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Inactive Financial Institution Letters 


[Federal Register: December 29, 1994]


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FEDERAL DEPOSIT INSURANCE CORPORATION
12 CFR Part 335

RIN 3064-AB32

 
Securities of Nonmember Insured Banks

AGENCY: Federal Deposit Insurance Corporation (FDIC).

ACTION: Final rule.

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SUMMARY: The Federal Deposit Insurance Corporation (FDIC) is amending 
its securities disclosure regulations. The amendments relate to 
registration and reporting requirements for non-member insured banks 
with securities registered under section 12 of the Securities Exchange 
Act of 1934 (Exchange Act or Act).
    Section 12(i) of the Exchange Act requires that the FDIC issue 
regulations substantially similar to those of the Securities and 
Exchange Commission (SEC) or publish its reasons for not doing so. 
These amendments are intended to comply with section 12(i) and to 
update the regulations. The SEC has amended its Exchange Act 
regulations, relating to Small Business Initiatives, Executive 
Compensation Disclosure, and Regulation of Communications Among 
Shareholders. The FDIC is amending its Exchange Act regulations to 
incorporate, in substance, the SEC changes noted above.

DATES: Effective Date. These amendments are effective on July 1, 1995.
    Early Compliance. These amendments may be immediately followed by 
the affected party.

FOR FURTHER INFORMATION CONTACT: M. Eric Dohm, Staff Accountant, 
Division of Supervision (202-898-8921) or Gerald J. Gervino, Senior 
Attorney, Legal Division (202-898-3723), Federal Deposit Insurance 
Corporation, 550 17th Street N.W., Washington, DC 20429.

SUPPLEMENTARY INFORMATION:

Background

    Section 12(i) of the Exchange Act grants authority to the FDIC to 
promulgate regulations applicable to the securities of insured banks 
(including foreign banks having an insured branch) which are neither 
members of the Federal Reserve System nor District banks (Nonmember 
Banks). These regulations must be substantially similar to the SEC's 
regulations under sections 12 (securities registration), 13 (periodic 
reporting), 14(a) (proxies and proxy solicitation), 14(c) (information 
statements), 14(d) (tender offers), 14(f) (arrangements for changes in 
directors), and 16 (beneficial ownership and reporting) of the Exchange 
Act. Section 12(i) does not require the FDIC to promulgate 
substantially similar regulations in the event that the FDIC finds that 
implementation of such regulation is not necessary or appropriate in 
the public interest or for protection of investors and the FDIC 
publishes such findings with detailed reasons therefor in the Federal 
Register. This amendment is intended to satisfy that requirement.

Amendments to Part 335

A. Small Business Initiatives

    Recognizing that smaller banks are disproportionately affected by 
complexities in the disclosure requirements of banks registered under 
section 12 of the Exchange Act, the FDIC is revising its regulations by 
permitting ``small business issuers'' (as defined under the SEC's 
Exchange Act rules) to provide financial and other item disclosure in 
conformance with Regulation S-B of the Securities and Exchange 
Commission (17 CFR Part 228) in lieu of certain disclosure requirements 
in FDIC Forms F-1, F-2, F-4, F-5, F-5A and the annual report to 
security holders. The definition of ``small business issuer'', 
generally includes banks with annual revenues of less than $25 million, 
whose voting stock does not have a public float of $25 million or more.
    For additional information and discussion, reference is made to the 
preamble contained in ``Small Business Initiatives'', SEC Release No. 
34-30968, 57 FR 36442 (August 13, 1992); and in ``Additional Small 
Business Initiatives'', SEC Release No. 34-32231, 58 FR 26509 (May 4, 
1993).

B. Executive Compensation Disclosure

    The SEC's regulations, as referenced by these amended Exchange Act 
rules, require disclosure of the compensation of the chief executive 
officer (CEO) regardless of the amount of compensation, and the four 
most highly compensated senior executive officers, excluding the CEO, 
who earn more than $100,000 per year in salary and bonus. Additionally, 
the regulations require a comprehensive three year compensation table, 
a table which discloses awards granted pursuant to long term incentive 
plans, and two disclosure tables relative to options and stock 
appreciation rights. The SEC's regulations also require:
    (a) Disclosure of all forms of director compensation, employment 
contracts and termination agreements which require payments in excess 
of $100,000;
    (b) A compensation committee report to shareholders which details 
compensation policies and the basis for the CEO's compensation for the 
last fiscal year;
    (c) Proxy statement disclosure of the existence of certain 
relationships between directors and the bank if specific circumstances 
exist; and
    (d) A graphical chart, which illustrates for the previous five 
years, the cumulative total return to shareholders, of stock 
appreciation and dividends.
    For additional information and discussion, reference is made to the 
preamble contained in ``Executive Compensation Disclosure'', SEC 
Release No. 34-31327, 57 FR 48125 (October 21, 1992); in ``Executive 
Compensation Disclosure'', SEC Release No. 34-32723, 58 FR 42882 
(August 12, 1993); and in ``Executive Compensation Disclosure'', SEC 
Release No. 34-33229, 58 FR 63010 (November 29, 1993).

C. Regulation of Communications Among Shareholders

    These amendments to the proxy rules and other related provisions 
will improve the effectiveness of the proxy-voting process and its 
effect on corporate governance of nonmember insured banks subject to 
Part 335. These amendments are the result of an effort to eliminate 
from the FDIC proxy rules, any unnecessary regulatory impediments to 
communication among shareholders and others and to the effective use of 
shareholder voting rights. Accordingly, the FDIC is revising its rules 
relative to the solicitation of proxy authority to allow management and 
other persons seeking proxy authority to get their case to the 
shareholders in a more efficient and effective manner. The FDIC has 
determined that modifications in the current rules are desirable to 
achieve the purposes set forth in the Exchange Act.
    The revisions eliminate Form F-6--Form for Statement in Election 
Contests (Sec. 335.221) and also adopt new Form F-6A--Notice of Exempt 
Solicitation (Sec. 335.222). Disclosures relative to each participant 
in an election contest, which were previously provided on Forms F-6, 
are now required to be included on Form F-5--Form for Proxy Statement 
(Sec. 335.212). Form F-6A requirements apply to large shareholders who 
are disinterested in the subject matter of a shareholder vote and who 
are engaging in certain solicitations which are exempt from the 
regulatory requirements of the proxy rules.
    It should also be noted that the FDIC retains its existing rules 
which generally require the filing of preliminary proxy material and 
preliminary information statements with the FDIC for staff review and 
comment, prior to distribution of the definitive materials. The FDIC is 
amending its rules, however, to require that preliminary materials be 
deemed immediately available for public inspection upon filing, unless 
confidential treatment is obtained pursuant to Sec. 335.204(f(2).
    The amendments will make the FDIC's proxy and related disclosure 
rules substantially similar to the SEC's recently amended comparable 
rules. Prior to amendment of its rules, the SEC conducted an extensive 
three-year examination focused on the role of its former proxy and 
disclosure rules in impeding shareholder communication and 
participation. As a result of its examination, the SEC concluded that 
the demonstrated effect of its rules as previously written was contrary 
to Congress's intent that the rules assure fair, and effective 
shareholder suffrage. For additional information and discussion, 
reference is made to the preamble contained in ``Regulation of 
Communications Among Shareholders'', SEC Rel. No. 34-31326, 57 FR 48276 
(October 22, 1992).

D. Other

    As described previously, the FDIC is eliminating Form F-6--Form For 
Statement In Election Contests (Sec. 335.221) and also proposes to 
adopt new Form F-6A--Notice Of Exempt Solicitation (Sec. 335.222). In 
addition, several technical amendments will correct various errors 
which appear in the Code of Federal Regulations.

