As filed with the Securities and Exchange Commission on
August 14, 1996
_______________________________________________________
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
______________________________________________________
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1996. Commission File Number 0-17440
FEDERAL AGRICULTURAL MORTGAGE CORPORATION
(Exact name of registrant as specified in its charter)
Federally chartered instrumentality 52-1578738
of the United States (I.R.S. employer
(State or other jurisdiction of identification number)
incorporation or organization)
919 18th Street, N.W., Suite 200,
Washington, D.C. 20006
(Address of principal executive offices) (Zip code)
(202) 872-7700
(Registrant's telephone number, including area code)
Indicate by check mark whether the Registrant (1) has filed
all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding twelve
months (or such shorter period that the Registrant was required
to file such reports), and (2) has been subject to such filing
requirements for the past 90 days
Yes [X] No
Indicate the number of shares outstanding of each of the
issuer's classes of common stock, as of the last practicable
date.
As of August 14, 1996, there were 990,000 shares of Class A
Voting Common Stock, 593,401 shares of Class B Voting Common
Stock, and 1,221,397 shares of Class C Non-Voting Common Stock
outstanding.
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS
The following interim consolidated financial statements of
the Federal Agricultural Mortgage Corporation (the "Corporation"
or "Farmer Mac") have been prepared, without audit, pursuant to
the rules and regulations of the Securities and Exchange
Commission. Such interim consolidated financial statements
reflect all normal and recurring adjustments that are, in the
opinion of management, necessary to a fair statement of the
results for the interim periods presented. Certain information
and footnote disclosures normally included in annual consolidated
financial statements have been condensed or omitted as permitted
by such rules and regulations. Management believes that the
disclosures are adequate to present fairly the consolidated
financial position, consolidated results of operations and
consolidated cash flows at the dates and for the periods
presented. These condensed financial statements should be read
in conjunction with the audited 1995 financial statements of
Farmer Mac. Results for interim periods are not necessarily
indicative of those to be expected for the fiscal year.
The following information concerning Farmer Mac's financial
statements as of June 30, 1996, December 31, 1995 and June 30,
1995 is included herein.
Consolidated Balance Sheets............................ 3
Consolidated Statements of Operations.................. 4
Consolidated Statements of Cash Flows.................. 5
<PAGE>
<TABLE>
FEDERAL AGRICULTURAL MORTGAGE CORPORATION
CONSOLIDATED BALANCE SHEETS
(Dollars in Thousands)
June 30, December 31,
1996 1995
(unaudited)
ASSETS:
<S> <C> <C>
Cash and cash equivalents $ 32,715 $ 8,336
Interest receivable 14,854 15,572
Guarantee fees receivable 469 573
Investment securities
Held-to-maturity 3,992 7,419
Available-for-sale 52,430 55,862
Farmer Mac I & II Securities 404,503 417,169
Other investments 1,933 2,340
Farmer Mac I & II payments receivable 5,297 4,939
Office equipment, net 59 65
Prepaid expenses and other assets 134 189
TOTAL ASSETS $ 516,386 $ 512,464
LIABILITIES AND STOCKHOLDERS' EQUITY:
LIABILITIES:
Debentures, notes and bonds, net:
Due within one year $ 225,361 $ 207,422
Due after one year 266,967 284,084
Accrued interest payable 7,487 8,394
Accounts payable and accrued expenses 1,475 740
Allowance for sold Farmer Mac I & II
Securities 223 112
TOTAL LIABILITIES 501,513 500,752
STOCKHOLDERS' EQUITY
Common stock:
Class A Voting, $1 par value,
2,000,000 shares authorized,
990,000 shares issued and
outstanding 990 670
Class B Voting, $1 par value,
2,000,000 shares authorized,
593,401 shares issued and
outstanding 593 500
Class C Non-Voting, $1 par value,
4,000,000 shares authorized,
1,221,397 shares issued and
outstanding 1,221 1,170
Additional paid in capital 22,035 19,331
Note receivable for purchase of stock (557) -
Unrealized (loss) gain on securities
available-for-sale 99 140
Accumulated deficit (9,508) (10,099)
TOTAL STOCKHOLDERS' EQUITY 14,873 11,712
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 516,386 $ 512,464
See accompanying notes to consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
FEDERAL AGRICULTURAL MORTGAGE CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in Thousands, Except Per Share Amounts)
<S> <C> <C> <C> <C>
Three Months Ended June 30 Six Months Ended June 30
1996 1995 1996 1995
(unaudited) (unaudited) (unaudited) (unaudited)
INTEREST INCOME:
<S> <C> <C> <C> <C>
Investments and cash equivalents $ 1,997 $ 1,496 $ 3,466 $ 2,823
Farmer Mac I and II Securities 7,812 7,112 15,265 13,814
TOTAL INTEREST INCOME 9,809 8,608 18,731 16,637
INTEREST EXPENSE 9,027 8,243 17,422 16,005
NET INTEREST INCOME 782 365 1,309 632
OTHER INCOME:
Guarantee fees 328 310 652 645
Miscellaneous 16 55 51 71
Gain on issuance of mortgage-
backed securities, net 913 -- 913 --
TOTAL OTHER INCOME 1,257 365 1,616 716
OTHER EXPENSES:
Compensation and employee benefits 629 511 1,160 976
Professional fees 196 97 352 182
Insurance 54 51 105 108
Rent 34 42 75 84
Regulatory fees 71 92 143 184
Board of Directors fees
and meetin expenses 80 96 168 175
Administrative 105 102 188 180
Provision for losses 120 24 142 51
TOTAL OTHER EXPENSES 1,289 1,015 2,333 1,940
NET INCOME (LOSS) $ 750 $ (285) $ 592 $ (592)
NET INCOME (LOSS) PER SHARE $ 0.27 $ (0.12) $ 0.23 $(0.25)
See accompanying notes to consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
FEDERAL AGRICULTURAL MORTGAGE CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in Thousands)
Six Months Ended
June 30, 1996 June 30, 1995
(unaudited)
CASH FLOWS FROM
OPERATING ACTIVITIES:
<S> <C> <C>
Income (loss) from Operations $ 592 $ (592)
Adjustments to reconcile net loss to
cash provided by operating activities:
Amortization of premium on Farmer Mac I
and II Securities 1,844 2,533
Discount Note amortization 5,355 3,653
Decrease (increase) in guarantee fees receivable 104 (26)
Decrease in interest receivable 718 835
Increase in Farmer Mac I and II payments receivable (358) (3,059)
Decrease in prepaid expenses and other assets 55 53
Amortization of debt issuance costs 88 102
Increase (decrease) in accounts payable and
accrued expenses 735 (190)
(Decrease) increase in accrued interest payable
on Medium-Term Notes (907) 423
Provision for losses on Farmer Mac I Program 142 51
Other (42) (19)
Net cash provided by operating activities 8,326 3,764
CASH FLOWS FROM
INVESTING ACTIVITIES:
Farmer Mac I and II purchases (34,417) (62,842)
Purchases of investments (15,554) (20,959)
Proceeds from maturity of investments 22,782 13,614
Proceeds from Farmer Mac I and II
principal repayments 45,208 28,746
Purchases of office equipment (12) (5)
Net cash provided (used) by investing activities 18,007 (41,446)
CASH FLOWS FROM
FINANCING ACTIVITIES:
Proceeds from issuance of Medium-Term Notes 9,983 48,584
Payments to redeem Medium-Term Notes (49,580) (21,695)
Proceeds from issuance of Discount Notes 815,032 904,280
Discount Notes redeemed (780,000) (941,500)
Proceeds from issuance of common stock 2,611 -
Net cash used by financing activities (1,954) (10,331)
Net increase (decrease) in cash and cash
equivalents 24,379 (48,013)
Cash and cash equivalents at beginning of
period 8,336 73,129
Cash and cash equivalents at end of
period $ 32,715 $ 25,116
Supplemental disclosures of cash flow
information:
Cash paid during the six-month period for:
Interest $ 12,943 $ 11,882
See accompanying notes to consolidated financial statements.
</TABLE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1. ACCOUNTING POLICIES.
(a) Principles of Consolidation
Financial information at and for the six and three
months ended June 30, 1996 is consolidated to include the
accounts of Farmer Mac and its two wholly owned subsidiaries,
Farmer Mac Mortgage Securities Corporation and Farmer Mac
Acceptance Corporation. All material intercompany transactions
have been eliminated in consolidation.
(b) Reclassifications
Certain reclassifications of the 1995 information were
made to conform with the 1996 presentation.
NOTE 2. OFF-BALANCE SHEET FARMER MAC GUARANTEED SECURITIES.
Farmer Mac issues guarantees in the normal course of
business to fulfill its statutory purpose of increasing liquidity
for agricultural mortgage lenders. Farmer Mac guarantees the
timely payment of principal and interest on securities issued
under the Farmer Mac I and Farmer Mac II Programs. The following
table sets forth the outstanding principal balances of Farmer Mac
Guaranteed Securities issued under the Farmer Mac I and Farmer
Mac II Programs and not held in its portfolio.
<TABLE>
<CAPTION>
June 30, 1996 December 31, 1995
(In Thousands)
<S> <C> <C>
Farmer Mac I $ 197,208 $ 94,763
Farmer Mac II $ 9,226 $ 4,810
</TABLE>
At June 30, 1996, the $197.2 million of Farmer Mac I Securities
included $120.7 million of agricultural mortgage-backed
securities issued under Farmer Mac's expanded legislative
authorities for which Farmer Mac bears the risk of first loss
(the "AMBS").
<PAGE>
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations
LIQUIDITY AND CAPITAL RESOURCES
Farmer Mac's primary sources of liquidity are issuances of
debt obligations, and principal and interest payments received on
mortgages underlying securities purchased by Farmer Mac under the
Farmer Mac I and Farmer Mac II Programs. Farmer Mac issues
Discount Notes and Medium-Term Notes to cover transaction costs,
guarantee payments and the costs of purchasing Guaranteed
Portions, Qualified Loans and securities (including Farmer Mac
Guaranteed Securities backed by Guaranteed Portions and/or
Qualified Loans). Funds from the borrowings also may be used to
retire existing Notes and for liquidity purposes. At
June 30, 1996, Farmer Mac had $492.3 million of Discount Notes
and Medium-Term Notes (net of unamortized debt issuance costs,
discounts and premiums) outstanding, an $822 thousand increase
from December 31, 1995. During the first six months of 1996,
Farmer Mac issued $820.6 million of Discount Notes and $10.0
million of Medium-Term Notes and redeemed $780.0 million of
Discount Notes and $49.6 million of Medium-Term Notes.
The $7.3 million decrease in investments from December 31,
1995 to June 30, 1996 resulted from the maturity of liquidity
portfolio investments, comprised of U.S. agency securities and
other investments, which were funded by Discount Notes with
similar terms to maturity. The $12.7 million net decrease in
Farmer Mac I and II Securities was largely attributable to the
$45.2 million in principal payments and prepayments received on
the underlying loans since December 31, 1995, which was partially
offset by the purchase of $34.4 million of Farmer Mac II
Securities.
The $735 thousand increase in accounts payable and accrued
expenses from December 31, 1995 to June 30, 1996 was attributable
to expenses accrued as of June 30, 1996 in connection with the
$120.7 million issuance of AMBS on June 27, 1996.
At June 30, 1996, Farmer Mac's total loss allowance was $534
thousand. The Farmer Mac I and II Securities are shown net of
their applicable allowance of $311 thousand at June 30, 1996,
representing an increase of $31 thousand from year-end 1995; the
allowance for Farmer Mac Guaranteed Securities not held by Farmer
Mac was $223 thousand at June 30, 1996, representing an increase
of $111 thousand from year-end 1995. This increase was
attributable to the issuance of $120.7 million of AMBS (as to
which Farmer Mac bears the risk of first loss). Farmer Mac
considers the amounts in the allowance account to be adequate to
cover its exposure to guarantee payments in the Farmer Mac I
Program.
At June 30, 1996, a total of six loans aggregating $3.5
million were 90 days or more past due, four loans totaling $4.2
million were in foreclosure and title to two loans with an
aggregate outstanding principal balance of $698 thousand had been
acquired by the trust in the Farmer Mac I Program. The twelve
loans, combined, represent 2.74% of the aggregate principal
amount of outstanding Farmer Mac I Securities (excluding the
aggregate principal amount of outstanding AMBS) at June 30, 1996.
Management believes that no losses will be incurred by Farmer Mac
as a result of the loans in foreclosure or the real estate owned
by the trust since the Farmer Mac I Securities backed by those
loans are supported by 10% subordinated interests that were
created in connection with the issuance of the Farmer Mac I
Securities. No loss allowance has been made specifically for the
Farmer Mac II Program because the Guaranteed Portions are backed
by the full faith and credit of the United States and are not
exposed to credit losses.
At June 30, 1996, Farmer Mac's regulatory required minimum
capital was $5.5 million and its actual capital level was $14.9
million. At December 31, 1995, Farmer Mac's regulatory required
minimum capital was $4.7 million, and its actual capital level
was $11.7 million. As previously reported, the 1996 Act phases
in higher capital requirements over a three-year transition
period following the enactment of the 1996 Act. Certain levels
of enforcement are given to the FCA depending upon Farmer Mac's
compliance with these capital levels. See "Recent Legislative
Revisions to Farmer Mac's Statutory Charter _ Summary of
Statutory Changes _ Capital" and "Government Regulation of Farmer
Mac _ Regulation _ Capital Standards" in the Corporation's Annual
Report on Form 10-K for the year ended December 31, 1995. If the
fully phased-in (highest) standard under the 1996 Act had been in
effect at June 30, 1996, Farmer Mac's actual capital would have
been less than the total minimum capital required by $875
thousand.
