUNTANTS; SERVICES AND FEES
OF INDEPENDENT AUDITORS
1.
The C o m m issio n am ended i t s
•
r u le s to re q u ire d is c lo s u r e
o f w h e th e r a d e c i s i o n t o c h a n g e t h e in d e p e n d e n t a c c o u n t s o f r e g i s t r a n t
w as recom m ended o r a p p r o v e d by t h e a u d i t o r s i m i l a r c o m m itte e o f t h e
b o ard o f d i r e c t o r s .
SEC R e l. No. 3 4 -1 4 8 0 8 , 43 F e d e r a l R e g i s t e r 24288
(J u n e 5 , 1 9 7 8 ) .
C u r r e n t l y , I t e m 4 o f Form F -3
( C u r r e n t R e p o r t ) , 12 C .F .R .
§ 2 0 6 .4 3 , r e q u i r e s S t a t e member bank t o r e p o r t c h a n g e s i n i t s
a c c o u n ta n t,
in d e p e n d e n t
in c lu d in g th e d a te o f ch a n g e, r e p o r t s o f d is a g re e m e n ts w ith
t h e f o r m e r a c c o u n t a n t , d e s c r i p t i o n s o f a d v e r s e o p i n i o n s b y t h e fo rm e r
a c c o u n ta n t, and a l e t t e r
fro m t h e fo rm e r a c c o u n t a n t com m en tin g on t h e
i n f o r m a t i o n s u b m i tt e d by t h e B ank i n r e s p o n s e t o I te m 4 .
Form F -5
I te m 8 o f
(P ro x y S t a t e m e n t ) , 12 C .F .R . § 2 0 6 .5 1 , r e q u i r e s t h e r e p o r t i n g
bank to i d e n t i f y th e a c c o u n ta n t s e l e c t e d
d iffe re n t,
fo r th e c u r r e n t y e a r an d , i f
f o r t h e f i s c a l y e a r m o st r e c e n t l y c o m p l e t e d , an d t o d e s c r i b e
c h a n g e s i n a c c o u n t a n t s an d d i s a g r e e m e n t s w i t h a c c o u n t a n t s t h a t h a v e
o c c u r r e d s i n c e t h e m o st r e c e n t a n n u a l m e e t i n g ,
i n c l u d i n g v ie w s o f t h e
a c c o u n t a n t t h a t c o n f l i c t w i t h t h e b a n k 's v ie w o f t h e d i s a g r e e m e n t .
2.
The C o m m issio n a l s o h a s a d o p te d am endm ents t o i t s
re q u ir in g d is c lo s u re
in p ro x y s ta te m e n ts o f
♦The f o l l o w i n g p a g e i s
14.
(1)
ru le s
s e r v ic e s p ro v id e d d u rin g
-14the last fiscal year by a principal independent accountant, the percentage
relationship which the aggregate fees for all non-audit services bear
to the audit fee and the percentage relationship that the fees for each
non-audit service bear to the audit fees; and (2) whether the board
of directors or its audit or similar committee has approved each such
service.
SEC Release No. 34-14904, 43 Federal Register 29110 (July 6,
1978) .
Currently, Item 8 of Form F-5 (Proxy Statement), 12 C.F.R.
§ 206.51, does not specifically require the disclosure of information
regarding the provision of and fees concerning non-financial services
performed for a
state
member bank by its independent accountants
or the approval of such services by the bank's board of directors.
The Board believes that the rule changes adopted by the SEC
are beneficial and would adopt the amendments substantially in the form
adopted by the SEC by amending Item 4 of Form-F-3 (Current Report),
12 C.F.R. § 206.43, and Item 8 of Form F-5 (Proxy Statement), 12 C.F.R.
§ 206.51, as set forth below.
E.
SIMPLIFICATION AND OTHER COMMISSION AMENDMENTS.
The Commission has amended its regulations by adopting in
1977 and revising thereafter a new regulation, Regulation S-K, that
assembles in one place the reporting requirements that are applicable
to various forms.
SEC Rel. No. 5893, 42 Federal Register 65554 (December 30,
1977); SEC Rel. No. 34-15006, 43 Federal Register 34402 (August 3, 1978)
and SEC Rel. Nos. 34-15380 and 34-15418, 43 Federal Register 58181,
60418 (December 13 and 27, 1978).
-1 5 -
The Board has determined not to adopt at this time a separate
regulation substantially similar to Regulation S-K.
It believes the
same effect may be achieved by proposing common items to be contained
in its Form F-5 (Proxy Statement), 12 C.F.R. § 206.51, and cross-referenced
thereto from other forms.
Such cross-references are found in the proposed
amendments to Forms F-l (Registration Statement), F-2 (Annual Report),
and F-3 (Current Report), 12 C.F.R. §§ 206.41, 206.42 and 206.43, respectively^
as set forth below.
In addition, in connection with this proposal the Board has
simplified certain of the Commission amendments, such as those relating
to Management Remuneration in Item 7 of Form F-5 (Proxy Statement),
12 C.F.R. § 206.51, by shortening and rewriting certain provisions.
The Board is considering whether to extend this simplification technique
to the whole of Regulation F if it determines that it will produce significant
benefits to banks.
Therefore, the Board solicits comments from the
public and the banks regarding such simplification of Regulation F.
Finally, the Commission has proposed other amendments to its
rules and regulations.
Many of these changes, such as those relating
to industry segment reporting, for example, are not directly applicable
in the banking industry and therefore have not been proposed for adoption
by the Board.
PROPOSED AMENDMENTS
(1)
Section 206.4(h) of Regulation F would be amended by revising
subsections (3)-(5) and by adding subsection (6)-(8) to read as follows:
*
§206.4(h)(3)
(i)
*
*
Any person who, after acquiring directly or
indirectly the beneficial ownership of any equity security of a member
-1 6 -
State bank, of a class which is registered pursuant to Section 12 of
the Act, provided, such term shall not include securities of a class
of nonvoting securities, is directly or indirectly the beneficial
owner of more than 5 per cent of such class shall, within 10 days after
such acquisition, send to the bank at its principal executive office,
by registered or certified mail, and to each exchange where the security
is traded, and file with the Board, a statement containing the infor
mation required by Form F-ll.
Eight copies of the statement, including
all exhibits, shall be filed with the 3oard.
(ii)(A)
A person who would otherwise be obligated under paragraph (i)
of this section to file a statement on Form F-ll may, in lieu thereof,
file with the Board within 45 days after the end of the calendar year
in which such person became so obligated, eight copies, including all
exhibits, of a short form statement on Form F-11A and send one copy
each of such form to the bank at its principal executive office, by
registered or certified mail, and to the principal national securities
exchange where the security is traded:
Provided, That it shall not
be necessary to file a Form F-11A unless the percentage of the class
of equity security specified in paragraph (i) of this section beneficially
owned as of the end of the calendar year is more than 5 per cent:
provided further, That:
And
■17-
(1)
Such person has acquired such securities in the ordinary course
of his business and not with the purpose nor with the effect of changing
or influencing the control of the bank, nor in connection with or as
a participant in any transaction having such purpose or effect, including
any transaction subject to § 206.4(h)(5)(i); and
(2)
Such person is:
(a)
A broker or dealer registered under section 15 of the Act;
(b)
A bank as defined in Section 3(a)(6) of the Act;
(c) An insurance company as defined in Section 3(a)(19) of the
Act:
(d)
An investment company registered under Section 8 of the Investment
Company Act of 1940;
(e) An investment adviser registered under Section 203 of the Investment
Advisers Act of 1940;
(f)
An employee benefit plan, or pension fund which is subject
to the provisions of the Employee Retirement Income Security Act of
1974 ("ERISA") or an endowment fund;
(g)
A parent holding company, provided the aggregate amount held
directly by the parent, and directly and indirectly by its subsidiaries
which are not persons specified in paragraph (ii)(A)(2)(a) through (f)
of this section, does not exceed 1 per cent of the securities of the
subject class;
(h)
A group, provided that all the members are persons specified
in paragraph (ii)(A)(2)(a) through (g) of this section; and
-1 8 -
(3)
Such person has promptly notified any other person (or group
within the meaning of Section 13(d)(3) of the Act) on whose behalf it
holds, on a discretionary basis, securities exceeding 5 per cent of
the class, of any acquisition or transaction on behalf of such other
•
person that might be reportable by that person under Section 13(d) of
the Act.
This paragraph only requires notice to the account owner of
information that the filing person reasonably should be expected to
know and that would advise the account owner of an obligation he may
have to file a statement pursuant to Section 13(d) of the Act or an
amendment thereto.
(B)
Any person relying on § 206.4 (h) (3) (ii) (A) and § 206.4 (h) (4) (ii) (B)
shall, in addition to filing any statements required thereunder, file
a statement on Form F-11A, within ten days after the end of the first
month in which such person's direct or indirect beneficial ownership
exceeds 10 per cent of a class of equity securities specified in § 206.4(h)(3)(i)
computed as of the last day of the month, and thereafter within ten
days after the end of any month in which such person's beneficial ownership
of securities of such class, computed as of the last day of the month,
increases or decreases by more than 5 per cent of such class of equity
securities. Bight copies of such statement, including all exhibits,
shall be filed with the Board and one each sent, by registered or certified
mail, to the bank at its principal executive office and to the principal
national securities exchange where the security is traded.
Once an
amendment has been filed reflecting beneficial ownership of 5 per cent
or less of the class of securities, no additional filings are required
-1 9 -
by this paragraph (ii)(B) unless the person thereafter becomes the beneficial
owner of more than 10 per cent of the class and is required to file
pursuant to this provision.
(C)(1)
Notwithstanding paragraphs (ii)(A) and (ii)(B) and § 206.4(h)(4)(ii),
a person shall immediately become subject to § 206.4 (h)(3)(i) and 206.4(h)(4)(i)
and shall promptly, but not more than ten days later, file a statement
on Form F-ll if such person:
(a)
Has reported that it is the beneficial owner of more than
5 per cent of a class of equity securities in a statement on Form F11A pursuant to paragraph (ii)(A) or (ii)(B), or is required to report
such acquisition but has not yet filed the form?
(b)
Determines that it no longer has acquired or holds such securities
in the ordinary course of business or not with the purpose nor with
the effect of changing or influencing the control of the bank, nor in
connection with or as a participant in any transacton having such purpose
or effect, including any transaction subject to § 206.4(h)(5)(ii); and
(c)
Is at that time the beneficial owner of more than 5 per cent
of a class of equity securities described in
(2)
§
206.4(h)(3)(i).
For the ten-day period immediately following the date of the
filing of a Form F-ll pursuant to this paragraph (ii)(C), such person
shall not:
(A) Vote or direct the voting of the securities described
in paragraph (ii)(C)(1)(a); nor, (B) Acquire an additional beneficial
ownership interest in any equity securities of the bank nor of any person
controlling the bank.