Public Comment

    The Board requested comment on all aspects of the proposed rule, 
particularly those provisions specifically mentioned above. 59 FR 22555 
(May 2, 1994).
    The FDIC received six comment letters in response to its 
solicitation. All of the commenters were favorable to the adoption of 
the proposed amendments, as a whole. One commenter, offering otherwise 
favorable views, objected to the public availability of preliminary 
proxy material under the amendments.
    In conjunction with this rule, the FDIC also sought written 
comments relative to the following: Should the FDIC consider proposing 
a revision to Part 335, to incorporate by cross-reference the 
comparable rules of the SEC, rather than continue to maintain the 
separate but substantially similar body of rules contained in Part 335 
as is done presently? Interested persons were asked to address: (1) The 
benefits and disadvantages of cross-referencing as a method for 
assuring substantial similarity between the FDIC's and the SEC's 
regulations; (2) the potential cost savings or cost burden of cross-
referencing; (3) whether the FDIC should continue to review preliminary 
proxy materials and information statements; and (4) any other issues 
regarding a cross-referencing proposal which commenters believe 
pertinent. Written comments were invited to be submitted during a 60-
day comment period.
    All of the commenters supported cross-referencing to some extent. 
Two felt that the FDIC should be careful to adopt or preserve 
regulations different from those of the SEC, where FDIC drafted 
regulations would be more appropriate for banks. None provided an 
estimate of cost savings from the cross-referencing procedure. One 
commenter indicated that if this cross-referencing procedure is 
adopted, the FDIC should provide notice to banks filing under Part 335 
that the SEC has amended rules applicable to banks by cross-reference. 
The only commenter who addressed the question of advance filing of 
preliminary proxy material, felt that advance filing should be 
continued.
    In the interest of bringing our rules into similarity with the 
current SEC rules, the FDIC is adopting the rules as previously 
proposed, prior to publication of any comprehensive proposal to 
incorporate by cross-reference the comparable rules of the SEC. 
Recognizing the above noted response to its request for comment, the 
FDIC intends to take further action. Since the previously published 
request for comments concerning a comprehensive cross-referencing 
proposal was a general notice, the FDIC intends to publish for comment, 
a proposal to effect a comprehensive revision of Part 335. The revision 
would incorporate by cross-reference the comparable rules of the SEC 
rather than continue to maintain the separate but substantially similar 
body of rules as presently contained in Part 335. A comprehensive 
revision would generally make all relevant SEC Exchange Act 
regulations, and amendments thereto, applicable to registered Nonmember 
banks unless the FDIC acts to vary specific requirements applicable to 
such banks from the provisions of the SEC regulations. The FDIC intends 
to publish for comment, a proposed revision of Part 335 to 
comprehensively cross-reference the SEC's Exchange Act rules, in the 
near future.

Regulatory Flexibility Act

    The Board hereby certifies that the rule will not have a 
significant economic impact on a substantial number of small entities 
within the meaning of the Regulatory Flexibility Act (5 U.S.C. 601 et 
seq.). Therefore, the provisions of that Act relating to an initial and 
final regulatory flexibility analysis (5 U.S.C. 603 and 604) do not 
apply. This rule will not impose significant burdens on depository 
institutions of any size and would not have the type of impact 
addressed by the Act.

Paperwork Reduction Act

    The collection of information contained in this rule has been 
reviewed and approved by the Office of Management and Budget under 
control number 3064-0030, pursuant to the Paperwork Reduction Act of 
1980 (44 U.S.C. 3501 et seq.).
    The revisions to the collection of information in this rule are 
found in Sec. 335.102, Sec. 335.201, Sec. 335.202, Sec. 335.203, 
Sec. 335.204, Sec. 335.205, Sec. 335.207, Sec. 335.210, Sec. 335.212, 
Sec. 335.213, Sec. 335.214, Sec. 335.220, Sec. 335.221, Sec. 335.222, 
Sec. 335.301, Sec. 335.309a, Sec. 335.310, Sec. 335.312, Sec. 335.321, 
Sec. 335.330, Sec. 335.331, and Sec. 335.622. The most significant of 
these revisions relate to executive compensation disclosure, small 
business initiatives, and communications among shareholders. The 
revisions remove Sec. 335.221, eliminating Form F-6--Form For Statement 
In Election Contests. The previous disclosure requirements of the Form 
F-6 are now included in Form F-5 (Sec. 335.212). The requirement to 
file Form F-6A--Notice Of Exempt Solicitation (Sec. 335.222), is also 
added. It is estimated that, relative to the final rule, the aggregate 
effect of all changes in burden is de minimis and that the changes 
counterbalance each other.
    The total estimated reporting burden for all collections of 
information in this final regulation is summarized as follows:

Number of Respondents: 4,368
Number of Responses Per Respondent: 1.42
Total Annual Responses: 6,214
Hours Per Response: 8.89
Total Annual Burden Hours: 55,276

    Comments on the accuracy of the burden estimate, and suggestions 
for reducing the burden, should be directed to the Office of Management 
and Budget, Paperwork Reduction Project (3064-0030), Washington, DC 
20503, with copies of such comments to Steven F. Hanft, Office of the 
Executive Secretary, room F-400, 550 17th Street, NW., Washington, DC 
20429.

Cost Benefit Analysis

    These amendments will significantly reduce the costs and burdens 
that have been imposed on ``small business issuers'', those who wish to 
communicate with shareholders, and others regarding management 
performance and matters submitted to a shareholder vote. Costs will 
also be reduced by the changes to the proxy statement delivery 
requirements. The amendments should result in cash and manpower savings 
for ``small business issuers'' and all those who will no longer be 
required to prepare and file proxy materials with the FDIC pursuant to 
the new exemptions for solicitations not seeking proxy authority. Even 
those who will be required to submit a Notice of Exempt Solicitation 
(new Form F-6A) will have a significantly reduced compliance burden. 
The amendments to the shareholder list provisions should not change 
substantially the costs or burdens to either the bank registrant or the 
requesting party. While some additional disclosure will be required 
relative to executive compensation, stock performance, and tabulation 
procedures and voting results, the overall cost resulting from these 
changes to banks should be minimal and is outweighed in any event by 
the benefits to shareholders and investors at large resulting from the 
enhanced information.

Statutory Basis

    The revisions to the FDIC's rules under sections 12, 13, 14(a), 
14(c), 14(d), 14(f) and 16 of the Exchange Act, are being adopted by 
the FDIC pursuant to Exchange Act section 12(i).

List of Subjects in 12 CFR Part 335

    Accounting, Banks, banking, Confidential business information, 
Reporting and recordkeeping requirements, Securities.

Text of Final Rules

    In accordance with the foregoing, Part 335 of chapter III of title 
12 of the Code of Federal Regulations is amended as follows:

PART 335--SECURITIES OF NONMEMBER INSURED BANKS

    1. The authority citation for part 335 continues to read as 
follows:


    Authority: Sec. 12(i) of the Securities Exchange Act of 1934, as 
amended (15 U.S.C. 78l(i)).

    2. Section 335.102 is amended by revising the first sentence of 
paragraph (y); by redesignating paragraphs (oo), (pp), (qq), (rr) and 
(ss) as paragraphs (pp), (qq), (rr), (ss) and (tt); by adding a new 
paragraph (oo); and by republishing newly designated paragraph (pp) 
introductory text and revising newly designated paragraph (pp)(3) to 
read as follows:


Sec. 335.102  Definitions.

* * * * *
    (y) The term officer or principal officer or executive officer 
means Chairman of the Board of Directors, Vice Chairman of the Board, 
Chairman of the Executive Committee, President, Vice President (except 
as indicated in the next sentence), Cashier, Treasurer, Secretary, 
Comptroller, and any other person who participates in major 
policymaking functions of the bank. * * *
* * * * *
    (oo) The term Small Business Issuer shall be defined in the same 
manner as currently defined in 17 CFR 240.12b-2.
    (pp) The terms solicit and solicitation mean:
* * * * *
    (3) The furnishing of a form of proxy or other communication to 
security holders under circumstances reasonably calculated to result in 
the procurement, withholding, or revocation of a proxy. The terms do 
not apply, however, to:
    (i) The furnishing of a form of proxy to a security holder upon the 
unsolicited request of such security holder;
    (ii) The performance by the bank of acts required by Sec. 335.210;
    (iii) The performance by any person of ministerial acts on behalf 
of a person soliciting a proxy; or
    (iv) A communication by a security holder who does not otherwise 
engage in a proxy solicitation (other than a solicitation exempt under 
Sec. 335.202) stating how the security holder intends to vote and the 
reasons therefore, provided that the communication:
    (A) Is made by means of speeches in public forums, press releases, 
published or broadcast opinions, statements, or advertisements 
appearing in a broadcast media, or newspaper, magazine or other bona 
fide publication disseminated on a regular basis;
    (B) Is directed to persons to whom the security holder owes a 
fiduciary duty in connection with the voting of securities of a bank 
held by the security holder; or
    (C) Is made in response to unsolicited requests for additional 
information with respect to a prior communication by the security 
holder made pursuant to this paragraph (oo)(3)(iv).
* * * * *
    3. Section 335.201 is amended by revising the reference ``(See 12 
CFR 335.102 (gg) and (oo))'' in paragraph (a) to read ``(See 12 CFR 
335.102 (gg) and (pp))''; and adding paragraph (d) to read as follows:


Sec. 335.201  Requirement of statement.

