NASD Informs Members of Upcoming District Committee and District Nominating Committee Elections

GUIDANCE

District Elections

Executive Summary

The purpose of this Special Notice to Members is to inform members of the upcoming nomination and election process to fill forthcoming vacancies on NASD District Committees and District Nominating Committees.

Information on District Committee and District Nominating Committee members currently serving through 2006, 2007, and 2008 is included in Attachment A. Information on District Election Procedures is included in Attachment B. A blank candidate profile sheet is also included (Attachment C).

Background

The NASD District Committees serve an important role within NASD by supporting NASD's mission to regulate securities markets for the ultimate benefit and protection of investors. Among other things, District Committee members:

• Alert staff to industry trends that could be a potential regulatory concern.

• Consult with NASD staff on proposed policies and rule changes brought to a District Committee for its views.

• Serve on Disciplinary Panels in accordance with NASD Rules.

• Promote NASD's mission and stated positions.

Committee members must have the experience, ability, and commitment to fulfill these responsibilities, including:

• Understanding the issues facing the securities industry and possessing the ability to apply knowledge and expertise to these issues to develop solutions.

• Fostering member interest and participation in NASD.

• Educating members in their District on the work of NASD.

• Attending regularly and participating professionally, effectively, and in a collegial manner in District Committee meetings.

• Remaining objective and unbiased in the performance of District Committee matters.

Committee members must also adhere to certain prohibitions and restrictions. These include:

• Refraining from serving as an expert witness in NASD disciplinary hearings or arbitrations.

• Being sensitive to conflicts, and refraining from participating in a particular matter when a conflict exists.

• Refraining from using membership on the District Committee for commercial purposes, or otherwise suggesting special access to NASD.

• Keeping sensitive, non-public, or propriety information confidential.

Nomination Process

Individuals from member firms of all sizes and segments of the industry are encouraged to submit names for consideration for membership on the 11 District Committees and District Nominating Committees. In this election, each District Committee will have three vacancies to fill, with the exception of District 10, which will have four.¹ The term of office for District Committee members is three years. Each District Nominating Committee will have five vacancies to fill for a one-year term. Persons who are interested in serving on the District Committee or the District Nominating Committee within their district must complete a candidate profile sheet (Attachment C) and submit it by hand delivery, courier service, mail, or facsimile to the District Director. Completed candidate profile sheets must be received by the District Director on or before July 29, 2005. Persons who submit candidate profile sheets after this date will not be considered. NASD encourages current and former committee members to assist NASD by soliciting candidates for both committees.

Article VIII, Sections 8.2 and 8.9 of the NASD Regulation By-Laws (By-Laws) establish formal eligibility requirements for members of the District Committee and District Nominating Committee. They provide that such members:

Completed nomination forms that are received by July 29, 2005, will be provided to all members of the appropriate District Nominating Committee for review. It is anticipated that on or before September 9, 2005, each District Director, acting on behalf of the District Nominating Committee, will notify the Secretary of NASD of each candidate nominated by the District Nominating Committee and the committee to which the candidate is nominated.

Members are reminded of the importance to accurately maintain their Executive Representative name and email address information, as well as their firm's main postal address. This will ensure that member mailings, such as election information, will be properly directed. Failure to keep this information accurate may jeopardize the member's ability to participate in District elections as well as other member votes. To update the Executive Representative name and email address, firms should access the NASD Contact System, located on NASD's Web site at www.nasd.com/ncs.

To update postal address information, the firm must file a Form BD Amendment via the Web CRD system. For assistance updating either of these systems, you may contact our Call Center at (301) 590-6500.

Questions/Further Information

Questions concerning this Special Notice may be directed to the District Director noted, or to Barbara Z. Sweeney, Senior Vice President and Corporate Secretary, NASD, at (202) 728-8062 or via email at [email protected].

¹ In some cases, a District Committee may have additional vacancies to fill if a member of the District Committee has resigned since the last election, as indicated in Attachment A.

