Federal Register / Vol. 60, No. 78 / Monday, April 24, 1995 / Rules and Regulations 20011

PART 615—FUNDING AND FISCAL

AFFAIRS, LOAN POLICIES AND

OPERATIONS, AND FUNDING

OPERATIONS

3. The authority citation for part 615

continues to read as follows:

Authority: Secs. 1.5, 1.7, 1.10, 1.11, 1.12,

2.2, 2.3, 2.4, 2.5, 2.12, 3.1, 3.7, 3.11, 3.25, 4.3,

4.9, 4.14B, 4.25, 5.9, 5.17, 6.20, 6.26, 8.0, 8.4,

8.6, 8.7, 8.8, 8.10, 8.12 of the Farm Credit Act

(12 U.S.C. 2013, 2015, 2018, 2019, 2020,

2073, 2074, 2075, 2076, 2093, 2122, 2128,

2132, 2146, 2154, 2160, 2202b, 2211, 2243,

2252, 2278b, 2278b–6, 2279aa, 2279aa–4,

2279aa–6, 2279aa–7, 2279aa–8, 2279aa–10,

2279aa–12); sec. 301(a) of Pub. L. 100–233,

101 Stat. 1568, 1608.

Subpart C—Issuance of Bonds, Notes,

Debentures and Similar Obligations

§ 615.5104 [Removed]

4. Section 615.5104 is removed.

§ 615.5105 [Amended]

5. Section 615.5105 is amended by

removing paragraph (c).

Subpart F—Property and Other

Investments

§ 615.5170 [Amended]

6. Section 615.5170 is amended by

removing paragraphs (b), (c), (d), (e) and

the designation for paragraph (a).

Subpart G—[Removed and reserved]

7. Subpart G, consisting of § 615.5190,

is removed and reserved.

Subpart O—Issuance of Farm Credit

Securities

§ 615.5498 [Removed and reserved]

8. Section 615.5498 is removed and

reserved.

Subpart P—[Removed and reserved]

9. Subpart P, consisting of

§§ 615.5500, 615.5520, and 615.5530 is

removed and reserved.

PART 618—GENERAL PROVISIONS

10. The authority citation for part 618

continues to read as follows:

Authority: Secs. 1.5, 1.11, 1.12, 2.2, 2.4,

2.5, 2.12, 3.1, 3.7, 4.12, 4.13A, 4.25, 4.29, 5.9,

5.10, 5.17 of the Farm Credit Act (12 U.S.C.

2013, 2019, 2020, 2073, 2075, 2076, 2093,

2122, 2128, 2183, 2200, 2211, 2218, 2243,

2244, 2252).

Subpart F—Miscellaneous Provisions

§ 618.8220 [Removed and reserved]

11. Section 618.8220 is removed and

reserved.

Dated: March 13, 1995.

Floyd Fithian,

Secretary, Farm Credit Administration Board.

[FR Doc. 95–10007 Filed 4–21–95; 8:45 am]

BILLING CODE 6705–01–P

12 CFR Part 620

RIN 3052–AB37

Disclosure to Shareholders

AGENCY: Farm Credit Administration.

ACTION: Final rule.

SUMMARY: The Farm Credit

Administration (FCA), by the Farm

Credit Administration Board, issues a

final regulation amending its disclosure

requirements for association annual

meeting information statements

including required disclosures for

director candidates nominated from the

floor. The amendments provide

associations more flexibility in

accepting floor nominations for director

positions, clarify disclosure

requirements when annual meetings are

held in more than one session and

shareholders vote by mail, and make

other technical changes.

EFFECTIVE DATE: The regulations shall

become effective upon expiration of 30

days after publication in the Federal

Register during which either or both

Houses of Congress are in session.

Notice of the effective date will be

published in the Federal Register.