* * * * *
    (d) The provisions of paragraph (a) of this section shall not apply 
to a communication made by means of speeches in public forums, press 
releases, published or broadcast opinions, statements, or 
advertisements appearing in a broadcast media, newspaper, magazine or 
other bona fide publication disseminated on a regular basis, provided 
that:
    (1) No form of proxy, consent or authorization or means to execute 
the same is provided to a security holder in connection with the 
communication; and
    (2) At the time the communication is made, a definitive proxy 
statement is on file with the FDIC pursuant to Sec. 335.204(c).
    4. Section 335.202 is amended by revising the introductory text; 
adding new paragraph (f); and removing the Note at the end of the 
section to read as follows:


Sec. 335.202  Exceptions.

    The requirements of this subpart (except Secs. 335.204(l), 335.206, 
and 335.210) shall not apply to the following:
* * * * *
    (f) Any solicitation by or on behalf of any person who does not, at 
any time during such solicitation, seek directly or indirectly, either 
on its own or another's behalf, the power to act as proxy for a 
security holder and does not furnish or otherwise request, or act on 
behalf of a person who furnishes or requests, a form of revocation, 
abstention, consent or authorization. Provided, however, that the 
exemption set forth in this paragraph shall not apply to:
    (1) The bank or an affiliate or associate of the bank (other than 
an officer or director or any person serving in a similar capacity);
    (2) An officer or director of the bank or any person serving in a 
similar capacity engaging in a solicitation financed directly or 
indirectly by the bank;
    (3) An officer, director, affiliate or associate of a person that 
is ineligible to rely on the exemption set forth in this paragraph 
(other than persons specified in paragraph (b)(1)(i) of this section), 
or any person serving in a similar capacity;
    (4) Any nominee for whose election as a director proxies are 
solicited;
    (5) Any person soliciting in opposition to a merger, 
recapitalization, reorganization, sale of assets or other extraordinary 
transaction recommended or approved by the board of directors of the 
bank who is proposing or intends to propose an alternative transaction 
to which such person or one of its affiliates is a party;
    (6) Any person who is required to report beneficial ownership of 
the bank's equity securities on a Form F-11 [Sec. 335.407], unless such 
person has filed a Form F-11 and has not disclosed pursuant to Item 4 
thereto an intent, or reserved the right, to engage in a control 
transaction, or any contested solicitation for the election of 
directors;
    (7) Any person who receives compensation from an ineligible person 
directly related to the solicitation of proxies, other than pursuant to 
Sec. 335.203(c);
    (8) Any person who, because of a substantial interest in the 
subject matter of the solicitation, is likely to receive a benefit from 
a successful solicitation that would not be shared pro rata by all 
other holders of the same class of securities, other than a benefit 
arising from the person's employment with the bank; and
    (9) Any person acting on behalf of any of the foregoing in 
paragraphs (f) (1) through (8) of this section.
    5. Section 335.203 is amended by adding a ``Note to Small Business 
Issuers'' following the introductory text of paragraph (a); and 
removing paragraph (c) and Instructions 1, 2 and 3 following paragraph 
(c) to read as follows:


Sec. 335.203  Annual report to security holders to accompany 
statements.

    (a) * * *

    Note to Small Business Issuers: A ``small business issuer'', as 
defined under 17 CFR 240.12b-2 has the option of providing financial 
and other item disclosure in conformance with Regulation S-B of the 
Securities and Exchange Commission (17 CFR Part 228) in lieu of the 
disclosure requirements set forth by paragraphs (a)(1) and (a)(3) 
through (a)(8) of this section. If there is no comparable disclosure 
requirement in Regulation S-B, a small business issuer need not 
provide the information requested. The definition of ``small 
business issuer'', generally includes banks with annual revenues of 
less than $25 million, whose voting stock does not have a public 
float of $25 million or more.
* * * * *
    6. Section 335.204 is amended by revising paragraph (f); revising 
the reference ``Sec. 335.220(e)'' to read ``Sec. 335.220(c)'' in each 
place it appears in paragraph (h); and adding new paragraph (l), to 
read as follows:


Sec. 335.204  Material required to be filed.

* * * * *
    (f)(1) All copies of preliminary proxy statements and forms of 
proxy filed pursuant to paragraph (a) of this section shall be clearly 
marked ``Preliminary Copies'', and shall be deemed immediately 
available for public inspection unless confidential treatment is 
obtained pursuant to paragraph (f)(2) of this section.
    (2) If action is to be taken with respect to any matter specified 
in Item 12 of Form F-5, all copies of the preliminary proxy statement 
and form of proxy filed pursuant to paragraph (a) of this section shall 
be for the information of the FDIC only and shall not be deemed 
available for public inspection until filed with the FDIC in definitive 
form, provided that:
    (i) The proxy statement does not relate to a matter or proposal 
subject to Sec. 335.409; and
    (ii) The filed material is marked ``Confidential, For Use of the 
FDIC Only''. In any and all cases, such material may be disclosed to 
any department or agency of the United States Government and to the 
Congress, and the FDIC may make such inquiries or investigation in 
regard to the material as may be necessary for an adequate review 
thereof by the FDIC.
* * * * *
    (l) Solicitations subject to Sec. 335.202(f). (1) Any person who:
    (i) Engages in a solicitation pursuant to Sec. 335.202(f); and
    (ii) At the commencement of that solicitation owns beneficially 
securities of the class which is the subject of the solicitation with a 
market value of over Sec. 5 million, shall furnish or mail to the FDIC, 
not later than three days after the date the written solicitation is 
first sent or given to any security holder, three copies of a statement 
containing the information specified in the Notice of Exempt 
Solicitation (Form F-6A, Sec. 335.222) which statement shall attach as 
an exhibit all written soliciting materials. Three copies of an 
amendment to such statement shall be furnished or mailed to the FDIC, 
in connection with dissemination of any additional communications, not 
later than three days after the date the additional material is first 
sent or given to any security holder. Three copies of the Notice of 
Exempt Proxy Solicitation and amendments thereto shall, at the same 
time the materials are furnished or mailed to the FDIC, be furnished or 
mailed to each national securities exchange upon which any class of 
securities of the bank is listed and registered.
    (2) Notwithstanding paragraph (l)(1) of this section, no such 
submission need be made with respect to oral solicitations (other than 
with respect to scripts used in connection with such oral 
solicitations), speeches delivered in a public forum, press releases, 
published or broadcast opinions, statements, and advertisements 
appearing in a broadcast media, or a newspaper, magazine or other bona 
fide publication disseminated on a regular basis.
    7. Section 335.205 is amended by revising paragraphs (a)(3) and 
(a)(4) to read as follows:


Sec. 335.205  Solicitation prior to furnishing required proxy 
statement.