The 1996 Act also requires the Corporation to increase its
core capital to at least $25 million by February 1998 or sooner
if business volume increases substantially. If the
recapitalization requirement had been in effect at June 30, 1996,
Farmer Mac's actual capital would have been less than the
required capital level by $10.1 million.
In the opinion of management, Farmer Mac has sufficient
liquidity and capital for the next twelve months.
<PAGE>
RESULTS OF OPERATIONS
Overview. During April and May of 1996, Farmer Mac
completed work on Phase I of its legislative implementation
process -- the development of an economic model that permits it
to analyze risk in the securitization and pricing of individual
loans or pools of loans under its new statutory authorities. The
model facilitates Farmer Mac's acquisition of loans in exchange
for AMBS (through its "swap" program) or for cash (through its
"cash window" program).
In June, Farmer Mac purchased an aggregate of approximately
$121 million of loans from the "AgFunding" division of the
Western Farm Credit Bank (WFCB). During the course of
negotiating the WFCB loan purchases, WFCB raised certain issues
with Farmer Mac as to their mutual obligations under the 1994
strategic alliance agreement and sought price adjustments from
Farmer Mac in connection with the sale of those loans. Although
Farmer Mac proposed a framework for resolution of those issues,
WFCB subsequently notified Farmer Mac that it was terminating the
AgFunding pooling program and the strategic alliance agreement,
effective August 16, 1996, based on its assertions of material
breaches by Farmer Mac of the agreement, and James M. Cirona,
President and Chief Executive Officer of WFCB, resigned from the
Farmer Mac Board of Directors, citing the potential conflict of
interest. Farmer Mac has informed WFCB that it disagrees with
WFCB's assertions, but that it does not object to the termination
of the agreement. While it is anticipated that Farmer Mac will
have further negotiations with WFCB relating to those matters,
Farmer Mac's management believes that, regardless of their
resolution, these matters will not have a material effect on
Farmer Mac's business prospects or its financial condition.
Also in June, Farmer Mac completed its first guarantee
transaction under its new statutory authorities, selling AMBS
backed by the WFCB loans to capital markets investors. The sale
of those securities permitted Farmer Mac to confirm and refine
its competitive pricing for the purchase of new agricultural real
estate loans. The spreads over corresponding U.S. Treasury
securities realized by Farmer Mac in the sale of the AMBS also
facilitated the opening of Farmer Mac's cash window for the
direct purchase of individual loans or groups of loans (Phase II
of its legislative implementation process) in mid-July, on
schedule with announcements made at its Annual Meeting of
Stockholders in early June. Farmer Mac has approved and
authorized a number of sellers to submit loans for possible sale
through the cash window and to date approximately $30 million of
loans have been so submitted for Farmer Mac's approval. In
addition to its program for purchasing loans through the cash
window, Farmer Mac is pursuing the acquisition of loans through
swap transactions with portfolio holders of agricultural loans,
although there is no assurance that any such portfolio swap
transactions actually will be consummated.
General. Farmer Mac reported net income for the six months
ended June 30, 1996 of $592 thousand, an increase of $1.2 million
from the $592 thousand loss reported for the six months ended
June 30, 1995. The decrease in loss is largely attributable to
an increase in the net interest income and the net gain realized
on the issuance of mortgage-backed securities. The net spread on
Farmer Mac's interest-earning assets over its interest-bearing
liabilities increased 26 basis points (0.26%) as the average rate
on Farmer Mac's interest-earning assets increased while the
interest rate on Farmer Mac's interest-bearing liabilities for
the comparable periods decreased. The net gain on the issuance
of the mortgage-backed securities resulted from the issuance and
sale of $120.7 million of AMBS, the first transaction under
Farmer Mac's expanded authorities.
For the three months ended June 30, 1996, Farmer Mac
reported income of $750 thousand, which represents a $1.0 million
increase in Farmer Mac's income, as compared to the $285 thousand
loss incurred for the three months ended June 30, 1995. The
increase in income is primarily attributable to the net gain on
the issuance of the mortgage-backed securities.
Notwithstanding Farmer Mac's improved financial performance
for the six and three months ended June 30, 1996, there is no
assurance that Farmer Mac will be able to sustain such
performance in the future. Although Farmer Mac's new authorities
give it the statutory flexibility to devise programs that operate
under guidelines similar to those of Fannie Mae and Freddie Mac,
that flexibility does not ensure the success of Farmer Mac's
programs. As previously reported, a number of factors have
constrained participation in Farmer Mac's programs to date and
caused its core business activities to be unprofitable. Those
factors have included: the excess liquidity of many agricultural
lenders; the attractiveness of loans (otherwise qualified under
the Farmer Mac programs) as investments for their originators;
the disinclination of many lenders to offer intermediate-term
adjustable rate and long-term fixed rate agricultural real estate
loans, as a result of the higher profitability associated with
short-term lending; the lack of borrower demand for intermediate-
term and long-term loans due to the lower interest rates
generally associated with shorter term loans; various restrictive
provisions in Farmer Mac's charter; and the unfavorable
regulatory capital treatment afforded banks and System
Institutions holding subordinated securities created in Farmer
Mac transactions. Even though the 1996 Act has removed those
charter provisions that Farmer Mac had concluded were
constraining the operation of the secondary market, most of the
other enumerated factors, over which Farmer Mac has little, if
any, control, may continue to exist as Farmer Mac seeks to
implement its new authorities. If those factors persist, they
will affect Farmer Mac's ability to generate the volume of
business necessary to achieve profitability and ultimately comply
with the requirement to raise capital to higher levels by
February 1998. Despite Farmer Mac's ongoing efforts to implement
its new authorities under the 1996 Act, its ability to operate
profitably (or to sustain profitability) in the future remains
uncertain. Profitability will be affected not only by guarantee
volume, but also by any payments Farmer Mac must make on its
guarantees; payments it must make on its Notes; the income it
earns on its investment securities, its mortgage portfolio and
other funds it is holding; and its administrative expenses.
Losses, if any, on guarantees will be affected by many
circumstances, including agricultural growing conditions,
agricultural market conditions, changes in government
agricultural support policies and the economy, both domestic and
international. Farmer Mac's future is still dependent upon
continued, more effective and significantly increased utilization
of its programs by its Class A and Class B stockholders.
Average Balances, Income and Expense, Yields and Rates. The
following table presents, for the periods indicated, information
regarding interest income on average interest-earning assets and
related yields, as well as interest expense on average interest-
bearing liabilities and related rates paid. The average balances
were calculated by averaging month-end balances.
<TABLE>
<CAPTION>
Six Months Ended June 30,
____________________________________________________
1996 1995
_________________________ __________________________
(Dollars in Thousands)
Average Income/ Average Average Income/ Average
Balances Expense Rate Balances Expense Rate
Assets
Interest-earning assets:
<S> <C> <C> <C> <C> <C> <C>
Farmer Mac I and II Securities $ 408,783 $ 15,265 7.47% $ 380,618 $ 13,814 7.26%
Investments and cash equivalents 113,846 3,466 6.09% 98,440 2,823 5.74%
Total interest-earning assets 522,629 18,731 7.17% 479,058 16,637 6.95%
Other assets 13,872 11,969
$ 536,501 $ 491,027
Liabilities and Stockholders' Equity
Interest-bearing liabilities:
Debentures, notes and bonds, net $ 516,602 $ 17,422 6.74% $ 471,898 $ 16,005 6.78%
Other liabilities 7,140 7,203
Stockholders' equity 12,759 11,926
$ 536,501 $ 491,027
Net interest income/spread $ 1,309 .43% $ 632 0.17%
Net yield on interest-earning
assets .50% 0.26%
</TABLE>
<PAGE>
Rate/Volume Analysis. The table below sets forth certain
information regarding the changes in the components of Farmer
Mac's net interest income for the periods indicated. For each
category, information is provided on changes attributable to (a)
changes in volume (change in volume multiplied by old rate); (b)
changes in rate (change in rate multiplied by old volume); and
(c) the total. Combined rate/volume variances, a third element
of the calculation, are allocated based on their relative size.
<TABLE>
<CAPTION>
Six Months Ended June 30, 1996
Compared to Six Months Ended June 30, 1995
Increase or (Decrease) Due to
Rate Volume Total
(in thousands)
Income from interest-
earning assets:
<S> <C> <C> <C>
Farmer Mac I and II Securities $ 407 $ 1,044 $ 1,451
Investments 182 461 643
Total income from interest-
earning assets 589 1,505 2,094
Expense on interest-bearing
liabilities (90) 1,507 1,417
Change in net interest income $ 679 $ (2) $ 677
</TABLE>
Net Interest Income. Net interest income totaled $1.3
million for the six months ended June 30, 1996, a $677 thousand
increase from the six months ended June 30, 1995. The increase
in net interest income was largely attributable to a 26 basis
point (0.26%) increase in the net interest spread, a result of
the shift in the composition of interest-earning assets from
lower yielding fixed rate assets to higher yielding adjustable
rate assets and the excess of interest earned on the loans
underlying the AMBS over the interest expense incurred to
purchase such loans, which were held in portfolio prior to the
securitization and sale of the securities.
Net interest income totaled $782 thousand for the three
months ended June 30, 1996, a $417 thousand increase from the
three months ended June 30, 1995. The increase in net interest
income resulted from a 31 basis point (0.31%) increase in the
rate and a $44.3 million increase in the average balance of
interest-earning assets, which more than offset the increase in
the average rate and the average balance of interest-bearing
liabilities, and the positive carry earned on the loans
underlying the AMBS. As previously discussed, the increase in
the rate of interest-earning assets was attributable to the shift
in the composition of interest-earning assets from lower yielding
fixed rate assets to higher yielding adjustable rate assets.
Interest Income. Interest income totaled $18.7 million and
$9.8 million for the six and three months ended June 30, 1996, an
increase of $2.1 million and $1.2 million as compared to the six
and three months ended June 30, 1995. The $2.1 million increase
was attributable to increases in average rate and average
balances of interest-earning assets. The increase in the average
rate of interest-earning assets was attributable to: (i) a shift
in the composition of the liquidity portfolio investments to
higher yielding adjustable rate investments; (ii) an increase in
the average interest rate earned on Farmer Mac II Securities, as
a result of rate adjustments on variable rate products in the
Farmer Mac II Program in January and April 1996; and (iii) the
increased level of yield maintenance income over the accelerated
level of premium amortization for prepayments of mortgage loans
underlying the Farmer Mac I Securities.
Prepayments of mortgage loans underlying the Farmer Mac I
Securities totaled $6.2 million and $12.0 million, respectively,
for the six months ended June 30, 1996 and 1995. As a result of
these prepayments, Farmer Mac recognized $298 thousand of
interest income from the excess of yield maintenance payments
over the related accelerated premium amortization in the six
months ended June 30, 1996, as compared to $188 thousand in the
six months ended June 30, 1995.
The $1.2 million increase in interest income from the three
months ended June 30, 1995 to the three months ended June 30,
1996 was attributable to the increases in the average rate and
average balances of interest earning assets.
Interest Expense. Interest expense for the six and three
months ended June 30, 1996 amounted to $17.4 million and $9.0
million, respectively, an increase of $1.4 million and
$784 thousand from the six and three months ended June 30, 1995.
The increases in interest expense were attributable to increases
in the average outstanding balances of debt for the comparable
periods. The average outstanding balances of debt increased
$44.7 million and $44.3 million, respectively, from the six and
three months ended June 30, 1995 to the six and three months
ended June 30, 1996.
Other Income. Other income totaled $1.6 million and $1.3
million for the six and three months ended June 30, 1996, an
increase of $900 thousand and $892 thousand from the six and
three months ended June 30, 1995. Guarantee fee income increased
$7 thousand and $18 thousand from the six and three months ended
June 30, 1995 to the six and three months ended June 30, 1996.
The increase in guarantee fee income was attributable to the
increased level of guarantee volume for the comparable periods.
As of June 30, 1996, Farmer Mac had $598.4 million of guaranteed
securities outstanding as compared to $507.0 million as of
June 30, 1995.
Miscellaneous income, composed primarily of transaction fees
generated from the Farmer Mac II Program, decreased $20 thousand
and $39 thousand from the six and three months ended June 30,
1995 to the six and three months ended June 30, 1996. The
decreases resulted from Farmer Mac's decision in May 1996 to
eliminate transaction fees on the Farmer Mac II Program to
increase Farmer Mac's competitiveness in the market for
Guaranteed Portions.
The $913 thousand gain on issuance of mortgage-backed
securities, net of hedging costs and related expenses, resulted
from the issuance and sale of the first AMBS under Farmer Mac's
expanded authorities.
Other Expenses. Other expenses totaled $2.3 million and
$1.3 million for the six and three months ended June 30, 1996, an
increase of $393 thousand and $274 thousand from the six and
three months ended June 30, 1995. The $393 thousand increase in
other expenses was attributable to the increases in compensation
and employee benefits, professional fees, and the provision for
losses, which were partially offset by a decrease in regulatory
fees.
Compensation and employee benefits increased $184 thousand
from the six months ended June 30, 1995 to the six months ended
June 30, 1996 because of an increase in staffing from the
comparable period in 1995 and a change in the officers'
compensation structure. Farmer Mac hired two additional
employees, one late in the second quarter of 1995 and one in the
fourth quarter of 1995, to assist with the Farmer Mac II program
and portfolio analysis. The Board of Directors worked with a
compensation consultant to establish a new compensation structure
for officers, which included incorporating the former initial
level of targeted annual incentive compensation into annual base
salary.
Professional fees, comprised of fees for legal, accounting
and consulting services increased $170 thousand from the six
months ended June 30, 1995 to the six months ended June 30, 1996.
This increase related primarily to legal and consulting fees
incurred in implementing the new legislative authorities.