-2 0 -
(D)
Any person who has reported an acquisition of securities in
a statement on Form F-11A pursuant to paragraph (ii)(A) or (ii)(B) and
thereafter ceases to be a person specified in paragraph (ii)(A)(2) shall
immediately become subject to § 206.4(h)(3)(i) and § 206.4(h)(4)(i)
and shall file, within ten days thereafter, a statement on Form F-ll
in the event such person is a beneficial owner at that time of more
than 5 per cent of the class of equity securities.
(iii)
Any person who, as of December 31, 1978, or as of the end
of any calendar year thereafter, is directly or indirectly the beneficial
owner of more than 5 per cent of any equity security of a class specified
in paragraph (h)(3)(i) and who is not required to file a statement under
paragraph (h)(3)(i) by virtue of the exemption provided by Section 13(d)(6)(A)
or (B) of the Act, or because such beneficial ownership was acquired
prior to December 20, 1970, or because such person otherwise (except
for the exemption provided by Section 13(d)(6)(c) of the Act) is not
required to file such statement, shall, within 45 days after the end
of the calendar year in which such person became obligated to report
under this paragraph, send to the bank at its principal executive office,
by registered or certified mail, and file with the 3oard, a statement
containing the information required by Form F-11A.
Sight copies of the
statement, including all exhibits, shall be filed with the 3oard.
(iv)
For the purposes of Section 13(d) and 13(g), any person,
in determining the amount of outstanding securities of a class of equity
securities, may rely upon information set forth in the bank's most recent
-2 1 quarterly or annual report, and any current report subsequent thereto,
filed with the Board pursuant to this Act, unless he knows or has reason
to believe that the information contained therein is inaccurate.
(v)(A)
Whenever two or more persons are required to file a statement
containing the information required by Form F-ll or Form F-11A with
respect to the same securities, only one statement need be filed, provided
that:
(1)
Each person on whose behalf the statement is filed is individually
eligible to use the Form on which the information is filed;
(2)
Each person on whose behalf the statement is filed is responsible
for the timely filing of such statement and any amendments thereto,
and for the completeness and accuracy of the information concerning
such person contained therein; such person is not responsible for the
completeness or accuracy of the information concerning the other persons
making the filing, unless such person knows or has reason to believe
that such information is inaccurate; and
(3)
Such statement identifies all such persons, contains the required
information with regard to each such person, indicates that such statement
is filed on behalf of all such persons, and includes, as an exhibit,
their agreement in writing that such a statement is filed on behalf
of each of them.
(B)
A group ' 3 filing obligations may be satisfied either by a
single joint filing or by each of the group's members making an individual
filing.
If the group's members elect to make their own filings, each
-2 2 such filing should identify all members of the group but the information
provided concerning the other persons malting the filing need only reflect
information which the filing person knows or has reason to know.
§206.4(h)(4)(i)
Form F-ll —
If any material change occurs in
the facts set forth in the statement required by § 206.4(h)(3)(i) including,
but not limited to, any material increase or decrease in the percentage
of the class beneficially owned, the person or persons who were required
to file such statement shall promptly file or cause to be filed with
the Board and send or cause to be sent to the bank at its principal
executive office, by registered or certified mail, and to each exchange
on which the security is traded an amendment disclosing such change.
An acquisition or disposition of beneficial ownership of securities
in an amount equal to 1 per cent or more of the class of securities
shall be deemec^ "material" for purposes of this rule; acquisitions or
dispositions of less than such amounts may be material, depending upon
the facts and circumstances.
The requirement that an amendment be filed
with respect to an acquisition which materially increases the percentage
of the class beneficially owned shall not apply if such acquisition
is exempted by Section 13(d)(6)(B) of the Act.
Sight copies of each
such amendment shall be filed with the 3oard.
(ii)
Form F-11A —
Notwithstanding paragraph (i) of this section,
and provided that the person or persons filing a statement pursuant
to § 206.4(h)(3)(ii) continues to meet the requirements set forth therein,
any person who has filed a short form statement on Form F-11A shall
amend such statement within 45 days after the end of each calendar year
to reflect, as of the end of the calendar year any changes in the information
23
reported in the previous filing on that Form, or if there are no changes
from the previous filing, a signed statement to that effect under cover
of Form F-11A. Eight copies of such amendment, including all exhibits,
shall be filed with the Board and one each sent, by registered or certified
mail, to the bank at its principal executive office and to the principal
national securities exchange where the security is traded.
Once an
amendment has been filed reflecting beneficial ownership of 5 per cent
or less of the class of securities, no additional filings are required
unless the person thereafter becomes the beneficial owner of more than
5 per cent of the class and is required to file pursuant to § 206.4 (h) (3).
Note:
For persons filing a short form statement pursuant to § 206.4(h) (3) (id.) ,
see also § 206.4 (h) (3) (iii) , (iv) and (v).
$206.4 (h)(5)(i)
For the purposes of Section 1 3 (d) and 13 (g) of
the Act, a beneficial owner of a security includes any person who, directly
or indirectly, through any contract, arrangement, understanding, relationship,
or otherwise has or shares:
(A)
Voting power which includes the power to vote, or to direct
the voting of, such security; and/or
(B)
Investment power which includes the power to dispose or to
direct the disposition of such security.
(ii)
Any person who, directly or indirectly, creates or uses a
trust, proxy, power of attorney, pooling arrangement or any other contract,
arrangement, or device with the purpose or effect of divesting such
person of beneficial ownership of a security or preventing the vesting
-24of such beneficial ownership as part of a plan or scheme to evade the
reporting requirements of Section 13(d) or 13(g) of the Act shall be
deemed for purposes of such sections to be the beneficial owner of such
security.
(iii)
All securities of the same class beneficially owned by a
person, regardless of the form which such beneficial ownership takes,
shall be aggregated in calculating the number of shares beneficially
owned by such person.
(iv)
Notwithstanding the provisions of paragraphs (i) and (iii)
of this section:
(A)(1)
A person shall be deemed to be the beneficial owner of
a security, subject to the provisions of paragraph (ii) of this section,
if that person has the right to acquire beneficial ownership of such
security, as defined in § 206.4(h)(3)(i), within 60 days, including
but not limited to any right to acquire:
(a) through the exercise of
any option, warrant, or right; (b) through the conversion of a security;
(c) pursuant to the power to revoke a trust, discretionary account,
or similar arrangement; or (d) pursuant to the automatic termination
of a trust, discretionary account or similar arrangement; provided,
however, any person who acquires a security or pcwer specified in paragraphs
(a), (b) or (c) above, with the purpose or effect of changing or influencing
the oontrol of the bank, or in connection with or as a participant in
any transaction having such purpose or effect, immediately upon such
acquisition shall be deemed to be the beneficial owner of the securities
-2 5 -
which may be acquired through the exercise or conversion of such security
or power.
Any securities not outstanding which are subject to such
options, warrants, rights or conversion privileges shall be deemed to
be outstanding securities of the class owned by such person but shall
not be deemed to be outstanding for the purpose of computing the percentage
of the class by any other person.
(2)
Paragraph (A)(1) remains applicable for the purpose of determining
the obligation to file with respect to the underlying security even
though the option, warrant, right or convertible security is of a class
of equity security, as defined in § 206.4 (h)(3)(i) and may therefore
give rise to a separate obligation to file.
(B)
A member of a national securities exchange shall not be deemed
to be a beneficial owner of securities held directly or indirectly by
it on behalf of another person solely because such member is the record
holder of such securities and, pursuant to the rules of such exchange
may direct the vote of such securities, without instruction, on other
than contested matters or matters that may affect substantially the
rights or privileges of the holders of the securities to be voted, but
is otherwise precluded by the rules of such exchange from voting without
instruction.
(C)
A person who in the ordinary course of business is a pledgee
of securities under a written pledge agreement shall not be deemed to
be the beneficial owner of such pledged securities until the pledgee
has taken all formal steps necessary which are required to declare a
26-
default and determines that the power to vote or to direct the vote
or to dispose or to direct the disposition of such pledged securities
will be exercised, provided that:
(1)
The pledgee agreement is bona fide and was not entered into
with the purpose nor with the effect of changing or influencing the
control of the bank, nor in connection with any transaction having such
purpose or effect, including any transaction subject to § 206.4 (h)(5)(ii);
(2)
The pledgee is a person specified in § 206.4(h)(3)(ii)(A)(2),
including persons meeting the conditions set forth in paragraph (h)
thereof; and
(3)
The pledgee agreement, prior to default, does not grant to
the pledgee:
(a)
The power to vote or to direct the vote of the pledged securities
or
*
(b)
The power to dispose or direct the disposition of the pledged
securities, other than the grant of such power(s) pursuant to a pledge
agreement under which credit is extended subject to Regulation T (12
C.F.R. §§ 220.1 to 220.3) and in which the pledgee is a broker or dealer
registered under Section 15 of the Act.
(D)
A person engaged in business as an underwriter of securities
who acquires securities through his participation in good faith in a
firm commitment underwriting registered under the Securities Act of
1933 shall not be deemed to be the beneficial owner of such securities
until the expiration of 40 days after the date of such acquisition.
-27-
§206.4 (h)(6)
Any person may expressly declare in any statement
filed that the filing of such statement shall not be construed as an
admission that such person is, for the purposes of section 13(d) or
13(g) of the Act, the beneficial owner of any securities covered by
the statement.
§206.4(h)(7)(i)
A person who becomes a beneficial owner of securities
shall be deemed to have acquired such securities for purposes of Section
13(d)(1) of the Act, whether such acquisition was through purchase or
otherwise.
However, executors or administrators of a decedent's estate
generally will be presumed not to have acquired beneficial ownership
of the securities in the decedent's estate until such time as such executors
or administrators are qualified under local law to perform their duties.
(ii)(A)
When two or more persons agree to act together for the
purpose of acquiring, holding, voting or disposing of equity securities
of a bank, the group formed thereby shall be deemed to have acquired
beneficial ownership, for purposes of Sections 13(d) and 13(g) of the
Act, as of the date of such agreement, of all equity securities of that
bank beneficially owned by any such persons.
(B)
Notwithstanding the previous paragraph, a group shall be deemed
not to have acquired any equity securities beneficially owned by the
other members of the group solely by virtue of their concerted actions
relating to the purchase of equity securities directly from a bank in
a transaction not involving a public offering; provided that:
-28(1)
All the members of the group are persons specified in § 206.4 (h) (3) (ii) (A) («.
(2)
The purchase is in the ordinary course of each member's business
and not with the purpose nor with the effect of changing or influencing
control of the bank, nor in connection with or as a participant in any
transaction having such purpose or effect, including any transaction
subject to § 206.4(h)(5)(ii);
(3)
There is no agreement among or between any members of the
group to act together with respect to the bank or its securities except
for the purpose of facilitating the specific purpose involved; and
(4)
The only actions among or between any members of the group
with respect to the bank or its securities subsequent to the closing
date of the nonpublic offering are those which are necessary to conclude
ministerial matters directly related to the completion of the offer
or sale of the securities.
