30.7—Q-7: How does a TARP recipient comply with the certification and disclosure requirements under § 30.4 (Q-4) of this part?
(a) Certification.
(c)
pensation committee must provide the
certifications required by § 30.4 (Q-4) of this
part stating that it has reviewed, with the TARP
recipient's senior risk officers, the SEO
compensation plans to ensure that these plans do
not encourage SEOs to take unnecessary and
excessive risks, the employee compensation plans
to limit any unnecessary risks these plans pose to
the TARP recipient, and the employee compensation
plans to eliminate any features of these plans
that would encourage the manipulation of reported
earnings of the TARP recipient to enhance the
compensation of any employee. For any period
during which no obligation arising from financial
assistance provided under the TARP remains
outstanding, the requirements under this paragraph
shall be modified to be consistent with § 30.4(d)
(Q-4(d)). Providing a statement similar to the
following and in the manner provided in paragraphs
(c) and (d) of this section, as applicable, would
satisfy this standard: “The compensation committee
certifies that:
(1)
It has reviewed with senior risk officers
the senior executive officer (SEO) compensation
plans and has made all reasonable efforts to
ensure that these plans do not encourage SEOs to
take unnecessary and excessive risks that threaten
the value of [identify TARP recipient];
(2)
It has reviewed with senior risk officers
the employee compensation plans and has made all
reasonable efforts to limit any unnecessary risks
these plans pose to the [identify TARP recipient];
and
(3)
It has reviewed the employee compensation
plans to eliminate any features of these plans
that would encourage the manipulation of reported
earnings of [identify TARP recipient] to enhance
the compensation of any employee.”
(b) Disclosure.
At least once per
TARP recipient fiscal year, the compensation
committee must provide a narrative description
identifying each SEO compensation plan and
explaining how the SEO compensation plan does not
encourage the SEOs to take unnecessary and
excessive risks that threaten the value of the
TARP recipient. The compensation committee must
also identify each employee compensation plan,
explain how any unnecessary risks posed by the
employee compensation plan have been limited, and
further explain how the employee compensation plan
does not encourage the manipulation of reported
earnings to enhance the compensation of any
employee.
(c) Location.
For TARP recipients
with securities registered with the SEC pursuant
to the Federal securities law, the compensation
committee must provide these certifications and
disclosures in the Compensation Committee Report
required pursuant to Item 407(e) of Regulation S-K
under the Federal securities laws ( 17 CFR
229.407(e)) and to Treasury. These disclosures
must be provided in the Compensation Committee
Report for any disclosure pertaining to any fiscal
year any portion of which is a TARP period (for a
TARP recipient with an obligation), or for any
disclosure pertaining to any fiscal year including a date on or before the
sunset date (for a TARP recipient that has never
had an obligation). Within 120 days of the
completion of a fiscal year during any part of
which is a TARP period (for a TARP recipient with
an obligation), or the completion of a fiscal year
including a date on or before the sunset date (for
a TARP recipient that has never had an
obligation), a TARP recipient that is a smaller
reporting company must provide the certifications
of the compensation committee to its primary
regulatory agency and to Treasury.
(d)
(a)
3]Application to private TARP
recipients. The rules provided in paragraphs
(a), (b), and (c) of this section are also
applicable to TARP recipients that do not have
securities registered with the SEC pursuant to the
Federal securities laws. Within 120 days of the
completion of the fiscal year during any part of
which is a TARP period (for a TARP recipient with
an obligation), or the completion of a fiscal year
including a date on or before the sunset date (for
a TARP recipient that has never had an
obligation), a private TARP recipient must provide
the certification of the compensation committee
(or board of directors, as applicable under § 30.4
(Q-4)) to its primary regulatory agency and to
Treasury.