The $91 thousand increase in the provision for losses
related to the issuance of the $120.7 million of AMBS in June
1996 for which Farmer Mac assumes the first risk of loss.
Regulatory fees decreased $41 thousand from the six months
ended June 30, 1995 to the six months ended June 30, 1996, the
result of a larger assessment by the Farm Credit Administration
for the 1994-95 fiscal year ($368 thousand) than the 1995-96
fiscal year ($285 thousand).
From the three months ended June 30, 1995 to the three
months ended June 30, 1996, other expenses increased $274
thousand, as result of the $118 thousand increase in compensation
and employee benefits, the $99 thousand increase in professional
fees and the $96 thousand increase in the provision for losses,
all of which occurred for the reasons discussed above.
Income tax expense. Although Farmer Mac is subject to
income taxes at regular corporate statutory rates, a provision
for income taxes has not been made because of net operating loss
carryforwards. At December 31, 1995, Farmer Mac had a book net
operating loss carryforward of approximately $10.0 million.
Dividends. Farmer Mac has not paid and does not expect to
pay dividends on its common stock in the near future. Dividends
on the common stock are subject to determination and declaration
by the Board. The Board has adopted a policy stating that no
dividends will be paid on Farmer Mac Voting or Non-Voting Common
Stock until such time as Farmer Mac's stockholders' equity is at
least equal to $22 million (the amount of gross proceeds raised
by Farmer Mac in its initial common stock offering). Thereafter,
up to 50% of accumulated net earnings may be paid out as
dividends, provided that stockholders' equity remains at least
equal to $22 million. No preference between holders of the
Voting Common Stock and Class C Non-Voting Common Stock has been
established relating to dividends. The ratio of dividends paid
on each share of Class C Non-Voting Common Stock to each share of
Voting Common Stock, however, will be three-to-one. If dividends
are to be paid to holders of the Voting Common Stock, such per
share dividends to holders of Class A and Class B Voting Common
Stock will be equal.
<PAGE>
PART II - OTHER INFORMATION
Item 1. LEGAL PROCEEDINGS.
The registrant is not a party to any pending legal
proceedings.
Item 2. CHANGES IN SECURITIES.
Not applicable.
Item 3. DEFAULTS UPON SENIOR SECURITIES.
Not applicable.
Item 4. SUBMISSION OF MATTERS TO A VOTE OF STOCKHOLDERS.
(a) Farmer Mac's Annual Meeting of Stockholders was held on June 13, 1996.
(b) Not Applicable.
(c) (1) Election of Directors
<TABLE>
- Class A Nominees
Number of Shares
For Withheld
<S> <C> <C>
Dean 753,351 5,500
Hemingway 753,051 5,800
Mulder 752,251 6,600
Nolan, D. 751,251 7,600
Nolan, M. 759,751 8,100
</TABLE>
<TABLE>
- Class B Nominees
Number of Shares
For Withheld
<S> <C> <C>
Cirona 586,901 1,300
McCarthy 587,601 600
Nelson 588,101 100
Raines 588,001 200
Rhodes 587,501 700
</TABLE>
(2) Selection of Independent Auditors
Class A Stockholders:
<TABLE>
Number of Shares
<S> <C>
For 756,051
Against 2,000
Abstain 800
</TABLE>
Class B Stockholders:
<TABLE>
Number of Shares
<S> <C>
For 588,201
Against 0
Abstain 0
</TABLE>
(d) Not Applicable
Item 5. OTHER INFORMATION.
None.
Item 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits.
Description
* 3.1 - Title VIII of the Farm Credit Act
of 1971, as most recently amended by the Farm
Credit System Reform Act of 1996, P.L. 104-105
(Form 10-K filed March 29, 1996).
** 3.2 - Amended and restated Bylaws of the
Registrant.
+* 10.1 - Stock Option Plan (Previously filed as Exhibit
19.1 to Form 10-Q filed August 14, 1992).
__________________
* Incorporated by reference to the indicated prior filing.
** Filed herewith.
+ Management contract or compensatory plan.
<PAGE>
+* 10.1.1 - Amendment No. 1 to Stock Option Plan (Previously
filed as Exhibit 10.2 to Form 10-Q filed August 16, 1993).
+** 10.1.2 - 1996 Stock Option Plan.
+* 10.2 - Employment Agreement dated May 5, 1989 between
Henry D. Edelman and the Registrant (Previously
filed as Exhibit 10.4 to Form 10-K filed
February 14, 1990).
+* 10.2.1 - Amendment No. 1 dated January 10, 1991 to Employment
Agreement between Henry D. Edelman and the Registrant
(Previously filed as Exhibit 10.4 to Form 10-K filed
April 1, 1991).
+* 10.2.2 - Amendment to Employment Contract dated as of June 1, 1993
between Henry D. Edelman and the Registrant (Previously
filed as Exhibit 10.5 to Form 10-Q filed November 15, 1993).
+* 10.2.3 - Amendment No. 3 dated as of June 1, 1994 to Employment
Contract between Henry D. Edelman and the Registrant
(Previously filed as Exhibit 10.5 to Form 10-Q filed
November 15, 1994).
+* 10.2.4 - Amendment No. 4 dated as of February 8, 1996 to Employment
Contract between Henry D. Edelman and the Registrant
(Form 10-K filed March 29, 1996).
+** 10.2.5 - Amendment No. 5 dated as of June 13, 1996 to Employment
Contract between Henry D. Edelman and the Registrant.
+* 10.3 - Employment Agreement dated May 11, 1989 between Nancy E.
Corsiglia and the Registrant (Previously filed as Exhibit
10.5 to Form 10-K filed February 14, 1990).
+* 10.3.1 - Amendment dated December 14, 1989 to Employment Agreement
between Nancy E. Corsiglia and the Registrant (Previously
filed as Exhibit 10.5 to Form 10-K filed February 14, 1990).
+* 10.3.2 - Amendment No. 2 dated February 14, 1991 to Employment
Agreement between Nancy E. Corsiglia and the Registrant
(Previously filed as Exhibit 10.7 to Form 10-K filed
April 1, 1991).
__________________
* Incorporated by reference to the indicated prior filing.
** Filed herewith.
+ Management contract or compensatory plan.
<PAGE>
+* 10.3.3 - Amendment to Employment Contract
dated as of June 1, 1993 between Nancy E. Corsiglia
and the Registrant (Previously filed as Exhibit
10.9 to Form 10-Q filed November 15, 1993).
+* 10.3.4 - Amendment No. 4 dated June 1, 1993 to
Employment Contract between Nancy E. Corsiglia and
the Registrant (Previously filed as Exhibit 10.11
to Form 10-K filed March 30, 1994).
+* 10.3.5 - Amendment No. 5 dated as of June 1, 1994
to Employment Contract between Nancy E. Corsiglia
and the Registrant (Previously filed as Exhibit
10.12 to Form 10-Q filed August 15, 1994).
+* 10.3.6 - Amendment No. 6 dated as of June 1, 1995
to Employment Contract between Nancy E. Corsiglia
and the Registrant (Form 10-Q filed August 14,
1995).
+* 10.3.7 - Amendment No. 7 dated as of February 8,
1996 to Employment Contract between Nancy E.
Corsiglia and the Registrant (Form 10-K filed
March 29, 1996).
+**10.3.8 - Amendment No. 8 dated as of June 13,
1996 to Employment Contract between Nancy E.
Corsiglia and the Registrant.
+* 10.4 - Employment Agreement dated June 13, 1989 between
Thomas R. Clark and the Registrant (Previously
filed as Exhibit 10.6 to Form 10-K filed
April 1, 1990).
+* 10.4.1 - Amendment No. 1 dated February 14, 1991 to Employment
Agreement between Thomas R. Clark and the Registrant
(Previously filed as Exhibit 10.9 to Form 10-K filed
April 1, 1991).
+* 10.4.2 - Amendment to Employment Contract dated as of
June 1, 1993 between Thomas R. Clark and the Registrant
(Previously filed as Exhibit 10.12 to Form 10-Q filed
November 15, 1993).
+* 10.4.3 - Amendment No. 3 dated June 1, 1993 to Employment
Contract between Thomas R. Clark and the Registrant
(Previously filed as Exhibit 10.16 to Form 10-K filed
March 30, 1994).
_________________
* Incorporated by reference to the indicated prior filing.
** Filed herewith.
+ Management contract or compensatory plan.
<PAGE>
+* 10.4.4 - Amendment No. 4 dated as of June 1,
1994 to Employment Contract between Thomas R. Clark
and the Registrant (Previously filed as Exhibit
10.17 to Form 10-Q filed August 15, 1994).
+* 10.4.5 - Amendment No. 5 dated as of June 1, 1995 to Employment
Contract between Thomas R. Clark and the Registrant
(Form 10-Q filed August 14, 1995).
+* 10.4.6 - Amendment No. 6 dated as of February 8, 1996 to Employment
Contract between Thomas R. Clark and the Registrant (Form
10-K filed March 29, 1996).
+** 10.4.7 - Amendment No. 7 dated as of June 13, 1996 to Employment
Contract between Thomas R. Clark and the Registrant.
+* 10.5 - Employment Agreement dated April 29, 1994 between
Charles M. Lewis and the Registrant (Previously
filed as Exhibit 10.18 to Form 10-Q filed August 15, 1994).
+* 10.5.1 - Amendment No. 1 dated as of June 1, 1995 to Employment
Contract between Charles M. Lewis and the Registrant
(Form 10-Q filed August 14, 1995) .
+* 10.5.2 - Amendment No. 2 dated as of February 8, 1996 to
Employment Contract between Charles M. Lewis and the
Registrant.
+** 10.5.3 - Amendment No. 3 dated as of June 13, 1996 to Employment
Contract between Charles M. Lewis and the Registrant.
+* 10.6 - Employment Agreement dated October 7, 1991 between Michael
T. Bennett and the Registrant (Previously filed as Exhibit
10.16 to Form 10-K filed March 30, 1992).
+* 10.6.1 - Amendment to Employment Contract dated as of June 1, 1993
between Michael T. Bennett and the Registrant (Previously
filed as Exhibit 10.17 to Form 10-Q filed November 15, 1993).
+* 10.6.2 - Amendment No. 2 dated June 1, 1993 to Employment Contract
between Michael T. Bennett and the Registrant (Previously
filed as Exhibit 10.21 to Form 10-K filed March 30, 1994).
_______________
* Incorporated by reference to the indicated prior filing.
** Filed herewith.
+ Management contract or compensatory plan.
<PAGE>
+* 10.6.3 - Amendment No. 3 dated June 1, 1994 to Employment Contract
between Michael T. Bennett and the Registrant (Previously
filed as Exhibit 10.22 to Form 10-K filed August 15, 1994).
+* 10.6.4 - Amendment No. 4 dated as of June 1, 1995 to Employment
Contract between Michael T. Bennett and the Registrant
(Form 10-Q filed August 14, 1995).
+* 10.6.5 - Amendment No. 5 dated as of February 8, 1996 to Employment
Contract between Michael T. Bennett and the Registrant
(Form 10-K filed March 29, 1996).
+** 10.6.6 - Amendment No. 6 dated as of June 13, 1996 to Employment
Contract between Michael T. Bennett and the Registrant.
+* 10.7 - Employment Agreement dated March 15, 1993 between
Christopher A. Dunn and the Registrant (Previously
filed as Exhibit 10.17 to Form 10-Q filed May 17, 1993).
+* 10.7.1 - Amendment to Employment Contract dated as of June 1, 1993
between Christopher A. Dunn and the Registrant
(Previously filed as Exhibit 10.19 to Form 10-Q filed
November 15, 1993).
+* 10.7.2 - Amendment No. 2 dated June 1, 1993 to Employment Contract
between Christopher A. Dunn and the Registrant (Previously
filed as Exhibit 10.25 to Form 10-K filed March 30, 1994).
+* 10.7.3 - Amendment No. 3 dated as of June 1, 1994 to Employment
Contract between Christopher A. Dunn and the Registrant
(Previously filed as Exhibit 10.26 to Form 10-Q filed
August 15, 1994).
+* 10.7.4 - Amendment No. 4 dated as of June 1, 1995 to Employment
Contract between Christopher A. Dunn and the Registrant
(Form 10-Q filed August 14, 1995).
+* 10.7.5 - Amendment No. 5 dated as of February 8, 1996 to
Employment Contract between Christopher A. Dunn and the
Registrant (Form 10-K filed March 29, 1996).
+** 10.7.6 - Amendment No. 6 dated as of June 13, 1996 to Employment
Contract between Christopher A. Dunn and the Registrant.
________________
* Incorporated by reference to the indicated prior filing.
** Filed herewith.
+ Management contract or compensatory plan.
<PAGE>
* 10.8 - Lease Agreement, dated September 30, 1991 between
919 Eighteenth Street, N.W. Associates Limited
Partnership and the Registrant (Previously
filed as Exhibit 10.20 to Form 10-K filed March 30,
1992).
* 10.9 - Strategic Alliance Agreement, dated November 15, 1994
between Western Farm Credit Bank and the Registrant,
as amended January 1, 1995 (Previously filed as
Exhibit 10.28 to Form 10-K filed March 31, 1995).
* 10.9.1 - Amendment No. 2 dated as of December 15, 1995 to Strategic
Alliance Agreement between Western Farm Credit Bank and
the Registrant (Form 10-K filed March 29, 1996).
* 10.9.2 - Amendment No. 3 dated as of March 15, 1996 to Strategic
Alliance Agreement between Western Farm Credit Bank and
the Registrant.
* 21 - Subsidiaries.
21.1 - Farmer Mac Mortgage Securities Corporation, a Delaware
Corporation.
21.2 - Farmer Mac Acceptance Corporation, a Delaware Corporation.