    (a) * * *
    (3) The identity of the participants in the solicitation (as 
defined in Instruction 3 to Item 3 of Form F-5 (Sec. 335.212)) and a 
description of their interests direct or indirect, by security holdings 
or otherwise, are set forth in each communication published, sent or 
given to security holders in connection with the solicitation; and
    (4) A written proxy statement meeting the requirements of this 
regulation is sent or given to security holders solicited pursuant to 
this section at the earliest practicable date.
* * * * *
    8. Section 335.207 is amended by revising paragraph (a); revising 
the first sentence of paragraph (b)(1); redesignating paragraph (d) 
introductory text and paragraphs (d)(1) through (d)(4) as paragraph 
(d)(1) introductory text and paragraphs (d)(1)(i) through (d)(1)(iv); 
republishing newly designated paragraph (d)(1) introductory text; 
designating paragraph (d) concluding text as paragraph (d)(2) and 
revising it; and adding a new paragraph (f), to read as follows:


Sec. 335.207  Requirements as to proxy.

    (a) The form of proxy:
    (1) Shall indicate in bold-face type whether or not the proxy is 
solicited on behalf of the bank's board of directors or, if provided 
other than by a majority of the board of directors, shall indicate in 
bold face type the identity of the persons on whose behalf the 
solicitation is made;
    (2) Shall provide a specifically designated blank space for dating 
the proxy; and
    (3) Shall identify clearly and impartially each separate matter 
intended to be acted upon, whether or not related to or conditioned on 
the approval of other matters, and whether proposed by the bank or by 
security holders. No reference need be made, however, to matters as to 
which discretionary authority is conferred under paragraph (c) of this 
section.
    (b)(1) Means shall be provided in the form of proxy whereby the 
person solicited is afforded an opportunity to specify by boxes a 
choice between approval or disapproval of, or abstention with respect 
to each separate matter referred to therein as intended to be acted 
upon, other than elections to office. * * *
* * * * *
    (d)(1) No proxy shall confer authority:
* * * * *
    (2) A person shall not be deemed to be a bona fide nominee and he 
shall not be named as such unless he has consented to being named in 
the proxy statement and to serve if elected. Provided, however, that 
nothing in this section shall prevent any person soliciting in support 
of nominees who, if elected, would constitute a minority of the board 
of directors, from seeking authority to vote for nominees named in the 
bank's proxy statement, so long as the soliciting party:
    (i) Seeks authority to vote in the aggregate for the number of 
director positions then subject to election;
    (ii) Represents that it will vote for all the bank nominees, other 
than those bank nominees specified by the soliciting party;
    (iii) Provides the security holder an opportunity to withhold 
authority with respect to any other bank nominee by writing the name of 
that nominee on the form of proxy; and
    (iv) States on the form of proxy and in the proxy statement that 
there is no assurance that the bank's nominees will serve if elected 
with any of the soliciting party's nominees.
* * * * *
    (f) No person conducting a solicitation subject to this subpart B 
shall deliver a form of proxy, consent or authorization to any security 
holder unless the security holder concurrently receives, or has 
previously received, a definitive proxy statement that has been filed 
with, or mailed for filing to, the FDIC pursuant to Sec. 335.204(c).
    9. Section 335.210 is revised to read as follows:


Sec. 335.210  Obligations of banks to provide a list of, or mail 
soliciting material to, security holders.

    (a) If the bank has made or intends to make a proxy solicitation in 
connection with a security holder meeting, upon the written request by 
any record or beneficial holder of securities of the class entitled to 
vote at the meeting to provide a list of security holders or to mail 
the requesting security holder's materials, regardless of whether the 
request references this section, the bank shall:
    (1) Deliver to the requesting security holder within five business 
days after receipt of the request:
    (i) Notification as to whether the bank has elected to mail the 
security holder's soliciting materials or provide a security holder 
list if the election under paragraph (b) of this section is to be made 
by the bank;
    (ii) A statement of the approximate number of record holders and 
beneficial holders, separated by type of holder and class, owning 
securities in the same class or classes as holders which have been or 
are to be solicited on management's behalf, or any more limited group 
of such holders designated by the security holder if available or 
retrievable under the bank's or its transfer agent's security holder 
data systems; and
    (iii) The estimated cost of mailing a proxy statement, form of 
proxy or other communication to such holders, including to the extent 
known or reasonably available, the estimated costs of any bank, broker, 
and similar person through whom the bank has solicited or intends to 
solicit beneficial owners in connection with the security holder 
meeting or action;
    (2) Perform the acts set forth in either paragraphs (a)(2)(i) or 
(a)(2)(ii) of this section, at the bank's or requesting security 
holder's option, as specified in paragraph (b) of this section:
    (i) Mail copies of any proxy statement, form of proxy or other 
soliciting material furnished by the security holder to the record 
holders, including banks, brokers, and similar entities, designated by 
the security holder. A sufficient number of copies must be mailed to 
the banks, brokers and similar entities for distribution to all 
beneficial owners designated by the security holder. The bank shall 
mail the security holder material with reasonable promptness after 
tender of the material to be mailed, envelopes or other containers 
therefor, postage or payment for postage and other reasonable expenses 
of effecting such mailing. The bank shall not be responsible for the 
content of the material; or
    (ii) Deliver the following information to the requesting security 
holder within five business days of receipt of the request: A 
reasonably current list of the names, addresses and security positions 
of the record holders, including banks, brokers and similar entities, 
holding securities in the same class or classes as holders which have 
been or are to be solicited on management's behalf, or any more limited 
group of such holders designated by the security holder if available or 
retrievable under the bank's or its transfer agent's security holder 
data systems; the most recent list of names, addresses and security 
positions of beneficial owners as specified in Sec. 335.214(b), in the 
possession, or which subsequently comes into the possession, of the 
bank. All security holder list information shall be in the form 
requested by the security holder to the extent that such form is 
available to the bank without undue burden or expense. The bank shall 
furnish the security holder with updated record holder information on a 
daily basis or, if not available on a daily basis, at the shortest 
reasonable intervals, provided, however, the bank need not provide 
beneficial or record holder information more current than the record 
date for the meeting or action.
    (b) If the bank is soliciting or intends to solicit with respect to 
a proposal that is subject to Sec. 335.409, the requesting security 
holder shall have the option set forth in paragraph (a)(2) of this 
section. With respect to all other requests pursuant to this section, 
the bank shall have the option to either mail the security holder's 
material or furnish the security holder list as set forth in paragraph 
(a)(2) of this section.
    (c) At the time of a list request, the security holder making the 
request shall:
    (1) If holding the bank's securities through a nominee, provide the 
bank with a statement by the nominee or other independent third party, 
or a copy of a current filing made with the FDIC and furnished to the 
bank, confirming such holder's beneficial ownership; and
    (2) Provide the bank with an affidavit, declaration, affirmation or 
other similar document provided for under applicable state law 
identifying the proposal or other corporate action that will be the 
subject of the security holder's solicitation or communication and 
attesting that:
    (i) The security holder will not use the list information for any 
purpose other than to solicit security holders with respect to the same 
meeting or action by consent or authorization for which the bank is 
soliciting or intends to solicit or to communicate with security 
holders with respect to a solicitation commenced by the bank; and
    (ii) The security holder will not disclose such information to any 
person other than a beneficial owner for whom the request was made and 
an employee or agent to the extent necessary to effectuate the 
communication or solicitation.
    (d) The security holder shall not use the information furnished by 
the bank pursuant to paragraph (a)(2)(ii) of this section for any 
purpose other than to solicit security holders with respect to the same 
meeting for which the bank is soliciting or intends to solicit or to 
communicate with security holders with respect to a solicitation 
commenced by the bank; or disclose such information to any person other 
than an employee, agent, or beneficial owner for whom a request was 
made to the extent necessary to effectuate the communication or 
solicitation. The security holder shall return the information provided 
pursuant to paragraph (a)(2)(ii) of this section and shall not retain 
any copies thereof or of any information derived from such information 
after the termination of the solicitation.
    (e) The security holder shall reimburse the reasonable expenses 
incurred by the bank in performing the acts requested pursuant to 
paragraph (a) of this section.
    10. Section 335.212 is amended by adding in Form F-5 Proxy 
Statement ``Note to Small Business Issuers'' after ``General 
Instructions''; revising paragraph (a)(2) in Item 3, and adding 
Instruction 3 to Item 3; revising paragraphs (a)(2) and (b) in Item 4, 
and adding an instruction at the end of Item 4; revising the text 
preceding the table in paragraph (d)(2) in Item 5; revising paragraph 
(a) in Item 7; removing paragraphs (b), (c), (d), (e), and (h), and all 
instructions and general instructions to paragraphs (a), (b), (c), (d), 
(e), and (h) in Item 7, and redesignating paragraphs (f), (g), and (i) 
of Item 7 as paragraphs (b), (c), and (d) respectively; revising Item 
9, the instructions to Item 9 and Item 18; and removing the ``Option 
Disclosure Instruction'' and the following option disclosure table 
along with notes thereto, which follow Item 21, to read as follows:


Sec. 335.212  Form for proxy statement (Form F-5).

