Federal Register / Vol. 75, No. 222 / Thursday, November 18, 2010 / Proposed Rules 70619 

1 12 CFR 620.5(i). 

2All references to senior officer(s) in this ANPRM 

refer to a senior officer as defined in 12 CFR 

619.9310. 

3All references to highly compensated 

individuals in this ANPRM refer to those officers 

described in 12 CFR 620.5(i)(2)(i)(B). 

4All references to compensation committees in 

this ANPRM refer to compensation committees as 

set forth in 12 CFR 620.31 and 12 CFR 630.6(b). 

5Public Law 92–181, 85 Stat. 583, 12 U.S.C. 2001 

et seq. 

6Section 5.17(a)(8), (9) and (10) of the Act. 12 

U.S.C. 2252(a)(8)(9) and (10). 

7Public Law 102–552, 106 Stat. 4131. 

later than early January 2011. In order 

to allow the public sufficient time to 

review and comment on the proposed 

rule with the benefit of review of the 

draft implementation guidance, the NRC 

has decided to extend the comment 

period until February 15, 2011. 

Dated at Rockville, Maryland, this 10th day 

of November 2010. 

For the Nuclear Regulatory Commission. 

Annette Vietti-Cook, 

Secretary of the Commission. 

[FR Doc. 2010–29108 Filed 11–17–10; 8:45 am] 

BILLING CODE 7590–01–P 

FARM CREDIT ADMINISTRATION 

12 CFR Parts 612, 620, and 630 

RIN 3052–AC41 

Standards of Conduct and Referral of 

Known or Suspected Criminal 

Violations; Disclosure to 

Shareholders; and Disclosure to 

Investors in System-Wide and 

Consolidated Bank Debt Obligations of 

the Farm Credit System; 

Compensation, Retirement Programs, 

and Related Benefits 

AGENCY: Farm Credit Administration. 

ACTION: Advance notice of proposed 

rulemaking (ANPRM). 

SUMMARY: The Farm Credit 

Administration (FCA, we, or our) is 

requesting comments on ways to clarify 

or otherwise enhance our regulations 

related to Farm Credit System (System) 

institutions’ disclosures to shareholders 

and investors on compensation, 

retirement programs and related benefits 

for senior officers, highly compensated 

individuals, and certain individual 

employees or other groups of 

employees. We are also seeking 

comments on whether we should issue 

new regulations in related areas. In 

keeping with today’s financial and 

economic environment, we believe it 

prudent and timely to undertake a 

review of our regulatory guidance on the 

identified areas. We intend to consider 

the information and suggestions we 

receive in response to this ANPRM 

when developing a rulemaking on 

compensation disclosures and related 

areas. 

DATES: You may send comments on or 

before March 18, 2011. 

ADDRESSES: We offer a variety of 

methods for you to submit your 

comments. For accuracy and efficiency 

reasons, commenters are encouraged to 

submit comments by e-mail or through 

the FCA’s Web site. As facsimiles (fax) 

are difficult for us to process and 

achieve compliance with section 508 of 

the Rehabilitation Act, we are no longer 

accepting comments submitted by fax. 

Regardless of the method you use, 

please do not submit your comments 

multiple times via different methods. 

You may submit comments by any of 

the following methods: 

• E-mail: Send us an e-mail at regcomm@fca.gov. 

• FCA Web site: http://www.fca.gov. 

Select ‘‘Public Commenters,’’ then 

‘‘Public Comments,’’ and follow the 

directions for ‘‘Submitting a Comment.’’ 

• Federal eRulemaking Portal: http:// 

www.regulations.gov. Follow the 

instructions for submitting comments. 

• Mail: Gary K. Van Meter, Deputy 

Director, Office of Regulatory Policy, 

Farm Credit Administration, 1501 Farm 

Credit Drive, McLean, VA 22102–5090. 

You may review copies of all comments 

we receive at our office in McLean, 

Virginia or on our Web site at http:// 

www.fca.gov. Once you are in the Web 

site, select ‘‘Public Commenters,’’ then 

‘‘Public Comments,’’ and follow the 

directions for ‘‘Reading Submitted 

Public Comments.’’ We will show your 

comments as submitted, including any 

supporting data provided, but for 

technical reasons we may omit items 

such as logos and special characters. 