² NASD will be filing with the Securities and Exchange Commission, for immediate effectiveness, an amendment to Article VIII of the By-Laws to modify the eligibility requirements for membership on the District Committee and District Nominating Committee by providing that candidates must be "registered with" rather than "employed by" an NASD member. The rationale for this change is that any person who engages in the investment banking or securities business of a member must be registered with NASD and be an associated person of that member. There is, however, no requirement that associated persons be employees. They may, in fact, operate for employment law purposes as independent contractors. The staff believes the requirement of being "registered with" as opposed to "employed by" the member more accurately aligns the candidacy requirements with the qualification of persons who may represent a member.

NASD also will be filing a second change to Article VIII to permit each District Nominating Committee, at the time it nominates its slate of nominees, to identify one alternate nominee for the District Committee and one alternate nominee for the District Nominating Committee who will, in an uncontested election, replace a member of the slate of nominees who withdraws or is otherwise determined to be ineligible.

ATTACHMENT A

District 1 Committee and District Nominating Committee Members

Elisabeth P. Owens, District Director
525 Market Street, Suite 300, San Francisco, CA 94105

(415) 882-1201
(415) 546-6991 fax

District 1 Committee—Chair: Francis X. Roche, II

Members to be elected to terms expiring January 2009: 3

Committee members to serve until January 2006

Committee members to serve until January 2007

Committee members to serve until January 2008

District 1 Nominating Committee—Chair: Robert S. Basso

Committee members to be elected to terms expiring January 2006: 5

Committee Members

District 2 Committee and District Nominating Committee Members

Lani M. Sen Woltmann, District Director

300 South Grand Avenue, Suite 1600, Los Angeles, CA 90071

(213) 613- 2601
(213) 617-3299 fax

District 2 Committee — Chair: Don S. Dalis

Members to be elected to terms expiring January 2009: 3

Committee members to serve until January 2006

Committee members to serve until January 2007

Committee members to serve until January 2008

District 2 Nominating Committee—Chair: Richard B. Gunter

Committee members to be elected to terms expiring January 2006: 5

Committee Members

District 3 Committee and District Nominating Committee Members

District 3 Committee—Chair: Bridget M. Gaughan

Members to be elected to terms expiring January 2009: 3

Committee members to serve until January 2006

Committee members to serve until January 2007

Committee Members to serve until January 2008

District 3 Nominating Committee—Chair: Kathryn A. Supko

Committee members to be elected to terms expiring January 2006: 5

Committee Members

District 4 Committee and District Nominating Committee Members

Thomas D. Clough, District Director

District 4 Committee—Chair: Deborah M. Castiglioni

Members to be elected to terms expiring January 2009: 3

Committee members to serve until January 2006

Committee members to serve until January 2007

Committee members to serve until January 2008

District 4 Nominating Committee—Chair: Pamela R. Ziermann

Committee members to be elected to terms expiring January 2006: 5

Committee Members

District 5 Committee and District Nominating Committee Members

Warren A. Butler, Jr., Regional Director

District 5 Committee—Chair: Carolyn R. May

Members to be elected to terms expiring January 2009: 3

Committee members to serve until January 2006

Committee members to serve until January 2007

Committee members to serve until January 2008

District 5 Nominating Committee—Chair: David A. Knight

Committee members to be elected to terms expiring January 2006: 5

Committee Members

District 6 Committee and District Nominating Committee Members

Virginia F. M. Jans, District Director

District 6 Committee—Chair: John R. Muschalek

Members to be elected to terms expiring January 2009: 3

Committee members to serve until January 2006

Committee members to serve until January 2007:

Committee members to serve until January 2008

District 6 Nominating Committee—Chair: William B. Madden

Committee members to be elected to terms expiring January 2006: 5

Committee Members

District 7 Committee and District Nominating Committee Members

Daniel J. Stefek, District Director

District 7 Committee—Chair: Dennis S. Kaminski

Members to be elected to terms expiring January 2009: 3

Committee members to serve until January 2006

Committee members to serve until January 2007

Committee members to serve until January 2008

District 7 Nominating Committee—Chair: Kenneth W. McGrath

Committee members to be elected to terms expiring January 2006: 5

Committee Members

District 8 Committee and District Nominating Committee Members

Carla A. Romano, District Director

District 8 Committee—Chair: Thomas M. McDonald

Members to be elected to terms expiring January 2009: 3

Committee members to serve until January 2006

Committee members to serve until January 2007

Committee members to serve until January 2008

District 8 Nominating Committee—Chair: Bruce J. Young

Committee members to be elected to terms expiring January 2006: 5

Committee Members

District 9 Committee and District Nominating Committee Members

District 9 Committee—Chair: W. Dean Karrash

Members to be elected to terms expiring January 2009: 3

Committee members to serve until January 2006

Committee members to serve until January 2007

Committee member to serve until January 2008

District 9 Nominating Committee—Chair: J. Lee Keiger, III

Committee members to be elected to terms expiring January 2006: 5

Committee Members

District 10 Committee and District Nominating Committee Members

Hans L. Reich, Regional Director

District 10 Committee—Chair: Richard J. Paley

Members to be elected to terms expiring January 2009: 4

Committee members to serve until January 2006

Committee members to serve until January 2007

Committee members to serve until January 2008

District 10 Nominating Committee—Chair: Charles V. Senatore

Committee members to be elected to terms expiring January 2005: 5

Committee Members

District 11 Committee and District Nominating Committee Members

Frederick F. McDonald, District Director

District 11 Committee—Chair: Mark R. Hansen

Members to be elected to terms expiring January 2009: 3

Committee members to serve until January 2006

Committee members to serve until January 2007

Committee members to serve until January 2008

District 11 Nominating Committee—Chair: John I. Fitzgerald

Committee members to be elected to terms expiring January 2006: 5

Committee Members

¹ This vacancy was created by the resignation of Richard M. Hurwitz. The term expires in January 2007.

² This vacancy was created by the resignation of Timothy J. Lyle. The term expires in January 2006.

³ Mr. Kirk resigned from the District 6 Nominating Committee and was appointed to fill a vacancy on the District 6 Committee created by the resignation of Darryl W. Traweek. Mr. Kirk must stand for election to serve out the remaining term on the District 6 Committee, which expires in January 2007.

⁴ This vacancy was created by the resignation of Sennett Kirk, III. The term expires in January 2006.

⁵ Ms. Buechner was appointed to fill a vacancy created by the resignation of Lora Rosenbaum. Ms. Buechner must stand for election to serve out the remaining term, which expires in January 2007.

⁶ This vacancy was created by the resignation of Barry M. Cash. The term expires in January 2007.

⁷ This vacancy was created by the resignation of Dorothy G. Sanders. The term expires in January 2008.

ATTACHMENT B

Procedures for Electing District Committee and District Nominating Committee Members¹

If the District Nominating Committee nominates the same number of nominees as there are positions to be filled on the District Committee and the District Nominating Committee and no additional candidate comes forward by delivering written notice to the appropriate District Director within 14 calendar days after the date of the Notice to Members identifying the nominees, the candidates nominated by the District Nominating Committee are considered duly elected.

Additional information pertaining to the District Committee and District Nominating Committee Election Procedures may be found in Article VIII of the By-Laws of NASD Regulation.

¹ NASD will be filing with the Securities and Exchange Commission, for immediate effectiveness, amendments to Article VIII of the By-Laws relating to District Committee and District Nominating Committee elections to: (1) clarify the eligibility requirements for membership on the District Committee and District Nominating Committee by providing that candidates must be "registered with," rather than "employed by," an NASD member; and (2) permit each District Nominating Committee, at the time it nominates its slate of nominees, to identify one alternate nominee for the District Committee and one alternate nominee for the District Nominating Committee who will, in an uncontested election, replace a member of the slate of nominees who withdraws or is otherwise determined to be ineligible.

ATTACHMENT C

Current Registration

Prior Registration (List the most recent first. Feel free to include extra pages if necessary.)

Memberships/Positions Held in Trade or Business Organizations

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Past NASD Experience and Dates of Service (please check all that apply)

Educational Background