§206.4 (h)(8)
The acquisition of securities of a bank by a person
who, prior to such acquisition, was a beneficial owner of more than
5 per cent of the outstanding securities of the same class as those
acquired shall be exempt from Section 13(d) of the Act, provided that:
(a)
The acquisition i3 made pursuant to preemptive subscription
rights in an offering made to all holders of securities of the class
to which the preemptive subscription rights pertain;
(b)
Such person does not acquire additional securities except
through the exercise of his pro rata share of the preemptive subscription
rights; and
(c)
The acquisition is duly reported, if required, pursuant to
Section 16(a) of the Act and the rules and regulations thereunder.
^
-292.
§ 206.5(1) of Regulation F would be amended as follows:
(1)
Tender Offers
(1) No person, directly or indirectly by use
of the mails or any means or instrumentality of interstate commerce
or 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 equity security, which is registered pursuant to Section 12
of the Act of any member State bank, if, after consummation thereof,
such person would, directly or indirectly, be the beneficial owner of
more than 5 per cent of such class, unless, at the time copies of the
offer or request or invitation 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-13.
The
definition of beneficial owner set forth in 206.4(h)(5) for the purposes
of Section 13(d)(1) of the Act shall apply also for purposes of Section 14(d)(1)
of the Act.
*
3.
*
*
*
*
§ 206.5(k) of Regulation F would be amended by adding a new
paragraph to read as follows:
(5)
If management intends to include in the proxy statement a
statement in opposition to a proposal received from a proponent, it
shall, not later than ten calendar days prior to the date the preliminary
copies of the proxy statement and form of proxy are filed pursuant to
§ 206.5(f) or, in the event that the proposal must be revised to be
-3 0 -
includable, not later than five calendar days after receipt by the bank
of the revised proposal, promptly forward to the proponent a copy of
the statement in opposition to the proposal.
In the event the proponent believes that the statement in opposition
contains materially false or misleading statements within the meaning
of 206.5(h) and the proponent wishes to bring this matter to the attention
of the Board, the proponent should promptly provide the staff with a
letter setting forth the reasons for this view and at the same time
promptly provide management with a copy of such letter.
4.
§ 206.41, Fo b *F-1, Item 8, Directors and Officers, would be amended
amended as follows:
ITEM 8 - DIRECTORS AND OFFICERS
The information required by Item 6(aMf) of § 206.51 shall be
reported pursuant to this Item.
5.
§ 206.41, Form F-l (Registration Statement), Item 10, Remuneration
of Directors and Officers, and Item 13, Interest of Management and Others in
Certain Transactions, would be combined into a new Item 10, Remuneration and
Other Transactions With Management and Others, and would read as follows:
ITEM 10 - REMUNERATION AND OTHER TRANSACTIONS
WITH MANAGEMENT AND OTHERS
(a)
The information required by Item 7(a);(b), (d),(e),(f) and (g) of
S 206.51 shall be reported pursuant to this Item.
The information required
by § 206.51, Item 7(d), (e) and (f) shall be reported for the past three
years.
-3 1 (b)
If the bank was organized within the past five years, furnish
the following information:
(1)
State the names of the promoters, the nature and amount of
anything of value (including money, property, contracts, options or
rights of any kind) received or to be received by each promoter directly
or indirectly from the bank, and the nature and amount of any assets,
services or other consideration therefor received or to be received
by the bank.
(2)
As to any assets acquired or to be acquired by the bank from
a promoter, state the amount at which acquired or to be acquired and
the principle followed, or to be followed in determining the amount.
Identify the persons making the determination and state their relationship,
if any, with the bank or any promoter.
If the assets were acquired
by the promoter within two years prior to their transfer to the bank,
state the cost thereof to the promoter.
6.
206.41, Form F-l (Registration Statement), Item 11, Management
Options to Purchase Securities,would be amended as follows:
ITEM 11 - MANAGEMENT OPTIONS TO PURCHASE SECURITIES
The information required by Item 7(c) of § 206.51 shall be reported
pursuant to this Item.
7.
§ 206.41, Form F-l (Registration Statement), Item 12, Principal
Holders of Securities, would be retitled, Security Ownership of Certain
Beneficial Ownership and Management, and would be amended as follows:
ITEM 12 - SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
The information required by Items 5(d), (e) and (g) of § 206.51,
shall be reported pursuant to this Item.
-3 2 -
8.
§ 206.41, Form-F-1 (Registration Statement), Items 14-20 would
be redesignated Items 13-19, respectively.
9.
§ 206.42, Form F-2 (Annual Report), Item 6, Directors of Bank/
would be amended follows:
ITEM 6 - DIRECTORS OF BANK
See General Instruction G.
Set forth the same informacion as is
required by Item 6(a), (d),(e) and (f) of Form F-5.
10.
In § 206.42, Form F-2 (Annual Report), Item 7, Remuneration
of Directors and Officers, would be revised to read as follows:
ITEM 7 - REMUNERATION OF DIRECTOR AND OFFICERS AND RELATED MATTERS
See General Instruction G.
Set forth the same information as to
remuneration of officers and directors and their transactions with management
and others as is required to be furnished by Item 7(a) and (b) of Form
F-5.
11.
In § 206.42, Form F-2 (Annual Report), Item 11, Officers of
the Bank, would be revised to read as follows:
ITEM 11 - OFFICERS OF BANK
See General Instruction G.
Set forth the same information as to
officers of bank as is required to be furnished by Item 6 of Form F-5.
12.
In § 206.42, Form F-2 (Annual Report), Item 13, Options Granted
to Management to Purchase Securities, would be revised to read as follows:
ITEM 13 - OPTIONS GRANTED TO MANAGEMENT TO PURCHASE SECURITIES
See General Instruction G.
Set forth the same information as
to options granted to management to purchase securities as is required
to be furnished by Item 7 (c) of Form F-5.
13.
In § 206.42, Form F-2 (Annual Report), Item 14, Interest of
Management and Others in Certain Transactions, would be revised to read
as follows:
-3 3 ITEM 14 - INTEREST OF MANAGEMENT AND OTHERS IN CERTAIN TRANSACTIONS.
See General Instruction G.
Set forth the same information as to the
interest of management and others in certain transactions as is required
to be furnished by Item 7(d),
14.
(e) and (f) of Form F-5.
§ 206.43, Form F-3 (Current Report), Item 4, Changes in Bank's
Accountant, would be amended by adding a new paragraph (e) which would
read as follows:
(e)
State whether the decision to change accountants was recommended
or approved by:
(1)
any audit or similar committee of the Board of Directors,
if the bank has such a committee? or
(2)
15.
the Board of Directors, if the bank has no such committee.
§ 206.43, Form F-3 (Current Report), would be amended by adding
a new Item 5, Resignation of Bank's Directors, which would read as follows:
ITIM 5 - RESIGNATIONS OF BANK'S DIRECTORS
(a)
If a director has resigned or declined to stand for re-election
to the Board of Directors since the date of the last annual meeting
of shareholders because of a disagreement with the bank on any matter
relating to the bank'3 operations, policies or practices, and if the
director has furnished the bank with a letter describing such disagreement
and requesting that the matter be disclosed, the bank shall state the
date of such resignation or declination to stand for re-election and
summarize the director's description of the disagreement.
(b)
If the bank believes that the description provided by the
director is incorrect or incomplete, it may include a brief statement
presenting its views of the disagreement.
(c)
The bank shall file a copy of the director's letter asan exhibit
with all copies of this Form F-3.
-3416.
§ 206.43, Form F-3 (Current Report), Present Item 5, Other
Materially Important Events, would be renumbered Item 6.
Present Item
6, Financial Statements and Exhibits, would be renumbered Item 7, and
would read as follows:
ITEM 7 - FINANCIAL STATEMENTS AND EXHIBITS
*
(b)
*
Exhibits.
*
*
*
Subject to the rules as to incorporation by reference,
the following documents shall be filed as exhibits to this report.
1.
Copies of any plan of acquisition or disposition described
in answer to Item 2, including any plan of reorganization, readjustment,
exchange, merger, consolidation or succession in connection therewith.
2.
17.
Letters from directors furnished pursuant to Item 5.
§ 206.44, Form F-4 (Quarterly Report), Item 7, Submission of
Matters to a Vote of Security Holders, would be amended by adding a
new paragraph (d) and Instruction 6 that would read as follows:
ITEM 7 - SUBMISSION OF MATTERS TO A VOTE*FOR SECURITY HOLDERS
*
(d)
*
*
*
*
Describe the terms of any settlement between the bank and
any other participant (as defined in § 206.S (i)) terminating any solicita
tion subject to § 206.5(i) including the cost or anticipated cost to
the bank.
Instructions
6.
*
*
*
*
If the bank has furnished to its security holders proxy soliciting
material containing the information called for by paragraph (d), the
paragraph may be answered by reference to the information contained
in such material.
.
. .
. .
. •
35-
18.
§ 206.47, Form F-ll, would be amended as follows:
Form for acquisition statement filed pursuant to
§ 206.4(h)(3) and amendments thereto filed pursuant to
§ 206.4(h)(4) of Regulation F
BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM
Washington, D.C.
20551
FORM F-ll
ACQUISITION STATEMENT TO BE FILED PURSUANT TO § 206.4(h)(3) or § 206.4(h)(4)
of Regulation F (Amendment No.
)
(Name and Address of Bank)
(Title of Class of Securities)
(CUSIP Number)
(Name, Address and Telephone Number or Person Authorized to
Receive Notices and Communications)
(Date of Event which Requires Filing of this Statement)
-3 6 -
If the filing person has previously filed a statement on Form
F-11A, and is filing this form because of § 206.4(h)(3)
check the following box [
MOTE:
(ii)(C) or (D),
].
Sight copies of this form, including all exhibits, should
be filed with the 3oard.
See § 206.4 (h) (3) (i) for other parties to
whom copies are to be sent.
SPECIAL INSTRUCTIONS FOR COMPLYING WITH FORM F-ll
Under Sections 13(d) and 23 of the Securities Exchange Act of 1934
and the rules and regulations thereunder, the Board is authorized to
solicit the information required to be supplied by this form by certain
security holders of certain banks.
Disclosure of the information specified in this schedule is mandatory,
except for Social Security or I.R.S. identification numbers, disclosure
of which is voluntary.
The information will be used for the primary
purpose of determining the disclosing the holdings of certain beneficial
owners of certain equity securities.
matter of public record.
This statement will be made a
Therefore, any information given will be
available for inspection by any member of the public.
Failure to disclose the information requested by this schedule,
except for Social Security or I.R.S. identification numbers, may result
in civil or criminal action against the persons involved for violation
of the Federal securities laws and rules promulgated thereunder.
-3 7 -
General Instructions;
A.
The item numbers and captions of the items shall be included
but the text of the items is to be omitted.