Form F-5--Proxy Statement General Instructions

* * * * *
    Note to Small Business Issuers: a ``small business issuer'', as 
defined under 17 CFR 240.12b-2 has the option of providing financial 
and other item disclosure in conformance with Regulation S-B of the 
Securities and Exchange Commission (17 CFR Part 228) in lieu of the 
disclosure requirements set forth in this section by Item 4, 
paragraph (b)(1)(xi); Item 5, paragraph (d); Item 6, paragraphs (a) 
through (d): Item 7, paragraphs (a) and (c); Item 8, paragraph (c); 
Item 10, paragraph (b); Item 12, paragraphs (a)(3)(vi), (a)(5), 
(a)(6), (a)(7), (b)(1) through (b)(8), (c)(1) through (c)(4), and 
(e); and Item 13. If there is no comparable disclosure requirement 
in Regulation S-B, a small business issuer need not provide the 
information requested. The definition of ``small business issuer'', 
generally includes banks with annual revenues of less than $25 
million, whose voting stock does not have a public float of $25 
million or more.

Information Required in Statement

* * * * *

Item 3--Persons Making the Solicitation

    (a) * * *
    (2) If the solicitation is made otherwise than by the bank, so 
state and give the names of the participants in the solicitation, as 
defined in paragraphs (a)(iii), (iv), (v) and (vi) of Instruction 3 
to this item.
* * * * *
    Instructions. * * *
    3. For purposes of this Item 3 and Item 4 of this Form F-5:
    (a) The terms ``participant'' and ``participant in a 
solicitation'' include the following:
    (i) The bank;
    (ii) Any director of the bank, and any nominee for whose 
election as a director proxies are solicited;
    (iii) Any committee or group which solicits proxies, any member 
of such committee or group, and any person whether or not named as a 
member who, acting alone or with one or more other persons, directly 
or indirectly takes the initiative, or engages, in organizing, 
directing, or arranging for the financing of any such committee or 
group;
    (iv) Any person who finances or joins with another to finance 
the solicitation of proxies, except persons who contribute not more 
than $500 and who are not otherwise participants;
    (v) Any person who lends money or furnishes credit or enters 
into any other arrangements, pursuant to any contract or 
understanding with a participant, for the purpose of financing or 
otherwise inducing the purchase, sale, holding or voting of 
securities of the bank by any participant or other persons, in 
support of or in opposition to a participant; except that such terms 
do not include a bank, broker or dealer who, in the ordinary course 
of business, lends money or executes orders for the purchase or sale 
of securities and who is not otherwise a participant; and
    (vi) Any person who solicits proxies.
    (b) The terms ``participant'' and ``participant in a 
solicitation'' do not include:
    (i) Any person or organization retained or employed by a 
participant to solicit security holders and whose activities are 
limited to the duties required to be performed in the course of such 
employment;
    (ii) Any person who merely transmits proxy soliciting material 
or performs other ministerial or clerical duties;
    (iii) Any person employed by a participant in the capacity of 
attorney, accountant, or advertising, public relations or financial 
adviser, and whose activities are limited to the duties required to 
be performed in the course of such employment;
    (iv) Any person regularly employed as an officer or employee of 
the bank or any of its subsidiaries who is not otherwise a 
participant; or
    (v) Any officer or director of, or any person regularly employed 
by, any other participant, if such officer, director or employee is 
not otherwise a participant.

Item 4--Interest of Certain Persons in Matters To Be Acted Upon

    (a) * * *
    (2) If the solicitation is made otherwise than on behalf of the 
bank, each participant in the solicitation, as defined in paragraphs 
(a)(iii), (iv), (v), and (vi) of Instruction 3 to Item 3 of this 
Form F-5.
* * * * *
    (b) Solicitations subject to Sec. 335.220.
    (1) Describe briefly any substantial interest, direct or 
indirect, by security holdings or otherwise, of each participant as 
defined in paragraphs (a)(ii), (iii), (iv), (v) and (vi) of 
Instruction 3 to Item 3 of this Form F-5, in any matter to be acted 
upon at the meeting, and include with respect to each participant 
the following information, or a fair and accurate summary thereof:
    (i) Name and business address of the participant.
    (ii) The participant's present principal occupation or 
employment and the name, principal business and address of any 
corporation or other organization in which such employment is 
carried on.
    (iii) State whether or not, during the past ten years, the 
participant has been convicted in a criminal proceeding (excluding 
traffic violations or similar misdemeanors) and, if so, give dates, 
nature of conviction, name and location of court, and penalty 
imposed or other disposition of the case. A negative answer need not 
be included in the proxy statement or other soliciting material.
    (iv) State the amount of each class of securities of the bank 
which the participant owns beneficially, directly or indirectly.
    (v) State the amount of each class of securities of the bank 
which the participant owns of record but not beneficially.
    (vi) State with respect to all securities of the bank purchased 
or sold within the past two years, the dates on which they were 
purchased or sold and the amount purchased or sold on each such 
date.
    (vii) If any part of the purchase price or market value of any 
of the shares specified in paragraph (b)(1)(vi) of this item is 
represented by funds borrowed or otherwise obtained for the purpose 
of acquiring or holding such securities, so state and indicate the 
amount of the indebtedness as of the latest practicable date. If 
such funds were borrowed or obtained otherwise than pursuant to a 
margin account or bank loan in the regular course of business of a 
bank, broker or dealer, briefly describe the transaction, and state 
the names of the parties.
    (viii) State whether or not the participant is, or was within 
the past year, a party to any contract, arrangements or 
understandings with any person with respect to any securities of the 
bank, including, but not limited to joint ventures, loan or option 
arrangements, puts or calls, guarantees against loss or guarantees 
of profit, division of losses or profits, or the giving or 
withholding of proxies. If so, name the parties to such contracts, 
arrangements or understandings and give the details thereof.
    (ix) State the amount of securities of the bank owned 
beneficially, directly or indirectly, by each of the participant's 
associates and the name and address of each such associate.
    (x) State the amount of each class of securities of any parent 
or subsidiary of the bank which the participant owns beneficially, 
directly or indirectly.
    (xi) Furnish for the participant and associates of the 
participant the information required by Sec. 335.212, Item 7(c).
    (xii) State whether or not the participant or any associates of 
the participant have any arrangement or understanding with any 
person--
    (A) With respect to any future employment by the bank or its 
affiliates; or
    (B) With respect to any future transactions to which the bank or 
any of its affiliates will or may be a party. If so, describe such 
arrangement or understanding and state the names of the parties 
thereto.
    (2) With respect to any person, other than a director or 
executive officer of the bank acting solely in that capacity, who is 
a party to an arrangement or understanding pursuant to which a 
nominee for election as director is proposed to be elected, describe 
any substantial interest, direct or indirect, by security holdings 
or otherwise, that such person has in any matter to be acted upon at 
the meeting, and furnish the information called for by paragraphs 
(b)(1) (xi) and (xii) of this item.
    Instruction: For purposes of this Item 4, beneficial ownership 
shall be determined in accordance with Sec. 335.403.