FOR FURTHER INFORMATION CONTACT:

Laurie A. Rea, Policy Analyst, Office of

Examination, Farm Credit

Administration, McLean, VA 22102–

5090, (703) 883–4498, or

James M. Morris, Senior Attorney,

Office of General Counsel, Farm

Credit Administration, McLean, VA

22102–5090, (703) 883–4020, TDD

(703) 883–4444.

SUPPLEMENTARY INFORMATION:

Background

On September 13, 1993, the FCA

issued a proposed regulation (58 FR

47836) that would amend certain

aspects of § 620.21(d) pertaining to

required disclosures in the association

annual meeting information statement

(Statement) concerning the nominating

and balloting process for association

directors. The FCA proposed changes to

§ 620.21(d) after learning that the

regulation may have inadvertently

placed an undue burden on certain

members. Section 620.21(d)(3) required

the Statement to ‘‘contain a notice that

nominations from the floor must be

made at the first sectional meeting’’

when the association’s annual meeting

was held in consecutive sectional

sessions. Consequently, certain

members that would have otherwise

attended a different session were

required to travel to the first sectional

session if they wished to participate in

the floor nominating process. Sections

620.21(d)(5) and (d)(6) also required that

persons nominated from the floor

provide the necessary written

disclosures ‘‘in writing at the meeting(s)

at which the nomination is considered.’’

The FCA proposed regulatory

amendments to make it less burdensome

for members to participate in the floor

nominating process. If the association’s

members are voting by mail ballot at the

conclusion of all sessions of the annual

meeting, the proposed rule allowed

floor nominations at any sectional

session. The proposed rule also relaxed

the disclosure requirement for floor

nominees by allowing them to provide

the mandated disclosures ‘‘within 10

days of nominations’’ instead of ‘‘at the

meeting(s) at which the nomination is

considered.’’ The FCA believed that

these regulatory changes would afford

members more opportunity to nominate

candidates from the floor when voting

by mail ballot after the annual meeting

is concluded and make it easier for floor

nominees to provide the required

disclosures without any significant

inconvenience to management or other

nominees.

The FCA received four comment

letters on the proposed rule during the

comment period that expired on

October 13, 1993. One letter was

submitted by a Farm Credit bank, two

letters by associations, and one by the

Farm Credit Council (Council) on behalf

of its membership. Commenters were

generally supportive of the proposed

changes. The Council commented that

its membership applauded the FCA’s

responsiveness to Farm Credit System

institutions’ concerns.

The final regulation allows persons to

be nominated from the floor at any

sectional session when the director

election is conducted by mail balloting

following the final session of the annual

meeting. However, in response to a

comment from the Council, the FCA has

changed the regulation so that

associations can specify in their bylaws

that nominations from the floor will be

accepted only at the first session. The

final rule requires persons nominated

from the floor to provide associations

with the written disclosure information

for mailing with the ballot. The final

rule also allows associations using mail

balloting after the last session the

latitude to prescribe in their bylaws the

time period for floor nominees to submit

the required disclosures.
20012 Federal Register / Vol. 60, No. 78 / Monday, April 24, 1995 / Rules and Regulations

1The FCA Board’s Policy Statement on

Regulatory Philosophy (59 FR 32189, June 22,

1994).

2The rights of stockholders to vote by proxy is

mandated by the Act in certain situations. See

§§ 4.3A(c)(2), 7.8(a)(3), and 7.13(a)(3) of the Act.

Response to Comments

The Council asserted that some

associations interpreted the proposed

regulation to require a change in their

current method of nominating and

electing directors because their

stockholders have the option of voting

by mail or in person at each

association’s annual meeting. Therefore,

the Council requested that the proposed

regulation be modified to permit

associations that hold annual meetings

in sectional sessions and conduct

elections by mail ballot after the final

sectional session to require in their

bylaws that all floor nominations be

made at the first sectional session.