The answers to the items
shall be so prepared as to indicate clearly the coverage of the items
without referring to the text of the items.
Answer every item.
If
an item is inapplicable or the answer is in the negative, so state.
B.
Information contained in exhibits to the statement may be incorporated
by reference in answer or partial answer to any item or sub-item of
the statement unless it would render such answer incomplete, unclear
or oonfusing.
Matter incorporated by reference shall be clearly identified
in the reference by page, paragraph, caption or otherwise.
An express
statement that the specified matter is incorporated by reference shall
be made at the particular place in the statement where the information
is required.
C.
If the statement is filed by a general or limited partnership,
syndicate, or other group, the information called for by Items 2-6,
inclusive, shall be given with respect to (i) each partner of such
general partnership;
(ii) each partner who is demonstrated as a general
partner who functions as a general partner of such limited partnership;
(iii)
each member of such syndicate or group; and (iv) each person controlling
such partner or member.
If the statement is filed by a corporation
or if a person referred to in (i), (ii), (iii) or (iv) of this instruction
is a corporation, the information called for by the above mentioned
items shall be given with respect to (a) each executive officer and
-3 8 -
director of such corporation;
(b) each person controlling such corporation;
and (c) each executive officer and director of any corporation or other
person ultimately in control of such corporation.
Executive officer
shall mean the president, secretary, treasurer, and any vice president
in charge of a principal business function (such as sales, administration
or finance) and any other person who performs or has the power to perform
similar policy making functions for the corporation.
Item 1 —
Security and Bank.
State the title of the class of equity securities to which this
statement relates and the name and address of the principal office of
the bank.
Item 2 —
Identity and Background.
If the person filing this statement or any person enumerated in
Instruction C of this statement is a corporation, general partnership,
limited partnership, syndicate or other group of persons, state its
name, the state or other place of its organization, it principal business,
the address of its principal business, the address of its principal
office and the information required by (d) and (e) of this item.
If
the person filing this statement or any person enumerated in Instruction C
is a natural person, provide the information specified in (a) through
(f) of this Item with respect to such person(s).
(a)
Name:
(b)
Residence or business address;
-3 9 -
(c)
Present principal occupation or employment and the name, principal
business and address of any corporation or other organization in which
such employment is conducted;
(d)
Whether or not, during the last five years, such person has
been convicted in a criminal proceeding (excluding traffic violations
or similar misdemeanors) and, if so, give the dates, nature of conviction,
name and location of court, any penalty imposed, or other disposition
of the case.
(e)
Whether or not, during the last five years, such peron was
a party to a civil proceeding of a judicial or administrative body of
competent jurisdiction and as a result of such proceeding was or is
subject to a judgment, decree or final order enjoining future violation
of, or prohibiting or mandating activities subject to, federal or state
securities laws or finding any violation with respect to such laws;
and, if so, identify and describe such proceedings and summarize the
terms of such judgment, decree or final order; and
(f) Citizenship.
Item 3 —
Source and Amount of Funds or Other Consideration.
State the source and the amount of funds or other consideration
used or to be used in making the purchases, and if any part of the purchase
price is or will be represented by funds or other consideration borrowed
or otherwise obtained for the purpose of acquiring, holding, trading
-40or voting the securities, a description of the transaction and the names
of the parties thereto.
Where material, such information should also
be provided with respect to prior acquisitions not previously reported
pursuant to this regulation.
If the source of all or any part of the
funds is a loan made in the ordinary course of business by a bank, as
defined in Section 3(a)(6) of the Act, the name of the bank shall not
be made available to the public if the person at the time of filing
the statement so requests in writing and files such request, naming
such bank, with the Board.
If the securities were acquired other than
by purchase, describe the method of acquisition.
Item 4 —
Purpose of Transaction.
State the purpose or purposes of the acquisition of securities
of the bank.
Describe any plans or proposals which the reporting persons
may have which related or would result in:
(a)
The acquisition by any person of additional securities of
the bank, or the disposition of securities of the bank;
(b)
An extraordinary corporate transaction, such as a merger,
reorganization or liquidation, involving the bank or any of its subsidiaries
(c)
A sale or transfer of a material amount of assets of the bank
or of any of its subsidiaries;
(d)
Any change in the present board of directors or management
of the bank, including any plans or proposals to change the number or
term of directors or to fill any existing vacancies on the board;
(e)
Any material change in the present capitalization or dividend
policy of the bank;
-41(f)
Any other material change in the bank's business or corporate
structure;
(g)
Changes in the bank's charter, bylaws or instruments corresponding
thereto or other actions which may impede the acquisition of control
of the bank by any person;
(h)
Causing a class of securities of the bank to be delisted from
a national securities exchange or to cease to be authorized to be quoted
in an inter-dealer quotation system of a registered national securities
association;
(i)
A class of equity securities of the bank becoming eligible
for•termination of registration pursuant to Section 12(g)(4) of the Act; or
(j)
Any action similar to any of those enumerated above.
ITEM 5 - INTEREST IN SECURITIES OF THE BANK
(a)
State the aggregate number and percentage of the class of
securities identified pursuant to Item 1 (which may be based on the
number of securities outstanding as contained in the most recently available
filing with the Board by the bank unless the filing person has reason
to believe such information is not current) beneficially owned (identifying
those shares which there is a right to acquire) by each person named
in Item 2.
The above mentioned information should also be furnished
with respect to persons who, together with any of the persons named
in Item 2, comprise a group within the meaning of Section 13(d)(3) of the Act
(b)
For each person named in response to paragraph (a), indicate
the number of shares as to which there is sole power to vote or to direct
the vote, shared power to vote or to direct the vote, sole power to
dispose or to direct the disposition, or shared power to dispose or
to direct the disposition.
Provide the applicable information required
-42by Item 2 with respect to each person with whom the power to vote or
to direct the vote or to dispose or direct the disposition is shared;
(c)
Describe any transactions in the class of securities reported
on that were effected during the past sixty days or since the most recent
filing on Form F-ll, whichever is less, by the persons named in response
to paragraph (a).
Instruction.
The description of a transaction required by Item
5(c) shall include, but not necessarily be limited to;
(1) the identity of
the person covered by Item 5(c) who effected the transaction;
(2) the
date of the transaction; (3) the amount of securities involved;
(4)
the price per share or unit; and (5) where and how the transaction was
effected.
(d)
If any other person is known to have the right to receive
or the power to direct the receipt of dividends from, or the proceeds
from the sale of, such securities, a statement to that effect should
be included in response to this item and, if such interest relates to
more than five percent of the class, such person should be identified.
(e)
If applicable, state the date on which the reporting person
ceased to be the beneficial owner of more than five percent of the class
of securities.
Instruction.
For computations regarding securities which represent
a right to acquire an underlying security, see § 206.4(h)(5)(iv) and
the note thereto
-4 3 -
Item 6 —
Contracts, Arrangement, Understandings or Relationships
with Respect to Securities of the Bank.
Describe any contracts, arrangements, understandings or relationships
(legal or otherwise) among the persons named in Item 2 and between such
persons and any person with respect to any securities of the bank, including
but not limited to transfer or voting of any of the securities, finder's
fees, joint ventures, loan or option arrangements, puts or calls, guarantees
or profits, division of profits or losses, or the giving or withholding
of proxies, and name the persons with whom such contracts, arrangements,
understandings or relationships have been entered into.
Include such
information for any of the securities that are pledged or otherwise
subject to a contingency the occurrence of which would give another
person voting power or investment power over such securities, except
that disclosure of standard default and similar provisions contained
in loan agreements need not be included.
Item 7 —
Material to be Filed as Exhibits.
Uie following shall be filed as exhibits:
Copies of written agreements
relating to the filing of joint acquisition statements as required by
S 206.4(h)(g)(v) and copies of all written agreements, contracts, arrangements,
understandings, plans, or proposals relating to:
(1) The borrowing
of funds to finance the acquisition as disclosed in Item 3; (2) the
acquisition of bank control, liquidation, sale of assets, merger, or
change in business or coprorate structure, or any other matter as disclosed
in Item 4; and (3) the transfer or voting of the securities, finder's
-4 4 -
fees, joint ventures, options, puts, calls, guarantees of loans, guarantees
against loss or of profit, or the giving or withholding of any proxy
as disclosed in Item 6.
Signature.
After reasonable inquiry and to the best of my knowledge and belief,
I certify that the information set forth in this statement is true,
complete and correct:
Date
Signature
Name/Title
The original statement shall be signed by each person on whose behalf
the statement is filed or his authorized representative.
If the statement
is signed on behalf of a person by his authorized representative (other
than an executive officer or general partner of the filing person),
evidence of the representative's authority to sign on behalf of such
person shall be filed with the statement, provided, however, that a
power of attorney for this purpose which is already on file with the
Board may be incorporated by reference.
The name and any title of each
person who signs the statement shall be typed or printed beneath his
signature
-4 5 -
Attention:
Intentional misstatements or omissions of fact constitute
Federal criminal violations (See 18 U.S.C. 1001).
19.
Proposed Form F-11A would be added to section 206.48 and would
read as follows:
§ 206.48 Short Form for statement filed pursuant to section 206.4(h)(3)
and amendments thereto filed pursuant to § 206.4(h)(4) of Regulation F
(Form F-11A)
BOARD OF GOVERNORS OF TBE
FEDERAL RESERVE SYSTEM
WASHINGTON, D.C.
20551
FORM F-11A
SHORT FORM OWNERSHIP STATEMENT TO BE FILED PURSUANT TO
S 206.4(h)(3) or 206.4(h)(4)
(Amendment No.
(Name of Bank)
(Title of Class of Securities)
(CUSIP Number)
)
-4 6 -
SPECIAL INSTRUCTIONS FOR COMPLYING WITH FORM F-llA
Under Sections 13(d), 13(g), and 23 of the Securities Exchange
Act of 1934 and the rules and regulations thereunder, the Board is authorized
to solicit the information required to be supplied by this schedule
by certain security holders of certain banks.
Disclosure of the information specified in this schedule is mandatory,
except for Social Security or I.R.S. identification numbers the disclosure
of which is voluntary.
The information will be used for the primary
purpose of determining and disclosing the holdings of certain beneficial
owners of certain equity securities.
matter of public record.
This statement will be made a
Therefore, any information given will be available
for inspection by any member of the public.
Failure to disclose the information requested by this schedule,
except for Social Security or I.R.S. identification numbers, may result
in civil or criminal action against the persons involved for violation
of the Federal securities laws and rules promulgated thereunder.
General Instructions:
A.
Statements containing the information required by this Form
shall be filed not later than February 14 following the calendar year
covered by the statement or within the time specified in § 335.4(h)(2)(ii)(B),
if applicable.
B.
Information contained in a form which is required to be filed
by the Securities and Exchange Commission's rules under Section 13(f)
of the Act (15 U.S.C. 78m(f)] for the same calendar year as that covered
by a statement on this Form may be incorporated by reference in response
-47to any of the items of this Form.