* 99.1 Map of U.S. Department of Agriculture (USDA) Regions
(Previously filed as Exhibit 1.1 to Form 10-K filed
April 1, 1991).
(b) Reports on Form 8-K.
The Registrant has not filed any reports on Form 8-K during
the quarter ended June 30, 1996.
________________
* Incorporated by reference to the indicated prior filing.
** Filed herewith.
+ Management contract or compensatory plan.
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the Registrant has duly caused
this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
FEDERAL AGRICULTURAL MORTGAGE CORPORATION
August 14, 1996
By: /s/ Henry D. Edelman
Henry D. Edelman
President and Chief Executive Officer
(Principal Executive Officer)
/s/ Nancy E. Corsiglia
Nancy E. Corsiglia
Vice President - Treasurer and Chief
Financial Officer
(Principal Financial Officer)
<PAGE>
Securities and Exchange Commission
Washington, D.C. 20549
Exhibits
to
Form 10-Q
under
The Securities Exchange Act of 1934
Federal Agricultural Mortgage Corporation
Exhibit Description
** 3.2 - Amended and restated Bylaws of the Registrant.
+** 10.1.2 - 1996 Stock Option Plan.
+** 10.2.5 - Amendment No. 5 dated as of June 13, 1996 to Employment
Contract between Henry D. Edelman and the Registrant.
+** 10.3.8 - Amendment No. 8 dated as of June 13, 1996 to Employment
Contract between Nancy E. Corsiglia and the Registrant.
+** 10.4.7 - Amendment No. 7 dated as of June 13, 1996 to Employment
Contract between Thomas R. Clark and the Registrant.
+** 10.5.3 - Amendment No. 3 dated as of June 13, 1996 to Employment
Contract between Charles M. Lewis and the Registrant.
+** 10.6.6 - Amendment No. 6 dated as of June 13, 1996 to Employment
Contract between Michael T. Bennett and the Registrant.
+** 10.7.6 - Amendment No. 6 dated as of June 13, 1996 to Employment
Contract between Christopher A. Dunn and the Registrant.
________________
** Filed herewith.
+ Management contract or compensatory plan.
<PAGE>
BY-LAWS OF THE
FEDERAL AGRICULTURAL MORTGAGE CORPORATION
("FARMER MAC")
as amended by the Board of Directors
on May 11, 1995
<PAGE>
Table of Contents
ARTICLE I
NAME AND LOCATION OF OFFICES
Section 1. Name..................................... 1
Section 2. Principal Office and Other Offices........1
Section 3. Seal......................................1
Section 4. Service of Process........................1
Section 5. Fiscal Year...............................1
ARTICLE II
PURPOSES
Section 1. Statutory Purposes........................1
Section 2. Ancillary Purposes........................2
ARTICLE III
OFFICERS AND EMPLOYEES
Section 1. Number and Type...........................2
Section 2. Appointment and Confirmation..............2
Section 3. Removal...................................2
Section 4. Vacancies.................................2
Section 5. The President.............................3
Section 6. The Secretary.............................3
Section 7. The Treasurer.............................3
Section 8. The Controller............................3
Section 9. Employee Conduct..........................4
Section 10. Outside or Private Employment.............4
ARTICLE IV
BOARD OF DIRECTORS
Section 1. Powers....................................4
Section 2. Number and Type of Directors..............5
Section 3. Meetings and Waiver of Notice.............6
Section 4. Meetings by Telephone.....................6
Section 5. Quorum....................................6
Section 6. Action Without a Meeting..................6
Section 7. Compensation..............................7
Section 8. Chairman and Vice Chairman................7
Section 9. Standing Committees.......................7
(a) Audit Committee......................7
(b) Compensation Committee...............8
(c) Executive Committee .................8
(d) Finance Committee....................9
(e) Program Development Committee.......10
(f) Public Policy Committee.............10
Section 10. Ad Hoc Committees........................10
ARTICLE V
SHAREHOLDERS
Section 1. Special Meeting..........................10
Section 2. Annual Meeting...........................11
Section 3. Notice...................................11
Section 4. Waiver of Notice.........................11
Section 5. Record Date..............................11
Section 6. Voting Lists.............................12
Section 7. Quorum...................................12
Section 8. Proxies..................................12
Section 9. Organization.............................13
Section 10. Voting of Shares.........................13
Section 11. Inspectors of Votes......................14
ARTICLE VI
SHARES OF STOCK
Section 1. Issuance and Conditions..................14
Section 2. Common Stock.............................14
Section 3. Redemption...............................15
Section 4. Dividends on Voting Common Stock and
Non-Voting Common Stock..................15
Section 5. Preferred Stock..........................15
Section 6. Dividends, Redemption, Conversion of
Preferred Shares.........................16
Section 7. Preference on Liquidation................16
Section 8. Purchase of Own Shares...................16
Section 9. Consideration for Shares.................16
Section 10. Stated Capital...........................16
Section 11. No Preemptive Rights.....................17
Section 12. Liability of Shareholders................17
ARTICLE VII
CERTIFICATES FOR SHARES AND THEIR TRANSFER
Section 1. Certificates.............................17
Section 2. Contents.................................18
Section 3. Transfer.................................18
Section 4. Records..................................19
ARTICLE VIII
INDEMNIFICATION
Section 1. Authorization............................19
Section 2. Procedure................................20
Section 3. Advance Payments.........................20
Section 4. Other Rights to Indemnification..........20
Section 5. Indemnification Insurance................20
ARTICLE IX
CONTRACTS, LOANS, CHECKS, DEPOSITS AND INVESTMENTS
Section 1. Contracts................................21
Section 2. Loans....................................21
Section 3. Checks, Drafts, etc......................21
Section 4. Deposits.................................21
Section 5. Investments..............................21
ARTICLE X
FACSIMILE SIGNATURES.................21
ARTICLE XI
AMENDMENTS....................22
<PAGE>
ARTICLE I
NAME AND LOCATION OF OFFICES
Section 1. Name
The Corporation shall do business as the Federal
Agricultural Mortgage Corporation.
Section 2. Principal Office and Other Offices
The principal office of the Corporation shall be
located in Washington, D.C. The Corporation may establish
ther offices in such other places, within or without the
District of Columbia, as the Board of Directors shall, from
time to time, deem useful for the conduct of the
Corporation's business.
Section 3. Seal
The seal of the Corporation shall be of such design as
shall be approved and adopted from time to time by the Board
of Directors, and may be affixed to any document by
impression, by printing, by rubber stamp, or otherwise.
Section 4. Service of Process
The Corporate Secretary or any Assistant Secretary of
the Corporation shall be agents of the Corporation upon whom
any process, notice or demand required or permitted by law
to be served upon the Corporation may be served.
Section 5. Fiscal Year
The fiscal year of the Corporation shall end on the
thirty-first day of December of each year.
ARTICLE II
PURPOSES
Section 1. Statutory Purposes
The Corporation is organized pursuant to its governing
statute, Title VIII of the Farm Credit Act of 1971, as
amended, to provide a secondary market for agricultural real
estate mortgage loans and to enhance the ability of
individuals in small rural communities to obtain financing
for moderate-priced homes and to undertake such other
activities authorized by such Act as may be necessary
and appropriate to further the availability of funds
for agricultural real estate mortgage loans and housing
in small rural communities.
Section 2. Ancillary Purposes
The Corporation is further organized to engage in such
other related activities that are not prohibited and as the
Board of Directors shall from time to time determine to be
in the furtherance of its statutory purposes.
ARTICLE III
OFFICERS AND EMPLOYEES
Section 1. Number and Type
The officers of the Corporation shall be a President,
one or more Vice Presidents (the number thereof to be
determined by the Board of Directors), a Secretary, a
Treasurer, and a Controller, each of whom shall be appointed
by the Chairman of the Board of Directors subject to
confirmation by resolution of the Board of Directors. Such
other officers and assistant officers as may be deemed
necessary may be appointed by the Chairman subject to
confirmation by resolution of the Board of Directors. Any of
the above offices may be held by the same person, except the
offices of President and Secretary.
Section 2. Appointment and Confirmation
The initial officers of the Corporation shall be
appointed and confirmed at such time as may be appropriate.
Thereafter, the officers shall be appointed and confirmed
annually at the first meeting of the Board of Directors held
after each annual meeting of the shareholders. If the
selection of officers is not held at such meeting, such
selection shall be held as soon thereafter as practicable.
Each officer shall hold office until his successor shall
have been duly appointed and confirmed or until his death or
until he shall resign or shall have been removed in the
manner hereinafter provided.
Section 3. Removal
Any officer may be removed by a majority of the Board
of Directors, whenever in its judgment the best interests of
the Corporation would be served thereby, but such removal
shall be without prejudice to the contract rights, if any,
of the persons so removed. Appointment or confirmation of an
officer shall not of itself create contract rights.
Section 4. Vacancies
A vacancy in an office because of death, resignation,
removal, disqualification or otherwise, may be filled by the
Chairman of the Board of Directors, subject to confirmation
by the Board of Directors at the meeting next following the
appointment, for the unexpired portion of the term.
Section 5. The President
The President shall be the principal executive officer
of the Corporation and, subject to the control of the Board
of Directors, shall in general supervise and control all of
the business and affairs of the Corporation. He may sign,
singly or with the Secretary or any other proper officer of
the Corporation authorized by the Board of Directors,
certificates for shares of the Corporation, any deeds,
mortgages, bonds, contracts, or other instruments which the
Board of Directors has authorized to be executed, except
where the signing and execution thereof shall be expressly
delegated by the Board of Directors to some other officer or
agent of the Corporation, or shall be required to be
otherwise signed or executed, and in general shall perform
all duties incident to the office of President and such
other duties as may be prescribed by the Board of Directors
from time to time.
Section 6. The Secretary
The Secretary shall: (a) keep the minutes of the
shareholders' and of the Board of Directors' meetings in one
or more books provided for that purpose; (b) see that all
notices are duly given in accordance with the provisions of
these By-laws; (c) be the custodian of the corporate records
and of the seal of the Corporation and see that the Seal of
the Corporation is affixed to all documents, the execution
of which on behalf of the Corporation under its seal is duly
authorized; (d) keep a register of the post office address
of each shareholder which shall be furnished to the
Secretary by such shareholder; (e) sign with the President,
certificates for shares of the Corporation, the issuance of
which shall have been authorized by resolution of the Board
of Directors; (f) have general control of the stock transfer
books of the Corporation; and (g) in general, perform all
duties incident to the office of Secretary and such other
duties as from time to time may be assigned to him by the
President or by the Board of Directors.
Section 7. The Treasurer
The Treasurer shall: (a) have charge and custody of and
be responsible for all funds and securities of the
Corporation, receive and give receipts for monies due and
payable to the Corporation from any source whatsoever, and
deposit all such monies in the name of the Corporation in
such banks, trust companies or other depositories as shall
be selected in accordance with a resolution of the Board of
Directors; and (b) in general, perform all of the duties
incident to the office of Treasurer and such other duties as
from time to time may be assigned to him by the President or
by the Board of Directors.
Section 8. The Controller
The Controller shall: (a) keep full and accurate
accounts of all assets, liabilities, commitments, receipts,
disbursements, and other financial transactions of the
Corporation; (b) certify vouchers for payment by the
Treasurer or his designee, and designate, with the written
concurrence of the Chairman of the Board, such other
officers, agents, and employees, severally, who may so
certify; and (c) in general, perform all the duties
ordinarily incident to the office of Controller and such
other duties as may be assigned to him by the Board of
Directors or by the Chairman of the Board.
Section 9. Employee Conduct
No officer or employee shall engage, directly or
indirectly, in any personal business transaction or private
arrangement for personal profit which arises from or is
based upon his official position or authority or upon
confidential information which he gains by reason of such
position or authority, and he shall reasonably restrict his
personal business affairs so as to avoid conflicts of
interest with his official duties. No officer or employee
shall divulge confidential information to any unauthorized
person, or release any such information in advance of
authorization for its release, nor shall he accept, directly
or indirectly, any valuable gift favor or service from any
person with whom he transacts business on behalf of the
Corporation.
Section 10. Outside Private Employment
No officer or employee shall have any outside or
private employment or affiliation with any firm or
organization incompatible with his concurrent employment by
the Corporation and he shall not accept or perform any
outside or private employment which the President of the
Corporation determines will interfere with the efficient
performance of his official duties. Any officer or employee
who intends to perform services for compensation or to
engage in any business shall report his intention to do so
to the President of the Corporation prior to such acceptance
or performance.
ARTICLE IV
BOARD OF DIRECTORS
Section 1. Powers
Except as otherwise provided in these By-Laws, the
powers of the Corporation shall be exercised by the Board
of Directors, which shall have all powers granted to it by
the Corporation's governing statute, as may be amended from
time to time, and such other powers including, but not
limited to, the power:
a. to determine the general policies
that shall govern the operations of the Corporation;
b. to issue stock in the manner provided
in Section 8.4 of TitleVIII of the Farm Credit Act of
1971, as amended;
c. to adopt, alter and use a corporate seal, which
shall be judicially noted;
d. to provide for a president, one or more
vice presidents, secretary, treasurer, and such other
officers, employees and agents, as may be necessary and
define their duties and compensation levels, all without
regard to title 5, United States Code, and require
surety bonds or make other provisions against losses
occasioned by acts of the aforementioned persons;
e. to provide guarantees in the manner provided
under Section 8.6 of Title VIII of the Farm Credit Act
of 1971, as amended;
f. to have succession until dissolved by law
enacted by the Congress;
g. to prescribe such standards as may be
necessary to carry out Title VIII of the Farm Credit
Act of 1971, as amended;
h. to enter into contracts and make payments
with respect to the contracts;
i. to sue and be sued in its corporate capacity
and to complain and defend in any action brought by or
against the Corporation in any state or federal court of
competent jurisdiction;
j. to make and perform contracts, agreements,
and commitments with persons and entities both inside and
outside the Farm Credit System;
k. to acquire, hold, lease, mortgage or dispose
of, at public or private sale, real and personal property,
purchase or sell any securities or obligations, and otherwise
exercise all the usual incidents of ownership of property
l. to conduct its business, carry on its operations,
and have officers and exercise the power granted by the
governing statute in any state without regard to any
qualification or similar statute in any such state;
m. to accept gifts or donations of services, of
property, real, personal or mixed, tangible or intangible;
and
n. to exercise such other incidental powers as are
necessary to carry out the powers, duties, and functions
of the Corporation in accordance with the governing statute.