Identifying information that you 

provide, such as phone numbers and 

addresses, will be publicly available. 

However, we will attempt to remove email addresses to help reduce Internet 

spam. 

FOR FURTHER INFORMATION CONTACT: 

Deborah A. Wilson, Senior 

Accountant, Office of Regulatory Policy, 

Farm Credit Administration, McLean, 

VA 22102–5090, (703) 883–4414, TTY 

(703) 883–4434, or 

Laura McFarland, Senior Counsel, 

Office of General Counsel, Farm Credit 

Administration, McLean, VA 22102– 

5090, (703) 883–4020, TTY (703) 883– 

4020. 

SUPPLEMENTARY INFORMATION: 

I. Objective 

The objective of this ANPRM is to 

gather information for the development 

of a rulemaking that could result in: 

• Enhancing the transparency and 

consistency of disclosures related to 

System institution compensation 

policies and practices 1 for senior 

officers,2 highly compensated 

individuals,3 and/or certain other 

groups of employees whose activities, 

either individually or in the aggregate, 

are reasonably likely to materially 

impact an institution’s financial 

performance and risk profile; 

• Clarifying and enhancing the 

authorities and responsibilities of 

System institution compensation 

committees 4 in furtherance of their 

oversight activities; 

• Increasing user-control in System 

institutions’ compensation policies and 

practices by providing for a non-binding 

shareholder vote on senior officer 

compensation; 

• Requiring timely notice to 

interested parties of significant events, 

facts or circumstances occurring at a 

System institution between required 

reporting periods; 

• Addressing the appropriateness of, 

and enhancing the disclosure of, certain 

payments to System institution 

directors; and 

• Providing audit committees greater 

authority to access external resources 

when needed. 

II. Background 

The Farm Credit Act of 1971, as 

amended (Act),5 authorizes the FCA to 

issue regulations implementing the 

provisions of the Act, including those 

provisions that address System 

institution disclosures to shareholders 

and investors. Our regulations are 

intended to ensure the safe and sound 

operations of System institutions and 

govern the disclosure of financial 

information to shareholders of, and 

investors in, the Farm Credit System.6

Congress explained in section 514 of the 

Farm Credit Banks and Associations 

Safety and Soundness Act of 1992 (1992 

Act) 7 that disclosure of financial 

information and the reporting of 

potential conflicts of interest by 

institution directors, officers, and 

employees help ensure the financial 

viability of the System. In the 1992 Act, 

Congress required that we review our 

regulations to ensure that System 

institutions provide adequate 

disclosures to shareholders and other 

interested parties. We completed this 

initial review in 1993 making 

appropriate amendments to our 


jlentini on DSKJ8SOYB1PROD with PROPOSALS
70620 Federal Register / Vol. 75, No. 222 / Thursday, November 18, 2010 / Proposed Rules 

8See SEC Release No. 33–9089, ‘‘Proxy Disclosure 

and Enhancements,’’ issued February 28, 2010. 

9Board of Governors of the Federal Reserve 

System, Docket No. OP–1374, ‘‘Guidance on Sound 

Incentive Compensation Policies,’’ June 21, 2010. 

10Public Law 111–203, 124 Stat. 1376. 

11See section 951 of Subtitle E of Title IX, 

‘‘Investor Protections and Improvements to the 

Regulation of Securities,’’ of the Wall Street Reform 

Act. 

12See section 953 of Subtitle E of Title IX, 

‘‘Investor Protections and Improvements to the 

Regulation of Securities,’’ of the Wall Street Reform 

Act. 

‘‘Standards of Conduct’’ regulations (59 

FR 24889, May 13, 1994), our 

‘‘Disclosure to Shareholders’’ regulations 

(59 FR 37406, July 22, 1994), and our 

‘‘Disclosure to Investors in System-wide 

and Consolidated Bank Debt Obligations 

of the Farm Credit System’’ regulations 

(59 FR 46742, September 12, 1994). We 

continue to periodically review and 

update our disclosure regulations to 

ensure they are appropriate for current 

business practices, that they ensure 

System institutions provide their 

shareholders with information to assist 

them in making informed decisions 

regarding the operations of the 

institutions, and that the disclosures 

provide investors with information 

necessary to assist them in making 

investment decisions. 