If such information is incorporated
by reference in this Form, copies of the relevant pages of such form
shall be filed as an exhibit to this Form.
C.
The item numbers and captions of the items shall be included
but the text of the items is to be omitted.
The answers to the items
shall be so prepared as to indicate clearly the coverage of the items
without referring to the text of the items.
Answer every item.
If
an item is inapplicable or the answer is in the negative, so state.
Item 1(a) Name of Bank:
Item 1(b) Address of Bank's Principal Office:
Item 2(a) Name of Person Filing:
Item 2(b) Address of Principal Business Office or,
if none, Residence:
Item 2(c) Citizenship:
Item 2(d) Title of Class of Securities
Item 3
If thi3 statement is filed pursuant to S 206.4(hi(3)(i)
or 206.4(h)(4)(ii) check whether the person filing
is a:
-48(a)
£
]
Broker or Dealer registered under Section 15 of the
(b)
£
]
Bank as defined in Section 3(a)(6) of the Act
(c)
£
]
Insurance Company as defined in Section 3(a)(19) of
£
]
Investment Company registered under Section 8 of the
Act
the Act
(d)
Investment Company Act
(e)
£
]
Investment Adviser registered under Section 203 of the
Investment Advisers Act of 1940
(f)
£
]
Employee Benefit Plan, Pension Fund which is subject
to the provisions of the Employee Retirement Income Security Act of
1974,or Endowment Fund
(g)
(Note:
(h)
£
]
Parent Holding Company, in accordance with § 206.4(h)(3)(ii)(A)(2)(
See Item 7)
{
]
Group, in accordance with § 206.4 (h) (3) (ii) (A) (2) (h)
ITEM 4 - OWNERSHIP
If the percent of the class owned, as of December 31 of the year
covered by the statement, or as of the last day of any month described
in § 206.4(h)(3)(B)
if applicable, exceeds five percent, provide the
following information as of that date and identify those shares for
which there is a right to acquire.
49-
Amount beneficially ovmed
(b)
Per cent of class
(c)
Number of shares as to which such person has
(i)
Sole power to vote or to direct the vote
(ii)
Shared power to vote or to direct the vote
(iii)
Sole power to dispose or to direct the disposition of
(iv)
Shared power to dispose or to direct the disposition of
Instruction;
for computations regarding securities which represent
a right to acquire an underlying security see § 206.4(h)(5){iv)(A).
ITEM 5 - OWNERSHIP OF FIVE PER CENT OR LESS OF A CLASS
If this statement is being filed to report the fact that as of
the date hereof the reporting person has ceased to be the beneficial
owner of more than five per cent of the class of securities, check the
following [
Instructions;
Dissolution of a group requires a response to this
item.
ITEM 6 - OWNERSHIP OF MORE THAN FIVE PER CENT
ON BEHALF OF ANOTHER PERSON
If any other person is known to have the right to receive or the
power to direct the receipt of dividends from, or the proceeds from
the sale of, such securities, a statement to that effect should be included
in response to this item and, if such interest relates to more than
five per cent of the class, such person should be identified.
A listing
-5 0 -
of the shareholders of an investment company registered under the Investment
Company Act of 1940 or the beneficiaries of employee benefit plan, pension
fund or endowment fund is not required.
ITEM 7 - IDENTIFICATION AND CLASSIFICATION OF THE
SUBSIDIARY WHICH ACQUIRED THE SECURITY BEING
REPORTED ON BY THE PARENT HOLDING COMPANY
If a parent holding company has filed this schedule, pursuant to
§ 206.4(h)(3)(ii)(A)(2)(g), so indicate under Item 3(g) and attach an
exhibit stating the identity and the Item 3 classification of the relevant
subsidiary.
If a parent holding company has filed this schedule pursuant
to § 206.4(h)(2)(ii), attach an exhibit stating the identification of
the relevant subsidiary.
ITEM 8 - IDENTIFICATION AND CLASSIFICATION OF
MEMBERS OF THE GROUP
If a group has filed this schedule pursuant to § 206.4(h)(3)(ii)
(A)(2)(h), so indicate under Item 3(h) and attach an exhibit stating
the identity and Item 3 classification of each member of the group.
If a group has filed this schedule pursuant to § 206.4 (h) (3) (iii), attach
an exhibit stating the identity of each member of the group.
ITEM 9 - NOTICE OF DISSOLUTION OF GROUP
Notice of dissolution of a group may be furnished as an exhibit
stating the date of the dissolution and that all further filings with
respect to transactions in the security reported on will be filed, if
required, by members of the group in their individual capacity.
Item 5.
See
-5 1 -
ITEM 10 - CERTIFICATION
The following certification shall be included if the statement
is filed pursuant to § 206.4 (h)(3)(ii).
By signing below I certify that, to the best of my knowledge and
belief, the securities referred to above were acquired in the ordinary
course of business and were not acquired for the purpose of and do not
have the effect of changing or influencing the control of the bank and
were not acquired in connection with or as a participant in any trans
action having such purposes or effect.
Signature.
After reasonable inquiry and to the best of my knowledge and belief
I certify that the information set forth in this statement is true,
complete and correct.
Date
4
Signature
Name/Title
The original statement shall be signed by each person on whose
behalf the statement is filed, or by his authorized representative.
If the statement is signed on behalf of a person by his authorized repre
sentative (other than an executive officer or general partner of the
-5 2 -
filing person), evidence of the representative's authority to sign on
behalf of such person shall be filed with the statement.
The name and
any title of each person who signs the statement shall be typed or printed
beneath his signature.
Note;
Sight copies of this statement, including all exhibits, should
be filed with the Board.
20.
§ 206.51, Form F-5 (Proxy Statement), Item 3, Persons Making
the Solicitation, would be amended follows;
ITEM 3 - PERSONS MAKING THE SOLICITATION
(a)
*
*
*
(b)
*
*
*
(6)
If any such solicitation is terminated pursuant to a settlement
between the bank and any other participant in such solicitation, describe
the terms of such settlement, including the cost or anticipated cost
•
thereof to the bank.
Instructions.
2.
1.
*
*
*
The information required pursuant to paragraph (b)(6) of this
Item should be included in any amended or revised proxy statement or
other soliciting material relating to the same meeting or subject matter
furnished to security holders by the bank subsequent to the date of
settlement.
21.
§ 206.51, Form F-5 (Proxy Statement), Item 5, Voting Securities
and Principal Holders Thereof, would be amended as follows;
-5 3 -
ITEM 5 - VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
(a)
*
*
*
(b)
*
*
*
(c)
*
*
*
(d)
Security cwnership of certain beneficial owners.
Furnish the following information as of the most recent practicable
date in substantially the tabular form indicated, with respect to any
person (including any "group" as the term is used in Section 13(d)(3)
of the Securities Exchange Act of 1934) who is known to the bank to
be the beneficial owner of more than five per cent of any class of the
bank's securities.
Show in Column (3) the total number of shares beneficially
owned and in Column (4) the percent of class so owned.
Of the number
of shares shown in Column (3), indicate by footnote or otherwise the
amount of shares with respect to which such listed beneficial owner
has the right to acquire beneficial ownership, as specified in
§206.4(h)(5)(iv)(A).
(1)
(2)
Title
Name and
Amount of
Address of
and Nature of
of
Beneficial
Beneficial
Class
of
Class
Owner
(3)
Ownership
(4)
Percent
*
-5 4 -
(e)
Security ownership of management.
Furnish the following information,
as of the most recent practicable date in substantially the tabular
form indicated, as to each class of equity securities of the bank or
any of its parents or subsidiaries, other than directors'qualifying shares,
beneficially owned by all directors and nominees, naming them, and directors
and officers of the bank as a group, without naming them.
(2)
Show in Column
the total number of shares beneficially owned and Column (3) the
per cent of class so owned.
Of the number of shares shown in Column
(2), indicate, by footnote or otherwise the amount of shares with respect
to which such persons have the right to acquire beneficial ownership
as specified in § 206.4(h)(5)(iv)(A).
(1 )
Title of Class
(2)
Amount and Nature of
(3)
Per cent of Class
Beneficial Ownership
Instructions to Item 5(d)(e) and (f).
1.
The percentages are
to be calculated on the basis of the amount of outstanding securities,
excluding securities held by or for the account of the bank or its sub
sidiaries, plus securities deemed outstanding pursuant to § 206.4(h)(5)(iv)(A) .
2.
For the purposes of this item, beneficial ownership shall be
determined in accordance with § 206.4(h)(5).
Include such additional
-5 5 -
subcolumns or any other appropriate explanation of Column (3) necessary
to reflect amounts as to which the beneficial owner has (1) sole voting
power,
(2) shared voting power,
(3) sole investment power, and (4) shared
investment power.
3.
The bank shall be deemed to know the contents of any statement
filed with the Board pursuant to Section 13(d) of the Act.
When applicable, a bank may rely upon information set forth in such
statements unless the bank knows or has reason to believe that such
information is not complete or accurate, or that a statement or amendment
should have been filed and was not.
4.
For purposes of furnishing information pursuant to paragraph
(d), the bank may indicate the source and date of such information.
5.
Where more than one beneficial owner is known to be listed
for the same securities, appropriate disclosure should be made to avoid
confusion.
(f)
If, to the knowledge of the persons on whose behalf the solicitation
is made, a change in control of the bank has occurred since the beginning
of its last fiscal year, state the name of the person(s) who acquired
such control, the amount and the source of the consideration used by
such person(s), the basis of the control, the date and a description
of the transaction(s) which resulted in the change of control, the percentage
of voting securities of the bank now beneficially owned directly or
indirectly by the person(s) who acquired control, and the identity of
the person(s) from whom control was assumed.
If the source of all or
-5 6 -
any part of the consideration used is a loan made in the ordinary course
of business by a bank as defined by Section 3(a)(6) of the Act, the
identity of such bank shall be omitted provided a request for confidentiality
has been made pursuant to Section 13(d)(1)(B) of the Act by the person(s)
who acquired control.
In lieu thereof, the material shall indicate
the identity of the bank so omitted and shall be filed separately with
the Board.
If the source of all or any part of the funds used to acquire
control of the bank was a loan made by a bank as defined by section
3(a)(6) of the Act indicate whether there exists any agreement, arrangement
or understanding pursuant to which the bank maintains or would maintain
a correspondent deposit account at such lending bank.
Instructions.
1.
State the terms of any loans or pledges obtained
by the new control group for the purpose of acquiring control, and the
names of the lenders or pledgees.
-.
Any arrangement or understandings among members of both the
former and new control groups and their associates with respect to the
election of directors and other matters should be described.
(g)
Changes in Control.
Describe any arrangements, known to the
bank, including any pledge by any person of securities of the bank or
any of its parents,the operation of which may at a subsequent date result
in a change in control of the bank.
A description is not required of
ordinary default provisions contained in any charter, trust indentures
or other governing instruments relating to securities of the bank.