Item 5--Voting Securities and Principal Holders Thereof

* * * * *
    (d) * * *
    (2) 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, each of the named executive 
officers as defined in 17 CFR 229.402(a)(3), and directors and 
executive officers of the bank as a group, without naming them. 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 persons have a right to acquire 
beneficial ownership as specified in Sec. 335.403(d)(1).
* * * * *

Item 7--Compensation and Other Transactions With Management and 
Others

* * * * *
    (a) Compensation of directors and executive officers. Furnish 
the information required by the applicable and currently effective 
SEC regulations contained in Item 8 of SEC Schedule 14A (17 CFR 
240.14a-101, Item 8).
* * * * *

Item 9--Compensation Plans

    If action is to be taken with respect to any plan pursuant to 
which cash or noncash compensation may be paid or distributed, 
furnish the following information:
    (a) Plans subject to security holder action.
    (1) Describe briefly the material features of the plan being 
acted upon, identify each class of persons who will be eligible to 
participate therein, indicate the approximate number of persons in 
each such class, and state the basis of such participation.
    (2)(i) In the tabular format specified below, disclose the 
benefits or amounts that will be received by or allocated to each of 
the following under the plan being acted upon, if such benefits or 
amounts are determinable:

New Plan Benefits

                                Plan Name                               
------------------------------------------------------------------------
                                                      Dollar     No. of 
                 Name and position                  value ($)    units  
------------------------------------------------------------------------
CEO...............................................  .........  .........
A.................................................  .........  .........
B.................................................  .........  .........
C.................................................  .........  .........
D.................................................  .........  .........
Executive Group...................................  .........  .........
Non-Executive Director Group......................  .........  .........
Non-Executive Officer Employee Group..............  .........  .........
------------------------------------------------------------------------

Instruction to New Plan Benefits Table

    Additional columns should be added for each plan with respect to 
which security holder action is to be taken.
    (ii) The table required by paragraph (a)(2)(i) of this item 
shall provide information as to the following persons:
    (A) Each person (stating name and position) specified in 17 CFR 
229.402(a)(3);
    (B) All current executive officers as a group;
    (C) All current directors who are not executive officers as a 
group; and
    (D) All employees, including all current officers who are not 
executive officers, as a group.
    (iii) If the benefits or amounts specified in paragraph 
(a)(2)(i) of this item are not determinable, state the benefits or 
amounts which would have been received by or allocated to each of 
the following for the last completed fiscal year if the plan had 
been in effect, if such benefits or amounts may be determined, in 
the table specified in paragraph (a)(2)(i) of this item:
    (A) Each person (stating name and position) specified in 17 CFR 
229.402(a)(3);
    (B) All current executive officers as a group;
    (C) All current directors who are not executive officers as a 
group; and
    (D) All employees, including all current officers who are not 
executive officers, as a group.
    (3) If the plan to be acted upon can be amended, otherwise than 
by a vote of security holders, to increase the cost thereof to the 
bank or to alter the allocation of the benefits as between the 
persons and groups specified in paragraph (a)(2) of this item, state 
the nature of the amendments which can be so made.
    (b) Additional information regarding specified plans subject to 
security holder action.
    (1) With respect to any pension or retirement plan submitted for 
security holder action, state:
    (i) The approximate total amount necessary to fund the plan with 
respect to past services, the period over which such amount is to be 
paid and the estimated annual payments necessary to pay the total 
amount over such period; and
    (ii) The estimated annual payment to be made with respect to 
current services. In the case of a pension or retirement plan, 
information called for by paragraph (a)(2) of this item may be 
furnished in the format specified by 17 CFR 229.402(f)(1).
    (2)(i) With respect to any specific grant of or any plan 
containing options, warrants or rights submitted for security holder 
action, state:
    (A) The title and amount of securities underlying such options, 
warrants or rights;
    (B) The prices, expiration dates and other material conditions 
upon which the options, warrants or rights may be exercised;
    (C) The consideration received or to be received by the bank or 
subsidiary for the granting or extension of the options, warrants or 
rights;
    (D) The market value of the securities underlying the options, 
warrants, or rights as of the latest practicable date; and
    (E) In the case of options, the federal income tax consequences 
of the issuance and exercise of such options to the recipient and 
the bank; and
    (ii) State separately the amount of such options received or to 
be received by the following persons if such benefits or amounts are 
determinable:
    (A) Each person (stating name and position) specified in 17 CFR 
229.402(a)(3);
    (B) All current executive officers as a group;
    (C) All current directors who are not executive officers as a 
group;
    (D) Each nominee for election as a director;
    (E) Each associate of any of such directors, executive officers 
or nominees;
    (F) Each other person who received or is to receive 5 percent of 
such options, warrants or rights; and
    (G) All employees, including all current officers who are not 
executive officers, as a group.
    Instructions to Item 9.
    1. The term ``plan'' as used in this item means any plan as 
defined in 17 CFR 229.402(a)(7)(ii).
    2. If action is to be taken with respect to a material amendment 
or modification of an existing plan, the item shall be answered with 
respect to the plan as proposed to be amended or modified and shall 
indicate any material differences from the existing plan.
    3. If the plan to be acted upon is set forth in a written 
document, three copies thereof shall be filed with the FDIC at the 
time copies of the proxy statement and form of proxy are first filed 
pursuant to Sec. 335.204(a).
    4. Paragraph (b)(2)(ii) of this item does not apply to warrants 
or rights to be issued to security holders as such on a pro rata 
basis.
* * * * *

Item 18. Voting Procedures

    As to each matter which is to be submitted to a vote of security 
holders, furnish the following information:
    (a) State the vote required for approval or election, other than 
for the approval of auditors.
    (b) Disclose the method by which votes will be counted, 
including the treatment and effect of abstentions and broker non-
votes under applicable state law as well as bank charter and by-law 
provisions.
* * * * *
    11. Section 335.213 is amended by adding 2 paragraphs of text to 
follow the existing text in the Note preceding Item 1 to read as 
follows:


Sec. 335.213  Form for information statement (Form F-5A).

Form F-5A--Information Statement

    Note: * * *

    Except as otherwise specifically provided, where any item calls 
for information for a specified period in regard to directors, 
officers or other persons holding specified positions or 
relationships, the information shall be given in regard to any 
person who held any of the specified positions or relationships at 
any time during the period. However, information need not be 
included for any portion of the period during which such person did 
not hold any such position or relationship provided a statement to 
that effect is made.
    Small Business Issuers: A ``small business issuer'', as defined 
under 17 CFR 240.12b-2 has the option of providing financial and 
other item disclosure in conformance with Regulation S-B of the 
Securities and Exchange Commission (17 CFR Part 228) in lieu of the 
following referenced disclosure requirements set forth in 
Sec. 335.212 Item 4(b)(1)(xi); Item 5, paragraph (d); Item 6, 
paragraphs (a) through (d); Item 7, paragraphs (a) and (c); Item 8, 
paragraph (c); Item 10, paragraph (b); Item 12, paragraphs 
(a)(3)(vi), (a)(5), (a)(6), (a)(7), (b)(1) through (b)(8), (c)(1) 
through (c)(4), and (e); and Item 13. If there is no comparable 
disclosure requirement in Regulation S-B, a small business issuer 
need not provide the information requested. The definition of 
``small business issuer'', generally includes banks with annual 
revenues of less than $25 million, whose voting stock does not have 
a public float of $25 million or more.
* * * * *
    12. Section 335.214 is amended by revising the introductory text in 
paragraph (a); by revising paragraphs (a)(1)(i)(A), (a)(3), (a)(4), 
(a)(5), Note 2 and Note 3 to paragraph (a), paragraph (d), and adding a 
new Note 4 to paragraph (a); by revising the reference ``17 CFR 
240.14b-1(c) or 17 CFR 240.14b-2(e) (2) and (3)'' in paragraph 
(a)(1)(i)(C) to read ``17 CFR 240.14b-1(b)(3) or 17 CFR 240.14b-2(b)(4) 
(ii) and (iii)''; by revising the reference ``17 CFR 240.14b-1(c) and 
17 CFR 240.14b-2(e) (2) and (3)'' in paragraph (a)(1)(ii)(A), the 
introductory text to paragraph (b), and paragraph (c) to read ``17 CFR 
240.14b-1(b)(3) and 17 CFR 240.14b-2(b)(4) (ii) and (iii)''; by 
revising the reference ``17 CFR 240.14b-2(a)(1)'' to read ``17 CFR 
240.14b-2(b)(1)(i)'' in paragraph (a)(2); and by revising the reference 
``17 CFR 240.14b-2(e)(1)'' to read ``17 CFR 240.14b-2(b)(4)(i)'' in 
paragraph (b)(1) to read as follows:


Sec. 335.214  Obligation of banks in communicating with beneficial 
owners.