In keeping with today’s economic and 

business environments and in 

accordance with the findings of 

Congress under the 1992 Act, we believe 

it is prudent and timely to undertake a 

review of our regulatory guidance 

related to senior officer compensation. 

The recent turmoil within the financial 

industry and the ensuing decline in the 

economy highlight the need to ensure 

that shareholders and investors are 

informed of compensation policies and 

practices. Shareholders and investors 

need information that allows them to 

assess which policies and practices 

encourage excessive risk-taking at the 

expense of the institution’s safety and 

soundness. With appropriate 

information, shareholders and investors 

can evaluate whether the institution’s 

compensation policies and practices 

create an environment in which 

employees take imprudent risks in order 

to maximize their expected income at 

the expense of the institution’s earnings 

performance and shareholder return. 

Similar efforts are in process at other 

regulatory agencies. For example, the 

Securities and Exchange Commission 

(SEC) recently revised its regulations to 

require that issuers disclose their 

compensation policies and practices as 

they relate to the company’s risk 

management.8 Likewise, the Board of 

Governors of the Federal Reserve 

System (FRB) has undertaken two 

supervisory initiatives involving a 

review of incentive compensation 

practices at certain banking 

organizations. The FRB has issued 

supervisory guidance designed to 

ensure that incentive compensation 

policies at banking organizations 

supervised by the FRB do not encourage 

imprudent risk-taking and are consistent 

with the safety and soundness of the 

organization.9 Also, the recently enacted 

Dodd-Frank Wall Street Reform and 

Consumer Protection Act (Wall Street 

Reform Act) 10 includes amendments to 

the Securities Exchange Act of 1934 

requiring, among other things, a 

separate resolution subject to a nonbinding shareholder vote on the 

compensation of executive officers of a 

SEC issuer.11 In addition, under the 

Wall Street Reform Act, each SEC issuer 

is required to disclose information that 

shows the relationship between 

executive compensation actually paid 

and the financial performance of the 

reporting entity.12

Active, effective oversight of senior 

officer compensation policies and 

practices will help align those policies 

and practices with safe and sound 

operations. Providing transparent, 

timely and accurate disclosures of 

senior officer compensation policies and 

practices will help ensure an institution 

adequately fulfills its obligation to its 

shareholders and investors. 

III. Areas of Consideration 

We are reviewing our regulations in 

order to identify where our disclosure 

regulations might be amended to 

enhance the transparency of an 

institution’s compensation policies and 

practices and if those practices affect the 

safety, soundness and financial 

performance of the institution. Also, we 

are reviewing our regulations to 

determine if they should be amended to 

facilitate qualified, objective and active 

compensation committees that are 

tasked to oversee an institution’s 

compensation programs. We are 

interested in public response to the 

questions contained in this ANPRM, 

including ways in which our regulations 

might further enhance disclosures of 

senior officer compensation policies and 

practices. We are also interested in the 

ways in which an institution’s 

compensation committee might further 

engage in active and effective oversight 

of those policies and practices. 

A. Enhanced Disclosures of Senior 

Officer Compensation 

Our existing disclosure regulations at 

§§ 620.5(i) and 630.20(i) require that 

certain disclosures of compensation 

paid to, or earned by, senior officers and 

other highly compensated employees 

(hereinafter collectively referred to as 

‘‘senior officers’’) be included in an 

institution’s annual report to 

shareholders (or an association’s annual 

meeting information statement). Our 

regulations also require disclosure of 

certain benefits paid to senior officers 

pursuant to a plan or arrangement in 

connection with resignation, retirement, 

or termination. However, depending on 

when an officer retires (or otherwise 

terminates employment with the 

institution), the payment may not be 

disclosed or it may not be disclosed in 

a timely manner due to the timing of the 

actual payment to the officer. As a 

result, shareholders and investors may 

not have all the information they need 

to make informed decisions on an 

institution’s compensation policies and 

practices for senior officers. 