-57-
22.
§ 206.51, Form F-5 (Proxy Statement), Item 6, Nominees and
Directors, would be retitled Directors and Officers, and amended as follows
ITEM 6 - DIRECTORS AND OFFICERS
If action is to be taken with respect to election of directors,
furnish the following information in tabular form to the extent practicable
with respect to each person nominated for election as a director and
each other person whose terra of office as a director will continue after
the meeting.
However, if the solicitation is made on behalf of persons
other than management, the information required need only be furnished
as to nominees of the persons making the solicitation.
(a)
Identification of directors and officers.
List all directors
and officers of the bank and all persons nominated or chosen to become
directors or officers.
Indicate all positions and offices with the
bank held by each person named.
State the age of the persons named,
their terms of office, and the periods during which each such person
has served.
Briefly describe any arrangement or understanding between
each director and officer and any other person pursuant to which such
director or officer was selected to serve in that capacity.
The term
officer is defined in §206.2.
Instructions.
(1)
Do not include any arrangements or understandings with directors
or officers of the bank acting solely in their capacities as such.
\
-58-
2.
No nominee or person chosen to become a director or who has
not consented to act as such should be named in response to this item.
In this regard, see § 335.5(d).
3.
No information need be given respecting any director whose
terra of office as a director will not continue after the meeting to
which the statement relates.
4.
In connection with action to be taken concerning the election
of directors, if fewer nominees are named than the number fixed by or
pursuant to the governing instruments, state the reasons for this procedure
and that the proxies cannot be voted for a greater number of persons
than the number of nominees named.
5.
With regard to proxy statements in connection with action to
be taken concerning the election of directors, if the solicitation is
made by persons other than management, information should be given as
to nominees of the persons making the solicitation.
In all other instances,
information should be given as to directors and persons nominated for
election or chosen by management to become directors.
-5 9 -
(b)
Identification of certain significant employees.
Where the
bank employs 'persons such as special consultants or attorneys who are
not officers, but who make or are expected to make significant cont
ributions to the business of the bank, such persons should be identified
and their background disclosed to the same extent as in the case of officers.
(c)
Family relationships.
State the nature of any family rela
tionships between any director, officer, or person nominated or chosen
by the bank to become a director or officer.
Instructions.
The term "family relationships" means any relation
ship by blood, marriage, or adoption, not more remote than first cousin.
4
(d)
Business experience.
(1) Give a brief account of the business
experience during the past five years of each director, officer or per
son nominated or chosen to become a director or officer, and each person
named in answer to paragraph (b), including principal occupations and
employment during that period, and the name and principal business of
any corporation or other organization in which such occupations and
employment were carried on.
When an officer or person named in response
to paragraph (b), has been employed by the bank or a subsidiary of the
bank for less than five years, a brief explanation should be included
as to the nature of the responsibilities undertaken by the individual
in prior positions in order to provide adequate disclosure of his prior
business experience.
What is required is information relating to the
level of his professional competence which may include, depending upon
the circumstances, such specific information as the size of the operation
-6 0 -
supervised.
(2) Indicate any other directorship held by each director
or person chosen to become a director in any company with a class of
securities registered pursuant to Section 12 of the Act.
(e)
Involvement in certain legal proceedings.
Describe any of
the following events which occurred during the past five years and which
are material to an evaluation of the ability or integrity of any di
rector, officer or person chosen or nominated to become a director or
officer of the bank:
(1)
A petition under the Bankruptcy Act or any state insolvency
law was filed by or against such person, or a receiver, fiscal agent
or similar officer was appointed by a court for the business or property
of such person, or any partnership in which he was a general partner
at or within two years before the time of such filing, or any corpora
tion or business association of which he was an executive officer at
or within two years before the time of such filing;
(2)
Such person was convicted in a criminal proceeding or is a
named subject of a pending criminal proceeding (excluding traffic vio
lations and other minor offenses);
(3)
Such person was the subject of any order, judgment, or decree,
not subsequently reversed, suspended or vacated, of any court of com
petent jurisdiction permanently or temporarily enjoining- him from, or
otherwise limiting the following activities:
-6 1 -
(i)
acting as an investment adviser, underwriter, broker or dealer
in securities, or as an affiliated person, director or employee of any
investment company, bank, savings and loan association or insurance
#
company, or engaging in or continuing any conduct or practice in con
nection with such activity;
(ii)
(iii)
engaging in any type of business practice; or
engaging in any activity in connection with the purchase
or sale of any security or in connection with any violation of federal
or state securities laws.
(4)
Such person was the subject of any order, judgment or decree,
not subsequently reversed, suspended or vacated, of any federal or state
authority barring, suspending or otherwise limiting for more than 60
days the right of such person to engage in any activity described in
subparagraph (3), above, or to be associated with persons engaged in
any such activity.
(5)
Such person was found by a court of competent jurisdiction
in a civil action, or by a government agency, to have violated any
federal or state securities law, and the judgment in such civil action
or finding by the government agency has not been subsequently reversed,
suspended, or vacated
-6 2 -
Instructions.
1.
For purposes of computing the five year period
referred to in this paragraph, the date of a reportable event shall
be deemed the date on which the final order, judgment or decree was
entered, or the date on which any rights of appeal from preliminary
orders, judgments, or decrees have lapsed.
With respect to bankruptcy
petitions, the computation date shall be the date of filing for uncon
tested petitions or the date upon which approval of a contested petition
became final.
2.
If any event specified in this subparagraph (e) has occurred
and information in regard thereto is omitted on the ground that it is
not material, the bank may furnish to the Board at the time of filing,
as supplemental information and not as part of the statement, materials
to which the omission relates, a description of the event, and a state
ment of the reasons for the omission of information in regard thereto.
3.
The bank is permitted to explain any mitigating circumstances
associated with events reported pursuant to this paragraph.
4.
If the information called for by Item 6(e) is being presented
in a proxy or information statement, no information need be given re
specting any director whose term in office as director will not continue
after the meeting to which the statement relates.
(f) Describe any of the following relationships which exist:
-63(1)
If the nominee or director has during the past five years
had a principal occupation or employment with any of the bank's parents,
subsidiaries or other affiliates;
(2)
If the nominee or director is related to an officer of any
of the bank's parents, subsidiaries or other affiliates by blood, marriage
or adoption (except relationships more remote than first cousin);
(3)
If the nominee or director is, or has within the last two
full fiscal years been, an officer, director or employee of, or owns,
or has within the last two full fiscal years owned, directly or indirectly,
in excess of 1 percent equity interest in any firm, corporation or other
business or professional entity;
(i)
Which has made payments to the bank or its subsidiaries for
property or services during the bank's last full fiscal year in excess
of 1 percent of the bank's consolidated gross revenues for its last
full fiscal year;
(ii)
Which proposes to make payments to the bank or its subsidiaries
for property or services during the current fiscal year in excess of
1 percent of the bank's consolidated gross revenues for its full fiscal
year;
(iii)
To which the bank or its subsidiaries were indebted at any
time during the bank's fiscal year in an aggregate amount in excess
of 1 percent of the bank's total consolidated assets at the end of such
fiscal year or $5,000,000, whichever is less;
-64-
(iv)
To which the bank or its subsidiaries have made payments for
property or services during such entity's last full fiscal year in ex
cess of 1 percent of such entity's gross revenues for its last full
fiscal year;
(v)
To which the bank or its subsidiaries propose
to make pay
ments for property or services during such entity's current fiscal year
in excess of 1 percent of such entity’s consolidated gross revenues
for its last full fiscal year;
(vi)
In order to determine whether payments made or proposed to
be made exceed 1 percent of the consolidated gross revenues of any en
tity other than the bank for such entity's last full fiscal year, it
is appropriate to rely on information provided by the nominee or director
(vii)
In calculating payments for property and services the fol
lowing may be excluded:
(A)
Payments where the rates or charges involved in the trans
action are determined by competitive bids, or the transaction involves
the rendering of services as a public utility at rates or charges fixed
in conformity with law or governmental authority;
(B)
Payments which arise solely from the ownership of securities
of the bank and no extra or special benefit not shared on a pro rata
basis by all holders of the class of securities is received;
-6 5 (viii)
(iii)
In calculating indebtedness for purposes of subparagraph
above, debt securities which have been publicly offered, admitted
to trading on a national securities exchange, or quoted on the automated
quotation system of a registered securities association may be excluded.
(4)
That the nominee or director is a member or employee of, or
is associated with, a law firm which the bank has retained in the last
two full fiscal years or proposes to retain in the current fiscal year;
(5)
That the nominee or director is a control person of the bank
(other than solely as a director of the bank).
(6)
In addition, the bank should disclose any other relationships
it is aware of between the director or nominee and bank or its management
which are substantially similar in nature and scope to those relationships
listed above.
NOTE— In the Board's view, where significant business or personal
relationships exist between the director or nominee and the bank or
its management, including, but not limited to, those as to which disclosure
would be required pursuant to item 6(b), characterization of a director
or nominee by any "label" connoting a lack of relationship to the issuer
and its management may be materially misleading.
(j)
(/)
Committees.
State whether or not the bank has standing
audit, nominating and compensation committees of the Board of Directors,
or committees performing similar functions.
If the bank has such committees,
-66however designated, identify each committee member, state the number
of committee meetings held by each such committee during the last fiscal
year and describe briefly the functions performed by such committees.
(2)(a)
If the bank has a nominating or similar committee, state
whether the committee will consider nominees recommended by shareholders
and, if so;
(b)
describe the procedures to be followed by shareholders in
submitting such recommendations.
(h)
Director Attendance.
State the total number of meetings of
the 3oard of Directors (including regularly scheduled and special meetings)
which were held during the last full fiscal year.
Name each incumbent
director who during the last full fiscal year attended fewer than 75
percent of the aggregate of (1) the total number of meetings of the
board of directors (held during the period for which he has been a
director) and (2) the total number of meetings held by all committees
of the board on which he served (during the periods that he served).
(i)
Resignation of Directors.
If a director has resigned or declined
to stand for re-election to the board of directors since the date of
the last annual meeting of shareholders because of a disagreement with
the bank on any matter relating to the bank's operations, policies or
practices, and if the director has furnished the bank with a letter
describing such disagreement and requesting that the matter be disclosed,
the bank shall state the date of resignation or declination to stand
for re-election and summarize the director's description of the disagreement.
(j)
If the bank believes that the description provided by the
director is incorrect or incomplete, it may include a brief statement
presenting its views of the disagreement.
-6 7 23.
§ 206.51, Fora F-5 (Proxy Statement), Item 7, Remuneration and
Other Transactions With Management and Others, would be amended as follows:
ITEM 7 - REMUNERATION AND OTHER TRANSACTIONS
WITH MANAGEMENT AND OTHERS
Furnish the information called for by this item if action is to
be taken with respect to (i) the election of directors,
(ii) any bonus,
Ml
profit sharing or other remuneration plan, contract or arrangement in
which any director, nominee for election 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 management, the information required
need be furnished only as to nominees for election as directors and
as to their associates.