Section 2. Number and Type of Directors
The Board of Directors shall consist of those directors
appointed or elected as provided in Section 8.2 of Title
VIII of the Farm Credit Act of 1971, as amended.
Section 3. Meetings and Waiver of Notice
The Board of Directors shall meet at the call of the
Chairman or a majority of its members. Notice shall be given
to each member by the Secretary at the direction of the
calling authority. Such notice shall be by letter, telegram,
cable, or radiogram delivered for transmission not later
than during the third day immediately preceding the day of
the meeting or by word of mouth, telephone, or radio phone,
received not later than during the second day immediately
preceding the day of the meeting. Notice of any such
meeting may be waived in writing signed by the person or
persons entitled thereto either before or after the time of
the meeting. Neither the business to be transacted at, nor
the purpose of, any meeting of the Board of Directors need
be specified in the notice or waiver of notice of the
meeting.
Section 4. Meetings by Telephone
Any meeting of the Board of Directors or any meeting of
a Board committee may be held with the members of the Board
or such committee participating in such meeting by telephone
or by any other means of communication by which all such
members participating in the meeting are able to speak to
and hear one another.
Section 5. Quorum
The presence, in person or otherwise, in accordance
with Section 6 of this Article, of eight of the then
incumbent members of the Board of Directors or of a majority
of the then incumbent members of a Board committee, as
applicable, at the time of any meeting of the Board or such
committee, shall constitute a quorum for the transaction of
business. The act of the majority of such members present
at a meeting at which a quorum is present shall be the act
of the Board of Directors or committee, as applicable,unless
the act of a greater number is required by these By-Laws.
Members may not be represented by proxy at any meeting of
the Board of Directors or committee thereof.
Section 6. Action Without a Meeting
Any action required to be taken by the Board of
Directors at a meeting, or by a committee of the Board at a
meeting can be taken without a meeting, if a consent in
writing, setting forth the actions so taken, is later signed
by a majority of the directors, or a majority of the members
of the committee, as the case may be. Such consent shall
have the same effect as a majority vote of the Board of
Directors or committee, as the case may be. Written notice
of any action taken pursuant to this section by a majority
of the directors, or members of a committee, as the case may
be, shall, within 10 days of such action, be given to all
directors or members of a committee not consenting to the
action.
Section 7. Compensation
Each director shall be paid such compensation as may be
fixed from time to time by resolution of the Board of
Directors, and each director shall also be reimbursed for
his or her travel and subsistence expenses incurred while
attending meetings of the Board of Directors or committees
thereof.
Section 8. Chairman and Vice Chairman
Under the authority of the Corporation's governing
statute, the President of the United States shall designate
one director from among those directors appointed by the
President as provided in Section 8.2 of the Farm Credit Act
of 1971, as amended, to be Chairman of the Board of
Directors. The Chairman shall preside over meetings of the
Board of Directors.
The Board of Directors shall select a Vice Chairman
from among the directors appointed by the President of the
United States who shall have all the rights, duties and
obligations of the Chairman at any time when the incumbent
Chairman is absent, unable or unwilling so to act, and at
any time when there is a vacancy in the office of Chairman.
The Vice Chairman shall serve at the pleasure of the Board
and shall be selected no less frequently than annually for a
term expiring on December 31 of each year.
Section 9. Standing Committees
The Standing Committees described in this Section shall
have such responsibilities and authority as are set forth
herein, together with such other responsibilities and
authority as may from time to time be provided in
resolutions adopted by the Board of Directors. The Board of
Directors shall designate members of the Standing Committees
from among its members.
(a) Audit Committee
The Audit Committee shall select and engage independent
accountants to audit the books, records and accounts of the
Corporation and its subsidiaries, if any, and to perform
such other duties as the Committee may from time to time
prescribe. The Committee shall review the scope of audits as
recommended by the public accountants to ensure that the
recommended scope is sufficiently comprehensive. The Audit
Committee's selection of accountants shall be made annually
in advance of the Annual Meeting of Stockholders and shall
be submitted for ratification or rejection at such meeting.
The Audit Committee shall receive a special report from
the independent accountants, prior to the public accountants'
report on the published financial statements. The special report
shall, among other things, point out and describe each material
item affecting the financial statements of the Corporation which
might in the opinion of the independent public accountants
receive, under generally accepted accounting principles,
treatment varying from that proposed for such statements.
The Committee shall decide in its discretion upon the treatment
to be accorded such items and shall take such other action in
respect of the special report as the Committee may deem
appropriate. A copy of the special report shall be transmitted
to the Compensation Committee, together with the Audit
Committee's decision.
(b) Compensation Committee
The Compensation Committee shall make recommendations
to the Board on the salaries and benefit plans of all
corporate directors and officers. The Committee shall
recommend a framework to the Board for all compensation
plans and shall have authority to act within the framework
approved by the Board. The Committee shall have exclusive
jurisdiction on behalf of the Corporation to make
recommendations to the full Board to approve, disapprove,
modify or amend all plans to compensate employees eligible
for incentive compensation.
The Compensation Committee shall review and approve,
prior to implementation, any employee benefit plan and any
amendment or modification thereof submitted to the Board to
the extent such plan or amendment or modification affects
employees under its jurisdiction.
(c) Executive Committee
The Executive Committee shall, during the intervals
between meetings of the Board, have and may exercise the
powers of the Board, other than those assigned to the Audit
and Compensation Committees, and except that it shall not
have the authority to take any of the following actions:
* the submission to stockholders of any action requiring
stockholders' authorization;
* the filling of vacancies on the Board of Directors or
on the Executive Committee;
* the fixing of compensation of directors for serving on
the Board or on the Executive Committee;
* the removal of any director, the President or any Vice
President, except that vacancies in established
management positions may be filled subject to
ratification by the Board of Directors;
* the amendment or repeal of the By-Laws or the adoption
of new by-laws;
* the amendment or repeal of any resolution of the Board
which, by its terms, is not so amendable or repealable;
* the declaration of dividends; and
any action which the Chairman or Vice Chairman of the
Board of Directors (in the event that the Vice Chairman
is the Chairman of the Board due to the absence,
inability or unwillingness of the Chairman so to act)
the President shall, by written instrument filed with
the Secretary, designate as a matter which should be
considered by the Board of Directors; and it is further
The Executive Committee shall include the Chairman of
the Board (or the Vice Chairman, who shall be deemed a
member of the Committee at any time when the incumbent
Chairman is absent, unable or unwilling so to act), who
shall be the Chairman of the Committee, and one
representative from each of the Corporation's two elected
classes of directors. The designation of such Committee and
the delegation thereto of authority shall not relieve any
director of any duty he or she owes to the Corporation. The
Executive Committee shall meet at the call of its chairman
or a majority of its members and all three members of the
Committee shall constitute a quorum. The action of the
majority of the members of the Committee present at a duly
convened meeting shall be the action of the Committee.
Members of the Committee may not be represented by proxy
at any meeting of the Committee. In connection with each
regular meeting of the Board of Directors, the minutes of
all meetings of the Executive Committee since the last
meeting of the Board shall be distributed to the Board, and
the Board shall take such action, if any, as the Board may
deem appropriate, to approve, alter or rescind actions, if
any, previously taken by the Committee, provided that rights
or acts of third parties vested or taken in reliance on such
action prior to any such alteration or rescission shall not
be adversely affected thereby.
(d) Finance Committee
The Finance Committee shall be responsible for determining
the financial policies of the Corporation and managing the
Corporation's financial affairs, except those financial policies
and affairs that are assigned to the Audit and Compensation
Committees.
Board, who shall be chairman of the Committee. During the
intervals between meetings of the Board, the Committee shall
have and may exercise the powers of the Board, except those
assigned to the Audit and Compensation Committees, in the
determination of the financial policies of the Corporation
and in the management of the financial affairs of the
Corporation.
The guarantee fee policies of the Corporation shall be
reviewed and approved by the Finance Committee and
recommended to the Board for its approval. All capital
expenditures of the Corporation shall be approved by the
Committee, except that it may authorize the President to
approve expenditures which do not involve the Corporation in
a new line of business. All action taken by the Finance
Committee shall be reported to the Board and shall be
subject to revision by the Board, provided that no acts or
rights of third parties shall be affected thereby.
(e) Program Development Committee
The Program Development Committee shall have primary
responsibility for reviewing and approving all policy
matters relating to changes, additions or deletions to the
Securities Guide, including the forms and appendices thereto
and any other forms or documents used in the Corporation's
programs. The Committee shall make recommendations to the
Board with respect to commencement of new programs and
modification or discontinuance of existing programs.
(f) Public Policy Committee
The Public Policy Committee shall consider matters of
public policy referred to it by the Board or the Chairman
including: (i) the Corporation's relationship with and
policies regarding Borrowers; (ii) the Corporation's
relationship with and policies regarding Congress and
governmental agencies and instrumentalities; and (iii)
matters which generate actual or apparent conflicts of
interest between the Corporation and one or more of its
directors. The Committee shall report the outcome of its
evaluation of matters under preceding clause (iii)
within a reasonable time after reference is made.
Section 10. Ad Hoc Committees
The Board of Directors may, by resolution adopted by a
majority of its members, designate from among its members
one or more ad hoc committees, each of which to the extent
provided in the resolution and in these By-Laws shall have
and may exercise all the authority of the Board of
Directors. No such ad hoc committee shall have the authority
of the Board of Directors in reference to any powers
reserved to the full Board of Directors by the resolution or
these By-Laws.
ARTICLE V
SHAREHOLDERS
Section 1. Special Meeting
Special meetings of the shareholders shall be held upon
the call of either the Chairman or a majority of the
directors of the Corporation, and shall be called by the
Chairman upon the written request of holders of at least
one-third of the shares of the Corporation having voting
power. A special meeting may be called for any purpose or
purposes for which shareholders may legally meet, and shall
be held, within or without the District of Columbia, at such
place as may be determined by the Chairman or a majority of
the directors of the Corporation, whichever shall call the
meeting.
Section 2. Annual Meeting
An annual meeting of the shareholders shall be held
each year at such date and at such time as designated by the
Board of Directors. At the meeting, the shareholders
entitled to vote shall elect directors and transact such
other business as may properly be brought before the
meeting.
Section 3. Notice
Written or printed notice stating the place, day and
hour of any meeting and, in the case of a special meeting,
the purpose for which the meeting is called, shall be
delivered not less than 10 nor more than 50 days before the
date of the meeting, either personally or by mail, by or at
the direction of the Chairman of the Board, or the
Secretary, or the officer or persons calling the meeting, to
each shareholder of record entitled to vote at such meeting.
If mailed, such notice shall be deemed to be delivered
when deposited in the United States mail with postage
thereon prepaid, addressed to the shareholder at his address
as it appears on the stock transfer books of the Corporation
or such other address as the shareholder has in writing
instructed the Secretary.
Section 4. Waiver of Notice
Attendance by a shareholder at a shareholders' meeting,
whether in person or by proxy, without objection to the
notice or lack thereof, shall constitute a waiver of notice
of the meeting. Any shareholder may, either before or after
the time of the meeting, execute a waiver of notice of such
meeting.
Section 5. Record Date
For the purpose of determining shareholders entitled to
notice or to vote at any meeting of shareholders or any
adjournment thereof, or shareholders entitled to receive
payment of any dividend, or in order to make a determination
of shareholders for any other proper purpose, the Board of
Directors shall fix in advance a date as the record date
for any such determination of shareholders, such date in any
case to be not more than 60 days, in the case of a meeting
of shareholders, not less than 10 days prior to the date on
which the particular action requiring such determination of
shareholders is to be taken. If the Board of Directors fails
to designate such a date, the date on which notice of the
meeting is mailed or the date on which the resolution of the
Board of Directors declaring such dividends is adopted, as
the case may be, shall be the record date for such
determination of shareholders. When a date is set for the
determination of shareholders entitled to vote at any
meeting of shareholders, such determination shall apply to
any adjournment thereof.
Section 6. Voting Lists
The officer or agent having charge of the stock
transfer books for shares of the Corporation shall make a
complete record of the shareholders entitled to vote at each
meeting of the shareholders or any adjournment thereof,
arranged in alphabetical order, with the address and the
number of shares held by each. Such officer or agent shall
also prepare two separate lists of such shareholders, one
indicating in alphabetical order which shareholders are
financial institutions not members of the Farm Credit System
and another indicating in alphabetical order which
shareholders are member institutions of the Farm Credit
System. Such records shall be produced and kept open at the
time and place of the meeting and shall be subject to
nspection by any shareholder during the whole time of the
meeting for the purposes thereof.
Section 7. Quorum
A majority of the outstanding shares of the Corporation
entitled to vote, represented in person or by proxy, shall
constitute a quorum at a meeting of shareholders. If less
than a majority of the outstanding shares are represented at
a meeting, a majority of the shares so represented may
adjourn a meeting from time to time without further
notice. At such adjourned meeting at which a quorum shall be
present or represented, any business may be transacted which
might have been transacted at the meeting as originally
notified. The shareholders present at a duly organized
meeting may continue to transact business until adjournment,
notwithstanding the withdrawal of enough shareholders to
leave less than a quorum. Shares of its own stock belonging
to the Corporation shall not be counted in determining the
total number of outstanding shares at any given time.