We are considering whether current 

required disclosures should be changed 

to include quantitative and qualitative 

information on the obligations that have 

accrued to an institution from senior 

officers’ supplemental retirement and 

deferred compensation plans. Also, we 

want to identify how the disclosures 

could provide greater clarity to the 

variable components of senior officers’ 

compensation packages. We believe 

disclosures should provide information 

that assists shareholders and investors 

in understanding the impact of 

compensation programs on an 

institution’s operations. Shareholders 

and investors require sufficient 

information to assess whether senior 

officers’ compensation is appropriate in 

view of the institution’s financial 

condition, risk profile, and business 

activities. This information enables 

shareholders to understand how an 

institution’s board or compensation 

committee exercises its oversight 

responsibilities of ensuring a 

comprehensive and balanced 

compensation program that holds 

management accountable for an 

institution’s financial performance. 

Questions (1) through (8) of Section 

IV of this ANPRM address this topic. 

B. Compensation Committees 

Our existing rules at §§ 620.31 and 

630.6(b) require that System institutions 

have compensation committees and that 

these committees be responsible for 

reviewing the compensation policies 

and plans for senior officers and 

employees, as well as approving the 

overall compensation program for senior 

officers. Compensation committee 

oversight is critical in ensuring 

compensation policies and practices do 

not jeopardize an institution’s safety 


jlentini on DSKJ8SOYB1PROD with PROPOSALS
Federal Register / Vol. 75, No. 222 / Thursday, November 18, 2010 / Proposed Rules 70621 

13External resources may include, but not be 

limited to, outside advisors, consultants, or legal 

counsel. 

and soundness. In FCA bookletter, 

‘‘Compensation Committees’’ (BL–060), 

dated July 9, 2009, we issued guidance 

on how compensation committees could 

fulfill these duties. We are considering 

incorporating this guidance into our 

existing rules. We are also considering 

additional ways to enhance the 

authorities and responsibilities of 

System institution compensation 

committees to continue to achieve 

active and effective oversight of senior 

officers’ compensation policies and 

practices. For example, in order for 

compensation committees to effectively 

fulfill their role, they must be 

specifically tasked with ensuring that 

compensation policies and practices do 

not jeopardize the safety and soundness 

of the institution. We are considering 

ways to re-emphasize that oversight 

responsibility. Understanding the 

financial commitment and total cost to 

the institution of the compensation 

programs and verifying that the 

institution is providing accurate and 

transparent disclosures on 

compensation are appropriate tasks for 

a compensation committee. 

We are aware that some System 

institutions engage compensation 

consultants to make recommendations 

on compensation programs, plans, 

policies and practices. Compensation 

consultants can provide significant 

expertise to the board or compensation 

committee on compensation matters. 

These same consultants may also 

provide additional services, such as 

administration of compensation and 

benefit programs or actuarial services, 

on behalf of an institution’s 

management. The degree of reliance 

placed on the consultant’s expertise by 

the compensation committee may be a 

function of the consultant’s 

independence from management 

influence. Therefore, we are considering 

requiring disclosure of the additional 

services provided to management by the 

consultant and requiring that the related 

fees paid to the consultant be disclosed. 

We are also considering if the 

significance of these additional services 

should impact whether they are 

included in the compensation 

disclosures. 

Questions (9) through (13) of Section 

IV of this ANPRM address this topic. 

C. Shareholder Approval of Senior 

Officers’ Compensation 

Recent initiatives, such as the Wall 

Street Reform Act, require entities that 

are SEC issuers to include a separate 

resolution in their proxy solicitations 

subject to shareholder vote on the 

compensation of the entities’ executives. 

We are considering whether the FCA 

should issue regulations requiring a 

separate, non-binding, advisory 

shareholder vote on senior officer 

compensation and, if so, what those 

regulations should require. By providing 

for a non-binding advisory vote, 

shareholders would have a process 

through which they could express their 

approval or disapproval of an 

institution’s compensation policies and 

practices. Board oversight and 

governance of compensation policies 

and practices may be more effective and 

enhanced if the board is explicitly 

informed of shareholder approval or 

disapproval. A non-binding, advisory 

shareholder vote would not bind the 

board of directors or compensation 

committee to any particular course of 

action and would not overrule any 

board or committee decisions related to 

senior officers’ compensation. 