    (a) If the bank knows that securities of any class entitled to vote 
at a meeting are held of record by a broker, dealer, bank, association 
or other entity that exercises fiduciary powers in nominee name or 
otherwise, the bank shall:
    (1) * * *
    (i) * * *
    (A) Whether other persons are the beneficial owners of such 
securities, and if so, the number of copies of the proxy and other 
soliciting material (or if applicable, the number of copies of the 
information statement) necessary to supply such material to such 
beneficial owners.
* * * * *
    (3)(i) Make the inquiry required by paragraph (a)(1) of this 
section:
    (A) If the bank intends to solicit proxies, consents or 
authorizations:
    (1) At least 20 business days prior to the record date of the 
meeting of security holders; or
    (2) If such inquiry is impracticable 20 business days prior to the 
record date of a special meeting, as many days before the record date 
as practicable; or
    (3) If consents or authorizations are solicited, and such inquiry 
is impracticable 20 days before the earliest date on which they may be 
used to effect corporate action, as many days before that date as is 
practicable; or
    (4) At such later time as the rules of a national securities 
exchange on which the class of securities in question is listed may 
permit for good cause shown; or
    (B) If the bank does not intend to solicit proxies, consents or 
authorizations, the earlier of:
    (1) At least 20 business days prior to the record date of the 
meeting of security holders or the record date of written consents in 
lieu of a meeting; or
    (2) At least 20 business days prior to the date the information 
statement is required to be sent or given pursuant to Sec. 335.201(b).
    (ii) Provided, however, that if a record holder or respondent bank 
has informed the bank that a designated office(s) or department(s) is 
to receive such inquiries, the inquiry shall be made to such designated 
office(s) or department(s);
    (4) Supply in a timely manner, each record holder and respondent 
bank of whom the inquiries required by paragraphs (a)(1) and (a)(2) of 
this section are made with copies of the proxy, other proxy soliciting 
material (or if applicable, copies of the information statement), and/
or the annual report to security holders, in such quantities, assembled 
in such form and at such place(s), as the record holder may reasonably 
request in order to send such material to each beneficial owner of 
securities who is to be furnished with such material by the record 
holder or respondent bank; and
    (5) Upon the request of any record holder or respondent bank that 
is supplied with proxy soliciting material, information statements, 
and/or annual reports to security holders pursuant to paragraph (a)(4) 
of this section, pay its reasonable expenses for completing the mailing 
of such material to beneficial owners.
* * * * *
    Note 2: The attention of banks is called to the fact that each 
broker, dealer, bank, association or other entity that exercises 
fiduciary powers has an obligation under 17 CFR 240.14b-1 and 17 CFR 
240.14b-2 (except as provided therein with respect to employee 
benefit plan securities held in nominee name) and, with respect to 
brokers and dealers, applicable self-regulatory requirements to 
obtain and forward, within the time periods prescribed therein: 
Proxies (or in lieu thereof requests for voting instructions) and 
proxy soliciting materials (or if applicable, copies of the 
information statement) to beneficial owners on whose behalf it holds 
securities; and annual reports to security holders to beneficial 
owners on whose behalf it holds securities, unless the bank has 
notified the record holder or respondent bank that it has assumed 
responsibility to mail such material to beneficial owners whose 
names, addresses and securities positions are disclosed pursuant to 
17 CFR 240.14b-1(b)(3) and 17 CFR 240.14b-2(b)(4)(ii) and (iii).

    Note 3: The attention of banks is called to the fact that banks 
have an obligation, pursuant to paragraph (d) of this section, to 
cause proxies (or in lieu thereof requests for voting instructions), 
proxy soliciting material (or if applicable, copies of the 
information statement) and annual reports to security holders to be 
furnished, in a timely manner, to beneficial owners of exempt 
employee benefit plan securities.

    Note 4: The requirement for sending an annual report to security 
holders of record having the same address will be satisfied by 
sending at least one report to a holder of record at that address 
provided that those holders of record to whom the report is not sent 
agree thereto in writing. This procedure is not available, however, 
where banks, associations, other entities that exercise fiduciary 
powers, brokers, dealers and other persons hold securities in 
nominee accounts or ``street names'' on behalf of beneficial owners, 
and such persons are not relieved of any obligation to obtain or 
send such annual report to the beneficial owners.
* * * * *
    (d) If a bank furnishes information statements to, or solicits 
proxies, consents or authorizations from record holders and respondent 
banks who hold securities on behalf of beneficial owners, the bank 
shall cause proxies (or in lieu thereof requests for voting 
instructions), proxy soliciting material (or if applicable, copies of 
the information statement) and annual reports to security holders to be 
furnished, in a timely manner, to beneficial owners of exempt employee 
benefit plan securities.
    13. Section 335.220 is amended by removing paragraphs (b) and (c) 
and redesignating paragraphs (d) through (h) as paragraphs (b) through 
(f), respectively; and revising newly redesignated paragraphs (b) and 
(e), to read as follows:


Sec. 335.220  Special provisions applicable to election contests.

* * * * *
    (b) Solicitations prior to furnishing required statement. 
Notwithstanding the provisions of Sec. 335.201 a solicitation subject 
to Sec. 335.220 may be made prior to furnishing security holders a 
written statement containing the information specified in Form F-5 with 
respect to such solicitation: Provided, That--
    (1) No form of proxy is furnished to security holders prior to the 
time the written proxy statement required by Sec. 335.201 is furnished 
to security holders: Provided, however, that this paragraph (b)(1) 
shall not apply where a proxy statement then meeting the requirements 
of Form F-5 has been furnished to security holders by or on behalf of 
the person making the solicitation;
    (2) The identity of the participants in the solicitation (as 
defined in Instruction 3 of Item 3 of Form F-5 (Sec. 335.212)) and a 
description of their interests, direct or indirect, by security 
holdings or otherwise, are set forth in each communication published, 
sent or given to security holders in connection with the solicitation;
    (3) A written proxy statement meeting the requirements of this 
Subpart B is sent or given to security holders solicited pursuant to 
this paragraph (b) at the earliest practicable date.
* * * * *
    (e) Application of Sec. 335.204. The provisions of Sec. 335.204(c) 
through (f) shall apply, to the extent pertinent, to soliciting 
material subject to paragraphs (c) and (d) of this section.
* * * * *


Sec. 335.221  [Removed and Reserved]

    14. Section 335.221 (Form F-6) is removed and reserved.
    15. Section 335.222 (Form F-6A) is added to subpart B to read as 
follows:


Sec. 335.222  Notice of Exempt Solicitation to be included in 
statements submitted by or on behalf of a person pursuant to 
Sec. 335.204(l) (Form F-6A).

Form F-6A--Notice of Exempt Solicitation

    1. Name and address of the Bank:

----------------------------------------------------------------------
    2. Name of person relying on exemption:

----------------------------------------------------------------------
    3. Address of person relying on exemption:

----------------------------------------------------------------------
    4. Written materials. Attach written material required to be 
submitted pursuant to Sec. 335.204(l).

    16. Section 335.301 is amended by revising the reference ``(27 CFR 
249.220f)'' to read ``(17 CFR 249.220f)''; and adding a ``Note to Small 
Business Issuers'' immediately following the existing text to read as 
follows:


Sec. 335.301  Requirement of registration statement.

* * * * *
    Note to Small Business Issuers: a ``small business issuer'', as 
defined under 17 CFR 240.12b-2 has the option of providing the 
disclosure required by SEC Form 10-SB, optional form for the 
registration of securities of a small business issuer (17 CFR 
249.210b), in lieu of the disclosure requirements set forth in Form 
F-1 (Sec. 335.309a). The definition of ``small business issuer'', 
generally includes banks with annual revenues of less than $25 
million, whose voting stock does not have a public float of $25 
million or more.