Section 8. Proxies
At all meetings of shareholders, a shareholder entitled
to vote may vote by proxy executed in writing by the
shareholder or by its duly authorized attorney in fact.
Shares standing in the name of another corporation may be
voted by such officer, agent or proxy as the by-laws of such
corporation may prescribe, or, in the absence of such
provisions, as the board of directors of such corporation
may determine. All proxies shall be filed with the Secretary
of the Corporation before or at the time of the meeting, and
shall be revocable, if such revocation be in writing, until
exercised. No proxy shall be valid after eleven months from
the date of its executions unless otherwise provided in the
proxy.
The Board of Directors may solicit proxies from
shareholders to be voted by such person or persons as shall
be designated by resolution of the Board of Directors. The
Corporation shall assume the expense of solicitations
undertaken by the Board.
Any solicitation of proxies by the Corporation shall
contain the names of all persons the Corporation proposes to
nominate for directorships to be filled at the next meeting,
their business addresses, and a brief summary of their
business experience during the last five years. Each proxy
solicitation shall be accompanied by a copy of the most
recent annual report of the Corporation which report, to the
satisfaction of the Board of Directors, shall reasonably
represent the financial situation of the Corporation as of
the time of its preparation.
If any shareholder entitled to vote at a meeting of
shareholders shall seek a list of shareholders for the
purpose of soliciting proxies from any other shareholders,
the Corporation may, at its option, either (a) provide the
soliciting shareholder with a complete and current list
containing the names of all shareholders of the Corporation
entitled to vote at such meeting; and their addresses as
they appear on the transfer books of the Corporation; or (b)
mail such proxy solicitations on behalf of the soliciting
shareholders, upon being furnished the material to be mailed
and the reasonable cost of the mailing.
Section 9. Organization
Meetings of the shareholders shall be presided over by
the Chairman of the Board of Directors. The Secretary of the
Corporation shall act as secretary of every meeting and, if
the Secretary is not present, the meeting shall choose any
person present to act as secretary of the meeting.
Section 10. Voting of Shares
Except as provided in this Section, at every meeting of
the shareholders, every holder of common stock entitled to
vote on a matter coming before such meeting shall be
entitled to one vote for each share of common stock
registered in its name on the stock transfer books of the
Corporation at the close of the record date.
At each election of directors, the Chairman of the
meeting shall inform the shareholders present of the persons
appointed by the President of the United States to be
the appointed directors of the Corporation. The shareholders
entitled to vote for the election of directors which are
institutions of the Farm Credit System shall constitute a
single class and shall then proceed to elect five directors.
Following the election of directors by shareholders which
are institutions of the Farm Credit System, the shareholders
entitled to vote for the election of directors which are
financial institutions and are not institutions of the Farm
Credit System shall constitute a single class and shall
proceed to elect five directors.
Every holder of common stock entitled to vote for the
election of directors shall have the right to cast the
number of votes that is equal to the product of the number
of shares owned by it multiplied by the number of directors
to be elected of the class for which it may vote, and it may
cast all such votes for one person or may distribute them
evenly or unevenly among any number of persons not greater
than the number of such directors of such class to be
elected, at its option. Shares of its own stock belonging to
the Corporation shall not be eligible to vote on any matter.
Section 11. Inspectors of Votes
The Board of Directors, in advance of any meeting of
shareholders, may appoint one or more Inspectors of Votes to
act at the meeting or any adjournment thereof. In case any
person so appointed resigns or fails to act, the vacancy may
be filled by appointment by the Chairman of the meeting. The
Inspectors of Votes shall determine all questions concerning
the qualification of voters, the validity of proxies, the
acceptance or rejection of votes and, with respect to each
vote by ballot, shall collect and count the ballots and
report in writing to the secretary of the meeting the result
of the vote. The Inspectors of Votes need not be
shareholders of the Corporation. No person who is an officer
or director of the Corporation, or who is a candidate for
election as a director, shall be eligible to be an Inspector
of Votes.
ARTICLE VI
SHARES OF STOCK
Section 1. Issuance and Conditions
The Board of Directors shall have the power in
accordance with the provisions of the governing statute to
authorize the issuance of voting common, non-voting common
and preferred shares of stock. The Board of Directors may
by resolution impose a stock purchase requirement as a
prerequisite to participation in any program of the
Corporation. Any stock purchase requirement shall not apply
to any participant who is prohibited by law from acquiring
stock of the Corporation, provided such participant
undertakes to make such purchase when such legal
restrictions are alleviated, or to such otherwise eligible
participants as the Board may by resolution provide.
Section 2. Common Stock
The Corporation shall have voting common stock having
such par value as may be fixed by the Board of Directors,
which may only be issued to institutions which are
authorized to be issued such shares pursuant to Title VIII
of the Farm Credit Act of 1971, as amended.
The Corporation may issue non-voting common stock
having such par value as may be fixed by the Board of
Directors, which may be issued without limitations as to the
status of the holders thereof.
Except as otherwise provided in these By-Laws, the
powers, preferences and relative and other special rights
and the qualifications, limitations and restrictions
applicable to all shares of common stock, whether voting
common stock or non-voting common stock, shall be identical
in every respect.
Except as provided in this Section, the voting common
stock and the non-voting common stock of the Corporation
shall be fully transferable, except that, as to the
Corporation, they shall be transferred only on the books of
the Corporation.
Section 3. Redemption
Whenever the Corporation shall determine that any
shares of the voting common stock of the Corporation are
held by a person, including a partnership, joint venture,
trust, corporation or any other association, not eligible to
acquire such shares under the provisions of Title VIII of
the Farm Credit Act of 1971, as amended, the Corporation
shall notify such person in writing that such shares are to
be disposed of to a person eligible to acquire such shares
within a period of not more than 30 days. If the
Corporation determines that the shares have not been
transferred within 30 days of such notice, the Corporation
may redeem such shares at the lesser of the fair market
value thereof or the book value thereof at the date
established for such redemption.
The power to redeem voting common stock found to be
held by ineligible persons granted by this Section shall not
be deemed to limit the right of the Corporation, at its
discretion, to pursue any other lawful remedy against such
ineligible person.
Section 4. Dividends on Voting Common Stock and
Non-Voting Common Stock
To the extent that income is earned and realized, the
Board of Directors may from time to time declare and the
Corporation shall pay, dividends on the voting common stock
and the non-voting common stock, except that no such
dividends shall be payable with respect to any share that
has been called for redemption after the date established
for such redemption. No dividend shall be declared or paid
on any share of voting common stock or non-voting common
stock at any time when any dividend is due on the shares of
preferred stock and has not been paid.
The ratio of any dividends paid on the non-voting
common stock to any dividends paid on the voting common
stock shall be three-to-one. Dividends to the holders of the
non-voting common stock and the voting common stock are to
be paid concurrently. Such ratio may be decreased only by
the affirmative vote of the holders of two-thirds of
the outstanding shares of the non-voting common stock.
Section 5. Preferred Stock
The Corporation may issue shares of preferred stock
having such par value, and such other powers, preferences
and relative and other special rights, and qualifications,
limitations and restrictions applicable thereto, as may be
fixed by the Board of Directors. Such shares shall be
freely transferable, except that, as to the Corporation,
such shares shall be transferred only on the books of the
Corporation.
Section 6. Dividends, Redemption, Conversion of
Preferred Shares
The holders of the preferred shares shall be entitled
to such rate of cumulative dividends, and such shares shall
be subject to such redemption or conversion provisions,
as may be provided for at the time of issuance. Such
dividends shall be paid out of the net income of the
Corporation, to the extent earned and realized.
Section 7. Preference on Liquidation
In the event of any liquidation, dissolution, or
winding up of the Corporation's business,
(a) the holders of shares of preferred
stock shall be paid in full at par value thereof,
plus all accrued dividends, before the holders of
the voting common stock and non-voting common
stock receive any payment; and
(b) the ratio of any distributions to
the holders of non-voting common stock to any
distributions to the holders of voting common stock
shall be three-to-one per share. Such ratio may be
decreased only by the affirmative vote of the holders of
two-thirds of the outstanding shares of the non-voting
common stock.
Section 8. Purchase of Own Shares
The Corporation shall have the right, pursuant to
resolution by the Board of Directors, to purchase, take,
receive or otherwise acquire its own shares, but purchases,
whether direct or indirect, shall be made only to the extent
of unreserved and unrestricted earned or capital surplus
available therefor.
Section 9. Consideration for Shares
The Corporation shall issue shares of stock for such
consideration, expressed in dollars, but not less than the
par value thereof, as shall be fixed from time to time by
the Board of Directors. That part of the surplus of the
Corporation which is transferred to stated capital upon
issuance of shares as a share dividend shall be deemed to be
the consideration for the shares so issued.
The consideration for the issuance of shares may be
paid, in whole or in part, in cash or other property
acceptable to the Board of Directors, except that a
promissory note shall not constitute payment or partial
payment for the issuance of shares of the Corporation.
Section 10. Stated Capital
The consideration received upon the issuance of any
share of stock shall constitute stated capital to the extent
of the par value of such shares and the excess, if any, of
such consideration shall constitute capital surplus. The
stated capital of the Corporation may be increased from time
to time by resolution of the Board of Directors directing
that all or a part of the surplus of the Corporation be
transferred to stated capital. The Board of Directors may
direct that the amount of the surplus so transferred shall
be deemed to be stated capital in respect of any designated
class of shares.
The Board of Directors may, by resolution from time to
time, reduce the stated capital of the Corporation but only
in the amount of the aggregate par value of any shares
of the Corporation which shall have been reacquired and
canceled. Any surplus created by virtue of a reduction of
stated capital shall be deemed to be capital surplus.
Section 11. No Preemptive Rights
No holder of the shares of the Corporation of any
class, now or hereafter authorized, shall as such holder
have any preemptive or preferential rights to subscribe to,
purchase, or receive any shares of the Corporation of any
class, now or hereafter authorized, or any rights or options
for any such shares or any rights or options to subscribe to
or purchase any such shares or other securities convertible
into or exchangeable for or carrying rights or options to
purchase shares of any class or other securities, which may
at any time be issued, sold or offered for sale by the
Corporation or subjected to the rights or options to
purchase granted by the Corporation.
Section 12. Liability of Shareholders
A holder of shares of the Corporation shall be under no
obligation to the Corporation with respect to such shares
other than the obligation to pay to the Corporation the full
consideration for which such shares were or are to be
issued.
Any person becoming a transferee of shares in good
faith and without notice or knowledge that the full
consideration thereof had not been paid shall not be
personally liable to the Corporation for any unpaid portion
of such consideration.
ARTICLE VII
CERTIFICATES FOR SHARES AND THEIR TRANSFER
Section 1. Certificates
The interest of each shareholder of the Corporation
shall be evidenced by certificates representing shares of
stock of the Corporation, certifying the number of
shares represented thereby, and shall be in such form not
inconsistent with the governing statute of the Corporation
as the Board of Directors may from time to time prescribe.
The certificates of stock shall be signed by the
President and by the Secretary or Assistant Secretary and
sealed with the corporate seal or an engraved or printed
facsimile thereof. The signatures of such officers upon a
certificate may be facsimile if the certificate is manually
signed on behalf of a transfer agent or a registrar other
than the Corporation itself or one of its employees. In the
event that any officer who has signed or whose facsimile
signature has been placed upon such certificate shall have
ceased to be such before such certificate is issued, it may
be issued by the Corporation with the same effect as if such
officer had not ceased to be such at the time of the issue.
Each certificate or share shall be consecutively
numbered or otherwise identified. The name and address of
the person to whom the shares represented thereby are
issued, with the number of shares and date of issue, shall
be entered on the stock transfer books of the Corporation.
All certificates surrendered to the Corporation for transfer
shall be canceled, and no new certificate shall be issued
until the former certificate for a like number of shares
shall have been surrendered and canceled, except that in the
case of a lost, destroyed or mutilated certificate, a new
certificate may be issued upon such terms and with indemnity
to the Corporation as the Board of Directors may prescribe.
Section 2. Contents
Each certificate representing shares shall state:
a. That the Corporation is organized pursuant
to an Act of Congress;
b. The name of the person to whom issued;
c. The number and class of shares, and the
designation of the series, if any, which such
certificate represents;
d. The par value of each share represented by such
certificate;
e. The provisions by which such shares may be
redeemed; and
f. That the shares represented shall not have any
preemptive rights to purchase unissued or treasury
shares of the Corporation.
Each certificate representing shares of preferred stock
shall state upon the face thereof the annual dividend rate
for such shares, and shall state upon the reverse side
thereof the powers, preferences and relative and other
special rights and the qualifications, limitations and
restrictions applicable to such shares of preferred stock.
No certificate shall be issued for any share until such
hare is fully paid.
Section 3. Transfer
Transfer of shares of the Corporation shall be made
only on the stock transfer books of the Corporation by the
holder of record thereof or by his legal representative, who
shall furnish proper evidence of the authority to transfer,
or by his attorney thereto authorized by power of attorney
duly executed and filed with the Secretary of the
Corporation, and on surrender for cancellation of the
certificate for such shares.
The person in whose name shares stand on the books of
the Corporation shall be deemed by the Corporation to be the
owner thereof for all purposes.
Section 4. Records
The Corporation shall keep at its principal place of
business, or at the office of its transfer agent or
registrar, a record of its shareholders, giving the names
and addresses of all shareholders and the number of shares
held by each. Any person who shall be the holder of at least
five percent of the aggregate number of shares of any class
of common stock of the Corporation shall upon written demand
stating the purpose therefor, have the right to examine, in
person, or by agent or attorney, duly authorized in writing,
at any reasonable time or times, for any proper purpose, the
Corporation's record of shareholders
and minutes of meetings of the shareholders and the Board of
directors, and to make extracts therefrom.