Submitting senior officer 

compensation to a non-binding, 

advisory shareholder vote may be a 

practice that is appropriate for 

institutions that are cooperatively 

structured. One of the core cooperative 

principles is that those who use the 

cooperative should also control it. 

Submitting senior officer compensation 

to an advisory vote by System 

institution shareholders may promote 

member participation in their 

institution. 

Question (14) of Section IV of this 

ANPRM addresses this topic. 

D. Notice of Significant or Material 

Events 

The FCA promotes sound governance 

practices. In doing so, we believe 

interested parties deserve timely notice 

and disclosure of any event, fact or 

circumstance that boards and 

management consider material or 

significant to the operations or financial 

condition of their institution. The SEC 

requires its registrants to file, in a timely 

manner, a current report to announce 

major events that occur between 

reporting periods (i.e., the Form 8–K, 

Current Report). We are considering 

requiring System institutions to provide 

similar current reporting on intervening 

events that occur between annual and 

quarterly reporting periods. The 

intervening events we are considering 

include enforcement actions taken by or 

supervisory agreements with the FCA, 

departure of an institution’s director or 

an officer, results of matters an 

institution may submit to a vote by its 

shareholders, and other similar events. 

Question (15) of Section IV of this 

ANPRM addresses this topic. 

E. Remuneration to Boards of Directors 

in Connection With Conclusion of 

Services 

Section 612.2130(b) of our regulations 

defines a conflict of interest, or the 

appearance thereof. The rule states that 

a conflict exists, or may appear to exist, 

when a person has a financial interest 

in a transaction, relationship or activity 

that actually affects, or has the 

appearance of affecting, the person’s 

ability to perform official duties and 

responsibilities in a totally impartial 

manner and in the best interest of the 

institution. Payments to a director in 

connection with a restructuring or 

downsizing of the board or as a result 

of a merger, consolidation or other form 

of institutional reorganization may 

result in a board member having, or 

appearing to have, a conflict of interest 

or lack of total independence related to 

the transaction or board action. 

Shareholders and boards have approved 

such payments for economic reasons or 

when they wanted to recognize the 

contributions of directors stepping 

down from the board. We are 

considering regulating payments to 

directors under certain circumstances 

and also considering how or if these 

payments should be disclosed. 

Question (16) of Section IV of this 

ANPRM addresses this issue. 

F. Audit Committees 

Sections 620.30(c) and 630.6(a)(3) of 

the FCA’s regulations require a twothirds majority vote of the full board of 

directors of a bank, an association or the 

Federal Farm Credit Banks Funding 

Corporation (Funding Corporation) to 

deny its respective audit committee’s 

request for resources. We are 

considering whether we should remove 

the ability of the full board to deny a 

request from its audit committee for 

external resources.13 We are considering 

this matter based on a May 7, 2010, 

request from the Funding Corporation 

submitted on behalf of the System Audit 

Committee (SAC), asking us to amend 

§ 630.6(a)(3) of our regulations to 

remove the authority of the board of 

directors of the Funding Corporation to 

deny the SAC certain resources. 

Question (17) of Section IV of this 

ANPRM addresses this request. 

IV. Request for Comments 

We request and encourage any 

interested person(s) to submit comments 

on the following questions and ask that 

you support your comments with 

relevant data or examples. We remind 


jlentini on DSKJ8SOYB1PROD with PROPOSALS
70622 Federal Register / Vol. 75, No. 222 / Thursday, November 18, 2010 / Proposed Rules 

commenters that comments, and data 

submitted in support of a comment, are 

available to the public through our 

rulemaking files. 

(1) Should FCA enhance senior officer 

compensation disclosure requirements 

to improve transparency and current 

practices? Specifically, should the FCA 

consider enhancing disclosures on: 

(a) The significant terms of senior 

officers’ employment arrangements, 

whether or not dollar amounts are paid 

or earned during the reporting year, 

including components related to 

deferred compensation plans, 

supplemental retirement plans, 

performance agreements, and incentive 

or bonus compensation based on 

financial information; and 

(b) The position titles of officers 

included in the aggregated group’s 

compensation reported under existing 

§ 620.5(i)(2)(i)(B) of our regulations? 

(2) Should the FCA remove from 

§ 620.5(i)(2) the option that allows 

associations to disclose senior officer 

compensation information in annual 

meeting information statements instead 

of disclosing it in annual reports? 

