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Can you summarize 3 NYCRR Part 26?
General Regulations of the Superintendent > Stock Options
Short Summary
This legal document governs the provisions of a stock options plan for banks. It applies to entities implementing such a plan, subject to the provisions of the Banking Law, section 140-a, the regulations of the superintendent, and any other applicable law or regulation. The plan must include a general statement of its purposes and specify the total number of shares for which options may be granted. The plan’s duration should be defined, and options granted under the plan should not extend beyond a period of 10 years or as otherwise provided by the plan. The plan may include a provision restricting the sale of shares purchased through an option, unless waived by the superintendent. Options granted under the plan are generally non-assignable or transferable, except by will or by the laws of descent and distribution. The terms and conditions of options should be set forth or incorporated by reference in the instruments evidencing such options. The plan shall provide that options may be granted at not less than 100 percent of the fair market value of the shares covered by such option on the date the option is granted. If a realistic and fair market value of such shares is not readily determinable, an estimate of the fair market value shall be made and options may be granted at not less than this figure and in such case the plan shall set forth in detail the method to be employed in estimating fair market value. Among the factors which should be considered in such estimates are: (a) the market value of the shares of comparable banks; and (b) the trend of the bank’s earnings. The plan shall provide that options shall be granted only by (or upon recommendation of) a committee elected by the bank’s board of directors. However, with respect to participation by directors, the plan shall provide that options shall be granted by (or only in accordance with the recommendation of) a committee elected by the bank’s board of directors, none of the members of which committee shall be under consideration for a grant of options at the time such committee acts, or in accordance with the plan if the plan specifies the number of options which will be granted to directors. This legal document also governs the process of amending a plan or options in the banking industry. It states that any amendment to a plan must be adopted by the bank’s board of directors, approved by the majority of outstanding shares of the bank’s capital stock, and approved by the superintendent. However, there are exemptions to the stockholder approval requirement if the plan contains a provision similar to that permitted under section 26.13(a)(8) and the proposed amendment does not fall under specified categories or require an amendment of the bank’s organization certificate. In such cases, the bank must submit an application for approval to the superintendent, including the amendment, a certified copy of the board of directors’ resolution, an opinion of the bank’s counsel, and any other documents or information required by the superintendent. The superintendent will then approve or disapprove the application. Additionally, this document specifies that options can only be amended in accordance with the plan under which they were granted. The document also pertains to the notice that must be given to stockholders for a stockholders’ meeting to approve a plan. The notice must include several pieces of information, including a copy of the plan, comparative earnings statements and balance sheets of the bank, current annual compensation of officers, information on previously granted options, a statement indicating that the superintendent’s preliminary review of the plan does not imply approval or disapproval, and any other information required by the superintendent or applicable law. The document references the New York Codes, Rules and Regulations, specifically the General Regulations of the Superintendent under the Stock Options section. It also outlines the process for preliminary approval of a plan by a bank, including the submission of an application to the superintendent with various required documents. The superintendent will review the application and provide written approval or disapproval. Once final approval is granted, the plan can be submitted to the bank’s stockholders. The document does not mention any specific exemptions or penalties.
Whom does it apply to?
Entities implementing a stock options plan, subject to the provisions of the Banking Law, section 140-a, the regulations of the superintendent, and any other applicable law or regulation
What does it govern?
Provisions of a stock options plan for banks
What are exemptions?
No exemptions are mentioned.
What are the Penalties?
No specific penalties are mentioned.
Jurisdiction
New York