ARTICLE VIII
INDEMNIFICATION
Section 1. Authorization
The Corporation shall, to the extent permitted by law,
indemnify any person who was or is a party, whether as a
plaintiff acting with the approval of the Board of Directors
or as a defendant, or is threatened to be made a party to
any threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative or
investigative and whether formal or informal, by reason of
the fact that he or she is or was a director, officer,
employee or agent of the Corporation, or is or was serving
at the request of the Corporation as a director, officer,
employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, against expenses,
including attorneys' fees, judgments, fines and amounts paid
in settlement actually and reasonably incurred by him or her
in connection with such action, suit or proceeding if he
or she acted in good faith and in a manner he or she
reasonably believed to be in or not opposed to the best
interests of the Corporation and, with respect to any
criminal action or proceeding, had no reasonable cause to
believe his or her conduct was unlawful. Any such person
shall be indemnified by the Corporation to the extent he or
she is successful in the action, suit or proceeding. The
termination of any action, suit or proceeding by judgment,
order, settlement, conviction or upon a plea of nolo
contendere or its equivalent, shall not, of itself, create a
presumption that the person did not act in good faith and in
a manner which he reasonably believed to be in or not
opposed to the best interests of the Corporation, and, with
respect to any criminal proceeding, had reasonable cause to
believe that his or her conduct was unlawful.
Section 2. Procedure
Any indemnification under this Article shall be made by
the Corporation only as authorized in the specific case upon
a determination that indemnification is proper in the
circumstances because the officer, director, employee or
agent has met the applicable standard of conduct set forth
in this Article. Such determination shall be made by a
majority vote of the members of the Board of Directors who
were not parties to such action, suit or proceeding. If all
members of the Board of Directors were parties to such
action, suit or proceeding, such determination shall be made
either (a) by legal counsel or (b) by the shareholders at
the next meeting of shareholders. In any case under this
Article, the Board or shareholders are authorized to obtain
the opinion of independent legal counsel.
Section 3. Advance Payments
Expenses, including attorneys' fees, incurred in
defending a civil, criminal, administrative or investigative
action, suit or proceeding, whether formal or informal,
shall be paid by the Corporation in advance of the final
disposition of such action, suit or proceeding as authorized
in the manner provided in section 2 of this Article upon
receipt of an undertaking by or on behalf of the director,
officer, employee or agent to repay such amount only if it
shall ultimately be determined that he or she is not
entitled to be indemnified by the Corporation.
Section 4. Other Rights to Indemnification
The indemnification provided in this Article shall not
be deemed exclusive of any other rights to which the
director, officer, employee or agent may be entitled under
any by-law, agreement, vote of shareholders or disinterested
directors or otherwise. The indemnification provided by this
Article shall continue as to a person who has ceased to be a
director, officer, employee or agent and shall inure to the
benefit of the heirs, executors, and administrators of such
a person.
Section 5. Indemnification Insurance
The Corporation, pursuant to a resolution of the
Corporation, may purchase and maintain insurance on behalf
of any person who is or was a director, officer, employee or
agent of the Corporation or is or was serving at the request
of the Corporation as a director, officer, employee or agent
of another corporation, partnership, joint venture, trust or
other enterprise against any liability asserted against him
or her in any such capacity or arising out of his status as
such whether or not the Corporation would have the power to
indemnify him or her against such liability under the
provisions of this Article.
ARTICLE IX
CONTRACTS, LOANS, CHECKS, DEPOSITS AND STATEMENTS
Section 1. Contracts
The Board of Directors may authorize the Chairman or
officers of the Corporation to enter into any contract or
execute and deliver any instrument in the name of and on
behalf of the Corporation, and such authority may be general
or confined to specific instances.
Section 2. Loans
No loans shall be contracted on behalf of the
Corporation and no evidence of indebtedness shall be issued
in its name unless authorized by a resolution of the Board
of Directors. Such authority may be general or confined to
specific instances.
Section 3. Checks, Drafts, etc.
All checks, drafts or other orders for the payment of
money, notes or other evidence of indebtedness issued in the
name of the Corporation shall be signed by the Chairman or
officers of the Corporation and in such manner as shall from
time to time be determined by a resolution of the Board of
Directors.
Section 4. Deposits
All funds of the Corporation not otherwise employed
shall be deposited from time to time to the credit of the
Corporation at such banks, trust companies or other
depositories as the Board of Directors may select.
Section 5. Investments
The Board of Directors may authorize the Chairman or
officers of the Corporation to invest the funds of the
Corporation in such securities and in such manner as shall
from time to time be determined by a resolution of the Board
of Directors.
ARTICLE X
FACSIMILE SIGNATURES
The Board of Directors may by resolution authorize the
use of facsimile signatures in lieu of manual signatures.
ARTICLE XI
AMENDMENTS
These By-Laws may be altered, amended or repealed and
new by-laws, consistent with the governing statute, may be
adopted by the majority vote of the Board of Directors.
EXHIBIT 10.1.2
<PAGE>
FEDERAL AGRICULTURAL MORTGAGE CORPORATION
1996 STOCK OPTION PLAN
1. PURPOSE AND SCOPE
The purposes of this Plan are to encourage stock ownership
by key management employees of the Federal Agricultural Mortgage
Corporation (herein called the "Company") and its Subsidiaries,
to provide an incentive for such individuals to expand and
improve the profits and prosperity of the Company and its
Subsidiaries, and to assist the Company and its Subsidiaries in
attracting and retaining key personnel through the grant of
Options to purchase shares of the Company's Class C nonvoting
common stock.
2. DEFINITIONS
Unless otherwise required by the context:
(a) "Board" shall mean the Board of Directors of the
Company.
(b) "Committee" shall mean the Compensation Committee of
the Company, which is appointed by the Board, and which shall be
composed of at least three members of the Board.
(c) "Company" shall mean the Federal Agricultural Mortgage
Corporation, a federally chartered instrumentality of the United
States established by Title VIII of the Farm Credit Act of 1971,
as amended.
(d) "Code" shall mean the Internal Revenue Code of 1986, as
amended.
(e) "Option" shall mean a right to purchase Stock granted
pursuant to the Plan.
(f) "Option Price" shall mean the purchase price for Stock
under an Option, as referenced in Section 6(a) below.
(g) "Participant" shall mean an employee of the Company, or
of any subsidiary of the Company, to whom an Option is granted
under the Plan.
(h) "Plan" shall mean this Federal Agricultural Mortgage
Corporation Stock Option Plan.
(i) "Right of First Refusal" shall mean the right of the
Company to buy Stock from a Participant, under the terms and
conditions described in Section 6(e) below.
(j) "Stock" shall mean the Class C nonvoting common stock
of the Company, par value $1.00.
(k) "Subsidiary" shall mean a subsidiary corporation of the
Company, as defined in Sections 424(f) and 424(g) of the Code.
3. SHARES AVAILABLE UNDER THE PLAN
(a) Subject to the provisions of Section 10 of the Plan,
the maximum number of shares of Stock that may be the subject of
Options granted under the Plan is 112,830 shares of Class C
nonvoting common. Such shares may be treasury, or authorized,
but unissued, shares of Stock of the Company.
(b) The Company, during the term of the Plan, will at all
times reserve and keep available, and will seek or obtain from
any regulatory body having jurisdiction any requisite authority
necessary to issue and to sell, the number of shares of Stock
that shall be sufficient to satisfy the requirements of the Plan.
4. ADMINISTRATION
The Plan shall be administered by the Committee. Three
members of the Committee shall constitute a quorum for the
transaction of business. The Committee shall be responsible to
the Board for the operation of the Plan, and shall make
recommendations to the Board with respect to participation in the
Plan by employees of the Company and its Subsidiaries, and with
respect to the extent of that participation. The interpretation
and construction of any provision of the Plan by the Committee
shall be final, unless otherwise determined by the Board. No
member of the Board or the Committee shall be liable for any
action or determination made by him or her in good faith.
5. ELIGIBILITY
The Board, upon recommendation of the Committee, may grant
Options to any key management employee (including an employee who
is an officer) of the Company or its Subsidiaries. Options may
be awarded by the Board at any time and from time to time to new
Participants, or to then Participants, or to a greater or lesser
number of Participants, and may include or exclude previous
Participants, as the Board, upon recommendation by the Committee
shall determine. Options granted at different times need not
contain similar provisions.
6. TERMS AND CONDITIONS OF OPTIONS
Options granted pursuant to the Plan shall be authorized by
the Board and shall be evidenced by agreements in such form as
the Board, upon recommendation of the Committee, shall from time
to time approve. Such agreements shall comply with and be
subject to the following terms and conditions:
(a) OPTION PRICE. The purchase price for Stock under each
Option shall be $7.875 per share.
(b) TIME AND METHOD OF PAYMENThod of Payment. The Option
Price shall be paid in full in cash at the time an Option is
exercised under the Plan. Otherwise, an exercise of any Option
granted under the Plan shall be invalid and of no effect.
Promptly after the exercise of an Option and the payment of the
full Option Price, the Participant shall be entitled to the
issuance of a stock certificate evidencing the Participant's
ownership of such stock. Participants shall have none of the
rights of a shareholder until shares are issued to them, and no
adjustment will be made for dividends or other rights for which
the record date is prior to the date such stock certificate is
issued.
(c) NUMBER OF SHARES. Each Option shall state the total
number of shares of Stock to which it pertains.
(d) OPTION PERIOD AND LIMITATIONS ON EXERCISE OF OPTIONS.
The Board may, in its discretion, provide that an Option may not
be exercised in whole or in part for any period or periods of
time specified in the Option agreement. Except as provided in
the Option agreement, an Option may be exercised in whole or in
part at any time during its term. No Option may be exercised
after the expiration of ten years from the date it is granted.
No Option may be exercised for a fractional share of Stock.
(e) RIGHT OF FIRST REFUSAL. The Board may, in its
discretion, include in any Option granted under the Plan a
condition that the Participant shall agree to grant the Company a
Right of First Refusal, which, if so included, shall have the
following terms and conditions:
(1) The Participant shall give the Company
written notice (the "Offer Notice") of its intention to
sell any shares of Stock acquired (or to be acquired)
upon exercise of an Option (the "Offered Shares"). The
Company shall have three (3) business days (the
"Exercise Period") following receipt of the Offer
Notice to determine whether to exercise its Right of
First Refusal, which may be exercised either as to all
or as to none of the Offered Shares. By the end of the
Exercise Period, the Company shall have given written
notice to the Participant of its election to exercise
(the "Acceptance Notice") or not to exercise (the
"Rejection Notice") its Right of First Refusal. The
Participant shall tender the Offered Shares to the
Company within ten (10) business days after receipt of
an Acceptance Notice. Upon receipt of a Rejection
Notice, the Participant may sell the Offered Shares
free and clear of such Right of First Refusal.
(2) The price to be paid by the Company for the
Offered Shares shall be the average of the closing
prices for the Stock for the three (3) business days
immediately preceding the date of the Company's receipt
of the Offer Notice or, if no transactions occurred on
those days, the average of the bid and ask prices for
the Stock on such days.
7. TERMINATION OF SERVICE OTHER THAN BY REASON BY DEATH OR
RETIREMENT
(a) Except as provided in Section 8 below, if a Participant
ceases for any reason to be employed by the Company or any of its
Subsidiaries (unless such termination of employment was for
"cause," as defined in the employment agreement, if any, between
the Company and such Participant), the Participant may, at any
time within 30 days after the effective date of such termination
of employment, exercise his or her Options to the extent that he
or she would be entitled to exercise them on such date, but in no
event shall any Option be exercisable more than ten years from
the date it was granted; provided, however, that the Committee
shall have the discretion to determine whether Options not yet
exercisable at the date of notification of termination of
employment shall become immediately exercisable within 30 days
thereafter. The Committee shall determine, subject to applicable
law, whether a leave of absence shall constitute a termination of
service.
(b) If a Participant ceases to be employed by the Company
or any of its Subsidiaries for "cause" (as referred to in (a)
above, in the case of an employment agreement, or as determined
by the Committee, in the absence of an employment agreement), the
Participant's Options shall terminate immediately.
8. RIGHTS IN EVENTS OF DEATH OR RETIREMENT
If (i) a Participant dies while employed by the Company or
any of its Subsidiaries, or within 30 days after having retired
with the consent of the Company, or (ii) a Participant's
termination of service with the Company or any of its
Subsidiaries is due to the Participant's retirement with the
consent of the Company, then the Participant's Options shall, to
the extent not yet exercisable, immediately become exercisable,
and may be exercised (x) in the case of retirement, by the
Participant within 30 days after the date of his or her
retirement, and (y) in the case of death, by the executors or
administrators, or legatees or heirs, of the Participant's estate
within 30 days after the date an executor or administrator is
appointed to administer the Participant's estate; provided,
however, that in no event shall an Option be exercisable more
than ten years from the date it was granted. The Committee shall
determine whether a termination of service shall be considered a
retirement with the consent of the Company. Any such
determination of the Committee shall be final and conclusive,
unless overruled by the Board.
9. NONASSIGNABILITY
Options shall not be transferable other than by will or by
the laws of descent and distribution, and during a Participant's
lifetime shall be exercisable only by such Participant.