(3) What additional disclosures 

(qualitative and quantitative) are needed 

to ensure that all compensation, 

including deferred compensation and 

supplemental retirement benefits, are 

fully disclosed in a timely manner and 

that an institution’s total compensation 

policies, practices, and obligations for 

senior officers are effectively 

communicated in a transparent and 

timely manner? 

(4) Should FCA require the disclosure 

of compensation policies and practices 

related to the activities of certain 

employees, other than senior officers, 

which, either individually or in the 

aggregate, may expose the institution to 

a material amount of adverse risk? If so, 

what disclosures are needed to ensure 

the compensation programs, practices, 

and incentives for such employees are 

adequately disclosed so that 

shareholders and investors are informed 

of the potential risk areas? 

(5) To enhance transparency and a 

comprehensive understanding of the 

link between risk, return, and 

compensation incentives, should a 

discussion of an institution’s overall 

risk and reward structure for senior 

officer compensation and benefit 

policies and practices be a required 

disclosure and, if so, what level of 

disclosure or qualitative information 

should be required? 

(6) To ensure that all sources of 

compensation are disclosed, should 

institutions be required to disclose 

estimated payments to be made in the 

future to each senior officer in 

connection with deferred compensation 

arrangements, performance or incentive 

awards, and/or supplementary 

retirement benefits? If so, how should 

the disclosures be presented and for 

what periods? What other sources of 

senior officer compensation should be 

captured in current financial disclosures 

to shareholders? 

(7) To ensure that shareholders and 

investors have an appropriate 

understanding of the assumptions used 

by the institution to determine 

estimated future payments for 

compensation or benefits, if disclosed, 

should the assumptions used to 

determine the future payments also be 

disclosed? If so, should the disclosure 

include why the assumptions used to 

determine the estimated payments are 

different from those used to determine 

the present value of dollar amounts 

disclosed in the Summary 

Compensation Table? 

(8) Should institutions be required to 

disclose: 

(a) The dollar amount of any tax 

reimbursements (such as Internal 

Revenue Code Section 280G tax grossups) provided by the institution to a 

senior officer; 

(b) The business reason(s) for any 

material or significant change or 

adjustment to compensation or benefit 

programs from prior periods that 

increase or decrease salaries or 

compensation programs (individually or 

in the aggregate); 

(c) Quantitative and qualitative 

benchmarks used to determine senior 

officer compensation and performance 

and incentive bonuses, if and why 

benchmarks used in the current 

reporting period were different from 

those used in prior periods, the business 

reason(s) for changing the benchmarks 

used, whether the individual officer was 

successful in attaining the requirements 

of the benchmark used, and if and how 

each benchmark relates to the financial 

performance of the institution; 

(d) Significant events, trends or other 

information necessary to understand the 

institution’s senior officer compensation 

policies and practices; and 

(e) The vesting periods for long-term 

incentive and/or performance 

compensation or retirement benefits? 

(9) To support the compensation 

committee’s review and accountability 

processes, should compensation 

committees be required to certify 

compensation disclosures? If so, should 

the certification include a statement to 

the effect that: 

(a) The compensation disclosures are 

true, accurate, and complete, and that 

the disclosures are in compliance with 

all applicable regulatory requirements; 

(b) Comparable compensation 

practices used by the institution to 

develop its compensation policies 

support the valuation of senior officer 

compensation; and 

(c) The institution’s compensation 

policies and practices are consistent 

with the adverse risk-bearing capacity of 

the institution (as determined by the 

institution’s board) and do not pose a 

threat to the safety and soundness of the 

institution? 

(10) If compensation committees are 

required to certify compensation 

disclosures, what other areas should be 

addressed in the certification and what 

related statements should the committee 

certify? 

(11) Would it strengthen the operation 

and independence of the compensation 

committee if the FCA required that at 

least one of the compensation 

committee members be an outside 

director (independent of any affiliation 

with the institution other than serving 

as a director)? What would be the 

benefits and/or concerns with such a 

requirement? 

(12) If a System institution 

compensation committee uses the 

services of a compensation consultant, 

would the disclosure of that information 

be meaningful to shareholders and 

investors? What types of disclosures 

should be provided? 