    17. Section 335.309a (Form F-1) is amended by adding a new 
paragraph immediately preceding the ``General Instructions'' portion of 
Form F-1; revising Item 7 and Item 8; and revising paragraphs 7(b)(1), 
7(b)(2) and 7(c) under the heading ``Instructions as to Exhibits'' at 
the end of the section, to read as follows:


Sec. 335.309a  Form for registration of securities of a bank under 
section 12(b) or section 12(g) of the Securities Exchange Act of 1934 
(Form F-1).

Form F-1

* * * * *
    Indicate by check mark if the bank, as a ``small business 
issuer'' as defined under 17 CFR 240.12b-2, is providing alternative 
disclosures as permitted for small business issuers in this Form F-
1. [ ]
* * * * *

Item 7--Compensation of Directors and Executive Officers

    Set forth the same information as is required to be furnished by 
item 7(a) of Form F-5 (Sec. 335.212).

Item 8--Interest of Management and Others in Certain Transactions

    Set forth the same information for the past three years, as is 
required to be furnished by items 7(b), (c) and (d) of Form F-5 
(Sec. 335.212).

    Note: The information required by items 7(b), (c) and (d) of 
Form F-5 need not be included for any nominee for election as a 
director.
* * * * *

Instructions as to Exhibits

* * * * *
    7. * * *
    (b) * * *
    (1) Directors, officers, promoters, voting trustees, or security 
holders named in answer to item 5 are parties thereto except where 
the contract merely involves purchase or sale of current assets 
having a determinable market price, at such price.
    (2) It calls for the acquisition or sale of fixed assets for a 
consideration exceeding 15 percent of the value of all fixed assets 
of the bank and its subsidiaries.
* * * * *
    (c) Any management contract or any compensatory plan, contract 
or arrangement, including but not limited to plans relating to 
options, warrants or rights, pension, retirement or deferred 
compensation or bonus, incentive or profit sharing (or if not set 
forth in any formal document, a written description thereof) in 
which any director or any of the named executive officers of the 
bank, as defined by 17 CFR 229.402(a)(3), participates shall be 
deemed material and shall be filed; and any other management 
contract or any other compensatory plan, contract, or arrangement in 
which any other executive officer of the bank participates shall be 
filed unless immaterial in amount or significance except as follows: 
Notwithstanding the above, any compensatory plan, contract, or 
arrangement which pursuant to its terms is available to employees, 
officers or directors generally and which in operation provides for 
the same method of allocation of benefits between management and 
nonmanagement participants.
* * * * *
    18. Section 335.310 is amended by adding a ``Note to Small Business 
Issuers'' immediately following paragraph (c) to read as follows:


Sec. 335.310  Requirement of annual reports and annual reports of 
predecessors.

* * * * *
    Note to Small Business Issuers: a ``small business issuer'', as 
defined under 17 CFR 240.12b-2 has the option of providing the 
disclosure required by SEC Form 10-KSB, optional form for annual and 
transitional reports of small business issuers (17 CFR 249.310b), in 
lieu of the disclosure requirements set forth in Form F-2 
(Sec. 335.312). The definition of ``small business issuer'', 
generally includes banks with annual revenues of less than $25 
million, whose voting stock does not have a public float of $25 
million or more.

    19. Section 335.312 (Form F-2) is amended by adding a new paragraph 
immediately following the second line entitled ``(Title of class)'' in 
the introductory portion of Form F-2; adding to Item 11, new paragraph 
(a)(3) to immediately precede the instruction to paragraph (a); and 
revising paragraph (c)(3)(ii) of Item 11, to read as follows:


Sec. 335.312  Form for annual report of bank (Form F-2)

* * * * *
    Indicate by check mark if the bank, as a ``small business 
issuer'' as defined under 17 CFR 240.12b-2, is providing alternative 
disclosures as permitted for small business issuers in this Form F-
2. [ ]
* * * * *

Item 11--Exhibits, Financial Statement Schedules, and Reports on 
Form F-3

    (a) * * *
    (3) Those exhibits required by paragraph (c) of this Item 11. 
Identify in the list each management contract or compensatory plan 
or arrangement required to be filed as an exhibit to this form 
pursuant to paragraph (c)(3)(ii) of this Item 11.
* * * * *
    (c) * * *
    (3) * * *
    (ii) Any management contract or any compensatory plan, contract 
or arrangement, including but not limited to plans relating to 
options, warrants or rights, pension, retirement or deferred 
compensation or bonus, incentive or profit sharing (or if not set 
forth in any formal document, a written description thereof) in 
which any director or any of the ``named executive officers'' of the 
bank, as defined by 17 CFR 229.402(a)(3), participates shall be 
deemed material and shall be filed; and any other management 
contract or any other compensatory plan, contract, or arrangement in 
which any other executive officer of the bank participates shall be 
filed unless immaterial in amount or significance except as follows: 
notwithstanding the above, any compensatory plan, contract, or 
arrangement which pursuant to its terms is available to employees, 
officers or directors generally and which in operation provides for 
the same method of allocation of benefits between management and 
nonmanagement participants.
* * * * *
    20. Section 335.321 (Form F-3) is amended by revising paragraph (c) 
and Instructions 3 and 4 of Item 9 to read as follows:


Sec. 335.321  Form for current report of a bank (Form F-3).

Form F-3.--Current Report

* * * * *

Item 9--Submission of Matters to a Vote of Security Holders.

* * * * *
    (c) A brief description of each matter voted upon at the meeting 
and state the number of votes cast for, against or withheld, as well 
as the number of abstentions and broker non-votes, as to each such 
matter, including a separate tabulation with respect to each nominee 
for office.
* * * * *
    Instructions:
* * * * *
    3. Paragraph (b) need not be answered if: Proxies for the 
meeting were solicited pursuant to subpart B of this part; there was 
no solicitation in opposition to the management's nominees as listed 
in the proxy statement; and all of such nominees were elected. If 
the bank did not solicit proxies and the board of directors as 
previously reported to the FDIC was reelected in its entirety, a 
statement to that effect in answer to paragraph (b) will suffice as 
an answer thereto.
    4. Paragraph (c) must be answered for all matters voted upon at 
the meeting, including both contested and uncontested elections of 
directors.
* * * * *
    21. Section 335.330 is amended by adding a ``Note to Small Business 
Issuers'' at the end of the section to read as follows:


Sec. 335.330  Quarterly reports.

* * * * *
    Note to Small Business Issuers: a ``small business issuer'', as 
defined under 17 CFR 240.12b-2 has the option of providing the 
disclosure required by SEC Form 10-QSB, optional form for quarterly 
and transitional reports of small business issuers (17 CFR 
249.310b), in lieu of the disclosure requirements set forth in Form 
F-4 (Sec. 335.330). The definition of ``small business issuer'', 
generally includes banks with annual revenues of less than $25 
million, whose voting stock does not have a public float of $25 
million or more.

    22. Section 335.331 is amended by adding a new paragraph 
immediately following the line entitled ``(Former name, former address 
and former fiscal year, if changed since last report)'' in the 
introductory portion of Form F-4 to read as follows:


Sec. 335.331  Form for quarterly report of a bank (Form F-4).

Form F-4

* * * * *
    Indicate by check mark if the bank, as a ``small business 
issuer'' as defined under 17 CFR 240.12b-2, is providing alternative 
disclosures as permitted for small business issuers in this Form F-
4. [ ]
* * * * *
    23. Section 335.622 is amended by revising paragraph (g)(1) to read 
as follows:


Sec. 335.622  General notes to statement of income.

* * * * *
    (g) Disclosure of selected quarterly financial data in notes to 
financial statements--(1) Exemption. This paragraph (g) shall not apply 
unless the bank meets the tests prescribed by 17 CFR 229.302(a)(5).
* * * * *
    By Order of the Board of Directors.

    Dated at Washington, DC, this 20th day of December, 1994.
Federal Deposit Insurance Corporation.

Robert E. Feldman,
Acting Executive Secretary.
[FR Doc. 94-31661 Filed 12-28-94; 8:45 am]
BILLING CODE 6714-01-P
Last Updated 07/17/1999 communications@fdic.gov