(a)
Current remuneration.
Furnish the information required in
the table below, in substantially the tabular form as specified, concerning
all remuneration of the following persons and group for services in
all capacities to the bank during the bank's last fiscal year.
(1)
Five officers or directors.
Each of the five most highly
compensated, officers or directors of the bank as to whom the total remuneration
required to be disclosed in Columns Cl and C2, below, would exceed $50,000,
naming each such person:
(2)
and
All officers and directors.
All officers and directors of
the bank as a group, stating the number of persons in the group without
naming them.
-6 3 -
(3)
Specified Tabular Format
Remuneration Table
(A)
(D)
(C)
(B)
Name of
Capacities
Cash and cash-equivalent
Aggregate
individual
in which
forms of remuneration
of contingent
or number
served
forms of
of persons
remuneration
in group
(C2)
(Cl)
Salaries, fees
Securities or
directors' fees,
property, in
commissions, and
surance benefits
bonuses
or reimbursement,
personal benefits
Instructions to Item 7(a).
to this item.
1.
Columns A and 3 .
Persons subject
(a) This item applies to any person who was an officer
or director of the bank at any time during the fiscal year.
However,
information need not be given for any portion of the period during which
such person was not an officer or director of the bank, provided a statement
to that effect is mace.
(b) The term officer is defined in § 206.2(q)
(c) For the purposes of this item "bank" shall include the bank and
all its subsidiaries.
-69-
2.
Column C
(a)
Column Cl shall include all cash remuneration
distributed or accrued in the form of salaries, fees, directors' fees,
commissions and bonuses.
(b)
property.
Column C2 should include the following:
(i)
Securities or
Where any of the specified persons or group (a) exercises
any option, right or similar election in connection with any contract,
agreement, plan or arrangement, or (b) becomes entitled without further
contingencies to retain securities or property, state the spread between
the acquisition price, if any, and the fair market price of all securities
or property acquired under any contract, agreement, plan or arrangement.
The fair market price of any such securities or property shall be determined
as of the date during the fiscal year that either of the events in (a)
or (b) of this paragraph occurs, or if both events are contemplated,
the date of the latter event.
(ii)
Personal benefits.
(a)
The value of personal benefits which
are not directly related to job performance, which are furnished by
the bank directly or through third parties to each of the specified
persons and group, or benefits furnished by the bank to other persons
which indirectly benefit the specified persons.
Such personal benefits
shall include the costs of any premiums or benefits paid by the bank
for any life or health insurance policy or health plan of which bank
is not the sole beneficiary.
Such benefits shall be valued on the basis
of the aggregate actual cost to the bank.
Information need not be
furnished for any such benefit provided by the bank which does
-7 0 not discriminate in favor of officers or directors and which is available
generally to all salaried employees.
(b) No disclosure need be included
as to any person named in the remuneration table if the aggregate amount
of all personal benefits to such person did not exceed $5,000.
If disclosure
of such amounts is not made, a statement to that effect should be added
in a footnote to the table.
•
(c) If the bank cannot determine the actual
cost of personal benefits for a specified person without unreasonable
effort or expense, include a reasonable estimate of the cost of the
personal benefit to the bank.
If the bank cannot reasonably allocate
the extent to which the benefit is personal, include the aggregate cost
to the bank and estimate the percentage of cost attributable to personal
use.
If an estimate is made, disclose the factors upon which the estimate
is based.
(d) Please provide in a statement following the table a description
of the bank's policies and practices with respect to providing personal
benefits to officers, directors, or principal shareholders.
Describe
the type of benefits provided and the basis for selection of the recipients.
3.
Column D .
Column D shall include remuneration of the
specified persons and group in whole or in part for services rendered
during the latest fiscal year (including the forms of remuneration described
in paragraph (a) through (c) below) if the distribution of such remuneration
or the unconditional vesting or measurement of benefits thereunder is
subject to future events.
Footnote Disclosure.
If, as to a person named in the table, an amount
representing personal benefits included in Column C2 exceeds 10% of
the aggregate amount disclosed in Columns Cl and C2 or $25,000, whichever
is less, include a footnote to the table stating the dollar amount or
percentage of Column C2 represented by such personal benefits and briefly
describing such benefits-
(a)
Pensions or retirement plans? annuities; employment contracts;
deferred compensation plans.
(i)
As to each of the specified persons and group, the amount
expensed for financial reporting purposes by the bank for the year which
represents the contribution, payment, or accrual for the account of
any such person or group under any existing pension or retirement plans,
annuity contracts, deferred compensation plans, or any other similar
arrangements.
Such amounts should be reflected as remuneration for
the fiscal year under all such plans or arrangements, including plans
qualified under the Internal Revenue Code, unless in the case of a defined
benefit or actuarial plan, the amount of the contribution, payment,
or accrual in respect to a specified person
is not and cannot readily
be separately or individually calculated by the regular actuaries for
the plan.
(ii) If amounts are excluded from the table pursuant to the previous
provision, include a footnote to the table:
(a) stating the fact;
(b)
disclosing the percentage which the aggregate contributions to the plan
bear to the total remuneration of plan participants covered by such
plan; and (c) briefly describing the remuneration coverd by the plan.
(b)
(1)
Incentive and compensation plans and arrangements
With respect to stock options, stock appreciation rights plans,
phantom stock plans and any other incentive or compensation plan or
-72-
arrangement pursuant to which the measure of benefits is based on ob
jective standards or on the value of securities of the bank or another
person granted, awarded or entered into at any time in connection with
services to the bank, include as remuneration of each of the specified
persons and group any attributable amount expensed by the bank for fi
nancial reporting purposes for the fiscal year as remuneration for any
such person or group.
(2)
Where amounts are expensed and reported in the remuneration
table, and amounts are credited in a subsequent year in connection with
the same plan or arrangement for any proper reason including a decline
in the market price of the securities, such credit may be reflected
as a reduction of the remuneration reported in Column D.
If amounts
credited are reflected in the table, include a footnote stating the
amount of the credit and briefly describe such treatment.
(3)
The term "options" as used in this item includes all options,
warrants, or rights, other than those issued to security holders as
such on a pro rata basis.
-7 3 (c)
Stock purchase plans; profit sharing and thrift plans.
In
clude the amount of any contribution, payment or accrual for the account
of each of the specified persons and groups under any stock purchase,
profit sharing, thrift, or similar plans which has been expensed during
the fiscal year by the bank for financial reporting purposes.
Amounts
reflecting contributions under plans qualified under the Internal Revenue
Code may not be excluded.
4.
Other permitted disclosure.
The bank may provide additional
disclosure through a footnote to the table, through additional columns,
or otherwise, describing the components of aggregate remunerations in
such greater detail as is appropriate.
5.
Definition of "Plan."
Hie term "plan" as used in this item
includes all plans, contracts, authorizations, or arrangements whether
or not set forth in any formal documents.
6.
Transactions with third parties.
Item 7(a), among other things,
includes transactions between the bank and a third party when the pri
mary purposes of the transaction is to furnish remuneration to the per
sons specified in Item 7 (a).
Other transactions between the bank and
third parties in which persons specified in Item 7(a) have an interest,
or may realize a benefit, generally are addressed by other disclosure
requirements concerning the interest of management and others in certain
transactions.
Item 7 (a) does not require disclosure of remuneration
paid to a partnership in which any officer or director was a partner;
-74any such transactions should be disclosed pursuant to these other disclosure
requirements, and not as a note to the remuneration table presented
pursuant to Item 7 (a).
(b)
Proposed remuneration.
Briefly describe all remuneration
payments proposed to be made in the future pursuant to any existing
plan or arrangement to the persons and group specified in Item 7 (a).
As to defined benefit or actuarial plans, with respect to which amounts
are not included in the table pursuant to Instruction 3(a) to Item 7(a),
include a separate table showing the estimated annual benefits payable
upon retirement to persons in specified remuneration and years-of-service
classification.
Instruction.
Information need not be furnished with respect to
any group life, health, hospitalization, or medical reimbursement plans
which do not discriminate in favor of officers or directors of the bank
and which are available generally to all salaried employees.
(c)
Options, warrants, or rights.
Furnish the following information
as to all options to purchase any securities from the bank which were
granted to or exercised by the following persons since the beginning
of the bank's last fiscal year, and as to all options held by such persons
as of the latest practicable date:
(i) each director or officer named
in answer to paragraph (a)(1), naming each such person; and (ii) all
directors and officers of the bank as a group, without naming them;
(1)
As to options granted during the period specified state:
{i) the title and aggregate amount of securities called for; (ii) the
-7 5 average option price per share; and (iii) if the option price was less
than 100 percent of the market value of the security on the date of
grant, state such fact, and the market price on such date, shall be
disclosed.
(2)
As to options exercised during the period specified, state
(i) the title and aggregate amount of securities purchased;
(ii) the
aggregate purchase price; and (iii) the aggregate market value of the
securities purchased on the date of purchase.
(3)
As to all unexercised options held as of the latest practicable
date (state date), regardless of when such options were granted, state
(i) the title and aggregate amount of securities called for, and (ii)
the average option price per share.
Instructions.
1.
The term "options" as used in this paragraph
(c) includes all options, warrants or rights, other than those issued
to security holders as such on a pro rata basis.
Where the average
option price per share is called for, the weighted average price per share
shall be given.
2.
The extension, regranting or material amendment of options
shall be deemed the granting of options within the meaning of this
paragraph.
3.
(i)
Where the total market value on the granting dates of
the securities called for by all options granted during the period
specified does not exceed $10,000 for any officer or director named
-7 6 in answer to paragraph (a)(1), or $40,000 for all officers and directors
as a group, this item need not be answered with respect to options
granted to such persons or group.
(ii) Where the total market value
on the dates of purchases of all securities purchased through the ex
ercise of options during the period specified does not exceed $10,000
for any such period or $40,000 for such group, this item need not be
answered with respect to options exercised by such person or group.
(iii)
Where the total market value 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 such person or $40,000 for such group, this item
need not be answered with respect to options held as of the specified
date by such person or group.
4.
If the options relate to more than one class of securities
the information shall be given separately for each such class.
(d)
Indebtedness of management.
(1) State as to each of the
following persons, herein called specified persons, who was indebted
to the bank at any time since the beginning of its last fiscal year:
(a)
the largest aggregate amount of indebtedness, including extensions
of credit or overdrafts, endorsements or guarantees outstanding (in
dollar amounts and as a percentage of total equity capital accounts
at the time) at any time during such period;
(b) the nature of the
indebtedness and of the transaction in which it was incurred;
(c) the
amount thereof outstanding as of the la±est practicable date; and (d)
the rate of interest paid or charges thereon:
-77(i)
each director or officer of the bank;
(ii)
each nominee for election as director;
(iii)
each security holder who is known to bank to own of record
or beneficially more than five per cent of any class of the bank's voting
securities;
(iv)
each associate of any such director, officer, nominee or
principal security holder.