(13) If institution management 

engages the services of a compensation 

consultant that is also used by the 

compensation committee, or vice versa, 

should that fact be disclosed? If so, 

should the disclosure include a 

description of the additional services 

provided by the consultant for 

management that: 

(a) Benefits the institution as a whole, 

and 

(b) Are provided solely for 

management’s benefit? Should the 

consultant’s fees for the additional 

services be disclosed if those fees are in 

excess of de minimis amounts? 

(14) To enhance transparency and 

shareholder understanding of 

compensation programs and practices, 

should FCA’s regulations provide for a 

separate, non-binding advisory vote by 

System institution voting shareholders 

on senior officer compensation? If so: 

(a) When and how should the vote 

occur; 

(b) Within what timeframe should the 

results of the vote be reported to 

shareholders; 

(c) Should certain System institutions 

be exempt from the voting requirement 

and, if so, what criteria should be used 

to exempt those institutions; and 

(d) If a vote is required, should 

institutions be required to identify 


jlentini on DSKJ8SOYB1PROD with PROPOSALS
Federal Register / Vol. 75, No. 222 / Thursday, November 18, 2010 / Proposed Rules 70623 

14 12 CFR 620.5(i)(2)(i)(B) allows aggregated 

disclosure in the annual report of compensation 

paid to senior officers. 15 12 CFR 620.15 provides for the notice to the 

FCA and shareholders by System banks and 

associations when an institution is not in 

compliance with the minimum permanent capital 

standards required by the FCA. 

senior officer compensation amounts on 

an individual basis to facilitate the 

vote? 14

(15) Should System institutions be 

required to issue current reports on 

events, facts, or circumstances that 

management considers material or 

significant to the operations or financial 

condition of a System institution, 

similar to the notice on changes in 

capital levels described in § 620.15? 15 If 

so, what form should the report take, 

what types of events should be reported, 

and what timeframe would be 

appropriate for its issuance? 

(16) To ensure that certain payments 

to institution directors do not create the 

potential for a conflict of interest, or 

appearance thereof, should payments 

made to System institution directors in 

connection with a restructuring or 

downsizing of the board, or as a result 

of a merger, consolidation or other form 

of institutional reorganization be 

allowed or disallowed? 

(a) Under what circumstances would 

such payments constitute a conflict of 

interest or an appearance thereof? 

(b) If allowed, how and when should 

such payments be disclosed? 

(17) Should FCA remove from 

§§ 620.30(c) and 630.6(a)(3) the ability 

of a board of directors to deny a request 

for resources from its audit committee? 

Dated: November 12, 2010. 

Mary Alice Donner, 

Acting Secretary, Farm Credit Administration 

Board. 

[FR Doc. 2010–29025 Filed 11–17–10; 8:45 am] 

BILLING CODE 6705–01–P 

DEPARTMENT OF TRANSPORTATION 

Federal Aviation Administration 

14 CFR Part 39 

[Docket No. FAA–2010–1152; Directorate 

Identifier 2009–CE–026–AD] 

RIN 2120–AA64 

Airworthiness Directives; DORNIER 

LUFTFAHRT GmbH Models Dornier 

228–100, Dornier 228–101, Dornier 

228–200, Dornier 228–201, Dornier 

228–202, and Dornier 228–212 

Airplanes 

AGENCY: Federal Aviation 

Administration (FAA), Department of 

Transportation (DOT). 

ACTION: Notice of proposed rulemaking 

(NPRM). 

SUMMARY: We propose to adopt a new 

airworthiness directive (AD) for the 

products listed above that would 

supersede an existing AD. This 

proposed AD results from mandatory 

continuing airworthiness information 

(MCAI) originated by an aviation 

authority of another country to identify 

and correct an unsafe condition on an 

aviation product. The MCAI describes 

the unsafe condition as: 

The TC Holder received from operators, 

whose fleets are operated in demanding 

operating-conditions and with very frequent 

Short Take-Off and Landing (STOL) 

operations, reports of cracks located in the 

web of fuselage frame 19. On 05 February 

2007, EASA issued Airworthiness Directive 

(AD) 2007–0028 which mandated Alert 

Service Bulletin (ASB) 228–266 and required 

an inspection of the frame 19 on all Dornier 

228 aeroplanes. In addition, the TC Holder 

also initiated a flight-test campaign including 

strain measurements as well as finite element 

modelling and fatigue analyses to better 

understand the stress distribution onto the 

frame 19 and the associated structural 

components. 