Section 4.15 of the Farm Credit Act of

1971 (Act), concerning the nomination

of association directors, states

‘‘Nominations shall also be accepted

from the floor.’’ To comply with § 4.15

of the Act, associations must continue to

afford a full, fair, and meaningful

opportunity for members to make viable

nominations from the floor. Section

620.21(d)(3) has been revised to

emphasize this requirement.

The FCA believes allowing

nominations at any session of an

association annual meeting when mail

balloting occurs after those sessions is

the best method of ensuring members an

opportunity to nominate candidates

from the floor. Nevertheless, the FCA is

aware that some associations may wish

to retain bylaw provisions that provide

for the acceptance of floor nominations

only at the first session. The FCA is

engaged in a continuing effort to reduce

regulatory burden by eliminating

regulations that prescribe specific

operational or managerial practices 1

and amending regulations to provide

flexibility, so long as the requirements

of the Act are satisfied. Accordingly, the

FCA has revised the final § 620.21(d)(3)

to allow associations to prescribe that

nominations from the floor will be

accepted only at the first session.

Further, the FCA notes that, if an

association uses a combination of voting

in person and voting by mail ballot,

nominations from the floor can only be

made at the first session so that every

stockholder has the opportunity to vote

on floor nominees.

One commenter suggested that the

regulations be modified to expressly

accommodate a pre-annual meeting mail

balloting process. The commenter

argued that it is impossible for

associations employing a pre-annual

meeting mail balloting process to

comply with the floor nomination and

disclosure requirements of the proposed

regulations because many stockholders

have already voted by mail at the time

a floor nomination is made. The

commenter suggested that the FCA

allow associations to accept

nominations by mail. The suggestions

were not incorporated in the final

regulation for several reasons.

The FCA does not believe the use of

mail ballots prior to an association’s

annual meeting is legally permissible. In

addition to the slate of eligible

candidates presented by the nominating

committee, § 4.15 of the Act expressly

requires associations to accept

nominations ‘‘from the floor.’’ A

stockholder voting by mail prior to the

annual meeting would not be able to

vote for floor nominees because their

candidacy would not be known until

the meeting. In addition, a stockholder

who has voted by mail prior to the

annual meeting would not be able to

revoke his or her mail ballot and vote

in person at the meeting. Consequently,

stockholders who vote by mail ballot

prior to the annual meeting relinquish

their rights to vote for candidates

nominated from the floor at the meeting.

The FCA believes that accepting

nominations solely by mail would

discourage the borrowers’ active

participation in the management and

control of System institutions. Mail

nominations do not foster borrowers’

active involvement in the director

nomination and election process but

rather may minimize the stockholders’

role. Nominations by mail restrict

stockholders’ opportunity to discuss

potential candidates for director

positions. If nominations by mail were

employed, the absence of consideration

and discussion by members at the

annual meeting would also inhibit the

origination of viable nominations from

the floor. Accordingly, the FCA has not

modified the regulation to include a

procedure to accept floor nominations

by mail so that associations may

conduct mail balloting prior to the

annual meeting. The FCA notes that

proxy voting in director elections is a

permissible alternative voting method,

although it is not specifically mandated

by the Act.2 A secret proxy ballot allows

a stockholder who will be absent from

the meeting to designate another person

to cast his vote. Although proxies must

be returned to the association prior to

the start of the annual meeting, a

stockholder attending the meeting can

revoke his or her proxy prior to the

balloting at the annual meeting and vote

in person for a floor nominee.

Commenters raised concerns about

the appropriateness of the 10-day

timeframe prescribed in proposed

§ 620.21(d)(5) for floor nominees to

provide written disclosure information.

Three commenters suggested that the

10-day period be shortened to 5

business days. Commenters argued that

this would give floor nominees

sufficient time to prepare and submit

the required disclosure information

without unduly delaying the mailing of

ballots after the last sectional session.

The Council stated that its members

suggested a time period of 3 days or no

more than 5 days, and it recommended

that associations be allowed to set an

appropriate timeframe in their bylaws.