Instructions.
1.
Include the name of such person whose indebted
ness is described and the nature of the relationship by reason of which
the information is required to be given.
2.
Generally, no information need be given under this Item 7(d),
unless any of the following are present:
(a)
such extensions of credit are not made on substantially the
same terms, including interest rates, collateral and repayment terms,
as those prevailing at the time for comparable transactions with other
than the specified persons.
(b)
such extensions of credit were not made in the ordinary course
of business.
(c)
such extensions of credit have involved or presently involve
more than a normal risk of collectibility or other unfavorable features
C-- *
-7 3 including the restructuring of an extensions of credit or a delinquency
as to payment of interest or principal.
(d)
the aggregate amount of extensions of credit outstanding at
any time from the beginning of the last fiscal year to date to a spec
ified person together with his associates, exceeded 10 per cent of the equity
capital accounts of the bank at that time or $5 million, whichever is
less.
(2)
If any extension of credit to the specified persons as a group
exceeded 20 per cent of the equity capital accounts of the bank at any
time since the beginning of the last full fiscal year to date, disclose
the maximum aggregate amount of extensions of credit to the group during
the period, the aggregate amount as a percentage of the equity capital
accounts of the bank and include a statement, to the extent applicable,
that the bank has had, and expects to have in the future, banking transactions
in the ordinary course of its business with directors, officers, principal
stockholders and their associates, on the same terras, including interest
rates, collateral and repayment terms on extensions of credit, as those
prevailing at the same time for comparable transactions with others.
3.
If any indebtedness required to be described arose under Section
16(b) of the Act and has not been discharged by payment, state the amount
of any profit realized, that such profit will inure to the benefit of
the bank or its subsidiaries and whether suit will be brought or other
steps taken to recover such profit.
If in the opinion of counsel a
question reasonably exists as to the recoverability of such profit,
-7 9 it will suffice to state all facts necessary to describe the transaction,
including the prices and number of shares involved.
4.
Notwithstanding the foregoing, any transaction or series of
transactions resulting in indebtedness to the bank or its subsidiaries
which may be considered material should be disclosed.
5.
If the information called for by Item 7(d) is being presented
in Form F-l, § 206.41, the information called for shall be presented
for the last three full fiscal years.
(e)
Transactions With Management.
Describe briefly any transaction
since the beginning of the bank's last full fiscal year or any presently
proposed transactions, to which the bank or any of its subsidiaries
was or is to be a party, in which any of the specified persons in Item
7 (d) had or is to have a direct or indirect material interest, naming
such person and stating his relationship to the bank, the nature of
his interest in the transaction and, where practicable, the amount of
such interest.
Instructions.
1.
No information need be given in response to
this Item 7(e) as to any remuneration or other transaction reported
in response to Item 7(a),
(b), (c) or (d), or as to any transaction
with respect to which information may be omitted pursuant to Instruction
2 to Item 7 (c) or Instruction 2 or 3 to Item 7 (d).
Item 7(a) applies to this Item 7(e).
Instruction 2 to
-8 0 2.
No information need be given in answer to this Item 7 (e) as
to any transaction where:
(a)
The rates or charges involved in the transaction are determined
by competitive bids, or the transaction involves the rendering of services
as a common or contract carrier, or public utility, at rates or charges
fixed in conformity with law or governmental authority;
(b)
The transaction involves services as a bank depository of
funds, transfer agent, registrar, trustee under an indenture, or similar
services;
(c)
The amount involved in the transaction or series of similar
transactions, including all periodic installments in the case of any
lease or other agreement providing for period payments or installments,
does not exceed $40,000 for the term of each transaction or series of
transactions; or
(d) The interest of the specified person arises solely from the
4
ownership of securities of the bank and the specified person receives
no extra or special benefit not shared on a pro rata basis by all holders
of securities of the class.
3.
It should be noted that this item calls for disclosure of in
direct, as 'well as direct, material interests in transactions.
A person
who has a position or relationship with a firm, corporation, or other
entity, which engages in a transaction with the bank may have an indirect
-81interest in such transaction by reason of such position or relationship.
However, a person shall be deemed not to have a material indirect interest
in a transaction within the meaning of this Item 7(e) where:
(a)
the interest arises only (i) from such person's position as
a director of another corporation or organization (other than a partner
ship) which is a party to the transaction, or (ii) from the direct or
indirect ownership by such person and all other persons specified in
subparagraphs (1) through (4) above, in the aggregate, of less than
a 10 per cent equity interest in another person (other than a partnership)
which is a party to the transaction, or (iii) from both such position
and ownership;
(b) the interest arises only from such person's position as a
limited partner in a partnership in which he and all other persons
specified in (1) through (4) above had an interest of less than 10 per
cent; or
(c)
the interest of such person arises solely from the holding
of an equity interest (including a limited partnership interest but
excluding a general partnership interest) or a creditor interest in
another person which is a party to the transactions with the bank and
the transaction is not material to such other person.
4.
The amount of the interest of any specified person shall be
computed without regard to the amount of the profit or loss involved
-82-
in the transaction.
Where it is not practicable to state the approxi
mate amount of the interest, the approximate amount involved in the
transaction will be indicated.
5.
In describing any transaction involving the purchase or sale
of assets by or to the bank, otherwise than in the ordinary course of
business, state the cost of the assets to the purchaser and, if acquired
by the seller within two years prior to the transaction, the cost there
of, to the seller.
6.
If the information called for by Item 7(e) is being presented
in Form F-l, §206.41, the period for which the information called for
shall be presented for the previous three years.
7.
Include the name of each person whose interest in any trans
action is described and the nature of the relationship by reason of
which such interest is required to be described.
Where it is not prac
ticable to state the approximate amount of the interest, the approximate
amount involved in the transaction shall be indicated.
8.
Information shall be furnished in answer to this item with
respect to transactions not excluded above which involve remuneration
from the bank directly or indirectly, to any of the specified persons
for services in any capacity unless the interest of such persons arises
solely from the ownership individually and in the aggregate of less
than 10 per cent of any class of equity securities of another corporation
furnishing the services to the bank.
—
-------- ----------------
—
“
—
-839.
The foregoing instructions specify certain transactions and
interests as to which information may be omitted in answering this item.
These may be situations where, although the foregoing instructions do
not expressly authorize nondisclosure, the interest of a specified
person in the particular transaction or series of transactions is not
a mutual interest.
In that case, information regarding such interest
and transaction is not required to be disclosed in response to this
item.
The materiality of any interest or transaction is to be determined
on the basis of the significance of the information to investors in
light of all of the circumstances of the particular case.
The importance
of the interest to the person having the interest, the relationship
of the parties to the transaction to each other and the amount involved
in the transaction are among the factors to be considered in determining
the significance of the information to investors.
(f)
Transactions with pension or similar plans.
Describe briefly
any transactions since the beginning of the bank’s last full fiscal
year or any presently proposed transactions, to which any pension, re
tirement, savings or similar plan provided by the bank, or any of its
parents or subsidiaries was or is to be a party, in which any of the
specified persons in Item 7 (d) had or is to have a direct or indirect
material interest, naming such person and stating his relationship to
the bank, the nature of his interest in the transaction and, where
practicable, the amount of such interest.
Instructions.
1.
Instructions 2, 3, 4 and 5 to Item 7(e) shall
apply to this Item 7(f).'
-842.
Without limiting the general meaning of the term "transaction"
there shall be included in answer to this Item 7(f) any remuneration
received or any loans received or outstanding during the period, or
proposed to be received.
3.
No information need be given in answer to paragraph (f) with
respect to:
(a)
payments to the plan, or payments to beneficiaries, pursuant
to the terms of the plan;
(b)
payment of remuneration for services not in excess of 5 per
cent of the aggregate remuneration received by the specified person
during the bank's last fiscal year from the bank; or
(c)
any interest of the bank which* arises solely from its general
interest in the success of the plan.
(g)
Legal Proceedings.
Any material proceedings to which any
director, officer or affiliate of the bank, and persons holding in excess
of five per cent of the bank's outstanding stock, or any associate of
any such director, officer or security holder, is a party or has an
interest materially adverse to the bank or any of its subsidiaries should
also be described.
24.
§ 206.51, Form F-5 (Proxy Statement), Item 8, Relationship with
Independent Public Accountants, would be amended as follows:
ITEM 8 - RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANTS
*
(e)
*
*
If action is to be taken with respect to the selection or
approval of auditors, or if it is proposed that particular auditors
shall be recommended by any committee to select auditors for whom votes
are to be cast, name the auditors and describe briefly any direct financial
interest or any material indirect financial interest in the bank or
—
—
—
—
-85any of its parents or subsidiaries, or any connection during the past
f
3 years with the bank or any of its parents or subsidiaries in the capacity
of promoter, underwriter, voting trustee, director, officer, or employee.
If the auditors to be selected are other than those which were engaged
as the principal auditors for the bank's most recently filed certified
financial statements, briefly summarize the circumstances and conditions
surrounding the proposed change of such auditors, and state whether
such change was recommended or approved by:
(1)
any audit or similar committee of the Board of Directors,
if the bank has such a committee; or
(2)
the Board of Directors, if the bank has no such committee.
Por the fiscal year most recently completed, describe each pro
fessional service provided by the auditor and state the percentage
relationship which the aggregate of the fees for all nonaudit services
bear to the audit fees, and, except as provided below, state the percen
tage relationship which the fee for each nonaudit service bears to the
audit fees.
Indicate whether, before each professional service provided
by the principal accountant was rendered, it was approved by, and the
possible effect on the independence of the accountant was considered
by (1) any audit or similar committee of the board of directors and
(2) for any service not approved by an audit or similar committee, the
board of directors.
-86-
Instructions.
1.
For purposes of this subsection, all fees for
services provided in connection with the audit function (e.q.), reviews
of quarterly reports, filings with the Board, and annual reports) may
be computed as part of the audit fees.
Indicate which services are
reflected in the audit fees computation.
2.
If the fee for any nonaudit service is less than 3 per cent
of the audit fees, the percentage relationship need not be disclosed.
3.
Bach service should be specifically described.
Broad general
categories such as "tax matters" or "management advisory services" are
not sufficiently specific.
4.
Describe the circumstances and give details of any services
provided by the bank's independent accountant during the lastest fiscal
year that were furnished at rates or terras that were not customary.
5.
Describe any existing direct or indirect understanding or
agreement that places a limit on current or future years' audit fees,
including fee arrangements that provide fixed limits on fees that are
not subject to reconsideration if unexpected issues involving accounting
or auditing are encountered.
*
*
Disclosure of fee estimates is not required.
*
*
*
*
*
*
3oard of Governors of the Federal Reserve System, June 22, 1979.
{SEAL}___(£
\zi) Thcedcre F. Africa
Theodore S. Allison
Secretary of the Board
@FedFRASER