The results of these investigations 

confirmed that STOL operations diminish 

extensively the fatigue life of the frame 19. 

Fuselage frame 19 supports the rear 

attachment of the Main Landing Gear (MLG). 

This condition, if not corrected, could cause 

rupture of frame 19, leading to subsequent 

collapse of a MLG. 

The proposed AD would require actions 

that are intended to address the unsafe 

condition described in the MCAI. 

DATES: We must receive comments on 

this proposed AD by January 3, 2011. 

ADDRESSES: You may send comments by 

any of the following methods: 

• Federal eRulemaking Portal: Go to 

http://www.regulations.gov. Follow the 

instructions for submitting comments. 

• Fax: (202) 493–2251. 

• Mail: U.S. Department of 

Transportation, Docket Operations, 

M–30, West Building Ground Floor, 

Room W12–140, 1200 New Jersey 

Avenue, SE., Washington, DC 20590. 

• Hand Delivery: U.S. Department of 

Transportation, Docket Operations, 

M–30, West Building Ground Floor, 

Room W12–140, 1200 New Jersey 

Avenue, SE., Washington, DC 20590, 

between 9 a.m. and 5 p.m., Monday 

through Friday, except Federal holidays. 

For service information identified in 

this proposed AD, contact RUAG 

Aerospace Services GmbH, Dornier 228 

Customer Support, P.O. Box 1253, 

82231 Wessling, Germany; telephone: + 

49 (0) 8153–302280; fax: + 49 (0) 8153– 

303030. You may review copies of the 

referenced service information at the 

FAA, Small Airplane Directorate, 901 

Locust, Kansas City, Missouri 64106. 

For information on the availability of 

this material at the FAA, call 816–329– 

4148. 

Examining the AD Docket 

You may examine the AD docket on 

the Internet at http:// 

www.regulations.gov; or in person at the 

Docket Management Facility between 

9 a.m. and 5 p.m., Monday through 

Friday, except Federal holidays. The AD 

docket contains this proposed AD, the 

regulatory evaluation, any comments 

received, and other information. The 

street address for the Docket Office 

(telephone (800) 647–5527) is in the 

ADDRESSES section. Comments will be 

available in the AD docket shortly after 

receipt. 

FOR FURTHER INFORMATION CONTACT: Greg 

Davison, Glider Program Manager, FAA, 

Small Airplane Directorate, 901 Locust, 

Room 301, Kansas City, Missouri 64106; 

telephone: (816) 329–4130; fax: (816) 

329–4090. 

SUPPLEMENTARY INFORMATION: 

Comments Invited 

We invite you to send any written 

relevant data, views, or arguments about 

this proposed AD. Send your comments 

to an address listed under the 

ADDRESSES section. Include ‘‘Docket No. 

FAA–2010–1152; Directorate Identifier 

2009–CE–026–AD’’ at the beginning of 

your comments. We specifically invite 

comments on the overall regulatory, 

economic, environmental, and energy 

aspects of this proposed AD. We will 

consider all comments received by the 

closing date and may amend this 

proposed AD because of those 

comments. 

We will post all comments we 

receive, without change, to http:// 

regulations.gov, including any personal 

information you provide. We will also 

post a report summarizing each 

substantive verbal contact we receive 

about this proposed AD. 

Discussion 

On May 11, 2007, we issued AD 

2007–11–03, Amendment 39–15060 (72 

FR 28591; May 22, 2007). That AD 

required actions intended to address an 

unsafe condition on the products listed 

above. 

Since we issued AD 2007–11–03, the 

type certificate holder initiated a series 

of flight-test analyses to include strain 

measurements as well as finite element 

modeling and fatigue analyses to better 

understand the stress distribution onto 

frame 19 and the associated structural 

components. The analyses’ findings 

confirmed that extreme short take-off 


jlentini on DSKJ8SOYB1PROD with PROPOSALS