Consistent with its role as an arm’slength regulator, the FCA has revised

the regulation to allow associations the

latitude to prescribe in their bylaws the

time period for floor nominees to submit

the required disclosure. Associations

should provide a sufficient time for

floor nominees to compile the

information necessary to comply with

the regulatory requirements and ensure

that the election process is completed

expeditiously. Therefore, the time

period for floor nominees to submit the

required disclosure information was

changed in the final rule from ‘‘within

10 days of nomination’’ to ‘‘within the

time period prescribed by the

association’s bylaws.’’ If the bylaws do

not address this issue, the regulation

requires that this information be

submitted within 5 business days.

The Council also requested that the

regulation, as proposed, be changed by

adding the words ‘‘upon conclusion of

all sessions’’ after ‘‘mail ballot’’ in

§ 620.21(d)(5). The FCA agrees that the

suggested change clarifies the meaning

of paragraph (d)(5) and modified the

regulation accordingly.

The final regulation makes a technical

correction to § 620.21(c)(3). (See 51 FR

8644, March 13, 1986). The technical

correction deletes the words ‘‘during the

last year fiscal year to date’’ and inserts

the words ‘‘since the last annual

meeting’’ to clarify that associations are

required to disclose in the Statement

any resignations by directors that stem

from disagreements with the board that

occurred during the time period

between annual meetings.

List of Subjects in 12 CFR Part 620

Accounting, Agriculture, Banks,

banking, Reporting and recordkeeping

requirements, Rural areas.

For the reasons stated in the

preamble, part 620 of chapter VI, title 12
Federal Register / Vol. 60, No. 78 / Monday, April 24, 1995 / Rules and Regulations 20013

of the Code of Federal Regulations is

amended to read as follows:

PART 620—DISCLOSURE TO

SHAREHOLDERS

1. The authority citation for part 620

continues to read as follows:

Authority: Secs. 5.17, 5.19, 8.11 of the

Farm Credit Act (12 U.S.C. 2252, 2254,

2279aa–11); sec. 424 of Pub. L. 100–233, 101

Stat. 1568, 1656.

Subpart D—Association Annual

Meeting Information Statement

2. Section 620.21 is amended by

revising the heading and paragraphs

(c)(3), (d)(1), (d)(3), (d)(5), and (d)(6) to

read as follows:

§ 620.21 Contents of the information

statement and other information to be

furnished in connection with the annual

meeting.

* * * * *

(c) * * *

(3) If any director resigned or declined

to stand for reelection since the last

annual meeting because of a policy

disagreement with the board, and if the

director has furnished a letter requesting

disclosure of the nature of the

disagreement, state the date of the

director’s resignation and summarize

the director’s description of the

disagreement contained in the letter. If

the institution holds a different view of

the disagreement, the institution’s view

may be summarized.

* * * * *

(d) * * *

(1) If directors are nominated by

region, describe the regions and state

the number of voting shareholders

entitled to vote in each region. Any

nominee from the floor must be an

eligible candidate for the director

position for which the person has been

nominated.

* * * * *

(3) State that nominations shall be

accepted from the floor.

(i) If the annual meeting is to be held

in more than one session and mail

balloting will be conducted upon the

conclusion of all sessions, state that

nominations from the floor may be

made at any session or, if the

association’s bylaws so provide, state

that nominations from the floor shall be

accepted only at the first session.

(ii) If shareholders will not vote solely

by mail ballot upon conclusion of all

sessions, state that nominations from

the floor may be made only at the first

session.