10. EFFECT ON CHANGE IN STOCK SUBJECT TO THE PLAN
The aggregate number of shares of Stock available for
Options under the Plan, the shares subject to any Option and the
price per share shall all be proportionately adjusted for any
increase or decrease in the number of issued shares of Stock
subsequent to the effective date of the Plan resulting from a
merger, consolidation, reorganization, recapitalization, stock
dividend, stock split, combination or exchange of shares of
Stock, reclassification, or distribution to holders of shares of
Stock (other than cash dividends) or any similar change affecting
Stock including, but not limited to, a merger or other
reorganization event in which shares of Stock cease to exist. If
the Company shall be the surviving corporation in any merger or
consolidation, any Option shall pertain, apply, and relate to the
securities to which a holder of the number of shares of Stock
subject to the Option would have been entitled after the merger
or consolidation. Upon dissolution or liquidation of the
Company, or upon a merger or consolidation in which the Company
is not the surviving corporation, all Options outstanding under
the Plan shall terminate; provided, however, that each
Participant (and each other person entitled under Section 8 to
exercise an Option) shall have the right, immediately prior to
such dissolution or liquidation, or such merger or consolidation,
to exercise such Participant's Options in whole or in part, but
only to the extent that such Options are otherwise exercisable
under the terms of the Plan.
11. AMENDMENT AND TERMINATION
The Board, by resolution, may terminate, amend, or revise
the Plan with respect to any shares as to which Options have not
been granted. Neither the Board nor the Committee may, without
the consent of the holder of an Option, alter or impair any
Option previously granted under the Plan, except as authorized
herein. Unless sooner terminated, the Plan shall remain in
effect for a period of ten years from the date of the Plan's
adoption by the Board. Termination of the Plan shall not affect
any Option previously granted.
12. AGREEMENT AND REPRESENTATION OF EMPLOYEES
As a condition to the exercise of any portion of an Option,
the Company may require the person exercising such Option to
represent and warrant at the time of such exercise that any
shares of Stock acquired at exercise are being acquired only for
investment and without any present intention to sell or
distribute such shares, if, in the opinion of counsel for the
Company, such a representation is required under the Securities
Act of 1933 or any other applicable law, regulation, or rule of
any governmental agency.
13. EFFECTIVE DATE OF PLAN
The Plan shall be effective from the date that the Plan is
authorized by the Board.
<PAGE>
FEDERAL AGRICULTURAL MORTGAGE CORPORATION
STOCK OPTION PLAN
Stock Option Agreement
A. A STOCK OPTION for a total of ______ shares of Class C
nonvoting Common Stock, par value $1.00, of the Federal
Agricultural Mortgage Corporation, a federally chartered
instrumentality of the United States established by Title VIII of
the Farm Credit Act of 1971, as amended (herein the "Company"),
is hereby granted to ___________________ (herein the "Optionee"),
subject in all respects to the terms and provisions of the
Federal Agricultural Mortgage Stock Option Plan (herein the
"Plan"), dated , 1996, which has been incorporated herein by
reference.
B. The Option Price as determined by the Board of
Directors of the Company is _______ dollars per share.
[C. This Option may be exercised immediately to purchase up
to ________ shares of Stock; provided, however, that no shares of
Stock that may be acquired pursuant to the exercise of any Option
granted hereby may be sold prior to __________, 199 . Subject to
the provisions of Sections 7 and 8 of the Plan, if the Optionee
is an employee of the Company or any of its Subsidiaries on the
following dates, this Option may be exercised to acquire up to
the following additional number of shares of Stock:]
[D. The Shares to be acquired upon exercise of this Option
are subject to the Company's Right of First Refusal, as described
in Section 6(e) of the Plan.]
E. This Option may not be exercised if the issuance of
shares of Class C nonvoting Common Stock of the Company upon such
exercise would constitute a violation of any applicable Federal
or State securities or other law or valid regulation. The
Optionee, as a condition to his exercise of this Option, shall
represent to the Company that the shares of Class C nonvoting
Common Stock of the Company that the Optionee acquires under this
Option are being acquired by the Optionee for investment and not
with a present view to distribution or resale, unless counsel for
the Company is then of the opinion that such a representation is
not required under the Securities Act of 1933 or any other
applicable law, regulation, or rule of any governmental agency.
F. This Option may not be transferred in any manner
otherwise than by will or the laws of descent and distribution,
and may be exercised during the lifetime of the Optionee only by
him. The terms of this Option shall be binding upon the
executors, administrators, heirs, successors, and assigns of the
Optionee.
<PAGE>
G. This Option may not be exercised more than ten (10)
years from the date of its grant, and may be exercised during
such term only in accordance with the terms of the Plan.
Dated: , 199 .
Federal Agricultural Mortgage Corporation
By: _____________________________________
President
ATTEST:
______________________________
<PAGE>
The Optionee acknowledges receipt of a copy of the Plan, a
copy of which is annexed hereto, and represents that the Optionee
is familiar with the terms and provisions thereof. The Optionee
hereby accepts this Option subject to all the terms and
provisions of the Plan. The Optionee hereby agrees to accept as
binding, conclusive, and final all decisions and interpretations
of the Board of Directors and, where applicable, the Compensation
Committee, upon any questions arising under the Plan. As a
condition to the issuance of shares of Stock of the Company under
this Option, the Optionee authorizes the Company to withhold in
accordance with applicable law from any regular cash compensation
payable to him any taxes required to be withheld by the Company
under Federal, state, or local law as a result of his exercise of
this Option.
Dated , 199 .
_______________________________
Optionee
EXHIBIT 10.2.5
<PAGE>
2
AMENDMENT NO. 5 TO EMPLOYMENT CONTRACT
AGREED, as of the 13th day of June 1996, between the
Federal Agricultural Mortgage Corporation (FAMC) and Henry D.
Edelman (you), that the existing employment contract between the
parties hereto, dated May 5, 1989, as amended by Employment
Agreement Amendment No. 1 dated January 10, 1991, Amendment to
Employment Agreement dated as of June 1, 1993, Amendment No. 3 to
Employment Contract dated as of June 1, 1994 and Amendment No. 4
to Employment Contract dated as of February 8, 1996
(collectively, the Agreement), be and hereby is amended as
follows:
Section 2 and subsection 9(a)(iii) of the Agreement are
replaced in their entireties with the following new section and
subsection, respectively:
2. Term. The term of this Agreement shall continue until
June 1, 2000 or any earlier effective date of termination
pursuant to Paragraph 9 hereof (the "Term").
9(a)(iii) FAMC may terminate the employment of the
Employee without "cause" at any
time. Such termination shall become effective on the earlier
of June 1, 2000 or two years from the
date of notice of such termination.
As amended hereby, the Agreement remains in full force and
effect.
Federal Agricultural Mortgage Corporation Employee
By:_____________________________
Title: Chairman, Board of Directors
EXHIBIT 10.3.8
<PAGE>
AMENDMENT NO. 8 TO EMPLOYMENT CONTRACT
AGREED, as of the 13th day of June 1996, between the
Federal Agricultural Mortgage Corporation (FAMC) and Nancy E.
Corsiglia (you) that the existing employment contract between the
parties hereto, dated May 11, 1989, as amended by letter dated
December 14, 1989, Employment Agreement Amendment No. 2 dated
February 14, 1991, Amendment to Employment Agreement dated as of
June 1, 1993, Amendment No. 4 to Employment Contract dated as of
June 1, 1993, Amendment No. 5 to Employment Contract dated as of
June 1, 1994, Amendment No. 6 to Employment Contract dated as of
June 1, 1995 and Amendment No. 7 to Employment Contract dated as
of February 8, 1996 (collectively, the Agreement), be and hereby
is amended as follows:
Section 1 and subsection 8(a)(iii) of the Agreement are
replaced in their entireties with the following new section and
subsection, respectively:
1. Term. The term of your employment shall continue until
June 1, 1999 or any earlier effective date of termination
pursuant to Paragraph 8 hereof (the "Term").
8(a) (iii) FAMC may terminate your employment without
"cause" at any time. Such termination shall become
effective on the earlier of June 1, 1999 or two years from
the date of notice of such termination.
As amended hereby, the Agreement remains in full force and
effect.
Federal Agricultural Mortgage Corporation Employee
By:_____________________________
Title: President
EXHIBIT 10.4.7
<PAGE>
AMENDMENT NO. 7 TO EMPLOYMENT CONTRACT
AGREED, as of the 13th day of June 1996, between the
Federal Agricultural Mortgage Corporation (FAMC) and Thomas R.
Clark (you), that the existing employment contract between the
parties hereto, dated June 13, 1989, as amended by Employment
Agreement Amendment No. 1 dated February 14, 1991 and Amendment
to Employment Contract dated as of June 1, 1993, Amendment No. 3
to Employment Contract dated as of June 1, 1993, Amendment No. 4
to Employment Contract dated as of June 1, 1994, Amendment No. 5
to Employment Contract dated as of June 1, 1995 and Amendment No.
6 to Employment Contract dated as of February 8, 1996
(collectively, the Agreement), be and hereby is amended as
follows:
Section 1 and subsection 7(a)(iii) of the Agreement are
replaced in their entireties with the following new section and
subsection, respectively:
1. Term. The term of your employment shall continue until
June 1, 1999 or any earlier effective date of termination
pursuant to Paragraph 7 hereof (the "Term").
7(a) (iii) FAMC may terminate your employment without
"cause" at any time. Such termination shall become effective
on the earlier of June 1, 1999, or two years from the date of
notice of such termination.
As amended hereby, the Agreement remains in full force and
effect.
Federal Agricultural Mortgage Corporation Employee
By:_____________________________
Title: President
EXHIBIT 10.5.3
<PAGE>
AMENDMENT NO. 3 TO EMPLOYMENT CONTRACT
AGREED, as of the 13th day of June 1996, between the
Federal Agricultural Mortgage Corporation (FAMC) and Charles M.
Lewis (you), that the existing employment contract between the
parties hereto, dated April 29, 1994, as amended by Amendment No.
1 to Employment Contract dated as of June 1, 1995 and Amendment
No. 2 to Employment Contract dated as of February 8, 1996
(collectively, the Agreement), be and hereby is amended as
follows:
Section 1 and subsection 7(a) (iii) of the Agreement are
replaced in their entireties with the following new section and
subsection, respectively:
1. Term. The term of your employment shall continue
until June 1, 1998 or any earlier effective date of
termination pursuant to Paragraph 7 hereof (the "Term").
7(a) (iii) FAMC may terminate your employment without
"cause" at any time. Such termination shall become effective
on June 1, 1998.
As amended hereby, the Agreement remains in full force and
effect.
Federal Agricultural Mortgage Corporation Employee
By: _____________________________
Title: President
EXHIBIT 10.6.6
<PAGE>
AMENDMENT NO. 6 TO EMPLOYMENT CONTRACT
AGREED, as of the 13th day of June 1996, between the
Federal Agricultural Mortgage Corporation (Farmer Mac) and
Michael T. Bennett (you), that the existing employment contract
between the parties hereto, dated October 7, 1991, as amended by
Amendment to Employment Contract dated as of June 1, 1993,
Amendment No. 2 to Employment Contract dated as of January 6,
1994, Amendment No. 3 to Employment Contract dated as of June 1,
1994, Amendment No. 4 to Employment Contract dated as of June 1,
1995 and Amendment No. 5 to Employment Contract dated as of
February 8, 1996 (collectively, the Agreement), be and hereby is
amended as follows:
Section 1 and subsection 7(a)(3) of the Agreement are
replaced in their entirety with the following new section and
subsection, respectively:
1. Term. The term of your employment shall continue until
June 1, 1999 or any earlier effective date of termination
pursuant to Paragraph 7 hereof (the "Term").
7(a) (3) Farmer Mac may terminate your employment without
"cause" at any time. Such termination shall become effective
on June 1, 1999.
As amended hereby, the Agreement remains in full force
and effect.
Federal Agricultural Mortgage Corporation Employee
By: _____________________________
Title: President
EXHIBIT 10.7.6
<PAGE>
AMENDMENT NO. 6 TO EMPLOYMENT CONTRACT
AGREED, as of the 13th day of June 1996, between the Federal
Agricultural Mortgage Corporation (FAMC) and Christopher A. Dunn
(you), that the existing employment contract between the parties
hereto, dated March 15, 1993, as amended by Amendment to Employment
Contract dated as of June 1, 1993, Amendment No. 2 to Employment
Contract dated as of June 1, 1993, Amendment No. 3 to Employment
Contract dated as of June 1, 1994, Amendment No. 4 to Employment
Contract dated as of June 1, 1995 and Amendment No. 5 to Employment
Contract dated as of February 8, 1996 (collectively, the Agreement),
be and hereby is amended as follows:
Section 1 and subsection 7(a)(iii) of the Agreement are
replaced in their entireties with the following new section and
subsection, respectively:
1. Term. The term of your employment shall continue until
June 1, 1999 or any earlier effective date of termination
pursuant to Paragraph 7 hereof (the "Term").
7(a) (iii) FAMC may terminate your employment without "cause"
at any time. Such termination shall become effective on the
earlier of June 1, 1999 or two years from the date of notice of such
termination.
As amended hereby, the Agreement remains in full force and
effect.
Federal Agricultural Mortgage Corporation Employee
By:_____________________________
Title: President
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> JUN-30-1996
<CASH> 32,715
<SECURITIES> 462,858
<RECEIVABLES> 20,620
<ALLOWANCES> 223
<INVENTORY> 0
<CURRENT-ASSETS> 516,327
<PP&E> 59
<DEPRECIATION> 0
<TOTAL-ASSETS> 516,386
<CURRENT-LIABILITIES> 234,546
<BONDS> 266,967
0
0
<COMMON> 2,804
<OTHER-SE> 12,069
<TOTAL-LIABILITY-AND-EQUITY> 516,386
<SALES> 20,347
<TOTAL-REVENUES> 20,347
<CGS> 17,422
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 2,191
<LOSS-PROVISION> 142
<INTEREST-EXPENSE> 17,422
<INCOME-PRETAX> 592
<INCOME-TAX> 0
<INCOME-CONTINUING> 592
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 592
<EPS-PRIMARY> .23
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</TABLE>