* * * * *

(5) For each nominee who is not an

incumbent director, except a nominee

from the floor, provide the information

referred to in § 620.5 (j) and (k) and

§ 620.21(d)(4). If shareholders will vote

by mail ballot upon conclusion of all

sessions, each floor nominee must

provide the information referred to in

§ 620.5 (j) and (k) and § 620.21(d)(4) in

writing to the association within the

time period prescribed by the

association’s bylaws. If the association’s

bylaws do not prescribe a time period,

state that each floor nominee must

provide the written disclosure to the

association within 5 business days of

the nomination. The association shall

ensure that the information is

distributed to the voting shareholders

with the mailing of the ballots for the

election of directors in the same format

as the comparable information

contained in the association’s annual

meeting information statement. If

shareholders will not vote by mail ballot

upon conclusion of all sessions, each

floor nominee must provide the

information referred to in § 620.5 (j) and

(k) and § 620.21(d)(4) in writing at the

first session at which voting is held.

(6) No person may be a nominee for

director who does not make the

disclosures required by this subpart.

* * * * *

Dated: April 13, 1995.

Floyd Fithian,

Secretary, Farm Credit Administration Board.

[FR Doc. 95–10008 Filed 4–21–95; 8:45 am]

BILLING CODE 6705–01–P

DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

14 CFR Part 39

[Docket No. 94–NM–91–AD; Amendment

39–9200; AD 95–08–11]

Airworthiness Directives; Boeing

Model 767 Series Airplanes Equipped

With Off-Wing Escape Slides

AGENCY: Federal Aviation

Administration, DOT.

ACTION: Final rule.

SUMMARY: This amendment adopts a

new airworthiness directive (AD),

applicable to certain Boeing Model 767

series airplanes, that requires

replacement of the currently installed

door opening actuators of the emergency

off-wing escape system with new,

improved actuators. This amendment is

prompted by reports indicating that the

requirements of a previously issued AD

do not adequately preclude leakage from

these actuators. The actions specified by

this AD are intended to prevent failure

of the escape slide to deploy due to

failure of the door opening/snubbing

actuator, which could delay and

possibly jeopardize successful

emergency evacuation of an airplane.

DATES: Effective May 24, 1995.

The incorporation by reference of

Boeing Service Bulletin 767–25–0216,

dated February 3, 1994, as listed in

regulations, is approved by the Director

of the Federal Register as of May 24,

1995.

The incorporation by reference of

certain other publications listed in the

regulations was approved previously by

the Director of the Federal Register as of

November 25, 1992 (57 FR 47987,

October 21, 1992).

ADDRESSES: The service information

referenced in this AD may be obtained

from OEA Aerospace, Inc., P.O. Box KK,

Highway 12, Explosive Technology

Road, Fairfield, California 94533–0659;

and Boeing Commercial Airplane

Group, P.O. Box 3707, Seattle,

Washington 98124–2207. This

information may be examined at the

Federal Aviation Administration (FAA),

Transport Airplane Directorate, Rules

Docket, 1601 Lind Avenue, SW.,

Renton, Washington; or at the Office of

the Federal Register, 800 North Capitol

Street, NW., suite 700, Washington, DC.

FOR FURTHER INFORMATION CONTACT:

Jayson Claar, Aerospace Engineer,

Airframe Branch, ANM–120S, FAA,

Transport Airplane Directorate, Seattle

Aircraft Certification Office, 1601 Lind

Avenue, SW., Renton, Washington

98055–4056; telephone (206) 227–2784;

fax (206) 227–1181.

SUPPLEMENTARY INFORMATION: A

proposal to amend part 39 of the Federal

Aviation Regulations (14 CFR part 39) to

include an airworthiness directive (AD)

that is applicable to certain Boeing

Model 767 series airplanes was

published in the Federal Register on

August 30, 1994 (59 FR 44672). That

action proposed to require replacement

of the currently installed door opening

actuators of the emergency off-wing

escape system on Model 767 series

airplanes with new, improved actuators.

Interested persons have been afforded

an opportunity to participate in the

making of this amendment. Due

consideration has been given to the

comments received.

Response to Comments

One commenter supports the

proposed rule.

One commenter requests that the

name and address for obtaining service

information from OEA Aerospace, Inc.,

be corrected. The FAA concurs. Since

the issuance of the proposal, OEA has

changed its name from OEA, Inc., to